EXHIBIT 4.1
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
Depositor,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
[ ]
Trustee
FORM OF POOLING AND SERVICING AGREEMENT
Dated as of [________] 1, 20[_]
Mortgage Asset-Backed Pass-Through Certificates
Series 20[__]-RZ[_]
TABLE OF CONTENTS
ARTICLE I DEFINITIONS.................................................... 6
Section 1.01. Definitions....................................... 6
Section 1.02. Determination of One-Month LIBOR................. 60
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE
OF CERTIFICATES.................................. 62
Section 2.01. Conveyance of Mortgage Loans..................... 62
Section 2.02. Acceptance by Trustee............................ 65
Section 2.03. Representations, Warranties and Covenants
of the Master Servicer and the Depositor......... 67
Section 2.04. Representations and Warranties of Sellers........ 69
Section 2.05. Execution and Authentication of Certificates;
Conveyance of Uncertificated REMIC Regular
Interests........................................ 71
Section 2.06. Purposes and Powers of the Trust................. 72
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS................ 73
Section 3.01. Master Servicer to Act as Servicer............... 73
Section 3.02. Subservicing Agreements Between Master Servicer
and Subservicers; Enforcement of Subservicers'
Obligations; Special Servicing................... 74
Section 3.03. Successor Subservicers........................... 75
Section 3.04. Liability of the Master Servicer................. 76
Section 3.05. No Contractual Relationship Between Subservicer
and Trustee or Certificateholders................ 76
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee............................ 76
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account.................... 77
Section 3.08. Subservicing Accounts; Servicing Accounts........ 79
Section 3.09. Access to Certain Documentation and Information
Regarding the Mortgage Loans..................... 81
Section 3.10. Permitted Withdrawals from the Custodial
Account.......................................... 81
Section 3.11. Maintenance of Primary Insurance Coverage........ 83
Section 3.12. Maintenance of Fire Insurance and Omissions
and Fidelity Coverage............................ 84
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption
and Modification Agreements; Certain
Assignments...................................... 85
Section 3.14. Realization Upon Defaulted Mortgage Loans........ 87
i
TABLE OF CONTENTS
(continued)
Section 3.15. Trustee to Cooperate; Release of Mortgage Files.. 90
Section 3.16. Servicing and Other Compensation; Compensating
Interest......................................... 91
Section 3.17. Reports to the Trustee and the Depositor......... 92
Section 3.18. Annual Statement as to Compliance................ 92
Section 3.19. Annual Independent Public Accountants'
Servicing Report................................. 93
Section 3.20. Right of the Depositor in Respect of the
Master Servicer.................................. 93
Section 3.21. Advance Facility................................. 93
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS................................ 98
Section 4.01. Certificate Account.............................. 98
Section 4.02. Distributions.................................... 98
Section 4.03. Statements to Certificateholders; Statements
to Rating Agencies; Exchange Act Reporting...... 102
Section 4.04. Distribution of Reports to the Trustee and the
Depositor; Advances by the Master Servicer...... 106
Section 4.05. Allocation of Realized Losses................... 108
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property.............................. 110
Section 4.07. Optional Purchase of Defaulted Mortgage Loans... 110
Section 4.08. Swap Agreement.................................. 111
ARTICLE V THE CERTIFICATES............................................. 113
Section 5.01. The Certificates................................ 113
Section 5.02. Registration of Transfer and Exchange of
Certificates.................................... 115
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.................................... 120
Section 5.04. Persons Deemed Owners........................... 121
Section 5.05. Appointment of Paying Agent..................... 121
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER........................ 122
Section 6.01. Respective Liabilities of the Depositor and the
Master Servicer................................. 122
Section 6.02. Merger or Consolidation of the Depositor or the
Master Servicer; Assignment of Rights and
Delegation of Duties by Master Servicer......... 122
Section 6.03. Limitation on Liability of the Depositor, the
Master Servicer and Others...................... 123
Section 6.04. Depositor and Master Servicer Not to Resign..... 124
ARTICLE VII DEFAULT...................................................... 125
ii
TABLE OF CONTENTS
(continued)
Section 7.01. Events of Default............................... 125
Section 7.02. Trustee or Depositor to Act; Appointment
of Successor.................................... 127
Section 7.03. Notification to Certificateholders.............. 128
Section 7.04. Waiver of Events of Default..................... 128
ARTICLE VIII CONCERNING THE TRUSTEE....................................... 129
Section 8.01. Duties of Trustee............................... 129
Section 8.02. Certain Matters Affecting the Trustee........... 130
Section 8.03. Trustee Not Liable for Certificates
or Mortgage Loans............................... 132
Section 8.04. Trustee May Own Certificates.................... 132
Section 8.05. Master Servicer to Pay Trustee's Fees
and Expenses; Indemnification................... 132
Section 8.06. Eligibility Requirements for Trustee............ 133
Section 8.07. Resignation and Removal of the Trustee.......... 134
Section 8.08. Successor Trustee............................... 135
Section 8.09. Merger or Consolidation of Trustee.............. 135
Section 8.10. Appointment of Co-Trustee or Separate Trustee... 135
Section 8.11. Appointment of Custodians....................... 136
Section 8.12. Appointment of Office or Agency................. 137
Section 8.13. DTC Letter of Representations................... 137
Section 8.14. Swap Agreement.................................. 137
ARTICLE IX TERMINATION.................................................. 138
Section 9.01. Termination Upon Purchase or Liquidation
of All Mortgage Loans........................... 138
Section 9.02. Additional Termination Requirements............. 143
ARTICLE X REMIC PROVISIONS............................................. 144
Section 10.01. REMIC Administration............................ 144
Section 10.02. Master Servicer, REMIC Administrator
and Trustee Indemnification..................... 147
ARTICLE XI MISCELLANEOUS PROVISIONS..................................... 149
Section 11.01. Amendment....................................... 149
Section 11.02. Recordation of Agreement; Counterparts.......... 151
Section 11.03. Limitation on Rights of Certificateholders...... 152
Section 11.04. Governing Law................................... 152
iii
TABLE OF CONTENTS
(continued)
Section 11.05. Notices......................................... 153
Section 11.06. Notices to Rating Agencies...................... 153
Section 11.07. Severability of Provisions...................... 154
Section 11.08. Supplemental Provisions for Resecuritization.... 154
Section 11.09. Intended Third Party Beneficiary................ 155
EXHIBITS
Exhibit A Form of Class A Certificate
Exhibit B-1 Form of Class M Certificate
Exhibit B-2 Form of Class B Certificate
Exhibit C Form of Class SB Certificate
Exhibit D Form of Class R Certificate
Exhibit E Form of Custodial Agreement
Exhibit F Mortgage Loan Schedule
Exhibit G Form of Request for Release
Exhibit H-1 Form of Transfer Affidavit and Agreement
Exhibit H-2 Form of Transferor Certificate
Exhibit I Form of Investor Representation Letter
Exhibit J Form of Transferor Representation Letter
Exhibit K Form of Form 10-K Certification
Exhibit L Form of Back-Up Certification to Form 10-K Certification
Exhibit M Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N Form of Rule 144A Investment Representation
Exhibit O Form of ERISA Representation Letter for Class SB Certificates
Exhibit P Form of ERISA Representation Letter for Class M Certificates
Exhibit Q Information to be Provided by the Master Servicer to the Rating
Agencies Relating to Reportable Modified Mortgage Loans
Exhibit R Schedule of Swap Agreement Notional Balances
Exhibit S Swap Agreement
Exhibit T Servicing Criteria to be Addressed in Assessment of Compliance
iv
This Pooling and Servicing Agreement, effective as of [________] 1, 20[_],
among RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., 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 [_____________], a banking association
organized under the laws of the United States, as trustee (together with its
permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
seventeen 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 Swap Account and the Swap Agreement) subject to
this Agreement as a real estate mortgage investment conduit (a "REMIC") for
federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC I." The Class [R-I] Certificates will represent the sole
Class of "residual interests" in REMIC I for purposes of the REMIC Provisions
(as defined herein) under federal income tax law. The 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 Initial
REMIC I Uncertificated
Pass-Through REMIC I Latest Possible
Designation Rate Principal Balance Maturity Date
----------- -------------- ----------------- ----------------
[I-1-A] [____](1) [_______] [________] 20[_]
[I-1-B] [____](1) [_______] [________] 20[_]
[I-2-A] [____](1) [_______] [________] 20[_]
[I-2-B] [____](1) [_______] [________] 20[_]
[I-3-A] [____](1) [_______] [________] 20[_]
[I-3-B] [____](1) [_______] [________] 20[_]
[I-4-A] [____](1) [_______] [________] 20[_]
[I-4-B] [____](1) [_______] [________] 20[_]
[I-5-A] [____](1) [_______] [________] 20[_]
[I-5-B] [____](1) [_______] [________] 20[_]
[I-6-A] [____](1) [_______] [________] 20[_]
[I-6-B] [____](1) [_______] [________] 20[_]
[I-7-A] [____](1) [_______] [________] 20[_]
1
Uncertificated Initial
REMIC I Uncertificated
Pass-Through REMIC I Latest Possible
Designation Rate Principal Balance Maturity Date
----------- -------------- ----------------- ----------------
[I-7-B] [____](1) [_______] [________] 20[_]
[I-8-A] [____](1) [_______] [________] 20[_]
[I-8-B] [____](1) [_______] [________] 20[_]
[I-9-A] [____](1) [_______] [________] 20[_]
[I-9-B] [____](1) [_______] [________] 20[_]
[I-10-A] [____](1) [_______] [________] 20[_]
[I-10-B] [____](1) [_______] [________] 20[_]
[I-11-A] [____](1) [_______] [________] 20[_]
[I-11-B] [____](1) [_______] [________] 20[_]
[I-12-A] [____](1) [_______] [________] 20[_]
[I-12-B] [____](1) [_______] [________] 20[_]
[I-13-A] [____](1) [_______] [________] 20[_]
[I-13-B] [____](1) [_______] [________] 20[_]
[I-14-A] [____](1) [_______] [________] 20[_]
[I-14-B] [____](1) [_______] [________] 20[_]
[I-15-A] [____](1) [_______] [________] 20[_]
[I-15-B] [____](1) [_______] [________] 20[_]
[I-16-A] [____](1) [_______] [________] 20[_]
[I-16-B] [____](1) [_______] [________] 20[_]
[I-17-A] [____](1) [_______] [________] 20[_]
[I-17-B] [____](1) [_______] [________] 20[_]
[I-18-A] [____](1) [_______] [________] 20[_]
[I-18-B] [____](1) [_______] [________] 20[_]
[I-19-A] [____](1) [_______] [________] 20[_]
[I-19-B] [____](1) [_______] [________] 20[_]
[I-20-A] [____](1) [_______] [________] 20[_]
[I-20-B] [____](1) [_______] [________] 20[_]
[I-21-A] [____](1) [_______] [________] 20[_]
[I-21-B] [____](1) [_______] [________] 20[_]
[I-22-A] [____](1) [_______] [________] 20[_]
[I-22-B] [____](1) [_______] [________] 20[_]
[I-23-A] [____](1) [_______] [________] 20[_]
[I-23-B] [____](1) [_______] [________] 20[_]
[I-24-A] [____](1) [_______] [________] 20[_]
[I-24-B] [____](1) [_______] [________] 20[_]
[I-25-A] [____](1) [_______] [________] 20[_]
[I-25-B] [____](1) [_______] [________] 20[_]
[I-26-A] [____](1) [_______] [________] 20[_]
[I-26-B] [____](1) [_______] [________] 20[_]
[I-27-A] [____](1) [_______] [________] 20[_]
[I-27-B] [____](1) [_______] [________] 20[_]
[I-28-A] [____](1) [_______] [________] 20[_]
[I-28-B] [____](1) [_______] [________] 20[_]
[I-29-A] [____](1) [_______] [________] 20[_]
[I-29-B] [____](1) [_______] [________] 20[_]
[I-30-A] [____](1) [_______] [________] 20[_]
2
Uncertificated Initial
REMIC I Uncertificated
Pass-Through REMIC I Latest Possible
Designation Rate Principal Balance Maturity Date
----------- -------------- ----------------- ----------------
[I-30-B] [____](1) [_______] [________] 20[_]
[I-31-A] [____](1) [_______] [________] 20[_]
[I-31-B] [____](1) [_______] [________] 20[_]
[I-32-A] [____](1) [_______] [________] 20[_]
[I-32-B] [____](1) [_______] [________] 20[_]
[I-33-A] [____](1) [_______] [________] 20[_]
[I-33-B] [____](1) [_______] [________] 20[_]
[I-34-A] [____](1) [_______] [________] 20[_]
[I-34-B] [____](1) [_______] [________] 20[_]
[I-35-A] [____](1) [_______] [________] 20[_]
[I-35-B] [____](1) [_______] [________] 20[_]
[I-36-A] [____](1) [_______] [________] 20[_]
[I-36-B] [____](1) [_______] [________] 20[_]
[I-37-A] [____](1) [_______] [________] 20[_]
[I-37-B] [____](1) [_______] [________] 20[_]
[I-38-A] [____](1) [_______] [________] 20[_]
[I-38-B] [____](1) [_______] [________] 20[_]
[I-39-A] [____](1) [_______] [________] 20[_]
[I-39-B] [____](1) [_______] [________] 20[_]
[I-40-A] [____](1) [_______] [________] 20[_]
[I-40-B] [____](1) [_______] [________] 20[_]
[I-41-A] [____](1) [_______] [________] 20[_]
[I-41-B] [____](1) [_______] [________] 20[_]
[I-42-A] [____](1) [_______] [________] 20[_]
[I-42-B] [____](1) [_______] [________] 20[_]
[I-43-A] [____](1) [_______] [________] 20[_]
[I-43-B] [____](1) [_______] [________] 20[_]
[I-44-A] [____](1) [_______] [________] 20[_]
[I-44-B] [____](1) [_______] [________] 20[_]
[I-45-A] [____](1) [_______] [________] 20[_]
[I-45-B] [____](1) [_______] [________] 20[_]
[I-46-A] [____](1) [_______] [________] 20[_]
[I-46-B] [____](1) [_______] [________] 20[_]
[I-47-A] [____](1) [_______] [________] 20[_]
[I-47-B] [____](1) [_______] [________] 20[_]
[I-48-A] [____](1) [_______] [________] 20[_]
[I-48-B] [____](1) [_______] [________] 20[_]
[I-49-A] [____](1) [_______] [________] 20[_]
[I-49-B] [____](1) [_______] [________] 20[_]
[A-I] [____](1) [_______] [________] 20[_]
----------
(1) Calculated as provided in the definition of Uncertificated REMIC I
Pass-Through Rate.
3
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
subject to this Agreement as a REMIC for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC II." The Class [R-II]
Certificates will represent the sole Class of "residual interests" in REMIC II
for purposes of the REMIC Provisions (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 Initial
REMIC II Uncertificated
Pass-Through REMIC II Latest Possible
Designation Rate Principal Balance Maturity Date
----------- -------------- ----------------- ----------------
[LT1] [____](1 [_______] November 2035
[LT2] [____](1 [_______] November 2035
[LT3] [____](1 [_______] November 2035
[LT4] [____](1 [_______] November 2035
[LT-IO] [____](1 (2) November 2035
----------
(1) Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
(2) REMIC II Regular Interest LT-IO will not have an Uncertificated Principal
Balance but will accrue interest on its uncertificated notional amount
calculated in accordance with the definition of "Uncertificated Notional
Amount" herein.
4
REMIC III
As provided herein, the REMIC Administrator will 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. The Class R-III Certificates will represent the sole
Class of "residual interests" in REMIC III for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, 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 Class of REMIC III Regular Certificates shall be the Maturity Date.
Aggregate Month of
Initial Final
Certificate Scheduled
Pass-Through Principal Distribution
Designation Type Rate Balance Features Date Initial Ratings
----------- ---------- ---------------- ----------- --------------------------- ------------ -----------------
[S&P] [Moody's]
----- ---------
Class [__] Regular(1) Adjustable $[_______] [Senior/Adjustable Rate] [___] 20[_] [AAA] [Aaa]
Class [__] Regular(1) Adjustable $[_______] [Senior/Adjustable Rate] [___] 20[_] [AAA] [Aaa]
Class [__] Regular(1) Adjustable $[_______] [Senior/Adjustable Rate] [___] 20[_] [AAA] [Aaa]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] 20[_] [AA+] [Aa1]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] 20[_] [AA] [Aa2]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] 20[_] [AA-] [Aa3]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] 20[_] [A+] [A2]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] 20[_] [A] [A3]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] 20[_] [A-] [Baa1]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] ▇▇[_] [▇▇▇▇] [▇▇▇▇]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Mezzanine/Adjustable Rate] [___] ▇▇[_] [▇▇▇] [Baa3]
Class [__] Regular(1) Adjustable(2)(3) $[_______] [Subordinate/Adjustable [___] ▇▇[_] [▇▇▇-] [Ba1]
Rate]
Class [__] Regular(4) (4) $[_______] [Subordinate Rate] [N/A] [N/A] [N/A]
Class [__] Regular(5) (6) (7) [Residual] [N/A] [N/A] [N/A]
----------
(1) The [Class A, Class M and Class B] Certificates will represent 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 Swap 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 Swap Account, all pursuant to and as further provided in
Section 4.08 hereof].
(2) [The REMIC III Regular Interests ownership of which is represented by the
Class A, Class M and Class B 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].
5
(3) The [Class A, Class M and Class B] 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 two REMIC III Regular Interests, a
principal only regular interest designated SB-PO and an interest only
regular interest designated SB-IO, 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 and SB-PO.
(5) [REMIC III Regular Interest IO will be held as an asset of the Swap
Account established by the Trustee].
(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, Class M Certificates and Class B
Certificates], an amount equal to 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 (a) Prepayment Interest Shortfalls on the
Mortgage Loans during the prior calendar month (to the extent not covered by
Eligible Master Servicing Compensation pursuant to Section 3.16) and Relief Act
Shortfalls on Mortgage Loans during the related Due Period, in each case
allocated to each Class of Certificates pro rata, on the basis of Accrued
Certificate Interest payable on such Distribution Date absent such reductions;
and (b) the interest portion of Realized Losses allocated to such Class through
Subordination as described in 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
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)(v) and (vi).
6
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 Mortgage Rate: With respect to any Mortgage Loan and any date of
determination, the Mortgage Rate borne by the related Mortgage Note, less the
rate at which the related Subservicing Fee accrues.
Adjustment Date: 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 the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
Amount Held for Future Distribution: 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, Insurance Proceeds, Principal Prepayments, Subsequent Recoveries, REO
Proceeds, 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, one of the
following: (i) the lesser of (a) the appraised value of such Mortgaged Property
based upon the appraisal or appraisals (or field review) made at the time of the
origination of the related Mortgage Loan, and (b) the sales price of the
Mortgaged Property at such time of origination, or (ii) in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan, one of (1)
the appraised value based upon the appraisal made at the time of origination of
the loan which was refinanced or modified, (2) the appraised value determined in
an appraisal made at the time of refinancing or modification or (3) the sales
price of the Mortgaged Property.
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
7
Property is located to reflect of record the sale of the Mortgage Loan to the
Trustee for the benefit of Certificateholders, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by law and accompanied by an Opinion of Counsel to
that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the
Closing Date, between Residential Funding and the Depositor relating to the
transfer and assignment of the Mortgage Loans.
Available Distribution Amount: With respect to any Distribution Date, an
amount equal to (a) the sum of (i) the amount on deposit in the Custodial
Account as of the close of business on the immediately preceding Determination
Date, including any Subsequent Recoveries, and amounts deposited in the
Custodial Account in connection with the substitution of Qualified Substitute
Mortgage Loans, (ii) the amount of any Advance made on the immediately preceding
Certificate Account Deposit Date, (iii) any amount deposited in the Certificate
Account on the related Certificate Account Deposit Date pursuant to the second
paragraph of Section 3.12(a), (iv) any amount 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 and (v) any amount deposited in the Certificate
Account pursuant to Section 4.07 or 9.01, reduced by (b) the sum as of the close
of business on the immediately preceding Determination Date of (i) any payments
or collections consisting of prepayment charges on the Mortgage Loans that were
received during the related Prepayment Period, (ii) the Amount Held for Future
Distribution, (iii) amounts permitted to be withdrawn by the Master Servicer
from the Custodial Account pursuant to clauses (ii)-(x), inclusive, of Section
3.10(a), and (iv) 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.
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 Shortfall: Any [Class A Basis Risk Shortfall], [Class B Basis
Risk Shortfall] [or] [Class M Basis Risk Shortfall].
Basis Risk Shortfall Carry-Forward Amount: Any [Class A Basic Risk
Shortfall Carry-Forward Amount], [Class B Basis Risk Shortfall Carry-Forward
Amount] [or] [Class M Basis Risk Shortfall Carry-Forward Amount].
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the State of New York, the State of California,
the State of Texas, the
8
State of Minnesota 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 unreimbursed Advances or Servicing Advances that were added
to the Stated Principal Balance of the Mortgage Loans during the preceding
calendar month and reimbursed to the Master Servicer or Subservicer pursuant to
Section 3.10(a)(vii) on or prior to such Distribution Date.
Cash Liquidation: 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 M] Certificate, [Class B]
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 "[_______________], as
trustee, in trust for the registered holders of Residential Asset Mortgage
Products, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series
20[_]-RZ[_]" and which account shall be held for the benefit of the
Certificateholders and which must be an Eligible Account.
Certificate Account Deposit Date: With respect to any Distribution Date,
the Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-United States Person shall be a holder of a Class R
Certificate for any purpose hereof. Solely for the purpose of giving any consent
or direction pursuant to this Agreement, any Certificate, other than a Class R
Certificate, registered in the name of the Depositor, the Master Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be outstanding and
the Percentage Interest or Voting Rights evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
or Voting Rights necessary to effect any such consent or direction has been
obtained. All references herein to "Holders" or "Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
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
9
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,
Class M Certificate or Class B Certificate], on any date of determination, an
amount equal to:
(i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, minus
(ii) the sum of (x) the aggregate of all amounts previously distributed
with respect to such Certificate (or any predecessor Certificate)
and applied to reduce the Certificate Principal Balance thereof
pursuant to Section 4.02(c) and (y) the aggregate of all reductions
in Certificate Principal Balance of such Certificates deemed to have
occurred in connection with Realized Losses which were previously
allocated to such Certificate (or any predecessor Certificate)
pursuant to Section 4.05;
provided, that with respect to any Distribution Date, the Certificate Principal
Balances of the [Class A Certificates, Class M Certificates and Class B
Certificates] will be increased, in each case to the extent of Realized Losses
previously allocated thereto and remaining unreimbursed, to the extent of
Subsequent Recoveries in the following order of priority: first to the [Class A
Certificates, pro rata, and then to the Class M-1 Certificates, Class M-2
Certificates, Class M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6 Certificates, Class M-7 Certificates, Class M-8
Certificates and Class B Certificates], in that order.
[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, Class M
Certificates and Class B Certificates then outstanding, which represents the sum
of (i) the Initial Principal Balance of the REMIC III Regular Interest SB-PO, as
reduced by Realized Losses allocated thereto and payments deemed made thereon,
and (ii) accrued and unpaid interest on the REMIC III Regular Interest SB-IO, 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 Basis Risk Shortfall: [With respect to each Class of Class A
Certificates and any Distribution Date for which the Pass-Through Rate for any
such Class of Certificates is equal to the Net WAC Cap Rate, the excess, if any,
of (x) the lesser of (a) Accrued Certificate Interest on that Class of
Certificates on such Distribution Date, calculated at a rate equal to One-Month
LIBOR plus the related Margin, as calculated for such Distribution Date, and (b)
11.00% per
10
annum, over (y) Accrued Certificate Interest on such Class of Class A
Certificates for such Distribution Date calculated at the Net WAC Cap Rate.]
Class A Basis Risk Shortfall Carry-Forward Amount: [With respect to each
Class of Class A Certificates and any Distribution Date, the sum of (a) the
aggregate amount of Class A Basis Risk Shortfall for such Class on such
Distribution Date plus (b) any Class A Basis Risk Shortfall Carry-Forward Amount
for such Class remaining unpaid from the preceding Distribution Date, plus (c)
one month's interest on the amount in clause (b) (based on the number of days in
the preceding Interest Accrual Period), to the extent previously unreimbursed by
Excess Cash Flow or the Swap Agreement pursuant to this Agreement, at a rate
equal to the related Pass-Through Rate.]
Class A Certificates: Collectively, the Class [__] Certificates, Class
[__] Certificates and Class [__] Certificates.
[Class A Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the Principal
Distribution Amount for that Distribution Date or (b) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the Principal Distribution Amount for that Distribution Date; and
(ii) the excess, if any, of (A) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.]
[Class A-1 Certificate: Any one of the Class A-1 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to [the Class M Certificates, the Class
B Certificates], the Class SB Certificates and the Class R Certificates with
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing (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
(iii) the obligation to pay the Class IO Distribution Amount.]
[Class A-1 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class A-2 Certificate: Any one of the Class A-2 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to [the Class M Certificates, the Class
B Certificates], the Class SB Certificates and the Class R Certificates with
respect to distributions and the allocation of Realized Losses in
11
respect of the Mortgage 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 (iii) the obligation to pay the Class IO Distribution Amount.]
[Class A-2 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class A-3 Certificate: Any one of the Class A-3 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to [the Class M Certificates, the Class
B Certificates], the Class SB Certificates and the Class R Certificates with
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing (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
(iii) the obligation to pay the Class IO Distribution Amount.]
[Class A-3 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class B Basis Risk Shortfalls: With respect to the Class B Certificates
and any Distribution Date for which the Pass-Through Rate for such Class of
Certificates is equal to the Net WAC Cap Rate, the excess, if any, of (x)
Accrued Certificate Interest on that Class of Certificates on such Distribution
Date, calculated at a rate equal to LIBOR plus the related Margin, as calculated
for such Distribution Date, over (y) Accrued Certificate Interest on such Class
of Class B Certificates for such Distribution Date calculated at the Net WAC Cap
Rate.]
[Class B Basis Risk Shortfall Carry-Forward Amounts: With respect to the
Class B Certificates and any Distribution Date, the sum of (a) the aggregate
amount of Class B Basis Risk Shortfall on such Distribution Date plus (b) any
Class B Basis Risk Shortfall Carry-Forward Amount remaining unpaid from the
preceding Distribution Date, plus (c) one month's interest on the amount in
clause (b) (based on the number of days in the preceding Interest Accrual
Period), to the extent previously unreimbursed by Excess Cash Flow or the Swap
Agreement pursuant to this Agreement, at a rate equal to the related
Pass-Through Rate.]
[Class B Certificate: Any one of the Class B Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit B-2, senior to the Class SB Certificates and the Class
R Certificates with respect to distributions and the allocation of Realized
Losses in 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
(iii) the obligation to pay the Class IO Distribution Amount.]
12
[Class B Margin: Initially, [__]% per annum, and on any Distribution Date
on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class B Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount, Class M-6 Principal Distribution Amount, the Class M-7
Principal Distribution Amount and the Class M-8 Principal Distribution Amount]
or (b) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount, Class M-6 Principal Distribution Amount, the
Class M-7 Principal Distribution Amount and the Class M-8 Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates,
Class M-7 Certificates and the Class M-8 Certificates (after taking
into account the payment of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount, Class M-6 Principal Distribution Amount, the
Class M-7 Principal Distribution Amount and the Class M-8 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class B Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class IO Distribution Amount: As defined in Section 4.08(f) hereof. For
purposes of clarity, the Class IO Distribution Amount for any Distribution Date
shall equal the amount payable to the Swap Account on such Distribution Date in
excess of the amount payable on REMIC III Regular Interest IO on such
Distribution Date, all as further provided in Section 4.08(b) hereof.]
13
[Class M Basis Risk Shortfall: With respect to each Class of Class M
Certificates and any Distribution Date for which the Pass-Through Rate for any
such Class of Certificates is equal to the Net WAC Cap Rate, the excess, if any,
of (x) the lesser of (a) Accrued Certificate Interest on that Class of
Certificates on such Distribution Date, calculated at a rate equal to One-Month
LIBOR plus the related Margin, as calculated for such Distribution Date, and (b)
11.00% per annum, over (y) Accrued Certificate Interest on such Class of Class M
Certificates for such Distribution Date calculated at the Net WAC Cap Rate.]
[Class M Basis Risk Shortfall Carry-Forward Amount: With respect to each
Class of Class M Certificates and any Distribution Date, the sum of (a) the
aggregate amount of Class M Basis Risk Shortfall for such Class on such
Distribution Date plus (b) any Class M Basis Risk Shortfall Carry-Forward Amount
for such Class remaining unpaid from the preceding Distribution Date, plus (c)
one month's interest on the amount in clause (b) (based on the number of days in
the preceding Interest Accrual Period), to the extent previously unreimbursed by
Excess Cash Flow or the Swap Agreement pursuant to this Agreement, at a rate
equal to the related Pass-Through Rate.]
Class M Certificates: Collectively, the Class [__] Certificates, Class
[__] Certificates, Class [__] Certificates, Class [__] Certificates, Class [__]
Certificates, Class [__] Certificates, Class [__] Certificates and Class [__]
Certificates.
[Class M-1 Certificate: Any one of the Class M-1 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B-1, senior to [the Class [__] Certificates, the
Class [__] Certificates, the Class [__] Certificates, the Class [__]
Certificates, the Class [__] Certificates, the Class [__] Certificates, the
Class [__] Certificates, the Class B Certificates,] the Class SB Certificates
and the Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions, (ii) the right to receive payments under the Swap Agreement and
(iii) the obligation to pay the Class IO Distribution Amount.]
[Class M-1 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-1 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount or (b) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates (after taking into
account the payment of the Class A Principal Distribution Amount for
that Distribution Date) and (2) the
14
Certificate Principal Balance of the Class M-1 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class M-2 Certificate: Any one of the Class M-2 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B-1, senior to [the Class [__] Certificates, the
Class [__] Certificates, the Class [__] Certificates, the Class [__]
Certificates, the Class [__] Certificates, the Class [__] Certificates, the
Class B Certificates,] the Class SB Certificates and the Class R Certificates
with respect to distributions and the allocation of Realized Losses as set forth
in Section 4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC III for purposes of the REMIC Provisions, (ii) the right to
receive payments under the Swap Agreement and (iii) the obligation to pay the
Class IO Distribution Amount.]
[Class M-2 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-2 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount and the Class M-1 Principal Distribution Amount or
(b) on or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount
and the Class M-1 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates and Class M-1
Certificates (after taking into account the payment of the Class A
Principal Distribution Amount and the Class M-1 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-2 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class M-3 Certificate: Any one of the Class M-3 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as
15
Exhibit B-1, senior to [the Class [__] Certificates, the Class [__]
Certificates, the Class [__] Certificates, the Class [__] Certificates, the
Class [__] Certificates, the Class B Certificates,] the Class SB Certificates
and the Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions, (ii) the right to receive payments under the Swap Agreement and
(iii) the obligation to pay the Class IO Distribution Amount.]
[Class M-3 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-3 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution Amount and
the Class M-2 Principal Distribution Amount or (b) on or after the Stepdown Date
if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount and the Class
M-2 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates and Class M-2 Certificates (after taking into account
the payment of the Class A Principal Distribution Amount, the Class
M-1 Principal Distribution Amount and the Class M-2 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-3 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class M-4 Certificate: Any one of the Class M-4 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B-1, senior to the [Class [__] Certificates, the
Class [__] Certificates, the Class [__] Certificates, the Class [__]
Certificates, the Class B Certificates,] the Class SB Certificates and the Class
R Certificates with respect to distributions and the allocation of Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest designated
as a "regular interest" in REMIC III for purposes of the REMIC Provisions, (ii)
the right to receive payments under the Swap Agreement and (iii) the obligation
to pay the Class IO Distribution Amount.]
16
[Class M-4 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-4 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount and the Class M-3 Principal Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount and the Class M-3 Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates and Class M-3 Certificates
(after taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount,
the Class M-2 Principal Distribution Amount and the Class M-3
Principal Distribution Amount for that Distribution Date) and (2)
the Certificate Principal Balance of the Class M-4 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class M-5 Certificate: Any one of the Class M-5 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B-1, senior to [the Class [__] Certificates, the
Class [__] Certificates, the Class [__] Certificates, the Class B Certificates,]
the Class SB Certificates and the Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
III for purposes of the REMIC Provisions, (ii) the right to receive payments
under the Swap Agreement and (iii) the obligation to pay the Class IO
Distribution Amount.]
[Class M-5 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-5 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date
17
after distribution of the Class A Principal Distribution Amount, the Class M-1
Principal Distribution Amount, the Class M-2 Principal Distribution Amount,
Class M-3 Principal Distribution Amount and the Class M-4 Principal Distribution
Amount or (b) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, Class M-3 Principal Distribution
Amount and the Class M-4 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates and
Class M-4 Certificates (after taking into account the payment of the
Class A Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution Amount,
Class M-3 Principal Distribution Amount and the Class M-4 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-5 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class M-6 Certificate: Any one of the Class M-6 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B-1, senior to [the Class [__] Certificates, the
Class [__] Certificates, the Class B Certificates,] the Class SB Certificates
and the Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the REMIC
Provisions, (ii) the right to receive payments under the Swap Agreement and
(iii) the obligation to pay the Class IO Distribution Amount.]
[Class M-6 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-6 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount and the Class M-5 Principal
Distribution Amount or (b) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
18
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount and the Class M-5
Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class
M-4 Certificates and Class M-5 Certificates (after taking into
account the payment of the Class A Principal Distribution Amount,
the Class M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution Amount, Class M-3 Principal Distribution Amount, Class
M-4 Principal Distribution Amount and the Class M-5 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-6 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class M-7 Certificate: Any one of the Class M-7 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B-1, senior to [the Class [__] Certificates, the
Class B Certificates,] the Class SB Certificates and the Class R Certificates
with respect to distributions and the allocation of Realized Losses as set forth
in Section 4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC III for purposes of the REMIC Provisions, (ii) the right to
receive payments under the Swap Agreement and (iii) the obligation to pay the
Class IO Distribution Amount.]
[Class M-7 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-7 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount and the Class M-6 Principal Distribution Amount or (b) on or
after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, Class M-3
19
Principal Distribution Amount, Class M-4 Principal Distribution
Amount, Class M-5 Principal Distribution Amount and the Class M-6
Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class M-5 Certificates and Class M-6 Certificates
(after taking into account the payment of the Class A Principal
Distribution Amount, the Class M-1 Principal Distribution Amount,
the Class M-2 Principal Distribution Amount, Class M-3 Principal
Distribution Amount, Class M-4 Principal Distribution Amount, Class
M-5 Principal Distribution Amount and the Class M-6 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-7 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class M-8 Certificate: Any one of the Class M-8 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B-1, senior to [the Class B Certificates,] the
Class SB Certificates and the Class R Certificates with respect to distributions
and the allocation of Realized Losses as set forth in Section 4.05, and
evidencing (i) an interest designated as a "regular interest" in REMIC III for
purposes of the REMIC Provisions, (ii) the right to receive payments under the
Swap Agreement and (iii) the obligation to pay the Class IO Distribution
Amount.]
[Class M-8 Margin: Initially, [__]% per annum, and on any Distribution
Date on or after the second Distribution Date after the first possible Optional
Termination Date, [__]% per annum.]
[Class M-8 Principal Distribution Amount: With respect to any Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal Distribution Amount, the
Class M-2 Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount, the Class M-6 Principal Distribution Amount and the Class
M-7 Principal Distribution Amount or (b) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution
Amount, the Class M-1 Principal Distribution Amount, the Class M-2
Principal Distribution Amount, Class M-3 Principal Distribution
Amount, Class M-4 Principal Distribution Amount,
20
Class M-5 Principal Distribution Amount, the Class M-6 Principal
Distribution Amount and the Class M-7 Principal Distribution Amount;
and
(ii) the excess, if any, of (A) the sum of (1) the aggregate Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates, Class M-2 Certificates, Class M-3 Certificates, Class
M-4 Certificates, Class M-5 Certificates, Class M-6 Certificates and
Class M-7 Certificates (after taking into account the payment of the
Class A Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the Class M-2 Principal Distribution Amount,
Class M-3 Principal Distribution Amount, Class M-4 Principal
Distribution Amount, Class M-5 Principal Distribution Amount, the
Class M-6 Principal Distribution Amount and the Class M-7 Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-8 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x) the product of (1) the applicable Subordination Percentage and
(2) the aggregate Stated Principal Balance of the Mortgage Loans
after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be made on that Distribution Date, over the Overcollateralization
Floor.]
[Class R Certificate: Any one of the Class [__], Class [__] or Class [__]
Certificates.]
[Class R-I Certificate: Any one of the Class R-I Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC I for purposes of the REMIC Provisions.]
[Class R-II Certificate: Any one of the Class R-II Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC II for purposes of the REMIC Provisions.]
[Class R-III Certificate: Any one of the Class R-III Certificates executed
by the Trustee and authenticated by the Certificate Registrar substantially in
the form annexed hereto as Exhibit D and evidencing an interest designated as a
"residual interest" in REMIC III for purposes of the REMIC Provisions.]
[Class 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, Class
M Certificates and Class B 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 for purposes of the REMIC
Provisions together with certain rights to payments under the Swap Agreement for
purposes of the REMIC Provisions.]
Closing Date: [__________], 20[_].
21
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 [Address of Trustee] Attention: Residential Asset
Mortgage Products, Inc., Series 20[_]-RZ[_].
Credit Repository: Equifax, Transunion and Experian, or their successors
in interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07 in the name of a depository institution, as
custodian for the holders of the Certificates, for the holders of certain other
interests in mortgage loans serviced or sold by the Master Servicer and for the
Master Servicer, into which the amounts set forth in Section 3.07 shall be
deposited directly. Any such account or accounts shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the
Depositor, the Master Servicer, the Trustee and a Custodian in substantially the
form of Exhibit E hereto.
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: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date Balance: $[__________].
Cut-off Date: [____________] 1, 20[_].
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 during the month of
the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in
22
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 May 1 that remained unpaid as of the close
of business on June 30 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.
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
▇▇▇▇▇▇▇ 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
23
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 [__________],
20[_] 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 [__________], 20[_],
among the Trustee on behalf of the Trust Fund, [_________________], 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.
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 [______________], or
(iv) in the case of the Certificate Account, a trust account or accounts
maintained in the corporate trust division of [______________], or (v) an
account or accounts of a depository institution acceptable each Rating Agency
(as evidenced in writing by each Rating Agency that use of any such account as
the Custodial Account or the Certificate Account will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the lower of
the then-current rating or the rating assigned to such Certificates as of the
Closing Date by such Rating Agency.
Eligible Master Servicing Compensation: With respect to any Distribution
Date, the lesser of (a) one-twelfth of [__]% of the Stated Principal Balance of
the Mortgage Loans
24
immediately preceding such Distribution Date and (b) the sum of the Servicing
Fee and all income and gain on amounts held in the Custodial Account and the
Certificate Account and payable to the Certificateholders with respect to such
Distribution Date; provided that for purposes of this definition the amount of
the Servicing Fee will not be reduced pursuant to Section 7.02(a) except as may
be required pursuant to the last sentence of such Section.
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, Class M Certificates and Class B
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, Class M Certificates and Class B
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 Trustee under the Swap Agreement for that Distribution Date.]
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 and Exchange Act of 1934, as amended.
Exchange Date: As defined in Section 5.02(e)(iii).
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.
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
Fitch: Fitch Ratings, or its successors in interest.
Fixed Swap Payment: With respect to any Distribution Date on or prior to
the Distribution Date in [________] 20[_], an amount equal to the product of (x)
a fixed rate equal to [__]%, (y) the Swap Agreement Notional Balance for that
Distribution Date and (z) a fraction, the numerator of which is (a) 19 for the
Distribution Date in [________] 20[_] and (b) 30 for any Distribution Date
occurring after the Distribution Date in [________] 20[_], and the denominator
of which is 360.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
25
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 [__] Certificates, the
Distribution Date occurring in [________] 20[_];with respect to the Class [__]
Certificates, Class [__] Certificates and each Class of Class M Certificates and
Class B Certificates, the Distribution Date occurring in [________] 20[_]. 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, Class M Certificates or Class B Certificates on
or before its Final Scheduled Distribution Date.]
Floating Swap Payment: With respect to any Distribution Date on or prior
to the Distribution Date in [________] 20[_], 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.
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(e).
▇▇▇▇▇▇▇ Mac: ▇▇▇▇▇▇▇ 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.
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 each adjustable-rate Mortgage Loan and as to any
Adjustment Date therefor, the related index as stated in the related Mortgage
Note.
26
Initial Certificate Principal Balance: With respect to each Class of
Certificates (other than the Class R Certificates), the Certificate Principal
Balance of such Class of Certificates as of the Cut-off Date as set forth in the
Preliminary Statement hereto.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Insurance Policy or any other related insurance policy
covering a Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under the Mortgage, any Subservicer, the Master Servicer or the
Trustee and are not applied to the restoration of the related Mortgaged Property
or released to the Mortgagor in accordance with the procedures that the Master
Servicer would follow in servicing mortgage loans held for its own account.
[Interest Accrual Period: With respect to the Class [_] Certificates,
Class [_] Certificates, Class [_] Certificates and Class [_] Certificates (i)
with respect to the Distribution Date in [_______] 20[_], the period commencing
the Closing Date and ending on the day preceding the Distribution Date in
[_______] 20[_], and (ii) with respect to any Distribution Date after the
Distribution Date in [_______] 20[_], 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)-(iii)].
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 Business Day: Any day other than (i) a Saturday or Sunday or (ii) a
day on which banking institutions in London, England are required or authorized
to by law to be closed.
LIBOR Certificates: [The Class A Certificates, Class M Certificates and
Class B 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-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
27
determination and the denominator of which is the Appraised Value of the related
Mortgaged Property.
Margin: The [Class A-1 Margin, Class A-2 Margin, Class A-3 Margin, Class
M-1 Margin, Class M-2 Margin, Class M-3 Margin, Class M-4 Margin, Class M-5
Margin, Class M-6 Margin, Class M-7 Margin, Class M-8 Margin and Class B Margin,
as applicable.]
[Marker Rate: With respect to the Class SB Certificates or REMIC III
Regular Interest SB-IO and any Distribution Date, in relation to the 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].
Master Servicer: As defined in the preamble hereto.
Maturity Date: With respect to each Class of Certificates of regular
interest or Uncertificated Regular Interest issued by any REMIC hereunder, 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, [_________], 20[_], which is the Distribution Date occurring
in the month following the last scheduled monthly payment of the Mortgage Loans.
Maximum Mortgage Rate: As to any adjustable-rate Mortgage Loan, the per
annum rate indicated in Exhibit F hereto as the "NOTE CEILING," which rate is
the maximum interest rate that may be applicable to such Mortgage Loan at any
time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: As to any adjustable-rate Mortgage Loan and any
date of determination, the Maximum Mortgage Rate minus the sum of the per annum
rate at which the Subservicing Fee accrues and the Servicing Fee Rate. With
respect to any fixed-rate Mortgage Loan and any date of determination, the Net
Mortgage Rate.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R) System.
Minimum Mortgage Rate: As to any adjustable-rate Mortgage Loan, a per
annum rate equal to the greater of (i) the Note Margin and (ii) the rate
indicated in Exhibit F hereto as the "NOTE FLOOR," which rate may be applicable
to such Mortgage Loan at any time during the life of such adjustable-rate
Mortgage Loan.
28
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: ▇▇▇▇▇'▇ Investors Service, Inc., or its successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan,
the mortgage, deed of trust or other comparable instrument creating a first or
junior lien on an estate in fee simple 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 attached hereto as Exhibit F,
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 (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) the state, city and zip code of the Mortgaged Property;
(iii) the maturity of the Mortgage Note ("MATURITY DATE," or "MATURITY DT"
for Mortgage Loans and if such Mortgage Loan is a Balloon Loan, the
amortization term thereof;
29
(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");
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T," "BT" or "CT" under the column "LN FEATURE," indicating
that the Mortgage Loan is secured by a second or vacation residence
(the absence of any such code means the Mortgage Loan is secured by
a primary residence); and
(xi) a code "N" under the column "OCCP CODE," indicating that the
Mortgage Loan is secured by a non-owner occupied residence (the
absence of any such code means the Mortgage Loan is secured by an
owner occupied residence).
(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");
Such schedule 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
30
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 Adjusted Mortgage Rate for such
Mortgage Loan as of such date minus the Servicing 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 Trustee, on behalf of the Trust, which net payment
shall not take into account any Swap Termination Payment.
Net WAC Cap Rate: [With respect to any Distribution Date and the Class A
Certificates, Class M Certificates and Class B Certificates, a per annum rate
(which will not be less than zero) equal to (i) the product of (a) weighted
average of the Net Mortgage Rates (or, if applicable, the Modified Net Mortgage
Rates) on the Mortgage Loans using the Net Mortgage Rates in effect for the
Monthly Payments due on such Mortgage Loans during the related Due Period,
weighted on the basis of the respective Stated Principal Balances thereof for
such Distribution Date, (b) 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, 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 due 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.]
Non-Primary Residence Loans: [The Mortgage Loans designated as secured by
second or vacation residences, or by non-owner occupied residences, on the
Mortgage Loan Schedule.] Non-United States Person: Any Person other than a
United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be made
by the Master Servicer or Subservicer in respect of a Mortgage Loan (other than
a Deleted Mortgage Loan) which, in the good faith judgment of the Master
Servicer, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds or REO Proceeds. To the extent that any
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
31
available to it, such Servicing Advances shall be deemed to be Nonrecoverable
Advances. The determination by the Master Servicer that it has made a
Nonrecoverable Advance shall be evidenced by an Officers' Certificate delivered
to the Depositor, the Trustee and the Master Servicer. 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.
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.
One-Month LIBOR: With respect to any Distribution Date, the arithmetic
mean of the London interbank offered rate quotations for one-month United States
dollar deposits, determined on the preceding LIBOR Rate Adjustment Date as set
forth in Section 1.02 hereof.
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, Class M and Class B Certificates] immediately prior to such date.
32
Overcollateralization Floor: With respect to the Mortgage Loans, an amount
equal to the product of (a) [0.50]% and (b) 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, to the extent 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 for 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, Class M and
Class B Certificates and any Distribution Date, the least of (i) One-Month LIBOR
plus the related Margin, (ii) the related Net WAC Cap Rate and (iii) [11.00]%
per annum.]
[With respect to the Class SB Certificates or REMIC III Regular Interest
SB-IO and any Distribution Date, a per annum rate equal to the percentage
equivalent of a fraction, the numerator of which is the sum of the amounts
calculated pursuant to clauses (i) through (iii) 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 or
REMIC III Regular Interest SB-IO, 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.]
Paying Agent: [________________] or any successor Paying Agent appointed
by the Trustee.
Percentage Interest: With respect to any [Class A Certificate, Class M
Certificate or Class B Certificate,] the undivided percentage ownership interest
in the related Class evidenced
33
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 as a Permitted Investment hereunder and will not reduce the
rating assigned to any
34
Class of Certificates by such Rating Agency below the then-current
rating 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.
Prepayment Assumption: [With respect to the [Class A, Class M and Class B]
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 4% per annum of the then
outstanding principal balance of the Mortgage Loans in the first month of the
life of the fixed-rate Mortgage Loans, and an additional approximate 1.9091% per
annum in each month thereafter until the twelfth month, and then beginning in
the twelfth month and in each month thereafter during the life of the fixed-rate
Mortgage Loans, a constant prepayment rate of 25.0% per annum each month and (b)
with respect to the adjustable-rate Mortgage Loans, assumes a constant
prepayment rate of 4% per annum of the then outstanding principal balance of the
adjustable-rate Mortgage Loans in the first month of the life of the
adjustable-rate Mortgage Loans, and an additional approximate 2.8182% per annum
in each month thereafter until the twelfth month, and then beginning in the
twelfth month and in each month thereafter during the life of the
adjustable-rate Mortgage Loans, a constant prepayment rate of 35% per annum each
month.]
35
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: With respect to any Mortgage Loan, each primary
policy of mortgage guaranty insurance or replacement policy therefor. Each
Mortgage Loan with a Primary Insurance Policy is identified on Exhibit F with
the exception of either code "23" or "96" under the column "MI CO CODE."
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, any Net Swap Payments
received by the Trustee under the Swap Agreement 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
36
(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) 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; and
(ix) any Net Swap Payments or Swap Termination Payment not due to a Swap
Counterparty Trigger Event due to the Swap Counterparty to the
extent not previously paid from interest or principal collections on
the Mortgage Loans.
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 Residential Funding Seller Guide for mortgage
collateral sellers that participate in Residential Funding's standard mortgage
programs, and Residential Funding's Servicing Guide and any other subservicing
arrangements which Residential Funding has arranged to accommodate the servicing
of the Mortgage Loans.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to Section 2.02,
2.03, 2.04 or 4.07, an amount equal to the sum of (i) if such Mortgage Loan (or
REO Property) is being purchased pursuant to Sections 2.02, 2.03, 2.04 or 4.07
of this Agreement, 100% of the Stated Principal Balance thereof plus the
principal portion of any related unreimbursed Advances and (ii) unpaid accrued
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the
rate per annum at which the Servicing Fee is calculated in the case of a
Modified Mortgage Loan) (or at the Net Mortgage Rate (or Modified Net Mortgage
Rate in the case of a Modified Mortgage Loan)) 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.
37
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 Note Margin not less than that of the Deleted Mortgage Loan;
(v) have a Periodic Rate Cap that is equal to that of the Deleted
Mortgage Loan;
(vi) have a next Adjustment Date no later than that of the Deleted
Mortgage Loan;
(vii) have a remaining term to stated maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan; and
(viii) comply with each representation and warranty set forth in Sections
2.03 and 2.04 hereof and Section 4 of the Assignment Agreement.
Rating Agency: [Each of Fitch, 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 from the
Due Date as to which interest was last paid or advanced to Certificateholders up
to the last day of the month in which the Cash Liquidation (or REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied as recoveries
of interest at the Net Mortgage Rate and to principal of the Mortgage Loan, net
of the portion thereof reimbursable to the Master Servicer or any Subservicer
with respect to related Advances, Servicing Advances or other
38
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 allocated to the Class SB Certificates shall be allocated
first to the REMIC III Regular Interest SB-IO in reduction of the accrued but
unpaid interest thereon until such accrued and unpaid interest shall have been
reduced to zero and then to the REMIC III Regular Interest SB-PO 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 [the Class A Certificates, Class M
Certificates and Class B Certificates] and each Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date. With
respect to [the Class SB and Class R Certificates,] and each Distribution Date,
the close of business on the last Business Day of the month next preceding the
month in which the related Distribution Date occurs or, with respect to the
first Distribution Date, the Closing Date.
Reference Bank Rate: As defined in Section 1.02.
Regular Certificates: [The Class A Certificates, Class M Certificates,
Class B Certificates and Class SB Certificates.]
39
Regular Interest: Any one of the REMIC regular interests in the Trust
Fund.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Relief Act: The Servicemembers Civil Relief Act, formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940.
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 Net WAC Rate: For any Distribution Date, a per annum rate equal to
the product of (i) the weighted average of the Net Mortgage Rates (or, if
applicable, the Modified Net Mortgage Rates) on the Mortgage Loans using the Net
Mortgage Rates in effect for the Monthly Payments due on such Mortgage Loans
during the related Due Period, weighted on the basis of the respective Stated
Principal Balances thereof for such Distribution Date and (ii) a fraction equal
to 30 divided by the actual number of days in the related Interest Accrual
Period. The foregoing rate is equal to the weighted average of the
Uncertificated REMIC I Pass-Through Rates with respect to the REMIC I Regular
Interests, weighted in each case by their respective Uncertificated Principal
Balances.
[REMIC I: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, 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.
40
[REMIC I Distribution Amount: For any Distribution Date, the REMIC I
Available Distribution Amount shall be distributed to REMIC II in respect of the
REMIC I Regular Interests and the Class R-I Certificates in the following
amounts and priority:
(a) to REMIC I Regular Interest A-I and REMIC I Regular Interest I-1-A
through I-48-B, pro rata, in an amount equal to (A) Uncertificated Accrued
Interest for such REMIC I Regular Interests for such Distribution Date, plus (B)
any amounts payable in respect thereof remaining unpaid from previous
Distribution Dates; and
(b) to the extent of amounts remaining after the distributions made
pursuant to clause (a) above, payments of principal shall be allocated as
follows: first, to REMIC I Regular Interests I-1-A through I-48-B starting with
the lowest numerical denomination 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 denomination, such payments of
principal shall be allocated pro rata between such REMIC I Regular Interests and
second, to the extent of any Overcollateralization Reduction Amount to REMIC I
Regular Interest A-I until the Uncertificated Principal Balance of such REMIC I
Regular Interest is reduced to zero.]
[REMIC I Interests: The REMIC I Regular Interests and the Class R-I
Certificates.]
[REMIC I Realized Losses: All Realized Losses on the Mortgage Loans shall
be allocated first, on each Distribution Date, to REMIC I Regular Interest A-I
until such REMIC I Regular Interest has been reduced to zero. Second, Realized
Losses shall be allocated to REMIC I Regular Interest I-1-A through REMIC I
Regular Interest I-48-B, starting with the lowest numerical denomination until
such REMIC I Regular Interest has been reduced to zero, provided that, for REMIC
I Regular Interests with the same numerical denomination, such Realized Losses
shall be allocated pro rata between such REMIC I Regular Interests.]
[REMIC I Regular Interest: Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular
interest" in REMIC I. Each REMIC I Regular Interest shall accrue interest at the
related Uncertificated REMIC I Pass-Through Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.]
[REMIC I Regular Interest A-I: A regular interest in REMIC I that is held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.]
[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.]
41
[REMIC II Available Distribution Amount: For any Distribution Date, the
amount distributed from REMIC I to REMIC II on such Distribution Date in respect
of the REMIC I Regular Interests.]
[REMIC II Distribution Amount: For any Distribution Date, the REMIC II
Available Distribution Amount shall be distributed to REMIC III in respect of
the REMIC II Regular Interests and the Class R-II Certificates in the following
amounts and priority:
(a) to REMIC II Regular Interest LT-IO, in an amount equal to (i)
Uncertificated Accrued Interest for such REMIC II Regular Interest for such
Distribution Date, plus (ii) any amounts in respect thereof remaining unpaid
from previous Distribution Dates;
(b) to the extent of amounts remaining after the distributions made
pursuant to clause (a) above, to REMIC II Regular Interests LT1, LT2, LT3 and
LT4, pro rata, in an amount equal to (i) their Uncertificated Accrued Interest
for such Distribution Date, plus (ii) any amounts in respect thereof remaining
unpaid from previous Distribution Dates; and
(c) to the extent of amounts remaining after the distributions made
pursuant to clauses (a) and (b) above:
(i) to REMIC I Regular Interests LT2, LT3 and LT4, their
respective Principal Distribution Amounts;
(ii) to REMIC I Regular Interest LT1 any remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
(iii) any remainder to 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 (i) 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-II Certificates, any remaining
amount.]
[REMIC II Net WAC Rate: With respect to any Distribution Date, a per annum
rate equal to the weighted average of (x) with respect to REMIC I Regular
Interests ending with the designation "B", the weighted average of the
Uncertificated REMIC I Pass-Through Rates for
42
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, (y) with respect to REMIC I Regular Interest A-I, 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-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[2] [I-2-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A] [Uncertificated REMIC I Pass-Through Rate]
[3] [I-3-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A and I-2-A] [Uncertificated REMIC I Pass-Through Rate]
[4] [I-4-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-3-A] [Uncertificated REMIC I Pass-Through Rate]
[5] [I-5-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-4-A] [Uncertificated REMIC I Pass-Through Rate]
[6] [I-6-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-5-A] [Uncertificated REMIC I Pass-Through Rate]
[7] [I-7-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-6-A] [Uncertificated REMIC I Pass-Through Rate]
[8] [I-8-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-7-A] [Uncertificated REMIC I Pass-Through Rate]
[9] [I-9-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-8-A] [Uncertificated REMIC I Pass-Through Rate]
[10] [I-10-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-9-A] [Uncertificated REMIC I Pass-Through Rate]
[11] [I-11-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-10-A] [Uncertificated REMIC I Pass-Through Rate]
[12] [I-12-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-11-A] [Uncertificated REMIC I Pass-Through Rate]
[13] [I-13-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-12-A] [Uncertificated REMIC I Pass-Through Rate]
[14] [I-14-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-13-A] [Uncertificated REMIC I Pass-Through Rate]
[15] [I-15-A through I-49-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]
43
Distribution
Date REMIC I Regular Interest Rate
------------ ------------------------ ------------------------------------------------------------------------
[16] [I-16-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-15-A] [Uncertificated REMIC I Pass-Through Rate]
[17] [I-17-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-16-A] [Uncertificated REMIC I Pass-Through Rate]
[18] [I-18-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-17-A] [Uncertificated REMIC I Pass-Through Rate]
[19] [I-19-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-18-A] [Uncertificated REMIC I Pass-Through Rate]
[20] [I-20-A through I-49-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]
[21] [I-21-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-20-A] [Uncertificated REMIC I Pass-Through Rate]
[22] [I-22-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-21-A] [Uncertificated REMIC I Pass-Through Rate]
[23] [I-23-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-22-A] [Uncertificated REMIC I Pass-Through Rate]
[24] [I-24-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-23-A] [Uncertificated REMIC I Pass-Through Rate]
[25] [I-25-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-24-A] [Uncertificated REMIC I Pass-Through Rate]
[26] [I-26-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-25-A] [Uncertificated REMIC I Pass-Through Rate]
[27] [I-27-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-26-A] [Uncertificated REMIC I Pass-Through Rate]
[28] [I-28-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-27-A] [Uncertificated REMIC I Pass-Through Rate]
[29] [I-29-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-28-A] [Uncertificated REMIC I Pass-Through Rate]
[30] [I-30-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-29-A] [Uncertificated REMIC I Pass-Through Rate]
[31] [I-31-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-30-A] [Uncertificated REMIC I Pass-Through Rate]
[32] [I-32-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-31-A] [Uncertificated REMIC I Pass-Through Rate]
[33] [I-33-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-32-A] [Uncertificated REMIC I Pass-Through Rate]
[34] [I-34-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
44
Distribution
Date REMIC I Regular Interest Rate
------------ ------------------------ ------------------------------------------------------------------------
[I-1-A through I-33-A] [Uncertificated REMIC I Pass-Through Rate]
[35] [I-35-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-34-A] [Uncertificated REMIC I Pass-Through Rate]
[36] [I-36-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-35-A] [Uncertificated REMIC I Pass-Through Rate]
[37] [I-37-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-36-A] [Uncertificated REMIC I Pass-Through Rate]
[38] [I-38-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-37-A] [Uncertificated REMIC I Pass-Through Rate]
[39] [I-39-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-38-A] [Uncertificated REMIC I Pass-Through Rate]
[40] [I-40-A through I-49-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]
[41] [I-41-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-40-A] [Uncertificated REMIC I Pass-Through Rate]
[42] [I-42-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-41-A] [Uncertificated REMIC I Pass-Through Rate]
[43] [I-43-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-42-A] [Uncertificated REMIC I Pass-Through Rate]
[44] [I-44-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-43-A] [Uncertificated REMIC I Pass-Through Rate]
[45] [I-45-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-44-A] [Uncertificated REMIC I Pass-Through Rate]
[46] [I-46-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-45-A] [Uncertificated REMIC I Pass-Through Rate]
[47] [I-47-A through I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-46-A] [Uncertificated REMIC I Pass-Through Rate]
[48] [I-48-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-47-A] [Uncertificated REMIC I Pass-Through Rate]
[49] [I-49-A] [2 multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate]
[I-1-A through I-49-A] [Uncertificated REMIC I Pass-Through Rate]
[Thereafter] [I-1-A through I-49-A] [Uncertificated REMIC I Pass-Through Rate]
[REMIC II Principal Reduction Amounts: For any Distribution Date, the
amounts by which the principal balances of the REMIC II Regular ▇▇▇▇▇▇▇▇▇ [▇▇▇],
[▇▇▇], [LT3] and [LT4], respectively will be reduced on such Distribution Date
by the allocation of Realized Losses and the distribution of principal,
determined as follows:
45
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
Y1 = the principal balance of the REMIC II Regular Interest LT1
after distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2
after distributions on the prior Distribution Date.
Y3 = the principal balance of the REMIC II Regular Interest LT3
after distributions on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4
after distributions on the prior Distribution Date (note: Y3 =
Y4).
(delta)Y1 = the REMIC II Regular Interest LT1 Principal Reduction Amount.
(delta)Y2 = the REMIC II Regular Interest LT2 Principal Reduction Amount.
(delta)Y3 = the REMIC II Regular Interest LT3 Principal Reduction Amount.
(delta)Y4 = the REMIC II Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate 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 principal balance of the REMIC II Regular
Interest LT1, LT2, LT3 and LT4 after distributions and the
allocation of Realized Losses to be made on such Distribution
Date.
(delta)P = P0 - P1 = the aggregate of the REMIC II Regular Interest LT1,
LT2, LT3 and LT4 Principal Reduction Amounts.
= the aggregate of the principal portions of Realized Losses to
be allocated to, and the principal distributions to be made
on, the Certificates on such Distribution Date (including
distributions of accrued and unpaid interest on the Class SB
Certificates for prior Distribution Dates).
R0 = the REMIC Net WAC Rate (stated as a monthly rate) after giving
effect to amounts distributed and Realized Losses allocated on
the prior Distribution Date.
46
R1 = the REMIC Net WAC Rate (stated as a monthly rate) after giving
effect to amounts to be distributed and Realized Losses to be
allocated on such Distribution Date.
(alpha) = (Y2 + Y3)/P0. The initial value of (alpha) on the Closing Date
for use on the first Distribution Date shall be 0.0001.
(gamma)0 = the lesser of (A) the sum for all Classes of Certificates
other than the Class SB Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the
REMIC Net WAC Rate, if applicable) for such Class applicable
for distributions to be made on such Distribution Date and
(ii) the aggregate Certificate Principal Balance for such
Class after distributions and the allocation of Realized
Losses on the prior Distribution Date and (B) R0*P0.
(gamma)1 = the lesser of (A) the sum for all Classes of Certificates
other than the Class SB Certificates of the product for each
Class of (i) the monthly interest rate (as limited by the
REMIC Net WAC Rate, if applicable) for such Class applicable
for distributions to be made on the next succeeding
Distribution Date and (ii) the aggregate Certificate Principal
Balance for such Class after distributions and the allocation
of Realized Losses to be made on such Distribution Date and
(B) R1*P1.
Then, based on the foregoing definitions:
(delta)Y1 = AP - AY2 - AY3 - AY4;
(delta)Y2 = ((alpha)A2){( (gamma)0R1 - (gamma)1R0)/R0R1};
(delta)Y3 = (alpha)AP - AY2; and
(delta)Y4 = AY3.
if both (delta)Y2 and (delta)Y3, as so determined, are non-negative numbers.
Otherwise:
(1) If (delta)Y2, as so determined, is negative, then
(delta)Y2 = 0;
(delta)Y3 = (▇▇▇▇▇){(▇▇▇▇▇)▇▇▇▇▇ - (▇▇▇▇▇)▇▇▇▇▇} (▇▇▇▇▇)▇▇▇};
(▇▇▇▇▇)▇▇ = (delta)Y3; and
(delta)Y1 = (delta)P - (delta)Y2 - (delta)Y3 - (delta)Y4.
47
(2) If (delta)Y3, as so determined, is negative, then
(delta)Y3 = 0;
(delta)Y2 = (▇▇▇▇▇){(▇▇▇▇▇)▇▇▇▇▇ - (▇▇▇▇▇)▇▇▇▇▇}/{▇▇▇▇▇▇▇ - (▇▇▇▇▇)▇▇▇};
(▇▇▇▇▇)▇▇ = (delta)Y3; and
(delta)Y1 = (delta)P - (delta)Y2 - (delta)Y3 - (delta)Y4.]
[REMIC II Realized Losses: Realized Losses on the Mortgage Loans shall be
allocated to the REMIC II Regular Interests as follows. The interest portion of
Realized Losses on the Mortgage Loans, if any, shall be allocated among REMIC II
Regular ▇▇▇▇▇▇▇▇▇ [▇▇▇], [▇▇▇] and [LT4], pro rata according to the amount of
interest accrued but unpaid thereon, in reduction thereof. Any interest portion
of such Realized Losses in excess of the amount allocated pursuant to the
preceding sentence shall be treated as a principal portion of Realized Losses
not attributable to any specific Mortgage Loan and allocated pursuant to the
succeeding sentences. The principal portion of Realized Losses with respect to
Mortgage Loans shall be allocated to the REMIC II Regular Interests as follows:
first, to REMIC II Regular ▇▇▇▇▇▇▇▇▇ [▇▇▇], [▇▇▇] 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, second, 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.
[REMIC II Regular Interests: REMIC II Regular Interest [LT1], REMIC II
Regular Interest [LT2], REMIC II Regular Interest [LT3], REMIC II Regular
Interest [LT4] and REMIC II Regular Interest [LT-IO].]
[REMIC II Regular Interest LT1: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.]
[REMIC II Regular Interest 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 the REMIC II Regular Interest LT1 on such Distribution Date.]
[REMIC II Regular Interest LT2: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.]
[REMIC II Regular Interest LT2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC II Regular Interest LT2
Principal Reduction Amount for
48
such Distribution Date over the Realized Losses allocated to the REMIC II
Regular Interest LT2 on such Distribution Date.]
[REMIC II Regular Interest LT3: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.]
[REMIC II Regular Interest 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 the REMIC II Regular Interest LT3 on such Distribution Date.]
[REMIC II Regular Interest LT4: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.]
[REMIC II Regular Interest 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 the REMIC II Regular Interest LT4 on such Distribution Date.]
[REMIC II Regular Interest LT-IO: A regular interest in REMIC II that is
held as an asset of REMIC III, that has an initial principal balance equal to
the related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such other terms as are
described herein.]
[REMIC III: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC II Regular Interests.]
[REMIC III Regular Interest SB-PO: A separate non-certificated beneficial
ownership interests in REMIC III issued hereunder and designated as a Regular
Interest in REMIC III. REMIC III Regular Interest SB-PO shall have no
entitlement to interest, and shall be entitled to distributions of principal
subject to the terms and conditions hereof, in aggregate amount equal to the
initial Certificate Principal Balance of the Class SB Certificates as set forth
in the Preliminary Statement hereto.]
[REMIC III Regular Interest SB-IO: A separate non-certificated beneficial
ownership interests in REMIC III issued hereunder and designated as a Regular
Interest in REMIC III. REMIC III Regular Interest SB-IO shall have no
entitlement to principal, and shall be entitled to distributions of interest
subject to the terms and conditions hereof, in aggregate amount equal to the
interest distributable with respect to the Class SB Certificates pursuant to the
terms and conditions hereof.]
[REMIC III Regular Interest IO: A separate non-certificated beneficial
ownership interests in REMIC III issued hereunder and designated as a Regular
Interest in REMIC III.
49
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, SB-PO and
IO, together with the Class A Certificates, Class M Certificates and Class B
Certificates.]
REMIC Provisions: Provisions of the federal income tax law relating to
real estate mortgage investment conduits, which appear at Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related provisions, and
temporary and final regulations (or, to the extent not inconsistent with such
temporary or final regulations, proposed regulations) and published rulings,
notices and announcements promulgated thereunder, as the foregoing may be in
effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
REO Disposition: 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 Net Mortgage Rate that
would have been applicable to the related Mortgage Loan had it been outstanding)
on the unpaid principal balance of the Mortgage Loan as of the date of
acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property) which proceeds are required to be deposited into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer on
behalf of the Trust Fund for the benefit of the Certificateholders through
foreclosure or deed in lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been
subject to an interest rate reduction, (ii) has been subject to a term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized by adding such
amount to the Stated Principal Balance of such Mortgage Loan; provided, however,
that a Mortgage Loan modified in accordance with clause (i) above for a
temporary period shall not be a Reportable Modified Mortgage Loan if such
Mortgage Loan has not been delinquent in payments of principal and interest for
six months since the date of such modification if that interest rate reduction
is not made permanent thereafter.
Repurchase Event: As defined in the Assignment Agreement.
50
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 [__]% 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 [__]% 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 or (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 so
long as written confirmation is obtained from each Rating Agency that such
reduction shall not reduce the ratings 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.]
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 with direct responsibility for the administration of this Agreement.
Restricted Class A Certificate: As defined in Section 5.02(e).
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect from
time to time.
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 Enhancement Percentage: [For any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is the sum of (i) the
aggregate Certificate Principal Balance of the [Class M Certificates and Class B
Certificates] and (ii) the Overcollateralization Amount,
51
in each case prior to the distribution of the Principal Distribution Amount on
such Distribution Date and the denominator of which is the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to
be made on that Distribution Date.]
Servicing Accounts: The account or accounts created and maintained
pursuant to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event by the Master Servicer or a Subservicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
including any expenses incurred in relation to any such proceedings that result
from the Mortgage Loan being registered on the MERS(R) System, (iii) the
management and liquidation of any REO Property, (iv) any mitigation procedures
implemented in accordance with Section 3.07, and (v) compliance with the
obligations under Sections 3.01, 3.08, 3.12(a) and 3.14, including, if the
Master Servicer or any Affiliate of the Master Servicer provides services such
as appraisals and brokerage services that are customarily provided by Persons
other than servicers of mortgage loans, reasonable compensation for such
services.
Servicing 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, 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.
52
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date
on or after the Stepdown Date, 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
foreclosure and REO Properties, over (y) the aggregate Stated Principal Balance
of the Mortgage Loans immediately preceding that Distribution Date.
Standard & Poor's: Standard & Poor's Ratings Services, a Division of The
▇▇▇▇▇▇-▇▇▇▇ 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 allocated to Certificateholders
with respect thereto for any previous Distribution Date.
Stepdown Date: [That Distribution Date which is the later to occur of (i)
the Distribution Date in [_______] 20[_] and (ii) the first Distribution Date on
which the Senior Enhancement Percentage is equal to or greater than [__]%.
Subordination: The provisions described in Section 4.05 relating to the
allocation of Realized Losses other than a pro rata basis.
Subordination Percentage: With respect to any Class of [Class A
Certificates, Class M Certificates or Class B Certificates], the respective
percentage set forth below.
Class Percentage Class Percentage
[__] [__]% [__] [__]%
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
53
or an REO Disposition prior to the related Prepayment Period and that resulted
in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in
the Program Guide in respect of the qualification of a Subservicer as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and interest
on a Mortgage Loan which is advanced by the related Subservicer (net of its
Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Depositor.
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.
Swap Account: The separate trust account created and maintained by the
Trustee pursuant to Section 4.08(a).
Swap Agreement: The interest rate swap agreement between the Swap
Counterparty and the Trustee, on behalf of the Trust, which agreement provides
for Net Swap Payments and Swap Termination Payments to be paid, as provided
therein, together with any schedules, confirmations or other agreements relating
thereto, attached hereto as Exhibit S.
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 Exhibit R hereto for such
Floating Rate Payer Payment Date.
Swap Counterparty: The swap counterparty under the Swap Agreement either
(a) entitled to receive payments from the Trustee from amounts payable by the
Trust Fund under this Agreement or (b) required to make payments to the Trustee
for payment to the Trust Fund, 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 ▇▇▇▇▇▇▇ Financial Products Inc.
54
Swap Counterparty Trigger Event: With respect to any Distribution Date,
(i) an Event of Default under the Swap Agreement with respect to which the Swap
Counterparty is a Defaulting Party, (ii) a Termination Event under the Swap
Agreement with respect to which the Swap Counterparty is the sole Affected
Party, or (iii) an additional termination event under the Swap Agreement with
respect to which the Swap Counterparty is the sole Affected Party.
Swap LIBOR: LIBOR as determined pursuant to the Swap Agreement.
Swap Termination Payment: Upon the designation of an "Early Termination
Date" as defined in the Swap Agreement, the payment to be made by the Trustee on
behalf of the Trust to the Swap Counterparty from payments from the Trust Fund,
or by the Swap Counterparty to the Trustee for payment to the Trust Fund, 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.
Transaction Party: As defined in Section 12.02(a).
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or
other form of assignment of any Ownership Interest in a Certificate.
Transfer Affidavit and Agreement: As defined in Section 5.02(e).
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 if either (a) on or after the Stepdown Date the Sixty-Plus
Delinquency Percentage for that Distribution Date exceeds [__]% of the current
Senior Enhancement Percentage or (b) on or after the Distribution Date in
[________] 20[_], 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:
[________] 20[_] to [________] 20[_]: [__]% with respect to [________] 20[_],
plus an additional 1/12th of [__]% for
each month thereafter;
55
[________] 20[_] to [________] 20[_]: [__]% with respect to [________] 20[_],
plus an additional 1/12th of [__]% for
each month thereafter;
[________] 20[_] to [________] 20[_]: [__]% with respect to [________] 20[_],
plus an additional 1/12th of [__]% for
each month thereafter;
[________] 20[_] and thereafter: [__]%.
Trustee: As defined in the preamble hereto.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Trust Fund: Collectively, the assets of each REMIC hereunder.
[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 the REMIC II Regular
Interests, pro rata, based on, and to the extent of, Uncertificated Accrued
Interest, as calculated without application of this sentence. Uncertificated
Interest on REMIC III Regular Interest SB-PO shall be zero. Uncertificated
Accrued Interest on the REMIC III Regular Interest SB-IO for each Distribution
Date shall equal Accrued Certificate Interest for the Class SB Certificates.]
[Uncertificated Notional Amount: With respect to the Class SB Certificates
or the REMIC III Regular Interest SB-IO, immediately prior to any Distribution
Date, the aggregate of the Uncertificated Principal Balances of the REMIC II
Regular Interests.
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 I-49-A]
56
Distribution Date REMIC I Regular Interests
----------------- -------------------------
[2] [I-2-A through I-49-A]
[3] [I-3-A through I-49-A]
[4] [I-4-A through I-49-A]
[5] [I-5-A through I-49-A]
[6] [I-6-A through I-49-A]
[7] [I-7-A through I-49-A]
[8] [I-8-A through I-49-A]
[9] [I-9-A through I-49-A]
[10] [I-10-A through I-49-A]
[11] [I-11-A through I-49-A]
[12] [I-12-A through I-49-A]
[13] [I-13-A through I-49-A]
[14] [I-14-A through I-49-A]
[15] [I-15-A through I-49-A]
[16] [I-16-A through I-49-A]
[17] [I-17-A through I-49-A]
[18] [I-18-A through I-49-A]
[19] [I-19-A through I-49-A]
[20] [I-20-A through I-49-A]
[21] [I-21-A through I-49-A]
[22] [I-22-A through I-49-A]
[23] [I-23-A through I-49-A]
[24] [I-24-A through I-49-A]
[25] [I-25-A through I-49-A]
[26] [I-26-A through I-49-A]
[27] [I-27-A through I-49-A]
[28] [I-28-A through I-49-A]
[29] [I-29-A through I-49-A]
[30] [I-30-A through I-49-A]
[31] [I-31-A through I-49-A]
[32] [I-32-A through I-49-A]
[33] [I-33-A through I-49-A]
[34] [I-34-A through I-49-A]
[35] [I-35-A through I-49-A]
[36] [I-36-A through I-49-A]
[37] [I-37-A through I-49-A]
[38] [I-38-A through I-49-A]
[39] [I-39-A through I-49-A]
[40] [I-40-A through I-49-A]
[41] [I-41-A through I-49-A]
[42] [I-42-A through I-49-A]
[43] [I-43-A through I-49-A]
[44] [I-44-A through I-49-A]
[45] [I-45-A through I-49-A]
[46] [I-46-A through I-49-A]
[47] [I-47-A through I-49-A]
[48] [I-48-A through I-49-A]
[49] [I-49-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.]
57
[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 the initial
amount set forth with respect thereto in the Preliminary Statement as reduced by
distributions deemed made in respect thereof pursuant to Section 4.02 and
Realized Losses allocated thereto pursuant to Section 4.05.]
[Uncertificated 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 Net Mortgage Rate of the Mortgage Loans multiplied by two (2),
subject to a maximum rate of [___]%. With respect to each REMIC I Regular
Interest ending with the designation "B", the greater of (x) a per annum rate
equal to the excess, if any, of (i) 2 multiplied by the weighted average Net
Mortgage Rate of the Mortgage Loans over (ii) [___]% and (y) 0.00000%. With
respect to REMIC I Regular Interest A-I, the weighted average Net Mortgage Rate
of the Mortgage Loans.]
[Uncertificated REMIC II Pass-Through Rate: With respect to any
Distribution Date and (i) REMIC II Regular Interests LT1 and LT2, the REMIC II
Net WAC Rate, (ii) REMIC II Regular Interest LT3, zero (0.00%), (iii) REMIC II
Regular Interest LT4, twice the REMIC II Net WAC Rate, and (iv) 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 March 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. [___]% of all of the Voting Rights shall
be allocated among Holders
58
of the Class A Certificates, the Class M Certificates and the Class B
Certificates in proportion to the outstanding Certificate Principal Balances of
their respective Certificates; [___]% of all of the Voting Rights shall be
allocated to the Holders of the Class SB Certificates, and [___]%, [___]% and
[___]% of all of the Voting Rights shall be allocated to the Holders of the
Class R-I Certificates, the Class R-II Certificates and the Class R-III
Certificates, respectively; in each case to be allocated among the Certificates
of such Class in accordance with their respective Percentage Interests.
59
Section 1.02. Determination of One-Month LIBOR
One-Month LIBOR applicable to the calculation of the Pass-Through Rate on
the LIBOR Certificates for any Interest Accrual Period (including the initial
Interest Accrual Period) will be determined on 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, One-Month LIBOR
shall be established by the Trustee and, as to any Interest Accrual Period,
shall equal the rate for one month United States dollar deposits that appears on
the Telerate Screen Page 3750 of the Moneyline Telerate Capital Markets Report
as of 11:00 a.m., London time, on the LIBOR Rate Adjustment Date. "Telerate
Screen Page 3750" means the display designated as page 3750 on the Telerate
Service (or such other page as may replace page 3750 on that service for the
purpose of displaying London interbank offered rates of major banks). If such
rate does not appear on such page (or such other page as may replace that page
on that service, or if such service is no longer offered, such other service for
displaying One-Month LIBOR or comparable rates as may be selected by the Trustee
after consultation with the Master Servicer), the rate will be the Reference
Bank Rate.
The "Reference Bank Rate" will be determined on the basis of the rates at
which deposits in U.S. Dollars are offered by the reference banks (which shall
be any three major banks that are engaged in transactions in the London
interbank market, selected by the Trustee after consultation with the Master
Servicer) as of 11:00 a.m., London time, on the LIBOR Rate Adjustment Date to
prime banks in the London interbank market for a period of one month in amounts
approximately equal to the aggregate Certificate Principal Balance of the LIBOR
Certificates then outstanding. The Trustee 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, 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 One-Month LIBOR for the prior
Distribution Date; provided, however, if, under the priorities described above,
One-Month LIBOR for a Distribution Date would be based on One-Month LIBOR for
the previous Distribution Date for the third consecutive Distribution Date, the
Trustee shall select an alternative comparable index (over which the Trustee has
no control), used for determining one-month Eurodollar lending rates that is
calculated and published (or otherwise made available) by an independent party.
The establishment of One-Month 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.
60
Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of One-Month
LIBOR on such date. Furthermore, the Trustee shall supply to any
Certificateholder so calling the Bondholder Inquiry Line at ▇-▇▇▇-▇▇▇-▇▇▇▇ and
requesting the Pass-Through Rate on the LIBOR Certificates for the current and
the immediately preceding Interest Accrual Period.
61
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(R) 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(R) 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
62
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(R) System and noting the presence of a MIN) with evidence of
recordation noted thereon or attached thereto, or a copy of such assignment or
assignments of the Mortgage with evidence of recording indicated thereon.
(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, 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
63
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(R) 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(R) System to indicate that such Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
(d) 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. 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 or the Swap Agreement in
accordance with the terms thereof, (C) 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 (D) all proceeds of
the conversion, voluntary or involuntary, of the foregoing into cash,
instruments, securities or other property, including without limitation all
amounts from time to time held or
64
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) and (D) 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, 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
65
other documents constituting a part of the Custodial Files delivered to it, or a
Custodian as its agent, in trust for the use and benefit of all present and
future Certificateholders. The Trustee or Custodian (the Custodian being so
obligated under a Custodial Agreement) agrees, for the benefit of
Certificateholders, to review each Custodial File delivered to it pursuant to
Section 2.01(b) within 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, 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,
the Trustee, Master Servicer 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(R) System,
the Master Servicer, at its own expense and without any right of reimbursement,
shall cause MERS to execute and deliver an assignment of the Mortgage in
66
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(R) 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.
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Depositor
(a) The Master Servicer hereby represents and warrants to the
Trustee for the benefit of the Certificateholders that 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;
67
(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 or the Trustee by the Master Servicer will, to the knowledge of the
Master Servicer, contain any untrue statement of a material fact or omit a
material fact necessary to make the information, certificate, statement or
report not misleading;
(viii) The Master Servicer has examined each existing, and
will examine each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing Agreement and each
designated Subservicer are acceptable to the Master Servicer and any new
Subservicing Agreements will comply with the provisions of Section 3.02;
(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 Trustee or the Custodian of a breach of any representation or
warranty set forth in this Section 2.03(a) which materially and adversely
affects the interests of the Certificateholders in any Mortgage Loan, the party
discovering such breach shall give prompt written notice to the other parties
(the Custodian being so obligated under a Custodial Agreement). Within 90 days
of its discovery or its receipt of notice of such breach, the Master Servicer
shall either (i) cure such breach in all material respects or (ii) to the extent
that such breach is with respect to a Mortgage Loan or a related document,
purchase such Mortgage Loan from the Trust Fund at the Purchase Price and in the
manner set forth in Section 2.02; provided that if the 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.
(b) The Depositor hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that as of the Closing Date (or, if
otherwise specified below, as of the date so specified): (i) 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
68
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 Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Custodial
Files to the Trustee or the Custodian.
Upon discovery by any of the Depositor, the Master Servicer, 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 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); 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 or the Trustee on behalf of the
Certificateholders. Notwithstanding the foregoing, the Depositor shall not be
required to cure breaches or purchase or substitute for Mortgage Loans as
provided in this Section 2.03(b) if the substance of the breach of a
representation set forth above also constitutes fraud in the origination of the
Mortgage Loan.
Section 2.04. Representations and Warranties of Residential Funding
The Depositor, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect of the
Assignment Agreement applicable to a Mortgage Loan 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 and the Certificateholders. Upon
the discovery by the Depositor, the Master Servicer, 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
in such Mortgage Loan,
69
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 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 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 (w) of Section 4 thereof, then the Master Servicer shall request
that Residential Funding pay to the Trust Fund, concurrently with and in
addition to the remedies provided in the preceding sentence, an amount equal to
any liability, penalty or expense that was actually incurred and paid out of or
on behalf of the Trust Fund, and that directly resulted from such breach, or if
incurred and paid by the Trust Fund thereafter, concurrently with such payment.
In the event that Residential Funding elects to substitute a Qualified
Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan pursuant to this
Section 2.04, Residential Funding shall deliver to the Trustee for the benefit
of the Certificateholders with respect to such Qualified Substitute Mortgage
Loan or Loans, the original Mortgage Note, the Mortgage, an Assignment of the
Mortgage in recordable form, and such other documents and agreements as are
required by Section 2.01, with the Mortgage Note endorsed as required by Section
2.01. No substitution will be made in any calendar month after the Determination
Date for such month. Monthly Payments due with respect to Qualified Substitute
Mortgage Loans in the month of substitution shall not be part of the Trust Fund
and will be retained by the Master Servicer and remitted by the Master Servicer
to Residential Funding on the next succeeding Distribution Date. For the month
of substitution, distributions to the Certificateholders will include the
Monthly Payment due on a Deleted Mortgage Loan for such month and thereafter
Residential Funding shall be entitled to retain all amounts received in respect
of such Deleted Mortgage Loan. The Master Servicer shall amend or cause to be
amended the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Qualified Substitute Mortgage Loan or Loans and the Master Servicer shall
deliver the amended Mortgage Loan
70
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 the Seller or
Residential Funding, as the case may be, 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 (w) of Section 4 thereof shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of the Certificateholders. If the
Master Servicer is Residential Funding, then the Trustee shall also have the
right to give the notification and require the purchase or substitution provided
for in the second preceding paragraph in the event of such a breach of a
representation or warranty made by Residential Funding in the Assignment
Agreement. In connection with the purchase of or substitution for any such
Mortgage Loan by Residential Funding, the Trustee shall assign to Residential
Funding all of the 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
Uncertificated REMIC 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,
71
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-I Certificates and the Class R-II Certificates). 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-I
Certificates and the Class R-II Certificates). The interests evidenced by the
Class R-III Certificates, together with the REMIC III Regular Interests,
constitute the entire beneficial ownership interest in REMIC III.]
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.
72
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(R) System, or cause the
removal from the registration of any Mortgage Loan on the MERS(R) System, to
execute and deliver, on behalf of the Trustee and the Certificateholders or any
of them, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee and its successors and assigns. Any
expenses incurred in connection with the actions described in the preceding
sentence shall be borne by the Master Servicer in accordance with Section
3.16(c), with no right of reimbursement; provided, that if, as a result of MERS
discontinuing or becoming unable to continue operations in connection with the
MERS(R) System, it becomes necessary to remove any Mortgage Loan from
registration on the MERS(R) System and to arrange for the assignment of the
related Mortgages to the Trustee, then any related expenses shall be
reimbursable to the Master Servicer 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
73
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. In connection with
servicing and administering the Mortgage Loans, the Master Servicer and any
Affiliate of the Master Servicer (i) may perform services such as appraisals and
brokerage services that are customarily provided by Persons other than servicers
of mortgage loans, and shall be entitled to reasonable compensation therefor in
accordance with Section 3.10 and (ii) may, at its own discretion and on behalf
of the Trustee, obtain credit information in the form of a "credit score" from a
credit repository.
(b) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the amount owing under the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so
permit, and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in
connection with the offering of pass-through certificates evidencing interests
in one or more of the Certificates providing for the payment by the Master
Servicer of amounts received by the Master Servicer as servicing compensation
hereunder and required to cover certain Prepayment Interest Shortfalls on the
Mortgage Loans, which payment obligation will thereafter be an obligation of the
Master Servicer hereunder.
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' Obligations; Special Servicing
(a) The Master Servicer may continue in effect Subservicing
Agreements entered into by Residential Funding and Subservicers prior to the
execution and delivery of this Agreement, and may enter into new Subservicing
Agreements with Subservicers, for the servicing and administration of all or
some of the Mortgage Loans. Each Subservicer shall be either (i) an institution
the accounts of which are insured by the FDIC or (ii) another entity that
engages in the business of originating or servicing mortgage loans, and in
either case shall be authorized to transact business in the state or states in
which the related Mortgaged Properties it is to service are situated, if and to
the extent required by applicable law to enable the Subservicer to perform its
obligations hereunder and under the Subservicing Agreement, and in either case
shall be a ▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ Mae 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
74
Mortgage Loan, the Master Servicer shall be entitled to receive and retain an
amount equal to the Subservicing Fee from payments of interest. Unless the
context otherwise requires, references in this Agreement to actions taken or to
be taken by the Master Servicer in servicing the Mortgage Loans include actions
taken or to be taken by a Subservicer on behalf of the Master Servicer. Each
Subservicing Agreement will be upon such terms and conditions as are generally
required by, permitted by or consistent with the Program Guide and are not
inconsistent with this Agreement and as the Master Servicer and the Subservicer
have agreed. With the approval of the Master Servicer, a Subservicer may
delegate its servicing obligations to third-party servicers, but such
Subservicer will remain obligated under the related Subservicing Agreement. The
Master Servicer and a Subservicer may enter into amendments thereto or a
different form of Subservicing Agreement, and the form referred to or included
in the Program Guide is merely provided for information and shall not be deemed
to limit in any respect the discretion of the Master Servicer to modify or enter
into different Subservicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of either this Agreement or the Program Guide in a manner which would
materially and adversely affect the interests of the Certificateholders. The
Program Guide and any other Subservicing Agreement entered into between the
Master Servicer and any Subservicer shall require the Subservicer to accurately
and fully report its borrower credit files to each of the Credit Repositories in
a timely manner.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the benefit of the Trustee and the Certificateholders, shall use
its best reasonable efforts to enforce the obligations of each Subservicer under
the related Subservicing Agreement 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)(vii).
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
75
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to have the
successor Subservicer assume liability for the representations and warranties
made by the terminated Subservicer in respect of the related Mortgage Loans and,
in the event of any such assumption by the successor Subservicer, the Master
Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
Section 3.04. Liability of the Master Servicer
Notwithstanding any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a Subservicer or reference to actions taken through a Subservicer or otherwise,
the Master Servicer shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the
Depositor and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
The Master Servicer shall be entitled to enter into any agreement with a
Subservicer 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, 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
76
assuming party except that the Master Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at
the expense of the Master Servicer, deliver to the assuming party all documents
and records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
each Subservicing Agreement to the assuming party.
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account
(a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Primary Insurance Policy, follow such
collection procedures as it would employ in its good faith business judgment and
which are normal and usual in its general mortgage servicing activities.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the Due Date
for payments due on a Mortgage Loan in accordance with the Program Guide,
provided, however, that the Master Servicer shall first determine that any such
waiver or extension will not impair the coverage of any related Primary
Insurance Policy or materially adversely affect the lien of the related
Mortgage. Notwithstanding anything in this Section to the contrary, the Master
Servicer or any Subservicer shall not enforce any prepayment charge to the
extent that such enforcement would violate any applicable law. In the event of
any such arrangement, the Master Servicer shall make timely advances on the
related Mortgage Loan during the scheduled period in accordance with the
amortization schedule of such Mortgage Loan without modification thereof by
reason of such arrangements unless otherwise agreed to by the Holders of the
Classes of Certificates affected thereby; provided, however, that no such
extension shall be made if any advance would be a Nonrecoverable Advance.
Consistent with the terms of this Agreement, the Master Servicer may also waive,
modify or vary any term of any Mortgage Loan or consent to the postponement of
strict compliance with any such term or in any manner grant indulgence to any
Mortgagor if in the Master Servicer's determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Certificateholders (taking into account any estimated Realized Loss that might
result absent such action), provided, however, that the Master Servicer may not
modify materially or permit any Subservicer to modify any Mortgage Loan,
including without limitation any modification that would change the Mortgage
Rate, forgive the payment of any principal or interest (unless in connection
with the liquidation of the related Mortgage Loan or except in connection with
prepayments to the extent that such reamortization is not inconsistent with the
terms of the Mortgage Loan), capitalize any amounts owing on the Mortgage Loan
by adding such amount to the outstanding principal balance of the Mortgage Loan,
or extend the final maturity date of such Mortgage Loan, unless such Mortgage
Loan is in default or, in the judgment of the Master Servicer, such default is
reasonably foreseeable. No such modification shall reduce the Mortgage Rate on a
Mortgage Loan below one-half of the Mortgage Rate as in effect on the Cut-off
Date, but not less than the sum of the rates at which the Servicing Fee and the
Subservicing Fee accrue. The final maturity date for any Mortgage Loan
77
shall not be extended beyond the Maturity Date. Also, the Stated Principal
Balance of all Reportable Modified Mortgage Loans subject to Servicing
Modifications (measured at the time of the Servicing Modification and after
giving effect to any Servicing Modification) can be no more than five percent of
the aggregate principal balance of the Mortgage Loans as of the Cut-off Date,
unless such limit is increased from time to time with the consent of the Rating
Agencies. 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
principal and interest on the Mortgage Loans due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the principal component
of any Subservicer Advance or of any REO Proceeds received in connection with an
REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted
Mortgage Rate on the Mortgage Loans, including the interest component of any
Subservicer Advance or of any REO Proceeds received in connection with an REO
Property for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and
Liquidation Proceeds (net of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02, 2.03, 2.04 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 4(w) 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
78
(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 payments in respect of principal and interest on the
Mortgage Loans received prior to 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 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
79
the requirements of the Program Guide and be otherwise acceptable to the Master
Servicer and each Rating Agency. The Subservicer will be required thereby to
deposit into the Subservicing Account on a daily basis all proceeds of Mortgage
Loans received by the Subservicer, less its Subservicing Fees and unreimbursed
advances and expenses, to the extent permitted by the Subservicing Agreement. If
the Subservicing Account is not an Eligible Account, the Master Servicer shall
be deemed to have received such monies upon receipt thereof by the Subservicer.
The Subservicer shall not be required to deposit in the Subservicing Account
payments or collections in the nature of 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, if any,
accrues in the case of a Modified Mortgage Loan) on any Curtailment received by
such Subservicer in respect of a Mortgage Loan from the related Mortgagor during
any month that is to be applied by the Subservicer to reduce the unpaid
principal balance of the related Mortgage Loan as of the first day of such
month, from the date of application of such Curtailment to the first day of the
following month. Any amounts paid by a Subservicer pursuant to the preceding
sentence shall be for the benefit of the Master Servicer as additional servicing
compensation and shall be subject to its withdrawal or order from time to time
pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate
Account, the Master Servicer shall for any Nonsubserviced Mortgage Loan, and
shall cause the Subservicers for Subserviced Mortgage Loans to, establish and
maintain one or more Servicing Accounts and deposit and retain therein all
collections from the Mortgagors (or advances from Subservicers) for the payment
of taxes, assessments, hazard insurance premiums, Primary Insurance Policy
premiums, if applicable, or comparable items for the account of the Mortgagors.
Each Servicing Account shall satisfy the requirements for a Subservicing Account
and, to the extent permitted by the Program Guide or as is otherwise acceptable
to the Master Servicer, may also function as a Subservicing Account. Withdrawals
of amounts related to the Mortgage Loans from the Servicing Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, or comparable items, to
reimburse the Master Servicer or Subservicer out of related collections for any
payments made
80
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
81
(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) 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
82
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
83
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 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
84
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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the
Mortgage Loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ 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 or otherwise
adversely affect the interests of the Certificateholders. Notwithstanding the
foregoing:
(i) the Master Servicer shall not be deemed to be in default
under this Section 3.13(a) by reason of any transfer or assumption which the
Master Servicer is restricted by law from preventing; and
(ii) if the Master Servicer determines that it is reasonably
likely that any Mortgagor will bring, or if any Mortgagor does bring, legal
action to declare invalid or otherwise avoid enforcement of a due-on-sale clause
contained in any Mortgage Note or Mortgage, the Master Servicer shall not be
required to enforce the due-on-sale clause or to contest such action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged Property is to be conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption or
85
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 pursuant to the terms of the
Mortgage (or, with respect to any junior lien, a junior lien of the same
priority in relation to any senior lien on such Mortgage Loan), (B) such
transaction will not adversely affect the coverage under any Required Insurance
Policies, (C) the Mortgage Loan will fully amortize over the remaining term
thereof, (D) no material term of the Mortgage Loan (including the interest rate
on the Mortgage Loan) will be altered nor will the term of the Mortgage Loan be
changed and (E) if the seller/transferor of the Mortgaged Property is to be
released from liability on the Mortgage Loan, the buyer/transferee of the
Mortgaged Property would be qualified to assume the Mortgage Loan based on
generally comparable credit quality and such release will not (based on the
Master Servicer's or Subservicer's good faith determination) adversely affect
the collectability of the Mortgage Loan. Upon receipt of appropriate
instructions from the Master Servicer in accordance with the foregoing, the
Trustee shall execute any necessary instruments for such assumption or
substitution of liability as directed by the Master Servicer. Upon the closing
of the transactions contemplated by such documents, the Master Servicer shall
cause the originals or true and correct copies of the assumption agreement, the
release (if any), or the modification or supplement to the Mortgage Note or
Mortgage to be delivered to the Trustee or the Custodian and deposited with the
Mortgage File for such Mortgage Loan. Any fee collected by the Master Servicer
or such related Subservicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer or such Subservicer
as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may
be, shall be entitled to approve a request from a Mortgagor for a partial
release of the related Mortgaged Property, the granting of an easement thereon
in favor of another Person, any alteration or demolition of the related
Mortgaged Property 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
86
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 at least 0.25% 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
87
not completed, or towards the correction of any default on a related senior
mortgage loan, or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan to Holders of Certificates of one
or more Classes after reimbursement to itself for such expenses or charges and
(ii) that such expenses and charges will be recoverable to it through
Liquidation Proceeds, Insurance Proceeds, or REO Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Custodial Account
pursuant to Section 3.10, whether or not such expenses and charges are actually
recoverable from related Liquidation Proceeds, Insurance Proceeds or REO
Proceeds). In the event of such a determination by the Master Servicer pursuant
to this Section 3.14(a), the Master Servicer shall be entitled to reimbursement
of its funds so expended pursuant to Section 3.10.
In addition, the Master Servicer may pursue any remedies that may be
available in connection with a breach of a representation and warranty with
respect to any such Mortgage Loan in accordance with Sections 2.03 and 2.04.
However, the Master Servicer is not required to continue to pursue both
foreclosure (or similar remedies) with respect to the Mortgage Loans and
remedies in connection with a breach of a representation and warranty if the
Master Servicer determines in its reasonable discretion that one such remedy is
more likely to result in a greater recovery as to the Mortgage Loan. Upon the
occurrence of a Cash Liquidation or REO Disposition, following the deposit in
the Custodial Account of all Insurance Proceeds, Liquidation Proceeds and other
payments and recoveries referred to in the definition of "Cash Liquidation" or
"REO Disposition," as applicable, upon receipt by the Trustee of written
notification of such deposit signed by a Servicing Officer, the Trustee or 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
88
discharged, such Mortgage Note and the related amortization schedule in effect
at the time of any such acquisition of title (after giving effect to any
previous Curtailments and before any adjustment thereto by reason of any
bankruptcy or similar proceeding or any moratorium or similar waiver or grace
period) remain in effect.
(c) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer on behalf of the Trust Fund shall dispose of
such REO Property as soon as practicable, giving due consideration to the
interests of the Certificateholders, but in all cases, within three full years
after the taxable year of its acquisition by the Trust Fund for purposes of
Section 860G(a)(8) of the Code (or such shorter period as may be necessary under
applicable state (including any state in which such property is located) law to
maintain the status of each 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 an Opinion of Counsel,
addressed to the Trustee and the Master Servicer, to the effect that the holding
by the Trust Fund of such REO Property subsequent to such period will not result
in the imposition of taxes on "prohibited transactions" as defined in Section
860F of the Code or cause any REMIC 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 Foreclosure Profits.
89
(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 Section 1.1445-2(d)(3) (or any successor
thereto) necessary to assure that no withholding tax obligation arises with
respect to the proceeds of such foreclosure except to the extent, if any, that
proceeds of such foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
Section 3.15. Trustee to Cooperate; Release of 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(R) System of such
Mortgage and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release, including any applicable UCC
termination statements. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Master Servicer shall deliver to the
Custodian, with a copy to the Trustee, a certificate of a Servicing Officer
substantially in 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
90
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), 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 late payment
charges, assumption fees, 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.
(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
91
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.
Section 3.17. Reports to the Trustee and the Depositor
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee and the Depositor a statement, certified
by a Servicing Officer, setting forth the status of the Custodial Account as of
the close of business on such Distribution Date as it relates to the Mortgage
Loans and showing, for the period covered by such statement, the aggregate of
deposits in or withdrawals from the Custodial Account in respect of the Mortgage
Loans for each category of deposit specified in Section 3.07 and each category
of withdrawal specified in Section 3.10.
Section 3.18. Annual Statement as to Compliance
The Master Servicer will deliver to the Depositor and the Trustee on or
before the earlier of (a) March 31 of each year 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, a servicer compliance certificate, signed by an
authorized officer of the Master Servicer, as described in Item 1123 of
Regulation AB, to the effect that:
(i) 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.
92
(ii) 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 materials 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 on Form 10-K
is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the Master Servicer at its expense shall cause a
firm of independent public accountants which shall be members of the American
Institute of Certified Public Accountants to furnish a report to the Depositor
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 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 the
Depositor is not obligated to supervise the performance of the Master Servicer
under this Agreement or otherwise.
Section 3.21. Advance Facility
93
(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 3.21
or otherwise in accordance with the documentation establishing the Advance
Facility to such Advancing Person or to a trustee, agent or custodian (an
"Advance Facility Trustee") designated by such Advancing Person in an Advance
Facility Notice described below in Section 3.21(b). Notwithstanding the
foregoing, if so required pursuant to the terms of the Advance Facility, the
Master Servicer may direct, and if so directed in writing the Trustee is hereby
authorized to and shall pay to the Advance Facility Trustee the Reimbursement
Amounts identified pursuant to the preceding sentence. An Advancing Person whose
obligations hereunder are limited to the funding of Advances and/or Servicing
Advances shall not be required to meet the qualifications of a Master Servicer
or a Subservicer pursuant to Section 3.02(a) or 6.02(c) hereof and shall not be
deemed to be a Subservicer under this Agreement. Notwithstanding anything to the
contrary herein, in no event shall Advance Reimbursement Amounts or Servicing
Advance Reimbursement Amounts be included in the Available Distribution Amount
or distributed to Certificateholders.
(b) If the Master Servicer enters into an Advance Facility and makes
the election set forth in Section 3.21(a), the Master Servicer and the related
Advancing Person shall deliver to the Trustee a written notice and payment
instruction (an "Advance Facility Notice"), providing the Trustee with written
payment instructions as to where to remit Advance Reimbursement Amounts and/or
Servicing Advance Reimbursement Amounts (each to the extent such type of
Reimbursement Amount is included within the Advance Facility) on subsequent
Distribution Dates. The payment instruction shall require the applicable
Reimbursement Amounts to be distributed to the Advancing Person or to an Advance
Facility Trustee designated in the Advance Facility Notice. An Advance Facility
Notice may only be terminated by the joint written direction of the Master
Servicer and the related Advancing Person (and any related Advance Facility
Trustee).
(c) Reimbursement Amounts shall consist solely of amounts in respect
of Advances and/or Servicing Advances made with respect to the Mortgage Loans
for which the
94
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
recognizing the interests of any Advancing Person or Advance Facility Trustee in
such Reimbursement Amounts as the Master Servicer may cause to be made subject
to Advance Facilities pursuant to this Section 3.21, and such other documents in
connection with such Advance Facility as may be reasonably requested from time
to time by any Advancing Person or Advance Facility Trustee and reasonably
satisfactory to the Trustee.
(e) Reimbursement Amounts collected with respect to each Mortgage
Loan shall be allocated to outstanding unreimbursed Advances or Servicing
Advances (as the case may be) made with respect to that Mortgage Loan on a
"first-in, first out" ("FIFO") basis, subject to the qualifications set forth
below:
(i) Any successor Master Servicer to Residential Funding (a
"Successor Master Servicer") and the Advancing Person or Advance Facility
Trustee shall be required to apply all amounts available in accordance with this
Section 3.21(e) to the reimbursement of Advances and Servicing Advances in the
manner provided for herein; provided, however, that after the succession of a
Successor Master Servicer, (A) to the extent that any Advances or Servicing
Advances with respect to any particular Mortgage Loan are reimbursed from
payments or recoveries, if any, from the related Mortgagor, and Liquidation
Proceeds or Insurance Proceeds, if any, with respect to that Mortgage Loan,
reimbursement shall be made, first, to the Advancing Person or Advance Facility
Trustee in respect of Advances and/or Servicing Advances related to that
Mortgage Loan to the extent of the interest of the Advancing Person or Advance
Facility Trustee in such Advances and/or Servicing Advances, second to the
Master Servicer in respect of Advances and/or Servicing Advances related to that
Mortgage Loan in excess of those in which the Advancing Person or Advance
Facility Trustee Person has an interest, and third, to the Successor Master
Servicer in respect of any other Advances and/or Servicing Advances related to
that Mortgage Loan, from such sources as and when collected, and (B)
reimbursements of Advances and Servicing Advances that are Nonrecoverable
Advances shall be made pro rata to the Advancing Person or Advance Facility
95
Trustee, on the one hand, and any such Successor Master Servicer, on the other
hand, on the basis of the respective aggregate outstanding unreimbursed Advances
and Servicing Advances that are Nonrecoverable Advances owed to the Advancing
Person, Advance Facility Trustee or Master Servicer pursuant to this Agreement,
on the one hand, and any such Successor Master Servicer, on the other hand, and
without regard to the date on which any such Advances or Servicing Advances
shall have been made. In the event that, as a result of the FIFO allocation made
pursuant to this Section 3.21(e), some or all of a Reimbursement Amount paid to
the Advancing Person or Advance Facility Trustee relates to Advances or
Servicing Advances that were made by a Person other than Residential Funding or
the Advancing Person or Advance Facility Trustee, then the Advancing Person or
Advance Facility Trustee shall be required to remit any portion of such
Reimbursement Amount to the Person entitled to such portion of such
Reimbursement Amount. Without limiting the generality of the foregoing,
Residential Funding shall remain entitled to be reimbursed by the Advancing
Person or Advance Facility Trustee for all Advances and Servicing Advances
funded by Residential Funding to the extent the related Reimbursement Amount(s)
have not been assigned or pledged to an Advancing Person or Advance Facility
Trustee. The documentation establishing any Advance Facility shall require
Residential Funding to provide to the related Advancing Person or Advance
Facility Trustee loan by loan information with respect to each Reimbursement
Amount distributed to such Advancing Person or Advance Facility Trustee on each
date of remittance thereof to such Advancing Person or Advance Facility Trustee,
to enable the Advancing Person or Advance Facility Trustee to make the FIFO
allocation of each Reimbursement Amount with respect to each Mortgage Loan.
(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.
96
(g) Any amendment to this Section 3.21 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 3.21, including
amendments to add provisions relating to a successor master servicer, may be
entered into by the Trustee, Depositor and the Master Servicer without the
consent of any Certificateholder, with written confirmation from each Rating
Agency that the amendment will not result in the reduction of the ratings on any
class of the Certificates below the lesser of the then current or original
ratings on such Certificates, 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 3.21 may not be amended or otherwise modified without
the prior written consent of the related Advancing Person.
97
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) all other amounts constituting the Available Distribution Amount for
the immediately succeeding Distribution Date and (vi) any payments or
collections in the nature of prepayment charges received by the Master Servicer
in respect of the Mortgage Loans and the related Prepayment Period.
(b) 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 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, which
shall mature not later than the Business Day next preceding the Distribution
Date next following the date of such investment (except that (i) if such
Permitted Investment is an obligation of the institution that maintains such
account or a fund for which such institution serves as custodian, then such
Permitted Investment may mature on such Distribution Date and (ii) any other
investment may mature on such Distribution Date if the Trustee shall advance
funds on such Distribution Date to the Certificate Account in the amount payable
on such investment on such Distribution Date, pending receipt thereof to the
extent necessary to make distributions on the Certificates) and shall not be
sold or disposed of prior to maturity. All income and gain realized from any
such investment shall be for the benefit of the Master Servicer and shall be
subject to its withdrawal or order from time to time. The amount of any losses
incurred in respect of any such investments shall be deposited in the
Certificate Account by the Master Servicer out of its own funds immediately as
realized.
Section 4.02. Distributions
(a) [On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate and distribute the Available Distribution
Amount for such date to the interests issued in respect of REMIC I, REMIC II and
REMIC III as specified in this Section.]
98
(b) (1) [On each Distribution Date, the REMIC I Distribution Amount
shall be distributed by REMIC I to REMIC II on account of the REMIC I Regular
Interests in the amounts and with the priorities set forth in the definition
thereof.]
(2) On each Distribution Date, the REMIC II Distribution
Amount shall be distributed by REMIC II to REMIC III on account of the REMIC II
Regular Interests in the amounts and with the priorities set forth in the
definition thereof.
(3) Notwithstanding the distributions on the REMIC Regular
Interests described in this Section 4.02(b), distribution of funds from the
Certificate Account shall be made only in accordance with Sections 4.02(c) and
(d).
(c) [On each Distribution Date (x) the Master Servicer on behalf of
the Trustee or (y) the Paying Agent appointed by the Trustee, shall distribute
to each Certificateholder of record on the next preceding Record Date (other
than as provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Master Servicer or the
Paying Agent, as the case may be, or, if such Certificateholder has not so
notified the Master Servicer or the Paying Agent by the Record Date, by check
mailed to such Certificateholder at the address of such Holder appearing in the
Certificate Register such Certificateholder's share (which share with respect to
each Class of Certificates, shall be based on the aggregate of the Percentage
Interests represented by Certificates of the applicable Class held by such
Holder of the following amounts), in the following order of priority, in each
case to the extent of the Available Distribution Amount on deposit in the
Certificate Account [(or, with respect to clause (xi)(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, being paid from and in reduction of the
Available Distribution Amount for such Distribution Date;
(ii) to the Class M Certificateholders and Class B
Certificateholders from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Accrued Certificate Interest
payable on the Class M Certificates and Class B Certificates with respect to
such Distribution Date, plus any related amounts accrued pursuant to this clause
(ii) but remaining unpaid from any prior Distribution Date, sequentially, to the
[Class M-1 Certificateholders, Class M-2 Certificateholders, Class M-3
Certificateholders, Class M-4 Certificateholders, Class M-5 Certificateholders,
Class M-6 Certificateholders, Class M-7 Certificateholders, Class M-8
Certificateholders and Class B Certificateholders], in that order, being paid
from and in reduction of the Available Distribution Amount for such Distribution
Date;
(iii) [reserved]
99
(iv) the Principal Distribution Amount shall be distributed as
follows, in each case to the extent of the remaining Principal Distribution
Amount:
(A) [first, the Class A Principal Distribution Amount,
sequentially, to the Class A-1 Certificateholders, Class A-2
Certificateholders and Class A-3 Certificateholders, in that order,
until the aggregate Certificate Principal Balance of the Class A
Certificates has been reduced to zero;
(B) third, to the Class M-1 Certificateholders, the Class M-1
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-1 Certificates has been reduced to zero;
(C) fourth, to the Class M-2 Certificateholders, the Class M-2
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-2 Certificates has been reduced to zero;
(D) fifth, to the Class M-3 Certificateholders, the Class M-3
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-3 Certificates has been reduced to zero;
(E) sixth, to the Class M-4 Certificateholders, the Class M-4
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-4 Certificates has been reduced to zero;
(F) seventh, to the Class M-5 Certificateholders, the Class
M-5 Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-5 Certificates has been reduced to zero;
(G) eighth, to the Class M-6 Certificateholders, the Class M-6
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-6 Certificates has been reduced to zero;
(H) ninth, to the Class M-7 Certificateholders, the Class M-7
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-7 Certificates has been reduced to zero;
(I) tenth, to the Class M-8 Certificateholders, the Class M-8
Principal Distribution Amount, until the Certificate Principal
Balance of the Class M-8 Certificates has been reduced to zero;
(J) eleventh, to the Class B Certificateholders, the Class B
Principal Distribution Amount, until the Certificate Principal
Balance of the Class B Certificates has been reduced to zero]; and
(v) to the Class A Certificateholders, Class M
Certificateholders and Class B 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
100
thereto to the extent not offset by Eligible Master Servicing Compensation on
such Distribution Date;
(vi) to the Class A Certificateholders, Class M
Certificateholders and Class B Certificateholders, the amount of any Prepayment
Interest Shortfalls previously allocated thereto remaining unpaid from prior
Distribution Dates together with interest thereon at the related Pass-Through
Rate, on a pro rata basis based on unpaid Prepayment Interest Shortfalls
previously allocated thereto;
(vii) to the Class A Certificateholders, the amount of any
unpaid Class A Basis Risk Shortfall Carry-Forward Amounts allocated thereto, on
a pro rata basis based on the amount of unpaid Class A Basis Risk Shortfall
Carry-Forward Amounts allocated thereto, and then sequentially, to the [Class
M-1 Certificateholders, the Class M-2 Certificateholders, the Class M-3
Certificateholders, the Class M-4 Certificateholders, the Class M-5
Certificateholders, the Class M-6 Certificateholders, the Class M-7
Certificateholders, the Class M-8 Certificateholders and Class B
Certificateholders,] in that order, the amount of any unpaid Basis Risk
Shortfall Carry-Forward Amounts allocated thereto;
(viii) to the Class A Certificateholders, Class M
Certificateholders and Class B 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, and then, sequentially, to the Class M-1
Certificateholders, the Class M-2 Certificateholders, the Class M-3
Certificateholders, the Class M-4 Certificateholders, the Class M-5
Certificateholders, the Class M-6 Certificateholders, the Class M-7
Certificateholders, the Class M-8 Certificateholders and the Class B
Certificateholders, in that order, the principal portion of any Realized Losses
previously allocated to such Class and remaining unreimbursed;
(x) to the Swap Account for payment to the Swap Counterparty,
any Swap Termination Payments due to a Swap Counterparty Trigger Event.
(xi) 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, Class M Certificates and Class B 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
(xii) to the Class R-III Certificateholders, the balance, if
any, of the Excess Cash Flow.
101
Notwithstanding anything in this Agreement to the contrary, all amounts
owed by the Trust to the Swap Counterparty under the Swap Agreement in any
calendar month shall be limited by the Available Distribution Amount for the
Distribution Date in such calendar month, before giving effect to any reductions
to the Available Distribution Amount to account for any Net Swap Payments
required to be made to the Swap Counterparty.
(d) Notwithstanding the foregoing clause (c), upon the reduction of
the Certificate Principal Balance of a Class of [Class A Certificates, Class M
Certificates or Class B 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 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 the next Distribution Date, the Master Servicer
shall, no later than the Determination Date in the month of such final
distribution, notify the Trustee and the Trustee shall, no later than two (2)
Business Days after such Determination Date, mail on such date to each Holder of
such Class of Certificates a notice to the effect that: (i) the Trustee
anticipates that the final distribution with respect to such Class of
Certificates will be made on such Distribution Date but only upon presentation
and surrender of such Certificates at the office of the Trustee or as otherwise
specified therein, and (ii) no interest shall accrue on such Certificates from
and after the end of the prior calendar month. In the event that
Certificateholders required to surrender their Certificates pursuant to Section
9.01(c) do not surrender their Certificates for final cancellation, the Trustee
shall cause funds distributable with respect to such Certificates to be
withdrawn from the Certificate Account and credited to a separate escrow account
for the benefit of such Certificateholders as provided in Section 9.01(d).
Section 4.03. Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting
(a) Concurrently with each distribution charged to the Certificate
Account and with respect to each Distribution Date the Master Servicer shall
forward to the Trustee and the Trustee shall forward by mail or otherwise make
available electronically on its website (which may be obtained by any
Certificateholder by telephoning the Trustee at (▇▇▇) ▇▇▇-▇▇▇▇) to each Holder
and the Depositor a statement setting forth the following information as to each
Class of Certificates, in each case to the extent applicable:
102
(i) the applicable Record Date, Determination Date and
Distribution Date;
(ii) the aggregate amount of payments received with respect to
the Mortgage Loans, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the
Master Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the
identity of the party receiving such fees or expenses;
(v) (A) the amount of such distribution to the
Certificateholders of such Class applied to reduce the Certificate Principal
Balance thereof, and (B) the aggregate amount included therein representing
Principal Prepayments;
(vi) the amount of such distribution to Holders of such Class
of Certificates allocable to interest;
(vii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to such
Holders if there were sufficient funds available therefor, the amount of the
shortfall;
(viii) the aggregate Certificate Principal Balance of each
Class of the Certificates, after giving effect to the amounts distributed on
such Distribution Date, separately identifying any reduction thereof due to
Realized Losses other than pursuant to an actual distribution of principal;
(ix) the percentage of the outstanding principal balances of
the [Class A Certificates and Class M Certificates] after giving effect to the
distributions on that Distribution Date;
(x) 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 preceding
Due Period;
(xi) on the basis of the most recent reports furnished to it
by Sub-Subservicers, the number and aggregate principal balances of Mortgage
Loans that are Delinquent (A) 30-59 days, (B) 60-89 days and (C) 90 or more days
and the number and aggregate principal balance of Mortgage Loans that are in
foreclosure;
(xii) 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 preceding Due Period;
(xiii) 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;
103
(xiv) any material breaches of Mortgage Loan representations
or warranties or covenants in the Agreement;
(xv) the number, aggregate principal balance and book value of
any REO Properties;
(xvi) 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;
(xvii) the aggregate amount of Realized Losses with respect to
the Mortgage Loans for such Distribution Date and the aggregate amount of
Realized Losses with respect to the Mortgage Loans incurred since the Cut-off
Date;
(xviii) the Pass-Through Rate on each Class of Certificates,
separately identifying One-Month LIBOR for such Distribution Date and the Net
WAC Cap Rate;
(xix) the Overcollateralization Amount and the Required
Overcollateralization Amount following such Distribution Date;
(xx) the number and aggregate principal balance of the
Mortgage Loans repurchased under Section 4.07;
(xxi) the aggregate amount of any recoveries with respect to
the Mortgage Loans on previously foreclosed loans from Residential Funding due
to a breach of representation or warranty;
(xxii) the weighted average remaining term to maturity of the
Mortgage Loans after giving effect to the amounts distributed on such
Distribution Date;
(xxiii) the weighted average Mortgage Rates of the Mortgage
Loans after giving effect to the amounts distributed on such Distribution Date;
(xxiv) [the Class A Basis Risk Shortfall, Class A Basis Risk
Shortfall Carry-Forward Amount, Class M Basis Risk Shortfall, Class M Basis Risk
Shortfall, Class B Basis Risk Shortfall Carry-Forward Amount and Prepayment
Interest Shortfalls;]
(xxv) the amount of any Net Swap Payment payable to the
Trustee on behalf of the Trust, any Net Swap Payment payable to the Swap
Counterparty, any Swap Termination Payment payable to the Trustee on behalf of
the Trust and any Swap Termination Payment payable to the Swap Counterparty; and
(xxvi) the occurrence of the Stepdown Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination. In addition to the statement provided to the Trustee as set
forth in this Section 4.03(a), the Master Servicer shall provide to any manager
of a trust fund consisting of some or all of the Certificates, upon
104
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 P to such Rating Agency within a reasonable
period of time; provided, however, that the Master Servicer shall not be
required to provide such information more than four times in a calendar year to
any Rating Agency.
(b) Within a reasonable period of time after the end of each
calendar year, the Master Servicer shall prepare, or cause to be prepared, and
the Trustee shall forward, or cause to be forwarded, to each Person who at any
time during the calendar year was the Holder of a Certificate, other than a
Class R Certificate, a statement containing the information set forth in clauses
[(i) and (ii)] referred to in 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 end of each
calendar year, 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 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 the Series
Supplement. Neither the Master Servicer nor the Trustee shall have any liability
with respect to the Master Servicer's failure to properly prepare or file such
periodic reports resulting
105
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
certifications.
(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.
Section 4.04. Distribution of Reports to the Trustee and the Depositor;
Advances by the Master Servicer
(a) Prior to the close of business on the Business Day next
succeeding each Determination Date, the Master Servicer shall furnish a written
statement (which may be in a mutually agreeable electronic format) to the
Trustee, any Paying Agent and the Depositor (the information in such statement
to be made available to Certificateholders by the Master Servicer on request)
(provided that the Master Servicer 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
106
Section 4.01(a), (iii) the amount of Prepayment Interest Shortfalls and Basis
Risk Shortfall Carry-Forward Amounts and (iv) the Net Swap Payments and Swap
Termination Payments, if any, for such Distribution Date. 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), 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) 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)
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.
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
107
amount equal to the Advance required to be made for the immediately succeeding
Distribution Date, it shall give notice to the Trustee of its inability to
advance (such notice may be given by telecopy), not later than 3:00 P.M., New
York time, on such Business Day, specifying the portion of such amount that it
will be unable to deposit. Not later than 3:00 P.M., New York time, on the
Certificate Account Deposit Date the Trustee shall, unless by 12:00 Noon, New
York time, on such day the Trustee shall have been notified in writing (by
telecopy) that the Master Servicer shall have directly or indirectly deposited
in the Certificate Account such portion of the amount of the Advance as to which
the Master Servicer shall have given notice pursuant to the preceding sentence,
pursuant to Section 7.01, (a) terminate all of the rights and obligations of the
Master Servicer under this Agreement in accordance with Section 7.01 and (b)
assume the rights and obligations of the Master Servicer hereunder, including
the obligation to deposit in the Certificate Account an amount equal to the
Advance for the immediately succeeding Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this Section
4.04(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;
(iii) third, the Class B Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(iv) fourth, to the Class M-8 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
(v) fifth, to the Class M-7 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
(vi) sixth, to the Class M-6 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
108
(vii) seventh, to the Class M-5 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
(viii) eighth, to the Class M-4 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
(ix) ninth, to the Class M-3 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
(x) tenth, to the Class M-2 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero;
(xi) eleventh, to the Class M-1 Certificates, until the
Certificate Principal Balance thereof has been reduced
to zero; and
(xii) twelfth, to the Class A 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
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, Class M Certificates or Class B Certificates shall be made by
reducing the Certificate Principal Balance thereof by the amount so allocated,
which allocation shall be deemed to have occurred on such Distribution Date;
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.]
109
(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 allocated to the Class SB Certificates shall, to the extent such Realized
Losses represent Realized Losses on an interest portion, be allocated to the
REMIC III Regular Interest SB-IO. Realized Losses allocated to the Excess Cash
Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued
Certificate Interest on the REMIC III Regular Interest SB-IO. Realized Losses
allocated to the Overcollateralization Amount pursuant to paragraph (b) of this
Section shall be deemed first to reduce the principal balance of the REMIC I
Regular Interest SB-PO until such principal balance shall have been reduced to
zero and thereafter to reduce accrued and unpaid interest on the REMIC III
Regular Interest SB-IO.]
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) As to any Mortgage Loan which is delinquent in payment by 90
days or more, the Master Servicer may, at its option, purchase such Mortgage
Loan from the Trustee at the Purchase Price therefor; provided, that any such
Mortgage Loan that becomes 90 days or more delinquent during any given Calendar
Quarter shall only be eligible for purchase pursuant to this Section 4.07 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, 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
110
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. Swap Agreement.
(a) On the Closing Date, the Trustee shall (i) establish and
maintain in its name, in trust for the benefit of Class A, Class M and Class B
Certificates, the Swap Account and (ii) for the benefit of the Class A, Class M
and Class B Certificates, cause the Trust to enter into the Swap Agreement.
(b) The Trustee shall deposit in the Swap Account all payments that
are payable to the Trust Fund under the Swap Agreement. Net Swap Payments and
Swap Termination Payments (other than Swap Termination Payments resulting from a
Swap Counterparty Trigger Event) payable by the Trust Fund to the Swap
Counterparty pursuant to the Swap Agreement shall be excluded from the Available
Distribution Amount and payable to the Swap Counterparty prior to any
distributions to the Certificateholders. On each Distribution Date, such amounts
will be remitted by the Trustee to the Swap Account for payment to the Swap
Counterparty, first to make any Net Swap Payment owed to the Swap Counterparty
pursuant to the Swap Agreement for such Distribution Date, and second to make
any Swap Termination Payment (not due to a Swap Counterparty Trigger Event) owed
to the Swap Counterparty pursuant to the Swap Agreement for such Distribution
Date. For federal income tax purposes, such amounts paid to the Swap Account on
each Distribution Date shall first be deemed paid to the Swap 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 Swap Account in respect of the Class IO
Distribution Amount. 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,
Class M and Class B Certificates and shall be paid as set forth under Section
4.02.
(c) Net Swap Payments payable by the Swap Counterparty to the
Trustee on behalf of the Trust Fund pursuant to the Swap Agreement will be
deposited by the Trustee into the Swap Account, and shall be included into the
definition of Excess Cash Flow.
(d) Subject to Sections 8.01 and 8.02 hereof, the 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 [Class A Certificates, Class M Certificates and Class B Certificates]
entitled to at least 51% of the Voting Rights of such Classes of Certificates,
or if the Trustee does not receive such direction from such Certificateholders,
then at the written direction of Residential Funding.
(e) The Swap Account shall be an Eligible Account. Amounts held in
the Swap Account from time to time shall continue to constitute assets of the
Trust Fund, but not of the REMICs, until released from the Swap Account pursuant
to this Section 4.08. The Swap 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 Swap Account. The Trustee shall keep records that accurately reflect the
111
funds on deposit in the Swap Account. The Trustee shall, at the direction of the
Master Servicer, invest amounts on deposit in the Swap Account in Permitted
Investments. In the absence of written direction to the Trustee from the Master
Servicer, all funds in the Swap Account shall remain uninvested.
(f) The Trustee and the Master Servicer shall treat the holders of
each Class of Certificates [(other than the Class SB Certificates and Class R
Certificates)] as having entered into a notional principal contract with the
holders of the [Class SB Certificates]. Pursuant to each such notional principal
contract, 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 such notional principal contract, the holder of the [Class
SB Certificates] shall be treated as having agreed to pay the related Basis Risk
Shortfall Carry Forward-Amounts 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 this notional principal contract 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
Swap Account pursuant to the notional principal contract. 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.
112
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates
(a) [The Class A Certificates, Class M Certificates, Class B
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 one or more Custodians
of the documents specified in Section 2.01. The Class A and Class M-1
Certificates shall be issuable in minimum dollar denominations of $[100,000] and
integral multiples of $1 in excess thereof. The Class M-2 Certificates, Class
M-3 Certificates, Class M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class M-7 Certificates, Class M-8 Certificates and Class B
Certificates shall be issuable in minimum dollar denominations of $[250,000] and
integral multiples of $1 in excess thereof. The Class SB Certificates shall be
issuable in registered, certificated form in minimum percentage interests of
[5.00]% and integral multiples of [0.01]%. Each Class of Class R Certificates
shall be issued in registered, certificated form in minimum percentage interests
of [20.00]% and integral multiples of [0.01]% in excess thereof; provided,
however, that one Class R Certificate of each Class will be issuable to the
REMIC Administrator as "tax matters person" pursuant to Section 10.01(c) in a
minimum denomination representing a Percentage Interest of not less than 0.01%.
The Certificates shall be executed by manual or facsimile signature on
behalf of an authorized officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Certificate Registrar by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.]
(b) The [Class A Certificates, Class M Certificates and Class B
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, Class M Certificate and Class B 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
113
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
114
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.
Neither the Depositor, the Master Servicer nor the Trustee shall be liable
for any actions taken by the Depository or its nominee, including, without
limitation, any delay in delivery of any 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, all references
herein to obligations imposed upon or to be performed by the Depositor in
connection with the issuance of the Definitive Certificates pursuant to this
Section 5.01 shall be deemed to be imposed upon and performed by the Trustee,
and the Trustee and the Master Servicer shall recognize the Holders of the
Definitive Certificates as Certificateholders hereunder.
(c) Each of the Certificates is intended to be a "security" governed
by Article 8 of the Uniform Commercial Code as in effect in the State of New
York and any other applicable jurisdiction, to the extent that any of such laws
may be applicable.
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
115
Trustee and the Certificate Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing.
(d) No transfer, sale, pledge or other disposition of a [Class B
Certificate, 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 B Certificate, 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 B
Certificates, 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 Rule 144A,
acting for its own account or the accounts of other "qualified institutional
buyers" as defined under Rule 144A, and (ii) is aware that the proposed
transferor intends to rely on the exemption from registration requirements under
the 1933 Act provided by Rule 144A. The Holder of a Class B Certificate, 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 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. If any transfer of a Class B Certificate held by
a transferor and to be held by a transferee in book-entry form is to made
without registration under the 1933 Act, the transferor shall be deemed to have
made each of the certifications set forth in Exhibit J hereto as of the transfer
date and the transferee shall be deemed to have made each of the certifications
set forth in Exhibit N hereto as of the transfer date, in each case as if such
Class B Certificate were in physical form.
(e) (i) [In the case of any Class A Certificate, Class M
Certificate, Class B Certificate, 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 and the Master Servicer to the effect
that the purchase or holding of such Class B Certificate, 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
116
of any subsequent enactments), and will not subject the Trustee, the Depositor
or the Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Depositor or the Master Servicer, or (B) the prospective
transferee shall be required to provide the Trustee, the Depositor and the
Master Servicer with a certification to the effect set forth in Exhibit P (with
respect to a Class A, Class M, Class B or Class SB Certificate; provided,
however; that such certification shall be deemed to have been given by any Class
A Certificateholder, Class M Certificateholder or Class B Certificateholder who
acquires a Book-Entry 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 either (a) 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 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) an insurance company, the
source of funds used to purchase or hold such Certificates is an "insurance
company general account," as the term is defined in DOL Prohibited Transaction
Class Exemption ("PTCE") 95-60, and the conditions in Sections I and III of PTCE
95-60 have been satisfied.
(ii) Any Transferee of a Class A Certificate, Class M
Certificate or Class B Certificate that does not deliver the Opinion of Counsel
or certification referred to in clause (i) above will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that such Transferee is not a Plan Investor.
(iii) If any Class A Certificate, Class M Certificate or Class
B Certificate (or any interest therein) is acquired or held by any Person that
does not satisfy the conditions described in paragraph (i) and (ii) above, then
the last preceding Transferee shall be restored, to the extent permitted by law,
to all rights and obligations as Certificate Owner thereof retroactive to the
date of such Transfer of such Class A Certificate, Class M Certificate or Class
B Certificate. The Trustee shall be under no liability to any Person for making
any payments due on such Certificate to such preceding Transferee.
(iv) Any purported Certificate Owner whose acquisition or
holding of any Class A Certificate, Class M Certificate or Class B Certificate
(or interest therein) was effected in violation of the restrictions in this
Section 5.02(e) shall indemnify and hold harmless the Depositor, the Trustee,
the Master Servicer, any Subservicer, 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
117
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 Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Class R Certificate, if it is,
or is holding an Ownership Interest in a Class R Certificate on
behalf of, a "pass-through interest holder."
118
(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 Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. The
Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section 5.02(f) or for making any payments due
on such Certificate to the holder thereof or for taking any other
action with respect to such holder under the provisions of this
Agreement.
(B) If any purported Transferee shall become a Holder of a
Class R Certificate in violation of the restrictions in this Section
5.02(f) and to the extent that the retroactive restoration of the
rights of the Holder of such Class R Certificate as described in
clause (iii)(A) above shall be invalid, illegal or unenforceable,
then the Master Servicer shall have the right, without notice to the
holder or any prior holder of such Class R Certificate, to sell such
Class R Certificate to a purchaser selected by the Master Servicer
on such terms as the Master Servicer may choose. Such purported
Transferee shall promptly endorse and deliver each Class R
Certificate in accordance with the instructions of the Master
Servicer. Such purchaser may be the Master Servicer itself or any
Affiliate of the Master Servicer. The proceeds of such sale, net of
the commissions (which may include commissions payable to the Master
Servicer or its Affiliates), expenses and taxes due, if any, 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
119
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 (v) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee the following:
(A) Written notification from each Rating Agency to the effect
that the modification, addition to or elimination of such provisions
will not cause such Rating Agency to downgrade its then-current
ratings, if any, of any Class of [Class A Certificates, Class M
Certificates or Class B Certificates] below the lower of the
then-current rating or the rating assigned to such Certificates as
of the Closing Date by such Rating Agency; and
(B) A Certificate of the Master Servicer stating that the
Master Servicer has received an Opinion of Counsel, in form and
substance satisfactory to the Master Servicer, to the effect that
such modification, addition to or absence of such provisions will
not cause any REMIC to cease to qualify as a REMIC and will not
cause (x) any REMIC 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
120
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 Registrar and
any agent of the Depositor, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.02 and for all other purposes whatsoever, except as and to
the extent provided in the definition of "Certificateholder" and in Section
4.09, and neither the Depositor, the Master Servicer, the Trustee, the
Certificate Registrar nor any agent of the Depositor, the Master Servicer, the
Trustee or the Certificate Registrar shall be affected by notice to the contrary
except as provided in Section 5.02(f).
Section 5.05. Appointment of Paying Agent
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.02. In the event of
any such appointment, on or prior to each Distribution Date the Master Servicer
on behalf of the Trustee shall deposit or cause to be deposited with the Paying
Agent a sum sufficient to make the payments to Certificateholders in the amounts
and in the manner provided for in Section 4.02, such sum to be held in trust for
the benefit of Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. Any sums so
held by such Paying Agent shall be held only in Eligible Accounts to the extent
such sums are not distributed to the Certificateholders on the date of receipt
by such Paying Agent.
121
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 ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; and
provided further that each Rating Agency's ratings, if any Class of Class A
Certificates, Class M Certificates or Class B Certificates in effect immediately
prior to such merger or consolidation will not be qualified, reduced or
withdrawn as a result thereof (as evidenced by a letter to such effect from each
Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section
6.04 to the contrary, the Master Servicer may assign its rights and delegate its
duties and obligations under this Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, is reasonably
satisfactory to the Trustee and the Depositor, is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor and
the Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to
122
be performed or observed by the Master Servicer under this Agreement; provided,
further, that each Rating Agency's rating of the Classes of Certificates that
have been rated in effect immediately prior to such assignment and delegation
will not be qualified, reduced or withdrawn as a result of such assignment and
delegation (as evidenced by a letter to such effect from each Rating Agency). In
the case of any such assignment and delegation, the Master Servicer shall be
released from its obligations under this Agreement, except that the Master
Servicer shall remain liable for all liabilities and obligations incurred by it
as Master 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 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)
123
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. 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.
124
ARTICLE VII
DEFAULT
Section 7.01. Events of Default
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to distribute or cause to be
distributed to Holders of Certificates of any Class any distribution
required to be made under the terms of the Certificates of such
Class and this Agreement and, in either case, such failure shall
continue unremedied for a period of 5 days after the date upon which
written notice of such failure, requiring such failure to be
remedied, shall have been given to the Master Servicer by the
Trustee or the Depositor or to the Master Servicer, the Depositor
and the Trustee by the Holders of Certificates of such Class
evidencing Percentage Interests aggregating not less than 25%; or
(ii) the Master Servicer shall fail to observe or perform in any material
respect any other of the covenants or agreements on the part of the
Master Servicer contained in the Certificates of any Class or in
this Agreement and such failure shall continue unremedied for a
period of 30 days (except that such number of days shall be 15 in
the case of a failure to pay the premium for any Required Insurance
Policy) after the date on which written notice of such failure,
requiring the same to be remedied, shall have been given to the
Master Servicer by the Trustee or the Depositor, or to the Master
Servicer, the Depositor and the Trustee by the Holders of
Certificates of any Class evidencing, as to such Class, Percentage
Interests aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar
law or appointing a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings, or for the winding-up or
liquidation of its affairs, shall have been entered against the
Master Servicer and such decree or order shall have remained in
force undischarged or unstayed for a period of 60 days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities, or
similar proceedings of, or relating to, the Master Servicer or of,
or relating to, all or substantially all of the property of the
Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay its
debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an
125
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 Holders of Certificates entitled to at least 51% of the Voting
Rights, by notice in writing to the Master Servicer (and to the Depositor if
given by the Trustee or to the Trustee if given by the Depositor), terminate all
of the rights and obligations of the Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, 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 shall, by notice to the Master Servicer and
the Depositor, immediately terminate all of the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder as
provided in Section 4.04(b). On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates (other than as a Holder
thereof) or the Mortgage Loans or otherwise, shall subject to Section 7.02 pass
to and be vested in the Trustee or the Trustee's designee appointed pursuant to
Section 7.02; and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees to cooperate with the Trustee 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.
126
Section 7.02. Trustee or Depositor to Act; Appointment of Successor
(a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 or resigns in accordance with Section 6.04,
the Trustee or, upon notice to the Depositor and with the Depositor's consent 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. If the Trustee has become the
successor to the Master Servicer in accordance with Section 6.04 or Section
7.01, then notwithstanding the above, the Trustee may, if it shall be unwilling
to so act, or shall, if it is unable to so act, appoint, or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, which is also a ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ 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. 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. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of such
successor out of payments on Mortgage Loans as it and such successor shall
agree; provided, however, that no such compensation shall be in excess of that
permitted the initial Master Servicer hereunder. The Depositor, the Trustee, the
Custodian and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. The
Servicing Fee for any successor Master Servicer appointed pursuant to this
Section 7.02 will be lowered with respect to those Mortgage Loans, if any, where
the Subservicing Fee accrues at a rate of less than 0.200% per annum in the
event that the successor Master Servicer is not servicing such Mortgage Loans
directly and it is necessary to raise the related Subservicing Fee to a rate of
0.200% per annum in order to hire a Subservicer with respect to such Mortgage
Loans.
(b) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in
127
causing MERS to revise its records to reflect the transfer of servicing to the
successor Master Servicer as necessary under MERS' rules and regulations, or
(ii) the predecessor Master Servicer shall cooperate with the successor Master
Servicer in causing MERS to execute and deliver an assignment of Mortgage in
recordable form to transfer the Mortgage from MERS to the Trustee and to execute
and deliver such other notices, documents and other instruments as may be
necessary or desirable to effect a transfer of such Mortgage Loan or servicing
of such Mortgage Loan on the MERS(R) System to the successor Master Servicer.
The predecessor Master Servicer shall file or cause to be filed any such
assignment in the appropriate recording office. The predecessor Master Servicer
shall bear any and all fees of MERS, costs of preparing any assignments of
Mortgage, and fees and costs of filing any assignments of Mortgage that may be
required under this subsection (b). The successor Master Servicer shall cause
such assignment to be delivered to the Trustee or the Custodian promptly upon
receipt of the original with evidence of recording thereon or a copy certified
by the public recording office in which such assignment was recorded.
Section 7.03. Notification to Certificateholders
(a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived as provided in Section 7.04 hereof.
Section 7.04. Waiver of Events of Default
The Holders representing at least 66% of the Voting Rights of Certificates
affected by a default or Event of Default hereunder may waive any default or
Event of Default; provided, however, that (a) a default or Event of Default
under clause (i) of Section 7.01 may be waived only by all of the Holders of
Certificates affected by such default or Event of Default and (b) no waiver
pursuant to this Section 7.04 shall affect the Holders of Certificates in the
manner set forth in Section 11.01(b)(i), (ii) or (iii). Upon any such waiver of
a default or Event of Default by the Holders representing the requisite
percentage of Voting Rights of Certificates affected by such default or Event of
Default such default or Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose hereunder. No such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon except to the extent expressly so waived.
128
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred (which has not
been cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents.
The Trustee shall forward or cause to be forwarded in a timely fashion the
notices, reports and statements required to be forwarded by the Trustee pursuant
to Sections 4.03, 7.03, and 10.01. The Trustee shall furnish in a timely fashion
to the Master Servicer such information as the Master Servicer may reasonably
request from time to time for the Master Servicer to fulfill its duties as set
forth in this Agreement. The Trustee covenants and agrees that it shall perform
its obligations hereunder in a manner so as to maintain the status of each 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
129
Depositor or the Master Servicer and which on their face, do not contradict the
requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error
of judgment made in good faith by a Responsible Officer or Responsible Officers
of the Trustee, unless it shall be proved that the Trustee was negligent in
ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect
to any action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding Certificates
which evidence, Percentage Interests aggregating not less than 25% of the
affected Classes as to the time, method and place of conducting any proceeding
for any remedy available to the Trustee, or exercising any trust or power
conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any
default (other than a default in payment to the Trustee) specified in clauses
(i) and (ii) of Section 7.01 or an Event of Default under clauses (iii), (iv)
and (v) of Section 7.01 unless a Responsible Officer of the Trustee assigned to
and working in the Corporate Trust Office obtains actual knowledge of such
failure or event or the Trustee receives written notice of such failure or event
at its Corporate Trust Office from the Master Servicer, the Depositor or any
Certificateholder; and
(v) Except to the extent provided in Section 7.02, no
provision in this Agreement shall require the Trustee to expend or risk its own
funds (including, without limitation, the making of any Advance) or otherwise
incur any personal financial liability in the performance of any of its duties
as Trustee hereunder, or in the exercise of any of its rights or powers, if the
Trustee shall have reasonable grounds for believing that repayment of funds or
adequate indemnity against such risk or liability is not reasonably assured to
it.
(d) The Trustee shall timely pay, from its own funds, the amount of
any and all federal, state and local taxes imposed on the Trust Fund or its
assets or transactions including, without limitation, (A) "prohibited
transaction" penalty taxes as defined in Section 860F of the Code, if, when and
as the same shall be due and payable, (B) any tax on contributions to a REMIC
after the Closing Date imposed by Section 860G(d) of the Code and (C) any tax on
"net income from foreclosure property" as defined in Section 860G(c) of the
Code, but only if such taxes arise out of a breach by the Trustee of its
obligations hereunder, which breach constitutes negligence or willful misconduct
of the Trustee.
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;
130
(ii) The Trustee may consult with counsel and any Opinion of
Counsel shall be full and complete authorization and protection in respect of
any action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any
of the trusts or powers vested in it by this Agreement or to institute, conduct
or defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders pursuant to the provisions of this
Agreement, unless such Certificateholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and skill in
their exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it by
this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder
and after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing so to do by the Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests, aggregating not less than
50%; provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it in the
making of such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of this
Agreement, the Trustee may require reasonable indemnity against such expense or
liability as a condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Master Servicer, if an Event of Default shall
have occurred and is continuing, and otherwise by the Certificateholder
requesting the investigation;
(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.
131
(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(R) System. Except as otherwise provided herein, the Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account or the Certificate Account by the Depositor or the Master
Servicer.
Section 8.04. Trustee May Own Certificates
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights it would have if it were not
Trustee.
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification
(a) The Master Servicer covenants and agrees to pay to the Trustee
and any co-trustee from time to time, and the Trustee and any co-trustee shall
be entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by each of them in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee and any co-trustee, and the Master Servicer 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
132
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, and the Master Servicer further agrees to
indemnify the Trustee for, and to hold the Trustee harmless against, any loss,
liability or expense arising out of, or in connection with, the provisions set
forth in the last paragraph of Section 2.01(b) hereof, including without
limitation, all costs, liabilities and expenses (including reasonable legal fees
and expenses) of investigating and defending itself against any claim, action or
proceeding, pending or threatened, relating to the provisions of such paragraph,
provided, that
(i) with respect to any such claim, the Trustee shall have
given the Master Servicer written notice thereof promptly after the Trustee
shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the
Trustee shall cooperate and consult fully with the Master Servicer in preparing
such defense; and
(iii) notwithstanding anything in this Agreement to the
contrary, the Master Servicer shall not be liable for settlement of any claim by
the Trustee entered into without the prior consent of the Master Servicer which
consent shall not be unreasonably withheld.
No termination of this Agreement shall affect the obligations created by
this Section 8.05(b) of the Master Servicer to indemnify the Trustee under the
conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the Master
Servicer in this Section 8.05(b) shall not pertain to any loss, liability or
expense of the Trustee, including the costs and expenses of defending itself
against any claim, incurred in connection with any actions taken by the Trustee
at the direction of Certificateholders pursuant to the terms of this Agreement.
Section 8.06. Eligibility Requirements for Trustee
The Trustee hereunder shall at all times be a national banking association
or a New York banking corporation having its principal office in a state and
city acceptable to the Depositor and organized and doing business under the laws
of such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for 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.
133
Section 8.07. Resignation and Removal of the Trustee
(a) The Trustee may at any time resign and be discharged from the
trusts hereby created by giving written notice thereof to the Depositor and the
Master Servicer. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation then the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.06 and shall fail to resign after
written request therefor by the Depositor, or if at any time the Trustee shall
become incapable of acting, or shall be adjudged bankrupt or insolvent, or a
receiver of the Trustee or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or liquidation, then the
Depositor may remove the Trustee and appoint a successor trustee by written
instrument, in duplicate, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee. In addition, in the
event that the Depositor determines that the Trustee has failed (i) to
distribute or cause to be distributed to Certificateholders any amount required
to be distributed hereunder, if such amount is held by the Trustee or its Paying
Agent (other than the Master Servicer or the Depositor) for distribution or (ii)
to otherwise observe or perform in any material respect any of its covenants,
agreements or obligations hereunder, and such failure shall continue unremedied
for a period of 5 days (in respect of clause (i) above) or 30 days (in respect
of clause (ii) above) after the date on which written notice of such failure,
requiring that the same be remedied, shall have been given to the Trustee by the
Depositor, then the Depositor, 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.
(c) The Holders of Certificates entitled to at least 51% of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
134
Section 8.08. Successor Trustee
(a) Any successor trustee appointed as provided in Section 8.07
shall execute, acknowledge and deliver to the Depositor and to its predecessor
trustee an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all 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 10 days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Depositor.
Section 8.09. Merger or Consolidation of Trustee
Any corporation or national banking association into which the Trustee may
be merged or converted or with which it may be consolidated or any corporation
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
national banking association succeeding to the business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation or national
banking association shall be eligible under the provisions of Section 8.06,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall mail notice of any such merger or consolidation to the
Certificateholders at their address as shown in the Certificate Register.
Section 8.10. Appointment of Co-Trustee or Separate Trustee
(a) Notwithstanding any other provisions hereof, at any time, for
the purpose of meeting any legal requirements of any jurisdiction in which any
part of the Trust Fund or property securing the same may at the time be located,
the Master Servicer and the Trustee acting jointly shall have the power and
shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of the
Trust Fund, and to vest in such Person or Persons, in such capacity, such title
to the Trust Fund, or any part thereof, and, subject
135
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Master Servicer and the Trustee may consider necessary
or desirable. If the Master Servicer shall not have joined in such appointment
within 15 days after the receipt by it of a request so to do, or in case an
Event of Default shall have occurred and be continuing, the Trustee alone shall
have the power to make such appointment. No co-trustee or separate trustee
hereunder shall be required to meet the terms of eligibility as a successor
trustee under Section 8.06 hereunder and no notice to Holders of Certificates of
the appointment of co-trustee(s) or separate trustee(s) shall be required under
Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate
trustee pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee. (d) Any
separate trustee or co-trustee may, at any time, constitute the Trustee, its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11. Appointment of Custodians
The Trustee may, with the consent of the Master Servicer and the
Depositor, or shall, at the direction of the Master Servicer 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. 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
136
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 [______________]
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 Agreement.]
[The Trustee is hereby authorized and directed to, and agrees that it
shall, enter into the Swap Agreement on behalf of the Trust Fund.]
137
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 EMC Mortgage Corporation or its designee
or the Master Servicer, as provided in Section 9.01(f), 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), to, but not including, the first day
of the month in which such repurchase price is distributed, and (B) any unpaid
Swap Termination Payment payable to the Swap Counterparty (or any Swap
Termination Payment payable to the Swap Counterparty as a result of the exercise
of the option provided for in this Section 9.01(a)(ii));
provided, however, that in no event shall the trust created hereby continue
beyond the expiration of 21 years from the death of the last survivor of the
descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United States to
the Court of St. ▇▇▇▇▇, 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 EMC Mortgage Corporation or its designee or the
Master Servicer, as applicable, 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 (w) of Section 4 of the Assignment Agreement that remain unpaid on the
date of such purchase.
138
The right of EMC Mortgage Corporation or its designee or the Master
Servicer, as applicable, 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 any Custodian shall, promptly following payment of the purchase
price, release to EMC Mortgage Corporation or its designee or the Master
Servicer, as applicable, the Mortgage Files pertaining to the Mortgage Loans
being purchased.
In addition to the foregoing, on any Distribution Date on or after the
Optional Termination Date, EMC Mortgage Corporation or its designee or the
Master Servicer, as provided in Section 9.01(f), shall have the right, at its
option, to purchase the [Class A Certificates, Class M Certificates, Class B
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, plus, with respect to any optional termination by EMC Mortgage Corporation
or its designee, an amount equal to all accrued and unpaid Servicing Fees and
reimbursement for all unreimbursed Advances and Servicing Advances, in each case
through the date of such optional termination. If the Master Servicer or EMC
Mortgage Corporation or its designee, as applicable, exercises this right to
purchase the outstanding Class A Certificates, Class M Certificates, Class B
Certificates and Class SB Certificates, EMC Mortgage Corporation or its designee
or the Master Servicer, as applicable, will promptly terminate the respective
obligations and responsibilities created hereby in respect of these Certificates
pursuant to this Article IX.
(b) The Master Servicer or EMC Mortgage Corporation or its designee,
as applicable, shall give the Trustee (and the Master Servicer if EMC Mortgage
Corporation or its designee is exercising its option) not less than 60 days'
prior notice of the Distribution Date on which (1) EMC Mortgage Corporation or
its designee or the Master Servicer, as applicable, anticipates that the final
distribution will be made to Certificateholders as a result of the exercise by
the Holder of the Class SB Certificates or the Master Servicer, as applicable,
of its right to purchase the Mortgage Loans) or (2) on which EMC Mortgage
Corporation or its designee or the Master Servicer, as applicable, anticipates
that the Certificates will be purchased as a result of the exercise by EMC
Mortgage Corporation or its designee or the Master Servicer, as applicable, 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
139
(with a copy to the Certificate Registrar) 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 EMC Mortgage Corporation or its designee or the Master Servicer, as
applicable, 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 EMC Mortgage Corporation or its
designee or the Master Servicer, as applicable, EMC Mortgage Corporation or its
designee or the Master Servicer, as applicable, 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 EMC Mortgage Corporation or its designee or the Master Servicer,
as applicable, of its right to purchase the outstanding Certificates, EMC
Mortgage Corporation or its designee or the Master Servicer, as applicable,
shall deposit in an Eligible Account, established by the Master Servicer on
behalf of the Trustee and separate from the Certificate Account, in the name of
the Trustee in trust for the registered holders of the Certificates, before the
Distribution Date on which such purchase is to occur, in immediately available
funds, an amount equal to the purchase price for the Certificates computed as
provided above, and provide notice of such deposit to the Trustee. 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. EMC Mortgage Corporation or its designee or the Master Servicer, as
applicable, 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,
Class M Certificates, Class B Certificates] and Class SB Certificates by the
Certificateholders thereof, the Trustee shall distribute to such
Certificateholders (i) the amount otherwise distributable on such Distribution
Date, if not in connection with the Holder's of the Class SB Certificates or the
Master Servicer's, as applicable, election to repurchase the Mortgage Loans or
the outstanding [Class A Certificates, Class M Certificates, Class B
Certificates] and Class SB Certificates, or (ii) if EMC Mortgage Corporation or
its designee or the Master Servicer, as applicable, elected to so repurchase the
Mortgage Loans or the outstanding [Class A Certificates, Class M Certificates,
Class B Certificates] and Class SB Certificates, an amount equal to the price
paid pursuant to
140
Section 9.01(a) as follows: first, with respect to any optional termination by
EMC Mortgage Corporation or its designee, payment of any accrued and unpaid
Servicing Fees and reimbursement for all unreimbursed Advances and Servicing
Advances, in each case through the date of such optional termination, to the
Master Servicer, second, 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, third, with respect to the Class M-1
Certificates, the outstanding Certificate Principal Balance thereof, plus
Accrued Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest, fourth, with respect to the
Class M-2 Certificates, the outstanding Certificate Principal Balance thereof,
plus Accrued Certificate Interest thereon for the related Interest Accrual
Period and any previously unpaid Accrued Certificate Interest, fifth, with
respect to the Class M-3 Certificates, the outstanding Certificate Principal
Balance thereof, plus Accrued Certificate Interest thereon for the related
Interest Accrual Period and any previously unpaid Accrued Certificate Interest,
sixth, with respect to the Class M-4 Certificates, the outstanding Certificate
Principal Balance thereof, plus Accrued Certificate Interest thereon for the
related Interest Accrual Period and any previously unpaid Accrued Certificate
Interest, seventh, with respect to the Class M-5 Certificates, the outstanding
Certificate Principal Balance thereof, plus Accrued Certificate Interest thereon
for the related Interest Accrual Period and any previously unpaid Accrued
Certificate Interest, eighth, with respect to the Class M-6 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest, ninth, with respect to the Class M-7
Certificates, the outstanding Certificate Principal Balance thereof, plus
Accrued Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest, tenth, with respect to the
Class M-8 Certificates, the outstanding Certificate Principal Balance thereof,
plus Accrued Certificate Interest thereon for the related Interest Accrual
Period and any previously unpaid Accrued Certificate Interest, eleventh, with
respect to the Class B Certificates, the outstanding Certificate Principal
Balance thereof, plus Accrued Certificate Interest thereon for the related
Interest Accrual Period and any previously unpaid Accrued Certificate Interest,
twelfth, to the Class A, Class M and Class B 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, thirteenth, 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 fourteenth, 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 Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders
to be withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Master Servicer (if it exercised its right to
purchase the Mortgage Loans) or the Trustee (in any other case), shall give a
second written notice to the remaining
141
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within six months after the
second notice any Certificate shall not have been surrendered for cancellation,
the Trustee shall take appropriate steps as directed by the Master Servicer to
contact the remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the escrow account and of
contacting Certificateholders shall be paid out of the assets which remain in
the escrow account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to the Master Servicer all amounts distributable to the holders thereof and
the Master Servicer shall thereafter hold such amounts until distributed to such
Holders. No interest shall accrue or be payable to any Certificateholder on any
amount held in the escrow account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01 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 Trustee shall on such date cause all funds in
the Eligible Account established by the Master Servicer deposited therein by the
Master Servicer pursuant to Section 9.01(b) to be withdrawn therefrom and
deposited in a separate escrow account for the benefit of such
Certificateholders, and the Master Servicer shall give a second written notice
to such Certificateholders to surrender their Certificates for payment of the
purchase price therefor. If within six months after the second notice any
Certificate shall not have been surrendered for cancellation, the Trustee shall
take appropriate steps as directed by the Master Servicer to contact the Holders
of such Certificates concerning surrender of their Certificates. The costs and
expenses of maintaining the escrow account and of contacting Certificateholders
shall be paid out of the assets which remain in the escrow account. If within
nine months after the second notice any Certificates shall not have been
surrendered for cancellation in accordance with this Section 9.01, the Trustee
shall pay to the Master Servicer all amounts distributable to the Holders
thereof and 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 escrow account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for payment in
accordance with this Section 9.01. Any Certificate that is not surrendered on
the Distribution Date on which a purchase pursuant to this Section 9.01 occurs
as provided above will be deemed to have been purchased and the Holder as of
such date will have no rights with respect thereto except to receive the
purchase price therefor minus any costs and expenses associated with such escrow
account and notices allocated thereto. Any Certificates so purchased or deemed
to have been purchased on such Distribution Date shall remain outstanding
hereunder. The Master Servicer shall be for all purposes the Holder thereof as
of such date.
(f) With respect to the first possible Optional Termination Date,
EMC Mortgage Corporation or its designee shall have the sole option to exercise
the purchase options described in Section 9.01(a) and the Master Servicer shall
have no claim thereto. If EMC Mortgage Corporation or its designee elects not to
exercise one of its options to purchase pursuant to Section 9.01(a) with respect
to the first possible Optional Termination Date, it shall lose such right and
have no claim to exercise any purchase options pursuant to this Section 9.01
thereafter. Beginning with the second possible Optional Termination Date and
thereafter, the
142
Master Servicer shall have the sole option to exercise the purchase options
described in Section 9.01(a).
(g) EMC Mortgage Corporation, if it is not the Master Servicer or
any Subservicer, or its designee, as applicable, shall be deemed to represent
that one of the following will be true and correct: (i) the exercise of the
optional termination right set forth in Section 9.01 shall not result in a
non-exempt prohibited transaction under ERISA or Section 4975 of the Code or
(ii) EMC Mortgage Corporation or such designee, as the case may be, is (A) not a
party in interest with respect to any Plan and (B) is not a "benefit plan
investor" (other than a plan sponsored or maintained by EMC Mortgage Corporation
or the designee, as the case may be, provided that no assets of such plan are
invested or deemed to be invested in the Certificates). If the holder of the
option is unable to exercise such option by reason of the preceding sentence,
then the Master Servicer may exercise such option.
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 and the Master Servicer have received an Opinion
of Counsel (which Opinion of Counsel shall not be an expense of the Trustee) to
the effect that the failure of any 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 REMIC I 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.]
143
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 the Class R-I
Certificates shall be designated as the sole Class of "residual interests" in
the REMIC I. The REMIC II Regular Interests shall be designated as the "regular
interests" and the Class R-II Certificates shall be designated as the sole Class
of "residual interests" in the REMIC II. The REMIC III Regular Interests shall
be designated as the "regular interests" and the Class R-III Certificates shall
be designated as the sole Class of "residual interests" in the 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 of 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 of in the manner provided under Treasury regulations section 1.860F-4(d)
and Treasury regulations Section 301.6231(a)(7)-1. The REMIC Administrator, as
tax matters person, shall (i) act on behalf of each of REMIC 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 deliver such Tax Returns in a timely manner to the
Trustee and the Trustee shall sign and file such Tax Returns in a timely manner.
The expenses of preparing such returns shall be borne by
144
the REMIC Administrator without any right of reimbursement therefor. The REMIC
Administrator agrees to indemnify and hold harmless the Trustee with respect to
any tax or liability arising from the Trustee's signing of Tax Returns that
contain errors or omissions. The Trustee and Master Servicer shall promptly
provide the REMIC Administrator with such information as the REMIC Administrator
may from time to time request for the purpose of enabling the REMIC
Administrator to prepare Tax Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a
Class R Certificate such information as is necessary for the application of any
tax relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee and the Trustee shall forward to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount, if any, and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of each
REMIC created hereunder.
(f) The Master Servicer and the REMIC Administrator shall take such
actions and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Master Servicer's or the REMIC Administrator's control and
the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status thereof as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). In performing their duties as more specifically
set forth herein, the Master Servicer and the REMIC Administrator shall not
knowingly or intentionally take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action reasonably
within their respective control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any 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 Master
Servicer or the REMIC Administrator, as applicable, has received an Opinion of
Counsel (at the expense of the party seeking to take such action or, if such
party fails to pay such expense, and the Master Servicer or the REMIC
Administrator, as applicable, determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to the Trust Fund created hereunder, endanger such status or,
unless the Master Servicer or the REMIC Administrator or both, as applicable,
determine in its or their sole discretion to indemnify the Trust Fund against
the imposition of such a tax, result in the imposition of such a tax. Wherever
in this Agreement a contemplated action may not be taken because the timing of
such action might result in the imposition of a tax on the Trust Fund, or may
only be taken pursuant to an Opinion of Counsel that such action would not
impose a tax on the Trust Fund, such action may nonetheless be taken provided
that the indemnity given in the preceding sentence with respect to any taxes
that might be imposed on the Trust Fund has been given and that all other
preconditions to the taking of such action have
145
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 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 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.
146
(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 Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, the "latest possible maturity date" by which the principal
balance of each regular interest in each REMIC would be reduced to zero is
[________], 20[_], 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 has 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 Depositor,
the REMIC Administrator and the Master Servicer for any taxes and costs
including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Depositor or the Master Servicer, as a result of
a breach of the Trustee's covenants set forth in Article VIII or this Article X.
In the event that Residential Funding is no longer the Master Servicer, the
Trustee shall indemnify Residential Funding for any taxes and costs including,
without limitation, any reasonable attorneys fees imposed on or incurred by
Residential Funding as a result of a breach of the Trustee's covenants set forth
in Article VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer or the Trustee,
as a result of a breach of the REMIC Administrator's covenants set forth in this
Article X with respect to compliance with the REMIC
147
Provisions, including without limitation, any penalties arising from the
Trustee's execution of Tax Returns prepared by the REMIC Administrator that
contain errors or omissions; provided, however, that such liability will not be
imposed to the extent such breach is a result of an error or omission in
information provided to the REMIC Administrator by the Master Servicer in which
case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the
Depositor, the REMIC Administrator and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Depositor, 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.
148
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment
(a) This Agreement or any Custodial Agreement may be amended from
time to time by the Depositor, the Master Servicer and the Trustee, without the
consent of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or
therein, which may be inconsistent with any other provisions herein or therein
or to correct any error,
(iii) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or desirable to maintain the qualification of
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, 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
149
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, or
(ii) adversely affect in any material respect the interest of
the Holders of Certificates of any Class in a manner other than as described in
clause (i) hereof without the consent of Holders of Certificates of such Class
evidencing, as to such Class, Percentage Interests aggregating not less than
66%, or
(iii) reduce the aforesaid percentage of Certificates of any
Class the Holders of which are required to consent to any such amendment, in any
such case without the consent of the Holders of all Certificates of such Class
then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless it shall
have first received an Opinion of Counsel (at the expense of the party seeking
such amendment) to the effect that such amendment or the exercise of any power
granted to the Master Servicer, the Depositor or the Trustee in accordance with
such amendment will not result in the imposition of a federal tax on the Trust
Fund or cause any REMIC 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.
150
(e) The Depositor shall have the option, in its sole discretion, to
obtain and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for the
purpose of protecting the Holders of the Class R Certificates against any or all
Realized Losses or other shortfalls. Any such instrument or fund shall be held
by the Trustee for the benefit of the Class R Certificateholders, but shall not
be and shall not be deemed to be under any circumstances included in 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
Section 1.860G-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, 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.
(f) Notwithstanding anything to the contrary set forth in Sections
11.01 (b), (c), (d), and (e), any amendment of Sections 4.02(c)(x) and 4.08 of
this Agreement shall require the consent of the Swap Counterparty as a
third-party beneficiary of Sections 4.02(c)(x) and 4.08 of this Agreement.
Section 11.02. Recordation of Agreement; Counterparts
(a) To the extent permitted by applicable law, this Agreement is
subject to recordation in all appropriate public offices for real property
records in all the counties or other comparable jurisdictions in which any or
all of the properties subject to the Mortgages are situated, and in any other
appropriate public recording office or elsewhere, such recordation to be
effected by the Master Servicer and at its expense on direction by the Trustee
(pursuant to the request of the Holders of Certificates entitled to at least 25%
of the Voting Rights), but only upon direction accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders.
(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.
151
Section 11.03. Limitation on Rights of Certificateholders
(a) The death or incapacity of any Certificateholder shall not
operate to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of any
of the parties hereto.
(b) No Certificateholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as hereinbefore provided, and unless also the
Holders of Certificates of any Class evidencing in the aggregate not less than
25% of the related Percentage Interests of such Class, shall have made written
request upon the Trustee to institute such action, suit or proceeding in its own
name as Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee 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 and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
152
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, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President (RAMP), or such other address as may hereafter be furnished to the
Master Servicer and the Trustee in writing by the Depositor; (b) in the case of
the Master Servicer, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
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, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 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 [▇▇▇▇▇'▇, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, 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 ▇▇▇▇▇'▇]; and (f) [in the case of the Swap
Counterparty, Hedge Agreement Provider, [_________________], or such other
address as may be hereafter furnished to the Depositor, the Trustee and the
Master Servicer in writing by the Swap Counterparty]. Any notice required or
permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such holder as shown in the Certificate
Register. Any notice so mailed within the time prescribed in this Agreement
shall be conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section 11.06. Notices to Rating Agencies
The Depositor, the Master Servicer or the Trustee, as applicable, (a)
shall notify each Rating Agency at such time as it is otherwise required
pursuant to this Agreement to give notice of the occurrence of any of the events
described in clause (i), (ii), (iii), (iv), (vii), (viii), (ix) or (x) below,
(b) shall notify the Subservicer at such time as it is otherwise required
pursuant to this Agreement to give notice of the occurrence of any of the events
described in clause (i), (ii), (iii)(1), (vii)(1) or (ix) below, or (c) provide
a copy to each Rating Agency at such time as otherwise required to be delivered
pursuant to this Agreement of any of the statements described in clauses (v) and
(vi) below:
(i) a material change or amendment to this Agreement,
(ii) the occurrence of an Event of Default,
(iii) (1) the termination or appointment of a successor Master
Servicer or (2) the termination or appointment of a successor Trustee or a
change in the majority ownership of the Trustee,
153
(iv) the filing of any claim under the Master Servicer's
blanket fidelity bond and the errors and omissions insurance policy required by
Section 3.12 or the cancellation or modification of coverage under any such
instrument,
(v) the statement required to be delivered to the Holders of
each Class of Certificates pursuant to Section 4.03,
(vi) the statements required to be delivered pursuant to
Sections 3.18 and 3.19,
(vii) (1) a change in the location of the Custodial Account or
(2) a change in the location of the Certificate Account,
(viii) the occurrence of any monthly cash flow shortfall to
the Holders of any Class of Certificates resulting from the failure by the
Master Servicer to make an Advance pursuant to Section 4.04,
(ix) the occurrence of the Final Distribution Date, and
(x) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the events
described in clauses (iv), (vii) or (viii) above, the Master Servicer shall
provide prompt written notice to each Rating Agency and the Subservicer, if
applicable, of any such event known to the Master Servicer.
Section 11.07. Severability of Provisions
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.08. Supplemental Provisions for Resecuritization
(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
154
Certificates initially issued hereunder, the adoption of the Supplemental
Article shall not constitute an "amendment" of this Agreement.
(b) 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. Intended Third Party Beneficiary
The Swap Counterparty is an express third-party beneficiary of Sections
4.02(c)(x) and 4.08 of this Agreement, and shall have the right to enforce the
provisions of Sections 4.02(c)(x) and 4.08 of this Agreement.
155
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of the 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 fully with the Depositor
to deliver to the Depositor (including any of its assignees or designees), any
and all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Depositor to permit the
Depositor or such Depositor to comply with the provisions of Regulation AB,
together with such disclosures relating to the Master Servicer, the Trustee and
the Mortgage Loans, or the servicing of the Mortgage Loans, reasonably believed
by the Depositor to be necessary in order to effect such compliance.
Section 12.02. Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent to the Depositor as of the
date on which information is first provided to the Depositor under Section 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 act or failure to act of the Trustee; (ii) it has not
been terminated as trustee in a securitization of mortgage loans; (iii) 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; (iv) there are no material legal or
governmental proceedings pending (or known to be contemplated) against it; and
(v) there are no affiliations, 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 (each,
a "Transaction Party").
(b) If so requested by the Depositor on any date following the date on
which information is first provided to the Depositor under Section 12.03, 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
156
not accurate as of the date of such request or such confirmation, provide
reasonably adequate disclosure of the pertinent facts, in writing, to the
requesting party.
Section 12.03. Information to Be Provided by the Trustee.
(c) If so requested by the Depositor for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
Certificates, the Trustee shall (i) notify the Depositor in writing of (A) any
material litigation or governmental proceedings pending against the Trustee and
(B) any affiliations or relationships that develop following the Closing Date
between the Trustee and any Transaction Party, and (ii) provide to the Depositor
a written description of such proceedings, affiliations or relationships.
(d) In addition to such information as the Trustee is obligated to provide
pursuant to other provisions of this Agreement, if so requested by the
Depositor, the Trustee shall provide such information reasonably available to
the Trustee regarding the performance or servicing of the Mortgage Loans as is
reasonably required to facilitate preparation of distribution reports in
accordance with Item 1121 of Regulation AB.
Section 12.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(e) deliver to the Depositor a report (in form and substance reasonably
satisfactory to the Depositor) regarding the Trustee'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 Depositor and signed by an
authorized officer of the Trustee, and shall address each of the Servicing
Criteria specified on a certification substantially in the form of Exhibit S
hereto; and
(f) 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.
(g) 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 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:
157
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification, accountants' letter
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;
(ii) any failure by the Trustee to deliver any information, report,
certification, accountants' letter or other material when and as required under
this Article XII; or
(iii) any breach by the Trustee of a representation or warranty set
forth in Section 12.02(a) or in a writing furnished pursuant to Section
12.02(b).
(h) In the case of any failure of performance described in clause (ii) of
this Section, the Trustee shall promptly reimburse the Depositor for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required by the Trustee.
[Signature Page Follows]
158
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the date and year first above written.
RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
By: _________________________
Name:
Title: Vice President
RESIDENTIAL FUNDING COMPANY, LLC
By: _________________________
Name:
Title:
[_______________________],
as Trustee
By: _________________________
Name:
Title:
▇▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF HENNEPIN )
On the ___ day of [___________], 20[_], before me, a notary public in and
for said State, personally appeared _______________, known to me to be a [Vice
President] of Residential Asset Mortgage Products, Inc., one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_________________________
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the ___ day of [___________], 20[_], before me, a notary public in and
for said State, personally appeared ____________, known to me to be a [Managing
Director] of Residential Funding Company, LLC, the Delaware 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 NEW YORK )
) ss.:
COUNTY OF NEW YORK )
On the ___ day of December, 2005, before me, a notary public in and for
said State, personally appeared ______________, known to me to be a Assistant
Vice President of [_________________], a [______________] that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said banking corporation, and acknowledged to me that such banking
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
_________________________
Notary Public
[Notarial Seal]
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 THE RIGHT TO RECEIVE PAYMENTS UNDER THE 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 TO THE ISSUER OR ITS AGENT FOR REGISTRATION OF
TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE
NAME OF CEDE & CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE &
CO., ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO
ANY PERSON IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.
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").
A-1
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.
A-2
CUSIP: [______] Certificate No. [_]
Date of Pooling and Servicing [Adjustable Pass-Through Rate]
Agreement and Cut-off Date:
[________] 1, 20[_]
First Distribution Date: Percentage Interest: [_]%
[_________], 20[_]
Master Servicer: Aggregate Initial Certificate Principal
Residential Funding Company, LLC Balance of the Class A-[_] Certificates:
$_________
Final Scheduled Distribution Date: Initial Certificate Principal Balance of
[___________], 20[_] this Class A-[_] Certificate:
$_________
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 20[_]-RZ[_]
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 one- to
four-family fixed and adjustable interest rate, first lien
mortgage loans sold by RESIDENTIAL ASSET MORTGAGE PRODUCTS,
INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or
[_______________] 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 Mortgage Products, Inc., the Master
Servicer, the Trustee or [_______________] or any of their affiliates. None of
the Depositor, the Master Servicer, [_______________] or any of their affiliates
will have any obligation with respect to any certificate or other obligation
secured by or payable from payments on the Certificates.
This certifies that [____________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class A-[_] Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of one- to four-family fixed and
adjustable interest rate, first lien mortgage loans (the "Mortgage Loans"), sold
by Residential Asset Mortgage Products, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement
referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Depositor, the
A-3
Master Servicer and [_______________], as trustee (the "Trustee"), a summary of
certain of the pertinent provisions of which is set forth hereafter. To the
extent not defined herein, the capitalized terms used herein have the meanings
assigned in the Agreement. This Certificate is issued under and is subject to
the terms, provisions and conditions of the Agreement, to which Agreement the
Holder of this Certificate by virtue of the acceptance hereof assents and by
which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the day prior (or if such last day is not a Business Day,
the Business Day immediately preceding such day) to such Distribution Date (the
"Record Date"), from the Available Distribution Amount in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
of interest and principal, if any, required to be distributed to Holders of
Class A-[_] Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of, this Certificate at the office or agency
appointed by the Trustee for that purpose in [_______________]. The 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 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.
A-4
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 [_______________], 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.
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").
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 neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
A-5
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
or Holder of the Class SB Certificates, as described in the Agreement, thereby
effecting early retirement of the related Certificates. The Agreement permits,
but does not require, the purchase by the Master Servicer or Holder of the Class
SB Certificates, as described in the Agreement, (i) from the Trust Fund of all
remaining Mortgage Loans and all property acquired in respect of such Mortgage
Loans, at a price determined as provided in the Agreement, or (ii) in whole, but
not in part, of all of the Class A Certificates, [Class M Certificates] and
Class SB Certificates from the Holders thereof; provided, that any such options
may only be exercised if the Stated Principal Balance of the Mortgage Loans
(before giving effect to the distributions to be made on such Distribution
Date), as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the Cut-off Date Principal Balance
of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_______________],
as Trustee
By: ___________________________________
Authorized Signatory
Dated: [_______], 20[_]
CERTIFICATE OF AUTHENTICATION
This is one of the Class A-[_] Certificates referred to in the
within-mentioned Agreement.
[_______________], as Certificate Registrar
By:___________________________________
Authorized Signatory
A-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Asset-Backed
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:_________________ ___________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
________________________________________________________________________________
for the account of _____________________________________________________________
account number or, if mailed by check, to ______________________________________
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________________, the
assignee named above, or __________________________, as its agent.
A-8
EXHIBIT B
FORM OF CLASS M-[_] 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).
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 ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE") [COUPLED WITH A RIGHT TO RECEIVE PAYMENTS
UNDER THE SWAP 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").
B-1
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.
B-2
CUSIP: [______] Certificate No. M-[_]
Date of Pooling and Servicing [Adjustable Pass-Through Rate]
Agreement and Cut-off Date:
[________] 1, 20[_]
First Distribution Date: Aggregate Initial Certificate Principal
[________], 20[_] Balance of the Class M-[_]Certificates:
$______
Master Servicer: Initial Certificate Principal Balance
Residential Funding Company, LLC of the Class M-[_] Certificates:
$_________
Final Scheduled Distribution Date:
_________ __, 20[_]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 20[_]-RZ[_]
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 one- to
four-family fixed and adjustable interest rate, first lien
mortgage loans sold by RESIDENTIAL ASSET MORTGAGE PRODUCTS,
INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or
[___________] 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 Mortgage Products, Inc., the Master
Servicer, the Trustee or [___________] or any of their affiliates. None of the
Depositor, the Master Servicer, [___________] or any of their affiliates will
have any obligation with respect to any certificate or other obligation secured
by or payable from payments on the Certificates.
This certifies that [___________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class M-[_] Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of one- to four-family fixed and
adjustable rate, first lien mortgage loans (the "Mortgage Loans"), sold by
Residential Asset Mortgage Products, Inc. (hereinafter called the "Depositor,"
which term includes any successor entity under the Agreement referred to below).
The Trust Fund was created pursuant to a Pooling and Servicing Agreement dated
as specified above (the "Agreement") among the Depositor, the Master Servicer
and [___________], 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
B-3
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 day prior (or if such last day is not a Business Day,
the Business Day immediately preceding such day) to such Distribution Date (the
"Record Date"), from the Available Distribution Amount in an amount equal to the
product of the Percentage Interest evidenced by this Certificate and the amount
of interest and principal, if any, required to be distributed to Holders of
Class M-[_] Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in [___________]. The Initial Certificate
Principal Balance of this Certificate is set forth above. The Certificate
Principal Balance hereof will be reduced to the extent of the distributions
allocable to principal and any Realized Losses allocable hereto.
No transfer of this 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").
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders. As provided in the Agreement, withdrawals from the Custodial
Account and/or the Certificate Account created for the benefit of
Certificateholders may be made by the Master Servicer from time to time for
purposes other than distributions to Certificateholders, such purposes including
without limitation reimbursement to the Depositor and the Master Servicer of
advances made, or certain expenses incurred, by either of them.
B-4
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 at any 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 [__________________], 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 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 neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure
B-5
of any Mortgage Loan, and (ii) the purchase by the Master Servicer or Holder of
the Class SB Certificates, as described in the Agreement, thereby effecting
early retirement of the related Certificates. The Agreement permits, but does
not require, the purchase by the Master Servicer or Holder of the Class SB
Certificates, as described in the Agreement, (i) from the Trust Fund of all
remaining Mortgage Loans and all property acquired in respect of such Mortgage
Loans, at a price determined as provided in the Agreement, or (ii) in whole, but
not in part, of all of the Class A Certificates, Class M Certificates and Class
SB Certificates from the Holders thereof; provided, that any such options may
only be exercised if the Stated Principal Balance of the Mortgage Loans (before
giving effect to the distributions to be made on such Distribution Date), as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance of
the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[__________________],
as Trustee
By: ___________________________________
Authorized Signatory
Dated: [_________], 20[_]
CERTIFICATE OF AUTHENTICATION
This is one of the Class M-[_] Certificates referred to in the
within-mentioned Agreement.
[__________________],
as Certificate Registrar
By: ___________________________________
Authorized Signatory
B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Asset-Backed
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:_________________ ___________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
________________________________________________________________________________
for the account of _____________________________________________________________
account number or, if mailed by check, to ______________________________________
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________________, the
assignee named above, or __________________________, as its agent.
EXHIBIT C
FORM OF CLASS SB CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A
CERTIFICATES AND CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED
HEREIN).
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").
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").
C-1
CUSIP:__________ Certificate No. [_]
Date of Pooling and Servicing Percentage Interest: [__]%
Agreement and Cut-off Date:
[_____________], 20[_]
First Distribution Date: Aggregate Certificate Principal Balance
[_____________], 20[_] of the Class SB Certificates: $______
Master Servicer: Initial Certificate Principal Balance of
Residential Funding Company, LLC this Certificate: $_________
Final Scheduled Distribution Date:
[_____________], 20[_]
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 20[_]-RZ[_]
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 one- to
four-family fixed and adjustable interest rate, first lien
mortgage loans sold by RESIDENTIAL ASSET MORTGAGE PRODUCTS,
INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or any of
their affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by
Residential Asset Mortgage Products, Inc., the Master Servicer, the Trustee or
any of their affiliates. None of the Depositor, the Master Servicer or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
This certifies that [_____________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Certificate Principal Balance of this Certificate by the aggregate Certificate
Principal Balance of all Class SB Certificates, both as specified above) in
certain distributions with respect to the Trust Fund consisting primarily of an
interest in a pool of one- to four-family fixed and adjustable interest rate,
first lien mortgage loans (the "Mortgage Loans"), sold by Residential Asset
Mortgage Products, Inc. (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Depositor, the Master Servicer and [_____________],
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
C-2
have the meanings assigned in the Agreement. This Certificate is issued under
and is subject to the terms, provisions and conditions of the Agreement, to
which Agreement the Holder of this Certificate by virtue of the acceptance
hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last day (or if such last day is not a Business Day,
the Business Day immediately preceding such last day) of the month immediately
preceding the month in which the related Distribution Date occurs (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 [_____________].
The Notional Amount of this Class SB Certificate as of any date of
determination will be calculated as described in the Agreement. This Class SB
Certificate will not accrue interest on its Certificate Principal Balance.
No transfer of this Class SB 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
C-3
using "plan assets" of any such plan to effect such acquisition (each of the
foregoing, a "Plan Investor").
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the. Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in [_____________], 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
C-4
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 neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or Holder of the Class SB Certificates, as described in the Agreement, thereby
effecting early retirement of the related Certificates. The Agreement permits,
but does not require, the purchase by the Master Servicer or Holder of the Class
SB Certificates, as described in the Agreement, (i) from the Trust Fund of all
remaining Mortgage Loans and all property acquired in respect of such Mortgage
Loans, at a price determined as provided in the Agreement, or (ii) in whole, but
not in part, of all of the [Class A Certificates, Class M Certificates] and
Class SB Certificates from the Holders thereof; provided, that any such options
may only be exercised if the Stated Principal Balance of the Mortgage Loans
(before giving effect to the distributions to be made on such Distribution
Date), as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the Cut-off Date Principal Balance
of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[________________________],
as Trustee
By:___________________________________
Authorized Signatory
Dated: [_____________], 20[_]
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
[________________________],
as Certificate Registrar
By:___________________________________
Authorized Signatory
C-6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Asset-Backed
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:_________________ ___________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
________________________________________________________________________________
for the account of _____________________________________________________________
account number or, if mailed by check, to ______________________________________
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________________, the
assignee named above, or __________________________, as its agent.
EXHIBIT D
FORM OF CLASS R-[__] CERTIFICATE
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").
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
D-1
FOREGOING (OTHER THAN AN INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS
ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT FOR ▇▇▇▇▇▇▇ 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.
D-2
Class R-[_] [Subordinate] Certificate No. [_]
Date of Pooling and Servicing Percentage Interest: [100]%
Agreement and Cut-off Date:
[_________]1, 20[_]
First Distribution Date: Final Scheduled Distribution Date:
[_________], 20[_] [_________], 20[_]
Master Servicer:
Residential Funding Company, LLC
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 20[_]-RZ[_]
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 one- to
four-family fixed and adjustable interest rate, first lien
mortgage loans sold by RESIDENTIAL ASSET MORTGAGE PRODUCTS,
INC.
This Certificate is payable solely from the assets of the Trust Fund and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or
[____________] 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 Mortgage Products, Inc., the Master
Servicer, the Trustee or [____________] or any of their affiliates. None of the
Depositor, the Master Servicer or [____________] 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 specified above in certain
distributions with respect to the Trust Fund consisting primarily of a pool of
one- to four-family fixed and adjustable interest rate, first lien mortgage
loans (the "Mortgage Loans"), sold by Residential Asset Mortgage Products, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement) among
the Depositor, the Master Servicer and [____________], 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.
D-3
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last day (or if such last day is not a Business Day,
the Business Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), from the Available
Distribution Amount in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount of interest and principal, if any,
required to be distributed to Holders of Class R-[_] Certificates on such
Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the 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 [____________]. The Holder of this
Certificate may have additional obligations with respect to this Certificate,
including tax liabilities.
No transfer of this Class R-[_] 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 herein 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 (a "Plan"), any
Person acting, directly or indirectly, on behalf of any such Plan or any Person
acquiring such Certificates with "plan assets" of a Plan
D-4
within the meaning of the Department of Labor regulation promulgated at 29
C.F.R. ss.2510.3-101 unless the Depositor, the Trustee and the Master Servicer
are provided with an Opinion of Counsel which establishes to the satisfaction of
the Depositor, the Trustee and the Master Servicer 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 Depositor, the Master Servicer, the Trustee 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 the
Agreement, which Opinion of Counsel shall not be an expense of the Depositor,
the Master Servicer, the Trustee or the Trust Fund. In lieu of such Opinion of
Counsel, a Person acquiring this Certificate may provide a certification in the
form of paragraph fifteen of Exhibit H-1 to the Agreement, which the Trustee may
rely upon without further inquiry or investigation.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in
D-5
[____________], 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 neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or Holder of the Class SB Certificates, as described in the Agreement, thereby
effecting early retirement of the related Certificates. The Agreement permits,
but does not require, the purchase by the Master Servicer or Holder of the Class
SB Certificates, as described in the Agreement, (i) from the Trust Fund of all
remaining Mortgage Loans and all property acquired in respect of such Mortgage
Loans, at a price determined as provided in the Agreement, or (ii) in whole, but
not in part, of all of the [Class A Certificates, Class M Certificates] and
Class SB Certificates from the Holders thereof; provided, that any such options
may only be exercised if the Stated Principal Balance of the Mortgage Loans
(before giving effect to the distributions to be made on such Distribution
Date), as of the Distribution Date upon which the proceeds of any such purchase
are distributed is less than ten percent of the Cut-off Date Principal Balance
of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[________________________],
as Trustee
By:___________________________________
Authorized Signatory
Dated: [__________], 20[_]
CERTIFICATE OF AUTHENTICATION
This is one of the Class R-[_] Certificates referred to in the
within-mentioned Agreement.
[________________________],
as Certificate Registrar
By:___________________________________
Authorized Signatory
D-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) a Percentage Interest evidenced by the within Mortgage Asset-Backed
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:_________________ ___________________________________________
Signature by or on behalf of assignor
___________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to
________________________________________________________________________________
for the account of _____________________________________________________________
account number or, if mailed by check, to ______________________________________
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by _____________________________________, the
assignee named above, or __________________________, as its agent.
EXHIBIT E
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time,
the "Agreement"), dated as of [___________] 1, 20[_], by and among
[________________________]., as trustee (including its successors under the
Pooling Agreement defined below, the "Trustee"), RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC., as company (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 [________________________], as custodian
(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 [___________] 1, 20[_],
relating to the issuance of Residential Asset Mortgage Products, Inc., Mortgage
Asset-Backed Pass-Through Certificates, Series 20[_]-RZ[_] (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
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
E-5-1
"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.
E-5-2
(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
E-5-3
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
E-5-4
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 will 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
E-5-5
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.
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
Miscellaneous Provisions
Section 4.1 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).
Section 4.2 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 neither the Company, the Master Servicer nor
the Trustee shall enter into any amendment hereof 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 4.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
Section 4.4 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
E-5-6
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 4.5 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.
[Signature Page Follows]
E-5-7
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
[________________]
Address: as Trustee
[________________]
[________________]
Attention: Residential Asset Mortgage By: _______________________________
Products, Inc., Name: _____________________________
Series 20[_]-RZ[_] Title: ____________________________
Address: RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: _______________________________
Name: _____________________________
Title: ____________________________
Address: RESIDENTIAL FUNDING COMPANY, LLC,
as Master Servicer.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: _______________________________
Name: _____________________________
Title: ____________________________
Address: [CUSTODIAN]
[________________]
[________________]
[________________]
By: _______________________________
Name: _____________________________
Title: ____________________________
▇-▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇ )
)ss.:
COUNTY OF NEW YORK )
On the _____ day of _______________, 20[_], before me, a notary public in
and for said State, personally appeared _____________, known to me to be a
___________ of [________________], a [__________] banking corporation that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said banking corporation and acknowledged to me that
such banking corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________________
Notary Public
[SEAL]
▇-▇-▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
)ss.:
COUNTY OF HENNEPIN )
On the _____ day of _______________, 20[_], before me, a notary public in
and for said State, personally appeared ___________________, known to me to be a
_________________ of Residential Asset Mortgage Products, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
________________________________
Notary Public
[Notorial Seal]
▇-▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
)ss.:
COUNTY OF HENNEPIN )
On the _____ day of _______________, 20[_], before me, a notary public in
and for said State, personally appeared ___________________, known to me to be a
_________________ of Residential Funding Company, LLC, the Delaware 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
[Notorial Seal]
▇-▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
)ss.:
COUNTY OF HENNEPIN )
On the _____ day of _______________, 20[_], before me, a notary public in
and for said State, personally appeared ___________________, known to me to be a
_________________ of [________________], 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
E-5-12
ANNEX I TO EXHIBIT E
FORM OF CUSTODIAN
INITIAL CERTIFICATION
[__________], 20[_]
[________________]
[________________]
[________________]
Re: Custodial Agreement, dated as of [__________], 20[_], by and among
[________________], Residential Asset Mortgage Products, Inc.,
Residential Funding Company, LLC and [________________], relating to
Mortgage Asset-Backed Pass-Through Certificates, Series 20[_]-RZ[_]
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.
[________________]
By: ___________________________________
Name: _________________________________
Title: ________________________________
E-5-13
ANNEX II TO EXHIBIT E
FORM OF CUSTODIAN INTERIM CERTIFICATION
____________ __, 20__
[__________________]
[__________________]
[__________________]
Re: Custodial Agreement, dated as of [___________] 1, 20[_], by and
among [__________________], Residential Asset Mortgage Products,
Inc., Residential Funding Company, LLC and [__________________],
relating to Mortgage Asset-Backed Pass- Through Certificates, Series
20[_]-RZ[_]
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.
[__________________]
By: ___________________________________
Name: _________________________________
Title: ________________________________
E-5-14
ANNEX III TO EXHIBIT E
FORM OF CUSTODIAN FINAL CERTIFICATION
____________ __, 20__
[__________________]
[__________________]
[__________________]
Attention: Residential Asset Mortgage Products, Inc., Series 20[_]5-RZ[_]
Re: Custodial Agreement, dated as of [____________], 20[_], by and among
[__________________], Residential Asset Mortgage Products, Inc.,
Residential Funding Company, LLC and [__________________], relating
to Mortgage Asset-Backed Pass- Through Certificates, Series
20[_]-RZ[_]
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.
[__________________]
By: ___________________________________
Name: _________________________________
Title: ________________________________
▇-▇-▇▇
▇▇▇▇▇ ▇▇ TO EXHIBIT E
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
E-5-16
EXHIBIT F
MORTGAGE LOAN SCHEDULE
[ON FILE WITH TRUSTEE AND CUSTODIAN]
EXHIBIT G
FORMS OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
________________________________
Residential Funding 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
G-2
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 Mortgage Asset-Backed Pass-Through Certificates, Series
20[_]-RZ[_], 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
H-1-1
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.
H-1-2
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
statement is accurate:
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").
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 the
statement above.
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
H-1-3
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 ______________ 20__.
[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__
H-1-4
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: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ (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, ▇▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, with copies
to the Internal Revenue Service, Attn:
H-1-5
IRS Reports Clearance Officer, W:CAR:MP:FP:S, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Comments on
the collection of information should be received by September 17, 2002. Comments
are specifically requested concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including
whether the information will have practical utility;
The accuracy of the estimated burden associated with the collection of
information (see below);
How the quality, utility, and clarity of the information to be collected
may be enhanced;
How the burden of complying with the collection of information may be
minimized, including through the application of automated collection
techniques or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation,
maintenance, and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an
estimated number of respondents of 470 and an estimated average annual burden
hours per respondent of one hour.
Books or records relating to a collection of information must be retained
as long as their contents may become material in the administration of any
internal revenue law. Generally, tax returns and tax return information are
confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed amendments
to 26 CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules
governing the transfer of noneconomic REMIC residual interests. In general, a
transfer of a noneconomic residual interest is disregarded for all tax purposes
if a significant purpose of the transfer is to 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).
H-1-6
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even in
situations where the economics of the transfer clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest. For
this reason, on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula test," an economic test. The
proposed regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any
consideration given to the transferee to acquire the interest; (2) the present
value of the expected future distributions on the interest; and (3) the present
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs. Section
1.860H-6(g) of the proposed regulations provides requirements for transfers of
FASIT ownership interests and adopts a safe harbor by reference to the safe
harbor provisions of the REMIC regulations. In January 2001, the IRS published
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) to set forth an alternative safe harbor
that taxpayers could use while the IRS and the Treasury considered comments on
the proposed regulations. Under the alternative safe harbor, if a transferor
meets the investigation requirement and the representation requirement but the
transfer fails to meet the formula test, the transferor may invoke the safe
harbor if the transferee meets a two-prong test (the asset test). A transferee
generally meets the first prong of this test if, at the time of the transfer,
and in each of the two years preceding the year of transfer, the transferee's
gross assets exceed $100 million and its net assets exceed $10 million. A
transferee generally meets the second prong of this test if it is a domestic,
taxable corporation and agrees in writing not to transfer the interest to any
person other than another domestic, taxable corporation that also satisfies the
requirements of the asset test. A transferor cannot rely on the asset test if
the transferor knows, or has reason to know, that the transferee will not comply
with its written agreement to limit the restrictions on subsequent transfers of
the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in
the case of a transfer or assignment of a noneconomic residual interest to a
foreign branch of an otherwise eligible transferee. If such a transfer or
assignment were permitted, a corporate taxpayer might seek to claim that the
provisions of an applicable income tax treaty would resource excess inclusion
income as foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset by foreign
tax credits. Such a claim would impede the assessment or collection of U.S. tax
on excess inclusion income, contrary to the congressional purpose of assuring
that such income will be taxable in all events. See, e.g., sections 860E(a)(1),
(b), (e) and 860G(b) of the Code.
The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.
H-1-7
Section 1.860E-1(c)(8) provides computational rules that a taxpayer may
use to qualify for safe harbor status under the formula test. Section
1.860E-1(c)(8)(i) provides that the transferee is presumed to pay tax at a rate
equal to the highest rate of tax specified in section 11(b). Some commentators
were concerned that this presumed rate of taxation was too high because it does
not take into consideration taxpayers subject to the alternative minimum tax
rate. In light of the comments received, this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative minimum tax rate to use the alternative minimum tax rate
applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in
the formula test are to be computed using a discount rate equal to the
applicable Federal short-term rate prescribed by section 1274(d). This is a
change from the proposed regulation and Rev. Proc. 2001-12. In those
publications the provision stated that "present values are computed using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded semiannually" and that "[a] lower discount rate may be used if the
transferee can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based on this
provision, certain taxpayers have been attempting to use unrealistically low or
zero interest rates to satisfy the formula test, frustrating the intent of the
test. Furthermore, the Treasury Department and the IRS believe that a rule
allowing for a rate other than a rate based on an objective index would add
unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if the
transferee can demonstrate that it regularly borrows substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate has been substituted for the applicable Federal rate. To simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term rates, provided that the present values are computed with a
corresponding period of compounding. With the exception of the provisions
relating to transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may choose to
apply the interest rate formula set forth in the proposed regulation and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
It is anticipated that when final regulations are adopted with respect to
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final regulations
contained in this document will also govern transfers of FASIT ownership
interests with substantially the same applicability date as is contained in this
document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August 19, 2002.
Special Analyses
It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action
H-1-8
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 ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. 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 * * *
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF TRANSFEROR CERTIFICATE
________________, 200__
[________________]
[________________]
[________________]
[________________]
[________________]
[________________]
Attention: Residential Funding Company, LLC Series 20[_]-RZ[_]
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 20[_]-RZ[_], Class R-
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
________________________ (the "Seller") to ______________________ (the
"Purchaser") of $___________ Initial Certificate Principal Balance of Mortgage
Asset-Backed Pass-Through Certificates, Series 20[_]-RZ[_], Class R-__ (the
"Certificates"), pursuant to Section 5.02 of the Pooling and Servicing Agreement
(the "Pooling and Servicing Agreement"), dated as of [________]1, 20[_] among
Residential Asset Mortgage Products, Inc., as seller (the "Company"),
Residential Funding Company, LLC, as master servicer (the "Master Servicer"),
and [______________], as trustee (the "Trustee"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by
the Seller to the Purchaser is or will be to impede the assessment or collection
of any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee
and the Master Servicer a transfer affidavit and agreement in the form attached
to the Pooling and Servicing Agreement as Exhibit 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
▇-▇-▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ 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: _________________________________
H-2-2
EXHIBIT I
FORM OF INVESTOR REPRESENTATION LETTER
___________, 20__
Residential Asset Mortgage Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[________________]
[________________]
[________________]
Residential Funding Company, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Funding Company, LLC Series 20[_]-RZ[_]
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 20[_]-RZ[_], Class [B] [SB] [R-[ ]]
Ladies and Gentlemen:
____________________________________ (the "Purchaser") intends to purchase
from (the "Seller") $___________ Initial Certificate Principal Balance of
Mortgage Asset-Backed Pass-Through Certificates, Series 20[_]-RZ[_], Class [B]
[SB] [R-[ ]](the "Certificates"), issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of [_________] 1,
20[_] among Residential Asset Mortgage Products, Inc., as seller (the
"Company"), Residential Funding Company, LLC, as master servicer (the "Master
Servicer"), and [__________________], as trustee (the "Trustee"). All terms used
herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company, the Trustee and the Master
Servicer that:
1. The Purchaser understands that (a) the Certificates have not been and
will not be registered or qualified under the Securities Act of 1933, as amended
(the "Act") or any state securities law, (b) the Company is not required to so
register or qualify the Certificates, (c) the Certificates may be resold only if
registered and qualified pursuant to the provisions of the Act or any state
securities law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains restrictions
regarding the transfer of the Certificates and (e) the Certificates will bear a
legend to the foregoing effect.
I-1
2. The Purchaser is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any applicable
state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business matters,
and, in particular, in such matters related to securities similar to the
Certificates, such that it is capable of evaluating the merits and risks of
investment in the Certificates, (b) able to bear the economic risks of such an
investment and (c) an "accredited investor" within the meaning of Rule 501(a)
promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to
review (a) [a copy of the Private Placement Memorandum, dated ________________,
20__, relating to the Certificates (b)] a copy of the Pooling and Servicing
Agreement and [b] [c] such other information concerning the Certificates, the
Mortgage Loans and the Company as has been requested by the Purchaser from the
Company or the Seller and is relevant to the Purchaser's decision to purchase
the Certificates. The Purchaser has had any questions arising from such review
answered by the Company or the Seller to the satisfaction of the Purchaser. [If
the Purchaser did not purchase the Certificates from the Seller in connection
with the initial distribution of the Certificates and was provided with a copy
of the Private Placement Memorandum (the "Memorandum") relating to the original
sale (the "Original Sale") of the Certificates by the Company, the Purchaser
acknowledges that such Memorandum was provided to it by the Seller, that the
Memorandum was prepared by the Company solely for use in connection with the
Original Sale and the Company did not participate in or facilitate in any way
the purchase of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and not to the Company
with respect to any damage, liability, claim or expense arising out of,
resulting from or in connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information, development or
event arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition of other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner or (e) take any other action, that (as to any of (a) through (e) above)
would constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the Act or
any state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
6. The Purchaser hereby certifies, represents and warrants to, and
covenants with the Depositor, the Trustee and the Master Servicer that the
following statement is correct:
The Purchaser is not an employee benefit plan or other plan or
arrangement subject to the prohibited transaction provisions of the
Employee Retirement
I-2
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").
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any Plan Investor or person
unless either such Plan Investor or person meets the requirements set forth in
the statement referred to in paragraph 6 above.
Very truly yours,
________________________________________
(Purchaser)
By: ____________________________________
Name: __________________________________
Title: _________________________________
I-3
EXHIBIT J
FORM OF TRANSFEROR REPRESENTATION LETTER
___________, 20__
Residential Asset Mortgage Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[________________]
[________________]
[________________]
Attention: Residential Funding Company, LLC Series 20[_]-RZ[_]
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 20[_]-RZ[_], Class [B] [SB] [R-[ ]]
Ladies and Gentlemen:
In connection with the sale by ____________ (the "Seller") to
_______________ (the "Purchaser") of $_______ Initial Certificate Principal
Balance of Mortgage Asset-Backed Pass-Through Certificates, Series 20[_]-RZ[_],
Class SB (the "Certificates"), issued pursuant to the Pooling and Servicing
Agreement (the "Pooling and Servicing Agreement"), dated as of [___________] 1,
20[_] among Residential Asset Mortgage Products, Inc., as seller (the
"Company"), Residential Funding Company, LLC, as master servicer, and
[______________], as trustee (the "Trustee"). The Seller hereby certifies,
represents and warrants to, and covenants with, the Company and the Trustee
that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will
J-1
not act, in any manner set forth in the foregoing sentence with respect to any
Certificate. The Seller has not and will not sell or otherwise transfer any of
the Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
Very truly yours,
________________________________________
(Seller)
By: ____________________________________
Name: __________________________________
Title: _________________________________
J-2
EXHIBIT K
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 [__________] 1, 20[_] (the "P&S Agreement") among
Residential Asset Mortgage Corporation, Inc. (the "Company"), Residential
Funding Company, LLC (the "Master Servicer") and [__________] (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
K-1
EXHIBIT L
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 [__________] 1, 20[_] (the "Agreement") by and among
Residential Asset Mortgage Products, Inc. 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 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:
L-1
EXHIBIT M
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
___________, 20__
Residential Asset Mortgage Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[________________]
[________________]
[________________]
Attention: Residential Funding Company, LLC Series 20[_]-RZ[_]
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 20[_]-RZ[_] Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
________________ (the "Trustee") to ______________________ (the "Lender") of
_______________ (the "Mortgage Loan") pursuant to Section 3.13(d) of the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
[__________] 1, 20[_] among Residential Asset Mortgage Products, Inc., as seller
(the "Company"), 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:
(i) the Mortgage Loan is secured by Mortgaged Property located in a
jurisdiction in which an assignment in lieu of satisfaction is required to
preserve lien priority, minimize or avoid mortgage recording taxes or otherwise
comply with, or facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a
refinancing of such Mortgage Loan and the form of the transaction is solely to
comply with, or facilitate the transaction under, such local laws;
(iii) the Mortgage Loan following the proposed assignment will be modified
to have a rate of interest at least [0.25] percent below or above the rate of
interest on such Mortgage Loan prior to such proposed assignment; and
M-1
(iv) such assignment is at the request of the borrower under the related
Mortgage Loan.
Very truly yours,
________________________________________
(Lender)
By: ____________________________________
Name: __________________________________
Title: _________________________________
M-2
EXHIBIT N
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 ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the Seller,
the Trustee and the Master Servicer (as defined in the Pooling and Servicing
Agreement (the "Agreement"), dated as of [__________] 1, 20[_] among Residential
Funding Company, LLC as Master Servicer, Residential Asset Mortgage Products,
Inc. as depositor pursuant to Section 5.02 of the Agreement and
[______________], as trustee, as follows:
a. The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
b. The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
c. The Buyer has been furnished with all information regarding the
Rule 144A Securities that it has requested from the Seller, the Trustee or
the Servicer.
d. Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise
approached
or negotiated with respect to the Rule 144A Securities, any interest in
the Rule 144A Securities or any other similar security with, any person in
any manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that would
constitute a distribution of the Rule 144A Securities under the 1933 Act
or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant
thereto, nor will it act, nor has it authorized or will it authorize any
person to act, in such manner with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on
Rule 144A. The Buyer is acquiring the Rule 144A Securities for its own
account or the accounts of other qualified institutional buyers,
understands that such Rule 144A Securities may be resold, pledged or
transferred only (i) to a person reasonably believed to be a qualified
institutional buyer that purchases for its own account or for the account
of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the 1933 Act.
3. The Buyer of Class SB Certificates or Class R Certificates 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.
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.
[Signature Page Follows]
N-2
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
Print Name of Seller _________________ Print Name of Buyer __________________
By: __________________________________ By: __________________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No.__________________________________ No.___________________________________
Date:_________________________________ Date:_________________________________
N-3
ANNEX I TO EXHIBIT N
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.
____ Corporations, 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.
N-4
____ Investment Adviser. The Buyer is an investment adviser registered under
the Investment Advisers Act of 1940.
____ SBIC. The Buyer is a Small Business Investment Company licensed by the
U.S. Small Business Administration under Section 301(c) or (d) of the
Small Business Investment Act of 1958.
____ Business Development Company. The Buyer is a business development company
as defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
____ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans within the meaning
of Title I of the Employee Retirement Income Security Act of 1974, but is
not a trust fund that includes as participants individual retirement
accounts or H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that,
in connection with any purchase of securities sold to the Buyer for the account
of a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
N-5
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: _________________________________
N-6
ANNEX II TO EXHIBIT N
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:
1. 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.
2. 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).
3. 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).
4. 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.
5. 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.
6. 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
N-7
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
By: ____________________________________
Name:
Title:
Date: ______________________________
N-8
EXHIBIT O
FORM OF ERISA REPRESENTATION LETTER
___________, 20__
Residential Asset Mortgage Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[____________________]
[____________________]
[____________________]
Residential Funding Company, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Funding Company, LLC Series 20[_]-RZ[_]
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 20[_]-RZ[_], Class [__]
Ladies and Gentlemen:
[____________________________________] (the "Purchaser") intends to
purchase from [______________________________] (the "Seller") $[____________]
Initial Certificate Principal Balance of Mortgage Asset-Backed Pass-Through
Certificates, Series 20[_]-RZ[_], Class ____ (the "Certificates"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of [_________] 1, 20[_] among Residential Asset Mortgage
Products, Inc., as the company (the "Depositor"), Residential Funding Company,
LLC, as master servicer (the "Master Servicer") and JPMorgan Chase Bank, N.A.,
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 or other plan subject
to the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") (a "Plan"), or any
other person (including an investment manager, a named fiduciary or a
trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan within the
meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3-101; 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
O-1
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, the Master Servicer 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 the Pooling and
Servicing Agreement.
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 or person unless
such Plan or person meets the requirements set forth in either (a) or (b) above.
Very truly yours,
________________________________________
(Purchaser)
By: ____________________________________
Name: __________________________________
Title: _________________________________
O-2
EXHIBIT P
FORM OF ERISA REPRESENTATION LETTER
___________, 20__
Residential Asset Mortgage Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[____________________]
[____________________]
[____________________]
Residential Funding Company, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Funding Company, LLC Series 20[_]-RZ[_]
Re: Residential Asset Mortgage Products, Inc.
Mortgage Asset-Backed Pass-Through Certificates,
Series 20[_]-RZ[_], Class [A-[ ]] [M-[ ]] [B]
Ladies and Gentlemen:
[____________________________________] (the "Purchaser") intends to
purchase from [______________________________] (the "Seller") $[____________]
Initial Certificate Principal Balance of Mortgage Asset-Backed Pass-Through,
Series 20[_]-RZ[_] (the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
[_________] 1, 20[_], among Residential Asset Mortgage Products, Inc., as
depositor (the "Depositor"), Residential Funding Company, LLC, as master
servicer (the "Master Servicer"), and [____________], as trustee (the
"Trustee"). All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement.
The Purchaser hereby certifies, represents and warrants to, and
covenants with the Depositor, the Trustee and the Master Servicer that, either:
(a) The Purchaser is not an employee benefit or other plan subject
to the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code") (a "Plan"), or any
other person (including an investment manager, a named fiduciary or a
trustee of any Plan) acting, directly or indirectly, on behalf of or
purchasing any Certificate with "plan assets" of any Plan within the
meaning of the Department of Labor ("DOL") regulation at 29 C.F.R.
ss.2510.3-101; or
P-1
(b) The Purchaser is an insurance company, the source of funds used
to purchase or hold the Certificates is an "insurance company general
account", as the term is defined in DOL Prohibited Transaction Class
Exemption ("PTCE") 95-60, and the conditions in Sections I and III of PTCE
95-60 have been satisfied.
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Seller, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any Plan or person unless that
Plan or person meets the requirements in either (a) or (b) above.
The Purchaser hereby agrees to indemnify and hold harmless the
Company, the Trustee, the Master Servicer, any Subservicer and the Trust Fund
from and against all liabilities, claims, costs or expenses incurred by such
parties as a result of a breach of any representation, warranty or covenant made
by the Purchaser herein.
Very truly yours,
By: ____________________________________
Name: __________________________________
Title: _________________________________
P-2
EXHIBIT Q
INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING
AGENCIES RELATING TO REPORTABLE MODIFIED MORTGAGE LOANS
Account number
Transaction Identifier
Unpaid Principal Balance prior to Modification
Next Due Date
Monthly Principal and Interest Payment
Total Servicing Advances
Current Interest Rate
Original Maturity Date
Original Term to Maturity (Months)
Remaining Term to Maturity (Months)
Trial Modification Indicator
Mortgagor Equity Contribution
Total Servicer Advances
Trial Modification Term (Months)
Trial Modification Start Date
Trial Modification End Date
Trial Modification Period Principal and Interest Payment
Trial Modification Interest Rate
Trial Modification Term
Rate Reduction Indicator
Interest Rate Post Modification
Rate Reduction Start Date
Rate Reduction End Date
Rate Reduction Term
Term Modified Indicator
Modified Amortization Period
Modified Final Maturity Date
Total Advances Written Off
Unpaid Principal Balance Written Off
Other Past Due Amounts Written Off
Write Off Date
Unpaid Principal Balance Post Write Off
Capitalization Indicator
Mortgagor Contribution
Total Capitalized Amount
Modification Close Date
Unpaid Principal Balance Post Capitalization Modification
Next Payment Due Date per Modification Plan
Principal and Interest Payment Post Modification
Interest Rate Post Modification
Payment Made Post Capitalization
Delinquency Status to Modification Plan
Q-1
EXHIBIT R
SCHEDULE OF SWAP NOTIONAL AMOUNTS
(SEE SCHEDULE A TO EXHIBIT S)
R-1
EXHIBIT S
SWAP AGREEMENT
(SEE ATTACHMENT)
S-1
EXHIBIT T
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 Criteria Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
General Servicing Considerations
--------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are
instituted to monitor any performance or
other triggers and events of default in
accordance with the transaction
agreements.
--------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing
activities are outsourced to third
parties, policies and procedures are
instituted to monitor the third party's
performance and compliance with such
servicing activities.
--------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the
transaction agreements to maintain a
back-up servicer for the pool assets are
maintained.
--------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and
omissions policy is in effect on the
party participating in the servicing
function throughout the reporting period
in the amount of coverage required by
and otherwise in accordance with the
terms of the transaction agreements.
--------------------------------------------------------------------------------
Cash Collection and Administration
--------------------------------------------------------------------------------
1122(d)(2)(i) Payments on pool assets are |X|
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 days specified in the transaction
agreements.
--------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire |X|
transfer on behalf of an obligor or to
an investor are made only by authorized
personnel.
--------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees
regarding collections, cash flows or
distributions, and any interest or other
fees charged for such advances, are
made,
--------------------------------------------------------------------------------
T-1
--------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
reviewed and approved as specified
in the transaction agreements.
--------------------------------------------------------------------------------
1122(d)(2)(iv) 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 agreements.
--------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is
maintained at a federally insured
depository institution as set forth in
the transaction agreements. For purposes
of this criterion, "federally insured
depository institution" with respect to
a foreign financial institution means a
foreign financial institution that meets
the requirements of Rule 13k-1(b)(1) of
the Securities Exchange Act.
--------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so
as to prevent unauthorized access.
--------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a
monthly basis for all asset-backed
securities related bank accounts,
including custodial accounts and related
bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30
calendar days after the bank statement
cutoff date, or such other number of
days specified in the transaction
agreements; (C) reviewed and approved by
someone other than the person who
prepared the reconciliation; and (D)
contain explanations for reconciling
items. These reconciling items are
resolved within 90 calendar days of
their original identification, or such
other number of days specified in the
transaction agreements.
--------------------------------------------------------------------------------
Investor Remittances and Reporting
--------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including
those to be filed with the Commission,
are maintained in accordance with the
transaction agreements and applicable
Commission requirements. Specifically,
such reports (A) are prepared in
accordance with timeframes and other
terms set forth in the transaction
agreements; (B) provide information
calculated in accordance with the terms
specified in the transaction agreements;
(C) are filed with the
--------------------------------------------------------------------------------
T-2
--------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
Commission as required by its rules and
regulations; and (D) agree with
investors' or the trustee's records as
to the total unpaid principal balance
and number of pool assets serviced by
the servicer.
--------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are |X|
allocated and remitted in accordance
with timeframes, distribution priority
and other terms set forth in the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor |X|
are posted within two business days to
the servicer's investor records, or such
other number of days specified in the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per |X|
the investor reports agree with
cancelled checks, or other form of
payment, or custodial bank statements.
--------------------------------------------------------------------------------
Pool Asset Administration
--------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on pool |X|
assets is maintained as required by the
transaction agreements or related asset
pool documents.
--------------------------------------------------------------------------------
1122(d)(4)(ii) Pool assets and related documents |X|
are safeguarded as required by the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or
substitutions to the asset pool are
made, reviewed and approved in
accordance with any conditions or
requirements in the transaction
agreements.
--------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on pool assets, including
any payoffs, made in accordance with the
related pool asset documents are posted
to the servicer's obligor records
maintained no more than two business
days after receipt, or such other number
of days specified in the transaction
agreements, and allocated to principal,
interest or other items (e.g., escrow)
in accordance with the related pool
asset documents.
--------------------------------------------------------------------------------
T-3
--------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(4)(v) The servicer's records regarding
the pool assets agree with the
servicer's records with respect to an
obligor's unpaid principal balance.
--------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms
or status of an obligor's pool asset
(e.g., loan modifications or re-agings)
are made, reviewed and approved by
authorized personnel in accordance with
the transaction agreements and related
pool asset documents.
--------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery
actions (e.g., forbearance plans,
modifications and deeds in lieu of
foreclosure, foreclosures and
repossessions, as applicable) are
initiated, conducted and concluded in
accordance with the timeframes or other
requirements established by the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection
efforts are maintained during the period
a pool asset is delinquent in accordance
with the transaction agreements. Such
records are maintained on at least a
monthly basis, or such other period
specified in the transaction agreements,
and describe the entity's activities in
monitoring delinquent pool assets
including, for example, phone calls,
letters and payment rescheduling plans
in cases where delinquency is deemed
temporary (e.g., illness or
unemployment).
--------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or
rates of return for pool assets with
variable rates are computed based on the
related pool asset documents.
--------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust
for an obligor (such as escrow
accounts): (A) such funds are analyzed,
in accordance with the obligor's pool
asset documents, on at least an annual
basis, or such other period specified in
the transaction agreements; (B) interest
on such funds is paid, or credited, to
obligors in accordance with applicable
pool asset documents and state laws; and
(C) such funds are returned to the
obligor within 30 calendar days of full
repayment of the related pool asset, or
such other number of days specified in
the transaction agreements.
--------------------------------------------------------------------------------
T-4
--------------------------------------------------------------------------------
Applicable
Servicing Criteria Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an
obligor (such as tax or insurance
payments) are made on or before the
related penalty or expiration dates, as
indicated on the appropriate bills or
notices for such payments, provided that
such support has been received by the
servicer at least 30 calendar days prior
to these dates, or such other number of
days specified in the transaction
agreements.
--------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in
connection with any payment to be made
on behalf of an obligor are paid from
the servicer's funds and not charged to
the obligor, unless the late payment was
due to the obligor's error or omission.
--------------------------------------------------------------------------------
1122(d)(4)(xiii) 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
agreements.
--------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and
uncollectible accounts are recognized
and recorded in accordance with the
transaction agreements.
--------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other
support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the
transaction agreements.
--------------------------------------------------------------------------------
T-5