EXECUTION COPY
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RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
JPMORGAN CHASE BANK, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2006
Home Equity Loan Pass-Through Certificates
Series 2006-HSA1
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TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS...............................................................3
Section 1.01 Definitions...............................................................3
Section 1.02 Determination of LIBOR...................................................35
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES.................36
Section 2.01 Conveyance of Mortgage Loans.............................................36
Section 2.02 Acceptance by Trustee....................................................40
Section 2.03 Representations, Warranties and Covenants of the Master Servicer
and the Company..........................................................41
Section 2.05 Execution and Authentication of Certificates; Conveyance of
Uncertificated REMIC Regular Interests...................................45
Section 2.06. Purposes and Powers of the Trust............................................46
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS.................................47
Section 3.01 The Master Servicer to Act as Servicer...................................47
Section 3.02 Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers' Obligations.................................49
Section 3.03 Successor Subservicers...................................................50
Section 3.04 Liability of the Master Servicer.........................................51
Section 3.05 No Contractual Relationship Between Subservicer and Trustee, Credit
Enhancer or Certificateholders...........................................51
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee..........51
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account..................................................................52
Section 3.08 Subservicing Accounts; Servicing Accounts................................54
Section 3.09 Access to Certain Documentation and Information Regarding the
Mortgage Loans...........................................................55
Section 3.10 Permitted Withdrawals from the Custodial Account.........................55
Section 3.11 Maintenance of Fire Insurance and Omissions and Fidelity Coverage........56
Section 3.12 Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments..........................................58
Section 3.13 Realization Upon Defaulted Mortgage Loans................................60
Section 3.14 Trustee to Cooperate; Release of Mortgage Files..........................63
Section 3.15 Servicing and Other Compensation.........................................64
Section 3.16 Reports to the Trustee and the Company...................................65
Section 3.17 Annual Statement as to Compliance and Servicing Assessment...............65
Section 3.18 Annual Independent Public Accountants' Servicing Report..................65
Section 3.19 Rights of the Company in Respect of the Master Servicer..................66
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...........................................66
Section 4.01 Certificate Account......................................................66
Section 4.02 Distributions............................................................67
Section 4.03 Statements to Certificateholders.........................................70
Section 4.04 Distribution of Reports to the Trustee and the Company...................74
Section 4.05 Allocation of Realized Losses............................................75
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged Property............75
Section 4.07 Optional Purchase of Defaulted Mortgage Loans............................76
ARTICLE V THE CERTIFICATES.........................................................78
Section 5.01 The Certificates.........................................................78
Section 5.02 Registration of Transfer and Exchange of Certificates....................80
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates........................86
Section 5.04 Persons Deemed Owners....................................................86
Section 5.05 Appointment of Paying Agent..............................................86
ARTICLE VI THE COMPANY AND THE MASTER SERVICER......................................87
Section 6.01 Respective Liabilities of the Company and the Master Servicer............87
Section 6.02 Merger or Consolidation of the Company or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master Servicer.........87
Section 6.03 Limitation on Liability of the Company, the Master Servicer and
Others...................................................................88
Section 6.04 Company and Master Servicer Not to Resign................................89
ARTICLE VII DEFAULT..................................................................89
Section 7.01 Events of Default........................................................89
Section 7.02 Trustee or Company to Act; Appointment of Successor......................91
Section 7.03 Notification to Certificateholders.......................................92
Section 7.04 Waiver of Events of Default..............................................92
Section 7.05 Servicing Trigger; Removal of Master Servicer............................93
ARTICLE VIII CONCERNING THE TRUSTEE...................................................94
Section 8.01 Duties of Trustee........................................................94
Section 8.02 Certain Matters Affecting the Trustee....................................95
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans....................97
Section 8.04 Trustee May Own Certificates.............................................97
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses; Indemnification......97
Section 8.06 Eligibility Requirements for Trustee.....................................98
Section 8.07 Resignation and Removal of the Trustee...................................99
Section 8.08 Successor Trustee.......................................................100
Section 8.09 Merger or Consolidation of Trustee......................................100
Section 8.10 Appointment of Co-Trustee or Separate Trustee...........................101
Section 8.11 Appointment of Custodians...............................................102
Section 8.12 Appointment of Office or Agency.........................................102
ARTICLE IX TERMINATION.............................................................102
Section 9.01 Optional Purchase by the Master Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or Liquidation of
All Mortgage Loans......................................................102
Section 9.02 Additional Termination Requirements.....................................106
ARTICLE X REMIC PROVISIONS........................................................107
Section 10.01 REMIC Administration....................................................107
Section 10.02 Master Servicer, REMIC Administrator and Trustee Indemnification........110
ARTICLE XI MISCELLANEOUS PROVISIONS................................................111
Section 11.01 Amendment...............................................................111
Section 11.02 Recordation of Agreement; Counterparts..................................113
Section 11.03 Limitation on Rights of Certificateholders..............................114
Section 11.04 Governing Law...........................................................115
Section 11.05 Notices.................................................................115
Section 11.06 Notices to Rating Agency and the Credit Enhancer........................116
Section 11.07 Severability of Provisions..............................................116
Section 11.08 Supplemental Provisions for Resecuritization............................116
Section 11.09 [Reserved]..............................................................117
Section 11.10 No Petition.............................................................117
ARTICLE XII COMPLIANCE WITH REGULATION AB...........................................118
Section 12.01. Intent of Parties; Reasonableness.........................................118
Section 12.02. Additional Representations and Warranties of the Trustee..................118
Section 12.03. Information to be Provided by the Trustee.................................119
Section 12.04. Report on Assessment of Compliance and Attestation........................120
Section 12.05. Indemnification; Remedies.................................................120
EXHIBITS
EXHIBIT A-1 FORM OF CLASS A CERTIFICATE
EXHIBIT A-2 FORM OF CLASS SB CERTIFICATE
EXHIBIT B FORM OF CLASS R CERTIFICATE
EXHIBIT C FORM OF CUSTODIAL AGREEMENT
EXHIBIT D MORTGAGE LOAN SCHEDULE
EXHIBIT E FORM OF REQUEST FOR RELEASE
EXHIBIT F [RESERVED]
EXHIBIT G-1 FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
EXHIBIT G-2 FORM OF TRANSFEROR CERTIFICATE
EXHIBIT H FORM OF INVESTOR REPRESENTATION LETTER
EXHIBIT I FORM OF TRANSFEROR REPRESENTATION LETTER
EXHIBIT J [RESERVED]
EXHIBIT K [RESERVED]
EXHIBIT L FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
EXHIBIT M FORM OF RULE 144A INVESTMENT REPRESENTATION
EXHIBIT N [RESERVED]
EXHIBIT O SERVICING CRITERIA
EXHIBIT P-1 FORM OF FORM 10-K CERTIFICATION
EXHIBIT P-2 FORM OF BACK-UP CERTIFICATE TO FORM 10-K CERTIFICATION
EXHIBIT Q [RESERVED]
EXHIBIT R ASSIGNMENT AGREEMENT
This is a Pooling and Servicing Agreement, effective as of
January 1, 2006, among RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC., as the
company (together with its permitted successors and assigns, the "Company"),
RESIDENTIAL FUNDING CORPORATION, as master servicer (together with its permitted
successors and assigns, the "Master Servicer"), and JPMORGAN CHASE BANK, N.A., a
national banking association, as Trustee (together with its permitted successors
and assigns, the "Trustee").
PRELIMINARY STATEMENT
The Company intends to sell home equity loan pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
multiple classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein).
REMIC I
As provided herein, the REMIC Administrator will make an election to
treat the segregated pool of assets consisting of the Mortgage Loans and certain
other related assets subject to this Agreement as a real estate mortgage
investment conduit (a "REMIC") for federal income tax purposes, and such
segregated pool of assets will be designated as "REMIC I." The Class R-I
Certificates will represent the sole Class of "residual interests" in REMIC I
for purposes of the REMIC Provisions (as defined herein) under federal income
tax law. The following table irrevocably sets forth the designation, remittance
rate (the "Uncertificated REMIC I Pass-Through Rate") and initial Uncertificated
Principal Balance for each of the "regular interests" in REMIC I (the "REMIC I
Regular Interests"). The "latest possible maturity date" (determined solely for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for each
REMIC I Regular Interest shall be the Maturity Date. None of the REMIC I Regular
Interests will be certificated.
Uncertificated REMIC I Initial Uncertificated Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date
LT1 Variable(1) $ 463,686,316.78 February 25, 2036
LT2 Variable(1) $ 14,044.78 February 25, 2036
LT3 Variable(1) $ 32,331.72 February 25, 2036
LT4 Variable(1) $ 32,331.72 February 25, 2036
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(1) Calculated as provided in the definition of Uncertificated REMIC I
Pass-Through Rate.
REMIC II
As provided herein, the REMIC Administrator will make an election
to treat the segregated pool of assets consisting of the REMIC I Regular
Interests as a REMIC for federal income tax purposes, and such segregated pool
of assets will be designated as REMIC II. The Class R-II Certificates will
represent the sole Class of "residual interests" in REMIC II for purposes of the
REMIC Provisions under federal income tax law. The 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 II. The "latest possible maturity
date" (determined solely for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii)) for each Class of REMIC II Regular Interests shall be the
Maturity Date.
Pass-
Through Initial Aggregate
Designation Rate Certificate Month of Final
Principal Scheduled Initial Ratings
Balance Distribution Date Moodys/S&P Features
Class A-1(1) Adjustable $ 282,669,000.00 November 25, 2020 Aaa/AAA Senior/Adjustable
Rate(2) Rate
Class A-2(1) 5.19% $ 42,249,000.00 November 25, 2020 Aaa/AAA Senior/Fixed Rate
Class A-3(1) 5.23% $ 47,465,000.00 February 25, 2022 Aaa/AAA Senior/Fixed Rate
Class A-4(1) (3) 5.49% $ 42,917,000.00 February 25, 2036 Aaa/AAA Senior/Fixed Rate
Class A-5(1) 5.31% $ 46,144,000.00 February 25, 2036 Aaa/AAA Senior/Lockout/
Fixed Rate
Class SB(4) N/A $ 2,321,025.26 February 25, 2036 N/A Subordinate
Class R-I N/A N/A --- N/A Residual
Class R-II N/A N/A --- N/A Residual
(1) Subject to a cap as described in the definition of "Pass-Through
Rate" herein.
(2) The Pass-Through Rate on the Class A-1 Certificates on any
Distribution Date will be equal to the lesser of (a) LIBOR plus
0.11%; and (b) the Net WAC Rate.
(3) Starting on the second Distribution Date after the Step-Up Date,
the Pass-Through Rate indicated above will increase by a per
annum rate equal to 0.50%.
(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 shall be comprised
of two regular interests in REMIC II, REMIC II Regular Interest
SB-IO and REMIC II Regular Interest SB-PO, as defined herein.
The Mortgage Loans have an aggregate Cut-off Date Principal
Balance equal to $463,765,025.26. The Mortgage Loans are conventional, fixed
rate, closed-end, primarily second lien home equity mortgage loans with either
fully amortizing or balloon payment features, having terms to maturity at
origination or modification of approximately 5, 10, 15, 20 or 25 years.
In consideration of the mutual agreements herein contained, the
Company, the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution Date and
the Class A Certificates, one month's interest accrued during the related
Interest Accrual Period at the related Pass-Through Rate on the Certificate
Principal Balance thereof immediately prior to such Distribution Date. In each
case Accrued Certificate Interest on any Class of Class A Certificates will be
reduced by the amount of (i) Prepayment Interest Shortfalls allocated thereto
(to the extent not offset by Excess Interest as provided in Section 4.02(g)) and
(ii) Relief Act Shortfalls allocated thereto, with reductions described in
clauses (i) and (ii) allocated among the Class A Certificates on a pro rata
basis in proportion to the Accrued Certificate Interest which would have
resulted absent such reductions. With respect to each Distribution Date and the
Class SB Certificates, interest accrued during the related Interest Accrual
Period at the related Pass-Through Rate on the Notional Amount thereof
immediately prior to such Distribution Date. In addition, Accrued Certificate
Interest with respect to each Distribution Date, as to the Class SB
Certificates, shall be reduced by an amount equal to the Realized Losses
allocated to the Excess Interest pursuant to Section 4.02(g) hereof and further
reduced by Prepayment Interest Shortfalls paid from Excess Interest pursuant to
Section 4.02(g). Accrued Certificate Interest on the Class A Certificates (other
than the Class A-1 Certificates) and the Class SB Certificates will be
calculated on the basis of a 360-day year, consisting of twelve 30-day months.
Accrued Certificate Interest for the Class A-1 Certificates will be calculated
on the basis of the actual number of days in the related Interest Accrual Period
and a 360-day year. Prepayment Interest Shortfalls on each Distribution Date
will be allocated to each Class of Certificates on a pro rata basis in
accordance with the amount of Accrued Certificate Interest which would have
resulted absent such shortfalls.
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.
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: As to any Distribution Date, the
total of the amounts held in the Custodial Account at the close of business on
the preceding Determination Date on account of (i) Liquidation Proceeds, REO
Proceeds, Insurance Proceeds, Principal Prepayments, Mortgage Loan purchases
made pursuant to Section 2.02, 2.03 or 4.07 and Mortgage Loan substitutions made
pursuant to Section 2.03 received in the month of such Distribution Date (other
than such Liquidation Proceeds, REO Proceeds, Insurance Proceeds and purchase
proceeds 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 related Due Date.
Appraised Value: With respect to any Mortgaged Property, the lesser of
(i) the appraised value of such Mortgaged Property based upon the appraisal made
at the time of the origination of the related Mortgage Loan, and (ii) the sales
price of the Mortgaged Property at such time of origination, except in the case
of a Mortgaged Property securing a refinanced or modified Mortgage Loan as to
which it is either the appraised value based upon the appraisal made at the time
of origination of the loan which was refinanced or modified or the appraised
value determined in an appraisal at the time of refinancing or modification, as
the case may be.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the
Closing Date, between Residential Funding and the Company relating to the
transfer and assignment of the Mortgage Loans, attached hereto as Exhibit R.
Available Distribution Amount: As to any Distribution Date, an amount
equal to (a) the sum of (without duplication) (i) payments of principal and
interest on the Mortgage Loans actually received by the Master Servicer or
Subservicer during the related Collection Period, (ii) Principal Prepayments,
Insurance Proceeds, Liquidation Proceeds, REO Proceeds and the proceeds of the
purchase of any Mortgage Loan pursuant to Sections 2.02, 2.03 and 4.07 received
during the related Collection Period and any amount deposited in the Custodial
Account pursuant to Section 2.03(b) in connection with the substitution of a
Mortgage Loan, (iii) amounts deposited in the Custodial Account in connection
with the substitution of Qualified Substitute Mortgage Loans, (iv) any amount
deposited in the Certificate Account pursuant to the second paragraph of Section
3.11(a), (v) any amount deposited in the Certificate Account pursuant to Section
4.07 or 9.01 and (vi) any amounts payable under the Policy, reduced by (b) the
sum as of the close of business on the last day of the related Collection Period
of (x) the Amount Held for Future Distribution and (y) amounts permitted to be
withdrawn by the Master Servicer from the Custodial Account in respect of the
Mortgage Loans pursuant to clauses (ii)-(ix), inclusive, of Section 3.10(a).
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
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, State of Texas, State of Pennsylvania, 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.
Cash Liquidation: With respect to any defaulted Mortgage Loan other than
a Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
Certificate: Any Class A Certificate, Class SB Certificate or Class R
Certificate.
Certificate Account: The separate account or accounts created and
maintained pursuant to Section 4.01, which shall be entitled "JPMorgan Chase
Bank, N.A., as trustee, in trust for the registered holders of Residential
Funding Mortgage Securities II, Inc., Home Equity Loan Pass-Through
Certificates, Series 2006-HSA1 and Financial Guaranty Insurance Company" which
account shall be held for the benefit of the Certificateholders and the Credit
Enhancer and which must be an Eligible Account. Any such account or accounts
created and maintained subsequent to the Closing Date shall be subject to the
approval of the Credit Enhancer, which approval shall not be unreasonably
withheld.
Certificate Account Deposit Date: As to any Distribution Date, the
Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-United States Person shall be a holder of a Class R
Certificate for any purpose hereof. Solely for the purpose of giving any consent
or direction pursuant to this Agreement, any Certificate, other than a Class R
Certificate, registered in the name of the Company, the Master Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be outstanding and
the Percentage Interest or Voting Rights evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
or Voting Rights necessary to effect any such consent or direction has been
obtained. All references herein to "Holders" or "Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register. Unless
otherwise indicated in this Agreement, the Custodial Agreement or the Assignment
Agreement, whenever reference is made to the actions taken by the Trustee on
behalf of the Certificateholders, such reference to Certificateholders shall
include the Credit Enhancer as long as there is no Credit Enhancer Default.
Certificate Owner: With respect to a Book-Entry Certificate, the Person
who is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Class A Certificate,
on any date of determination, an amount equal to (i) the Initial Certificate
Principal Balance of such Certificate as specified on the face thereof, minus
(ii) the sum of (x) the aggregate of all amounts previously distributed with
respect to such Certificate (or any predecessor Certificate), including
principal distributions made from payments on the Policy, 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 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,
unless these amounts have been paid under the Policy. With respect to each Class
SB Certificate, on any date of determination, an amount equal to the Percentage
Interest evidenced by such Certificate times an amount equal to the excess, if
any, of (A) the then aggregate Principal Balance of the Mortgage Loans over (B)
the then aggregate Certificate Principal Balance of the Class A Certificates
then outstanding. The Class R Certificates will not have a Certificate Principal
Balance.
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates or uncertificated interests
bearing the same designation.
Class A Certificates: Any one of the Class X-0, Xxxxx X-0, Class A-3,
Class A-4 and Class A-5 Certificates in the form attached hereto as Exhibit A-1.
Class A Interest Distribution Amount: As defined in Section 4.02(c)(1).
Class A Principal Distribution Amount: With respect to any Distribution
Date, the sum of the Principal Collection Distribution Amount and the
Overcollateralization Increase Amount.
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-1, senior to the Class SB Certificates and
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 an interest designated as a "regular interest" in REMIC II for
purposes of the REMIC Provisions.
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-1, senior to the Class SB Certificates and
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 an interest designated as a "regular interest" in REMIC II for
purposes of the REMIC Provisions.
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-1, senior to the Class SB Certificates and
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 an interest designated as a "regular interest" in REMIC II for
purposes of the REMIC Provisions.
Class A-4 Certificate: Any one of the Class A-4 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-1, senior to the Class SB Certificates and
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 an interest designated as a "regular interest" in REMIC II for
purposes of the REMIC Provisions.
Class A-5 Certificate: Any one of the Class A-5 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-1, senior to the Class SB Certificates and
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 an interest designated as a "regular interest" in REMIC II for
purposes of the REMIC Provisions.
Class A-5 Lockout Distribution Amount: For any Distribution Date, the
product of (i) the Class A-5 Lockout Percentage for such Distribution Date and
(ii) the Class A-5 Pro Rata Distribution Amount for such Distribution Date. In
no event shall the Class A-5 Lockout Distribution Amount for a Distribution Date
exceed the Class A Principal Distribution Amount for that Distribution Date.
Class A-5 Lockout Percentage: For each Distribution Date, the applicable
percentage set forth below:
DISTRIBUTION DATES LOCKOUT PERCENTAGE
DISTRIBUTION DATES
February 2006 through and including January 2009 0%
February 2009 through and including January 2011 45%
February 2011 through and including January 2012 80%
February 2012 through and including January 2013 100%
February 2013 and thereafter 300%
Class A-5 Pro Rata Distribution Amount: For any Distribution Date, an
amount equal to the product of (x) a fraction, the numerator of which is the
Certificate Principal Balance of the Class A-5 Certificates immediately prior to
that Distribution Date and the denominator of which is the aggregate Certificate
Principal Balance of the Class A Certificates immediately prior to that
Distribution Date and (y) the Class A Principal Distribution Amount for that
Distribution Date.
Class R Certificate: Any one of the Class R-I Certificates or Class R-II
Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B 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 B and evidencing an interest designated as a
"residual interest" in REMIC II for purposes of the REMIC Provisions.
Class SB Certificate: Any one of the Class SB Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A-4, subordinate to the Class A Certificates with
respect to distributions and the allocation of Realized Losses in respect of the
Mortgage Loans as set forth in Section 4.05, and evidencing an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions.
Closing Date: January 27, 2006.
Code: The Internal Revenue Code of 1986.
Collection Period: For any Distribution Date, the calendar month preceding
the month in which such Distribution Date occurs.
Combined Loan-to-Value Ratio: With respect to any Mortgage Loan, the
ratio, expressed as a percentage, of (A) the sum of (i) the original principal
balance of such Mortgage Loan and (ii) any outstanding principal balance, at the
time of origination of such Mortgage Loan, of all other mortgage loans, if any,
secured by senior or subordinate liens on the related Mortgaged Property, to (B)
the Appraised Value.
Commission: The Securities and Exchange Commission.
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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 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx, Xxxxx 00000,
Attention: RFMSII, Series 2006-HSA1.
Credit Enhancer: Financial Guaranty Insurance Company, or any successor
thereto.
Credit Enhancer Default: If the Credit Enhancer fails to make a payment
required under the Policy in accordance with its terms.
Credit Enhancer Premium Rate: The Premium Rate as specified in the
Insurance Agreement with respect to the Policy.
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
Company, the Master Servicer, the Trustee and a Custodian in substantially the
form of Exhibit C hereto.
Custodian: Xxxxx Fargo Bank, N.A., or any successor custodian appointed
pursuant to a Custodial Agreement and reasonably acceptable to the Credit
Enhancer.
Cut-off Date: January 1, 2006.
Cut-off Date Principal Balance: As to any Mortgage Loan, the actual unpaid
principal balance thereof as of the close of business on the day prior to the
Cut-off Date.
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.
Deficiency Amount: With respect to any Distribution Date and each Class
of the Class A Certificates, an amount, if any, equal to the sum of (1) the
excess, if any, of the Accrued Certificate Interest on such Class of Class A
Certificates on such Distribution Date over the portion of the amounts available
for distribution to such Class of Class A Certificates on such Distribution Date
and (2) (i) with respect to any Distribution Date that is not the Distribution
Date in February 2036, the principal portion of any Realized Losses allocated to
the Class A Certificates, if any, on such Distribution Date, after application
of Excess Interest with respect to any Realized Losses and the reduction of the
Overcollateralization Amount to zero, and (ii) on the Distribution Date in
February 2036, the aggregate Certificate Principal Balance of each Class of
Class A Certificates (after giving effect to all distributions to be made
thereon on such Distribution Date other than any portion thereof consisting of
an Insured Payment payable as principal on the Class A Certificates).
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquency Percentage: With respect to any Distribution Date, the
percentage equivalent of a fraction (A) the numerator of which is the Principal
Balance of Mortgage Loans that are Delinquent for 60 days or more as of such
Distribution Date and (B) the denominator of which is the aggregate Principal
Balance of the Mortgage Loans as of the beginning of the related Collection
Period, expressed as a percentage.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to
59 days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the next following monthly
scheduled due date; "60 to 89 days" or "60 or more days" delinquent when a
payment due on any scheduled due date remains unpaid as of the close of business
on the second following monthly scheduled due date; and so on. The determination
as to whether a Mortgage Loan falls into these categories is made as of the
close of business on the last business day of each month. For example, a
Mortgage Loan with a payment due on July 1 that remained unpaid as of the close
of business on August 31, the Mortgage Loan would then be considered to be 30 to
59 days delinquent. Delinquency information as of the Cut-off Date is determined
and prepared as of the close of business on the last business day immediately
prior to the Cut-off Date.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(3) of the Uniform Commercial Code of the State of New York and a
"clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Derivative Contract: Any ISDA Master Agreement, together with the
related Schedule and Confirmation, entered into by the Trustee and a Derivative
Counterparty in accordance with Section 4.09.
Derivative Counterparty: Any counterparty to a Derivative Contract as
provided in Section 4.09
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: With respect to any Distribution Date, the 20th day
(or if such 20th day is not a Business Day, the Business Day immediately
following such 20th day) of the month of the related Distribution Date.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, including, if not otherwise
included, any of the following: (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for
Xxxxxxx Mac, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) and
(iv) rural electric and telephone cooperatives described in Section
1381(a)(2)(C) of the Code. A Disqualified Organization also includes any
"electing large partnership," as defined in Section 775(a) of the Code and any
other Person so designated by the Trustee based upon an Opinion of Counsel that
the holding of an Ownership Interest in a Class R Certificate by such Person may
cause any REMIC or any Person having an Ownership Interest in any Class of
Certificates (other than such Person) to incur a liability for any federal tax
imposed under the Code that would not otherwise be imposed but for the Transfer
of an Ownership Interest in a Class R Certificate to such Person. The terms
"United States," "State" and "international organization" shall have the
meanings set forth in Section 7701 of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month
immediately following the month of the initial issuance of the Certificates or,
if such 25th day is not a Business Day, the Business Day immediately following
such 25th day.
Due Date: With respect to any Distribution Date and any Mortgage Loan,
the day of the month of the related Collection Period the Monthly Payment is due
as set forth in the related Mortgage Note.
Eligible Account: An account that is any of the following: (i)
maintained with a depository institution the debt obligations of which have been
rated by each Rating Agency in its highest rating available, or (ii) an account
or accounts in a depository institution in which such accounts are fully insured
to the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a
claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Custodial Account, a trust account or
accounts maintained in the corporate trust department of U.S. Bank National
Association, or (iv) in the case of the Certificate Account, a trust account or
accounts maintained in the corporate trust division of JPMorgan Chase Bank,
N.A., or (v) an account or accounts of a depository institution acceptable to
each Rating Agency (as evidenced in writing by each Rating Agency that use of
any such account as the Custodial Account or the Certificate Account will not
reduce the rating assigned to any Class of Certificates by such Rating Agency
below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency).
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: As defined in Section 7.01.
Excess Interest: As of any Distribution Date, the excess of (x) the
Available Distribution Amount over (y) the sum of (1) the Interest Distribution
Amount for such Distribution Date and (2) the Principal Remittance Amount for
that Distribution Date. Excess Interest shall be allocated on each Distribution
Date in accordance with the priorities set forth in Section 4.02(g).
Exchange Act: The Securities Exchange Act of 1934, as amended.
Xxxxxx Xxx: Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
FASIT: A "financial asset securitization investment trust" within the
meaning of Section 860L of the Code.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
FHA: The Federal Housing Administration, or its successor.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
9.01, which Final Distribution Date shall in no event be later than the end of
the 90-day liquidation period described in Section 9.02.
Final Scheduled Distribution Date: Solely for purposes of the face of
the Certificates, as follows: with respect to the Class A-1 Certificates and
Class A-2 Certificates, November 25, 2020; with respect to the Class A-3
Certificates, February 25, 2022, and with respect to the Class A-4, Class A-5
and Class SB Certificates, February 25, 2036. 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 or Class SB Certificates on or before its Final Scheduled
Distribution Date.
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 Collection Period over the sum of the unpaid principal balance of such
Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification: As defined in Section 4.03(f).
Xxxxxxx Mac: Xxxxxxx Mac, a corporate instrumentality of the United
States created and existing under Title III of the Emergency Home Finance Act of
1970, as amended, or any successor thereto.
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 Company, the Master Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company, the Master
Servicer or the Trustee or in an Affiliate thereof, and (iii) is not connected
with the Company, the Master Servicer or the Trustee as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Initial Certificate Principal Balance: With respect to each Class of
Certificates (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 Account: The separate account or accounts created and
maintained pursuant to Section 4.10, which shall be entitled "JPMorgan Chase
Bank, N.A., as trustee, in trust for the registered holders of Residential
Funding Mortgage Securities II, Inc., Home Equity Loan Pass-Through
Certificates, Series 2006-HSA1," and which must be an Eligible Account.
Insurance Agreement: The Insurance and Indemnity Agreement, dated as of
January 27, 2006, among the Master Servicer, the Seller, the Company, the
Trustee and the Credit Enhancer, including any amendments and supplements
thereto.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any insurance policy covering a Mortgage Loan, to the extent such
proceeds are payable to the mortgagee under the Mortgage, any Subservicer, the
Master Servicer or the Trustee and are not applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing mortgage loans
held for its own account.
Insured Payment: The Insured Payment as defined in the Policy.
Interest Accrual Period: With respect to any Certificate (other than the
Class A-1 Certificates) and any Distribution Date, the calendar month preceding
the month in which such Distribution Date occurs. The Interest Accrual Period
for the Class A-1 Certificates shall be (a) for the Distribution Date in
February 2006, the period commencing on the Closing Date and ending on the day
preceding the Distribution Date in February 2006, and (b) with respect to any
Distribution Date after the Distribution Date in February 2006, the period
commencing on the Distribution Date in the month immediately preceding the month
in which such Distribution Date occurs and ending on the day preceding such
Distribution Date.
Interest Distribution Amount: For any Distribution Date, the amount
payable pursuant to Section 4.02(c)(1).
Interim Certification: As defined in Section 2.02.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: As defined in Section 1.02.
LIBOR Rate Adjustment Date: As defined in Section 1.02.
Limited Repurchase Right Holder: RFC Asset Holdings II, Inc., or its
successor.
Liquidated Mortgage Loan: With respect to any Distribution Date, any
Mortgage Loan in respect of which the Master Servicer has determined, in
accordance with the servicing procedures specified herein, as of the end of the
related Collection Period, that substantially all Liquidation Proceeds which it
reasonably expects to recover, if any, with respect to the disposition of the
related Mortgaged Property have been recovered. In addition, the Master Servicer
will treat any Mortgage Loan that is 180 days or more delinquent as having been
finally liquidated.
Liquidation Expenses: Out-of-pocket expenses (exclusive of overhead)
which are incurred by or on behalf of the Master Servicer in connection with the
liquidation of any Mortgage Loan and not recovered under any insurance policy,
such expenses including, without limitation, legal fees and expenses, any
unreimbursed amount expended (including, without limitation, amounts advanced to
correct defaults on any loan which is senior to such Mortgage Loan) respecting
the related Mortgage Loan and any related and unreimbursed expenditures for real
estate property taxes or for property acquisition, restoration, preservation or
disposition, or insurance against casualty loss or damage.
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.
Marker Rate: With respect to the Class SB Certificates and any
Distribution Date, 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.
Maturity Date: With respect to each Class of Certificates representing
ownership of REMIC II Regular Interests or REMIC I Regular Interests issued by
each of REMIC I and REMIC II 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, February 25, 2036, which is the
Distribution Date occurring in the month following the last scheduled monthly
payment of the Mortgage Loans.
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.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the
mortgagee of such Mortgage Loan, solely as nominee for the originator of such
Mortgage Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and any Due Date, the payment of principal and interest received
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).
Moody's: Xxxxx'x 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
second lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining
to a particular Mortgage Loan and any additional documents required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to
the Trustee pursuant to Section 2.01 as from time to time are held or deemed to
be held as a part of the Trust Fund, the Mortgage Loans originally so held being
identified in the initial Mortgage Loan Schedule, and Qualified Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including, without
limitation, each related Mortgage Note, Mortgage and Mortgage File and all
rights appertaining thereto.
Mortgage Loan Schedule: The list of the Mortgage Loans attached hereto
as Exhibit D (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 in the related Loan Group:
(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");
(iv) the Mortgage Rate ("CUR RATE");
(v) the Principal Balance at origination ("ORG AMT");
(vi) the type of property securing the Mortgage Note ("PROPERTY
TYPE");
(vii) the appraised value ("APPRSL");
(viii) the initial scheduled monthly payment of principal, if
any, and interest ("ORIGINAL P & I");
(ix) the Cut-off Date Loan Principal Balance ("CUT-OFF BAL");
(x) the Combined Loan-to-Value Ratio at origination ("CLTV");
(xi) the date of the Mortgage Note ("NOTE DATE");
(xii) the original term to maturity of the Mortgage Loan
("ORIGINAL TERM");
(xiii) under the column "OCCP CODE," a code indicating whether
the Mortgage Loan is secured by a non-owner occupied
residence;
(xiv) the Principal Balance of any Mortgage Loan senior thereto
("SR BAL");
(xv) the Credit Score ("CR SCORE");
(xvi) the debt to income ratio ("DTI");
(xvii) product code ("PRODUCT CODE");
(xviii) loan purpose ("PURPOSE");
(xix) the lien position of the related Mortgage ("LIEN");
(xx) the Subservicer loan number (SERVICER LOAN #); and
(xxi) the remaining term of the Mortgage Loan (REMAINING TERM).
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: As to any Mortgage Loan, the interest rate borne by the
related Mortgage Note, or any modification thereto.
Mortgaged Property: The underlying real property securing a Mortgage
Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Liquidation Proceeds: With respect to any Liquidated Mortgage Loan,
Liquidation Proceeds net of Liquidation Expenses.
Net Mortgage Rate: With respect to each Mortgage Loan, the per annum
rate equal to the Adjusted Mortgage Rate minus (x) the per annum rate at which
the Servicing Fee accrues and (y) the Credit Enhancer Premium Rate.
Net WAC Cap Shortfall: With respect to any Distribution Date and any
Class of Class A Certificates, the excess, if any, of (x) interest that would
have accrued on such Class of Class A Certificates at the applicable
Pass-Through Rate without application of the Net WAC Rate over (y) interest
accrued thereon at the Net WAC Rate.
Net WAC Rate: With respect to any Distribution Date, a per annum rate
equal to the weighted average of the Net Mortgage Rates of the Mortgage Loans as
of the first day of the month preceding the month in which such Distribution
Date occurs. With respect to the Class A-1 Certificates, the Net WAC Rate is
further adjusted by multiplying the Net WAC Rate by a fraction, the numerator of
which is 30 and the denominator of which is the actual number of days in the
related Interest Accrual Period. 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.
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.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Notice: A Notice of Nonpayment and Demand for Insured Payment, a form of
which is attached as Exhibit A to the Policy.
Notional Amount: With respect to the Class SB Certificates or the REMIC
II Regular Interest SB-IO, immediately prior to any Distribution Date, the
aggregate of the Uncertificated Principal Balances of the REMIC II Regular
Interests.
Officers' Certificate: A certificate signed by the Chairman of the
Board, the President or a Vice President or Assistant Vice President, or a
Managing Director or Director, and by the Treasurer, the Secretary, or one of
the Assistant Treasurers or Assistant Secretaries of the Company or the Master
Servicer, as the case may be, and delivered to the Trustee, as required by this
Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the
Trustee and the Master Servicer, who may be counsel for the Company or the
Master Servicer, provided that any opinion of counsel (i) referred to in the
definition of "Disqualified Organization" or (ii) relating to the qualification
of REMIC I or REMIC II as REMICs or compliance with the REMIC Provisions must,
unless otherwise specified, be an opinion of Independent counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan
(including an REO Property) which was not the subject of a Principal Prepayment
in Full, Cash Liquidation or REO Disposition and which was not purchased,
deleted or substituted for prior to such Due Date pursuant to Section 2.02, 2.03
or 4.07.
Overcollateralization Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Principal Balances of the Mortgage Loans as
of the last day of the related Collection Period, over (b) the aggregate
Certificate Principal Balance of the Class A Certificates immediately prior to
that Distribution Date, less amounts distributable to the Class A Certificates
from the Principal Remittance Amount for such Distribution Date and Excess
Interest available to pay any Realized Loss Distribution Amount for such
Distribution Date.
Overcollateralization Floor: An amount equal to 0.50% of the aggregate
Cut-off Date Principal Balance of the Mortgage Loans.
Overcollateralization Increase Amount: With respect to any Distribution
Date, an amount equal to the lesser of (i) the Excess Interest available to pay
any Overcollateralization Increase Amount on that Distribution Date and (ii) the
excess, if any, of (x) the Required Overcollateralization Amount for that
Distribution Date over (y) the Overcollateralization Amount for that
Distribution Date.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate:
With respect to the Class A-1 Certificates, (1) a per annum rate equal
to LIBOR plus 0.11%, or, (2) the Net WAC Rate, if less;
With respect to the Class A-2 Certificates, 5.19% per annum or the Net
WAC Rate, if less;
With respect to the Class A-3 Certificates, 5.23% per annum or the Net
WAC Rate, if less;
With respect to the Class A-4 Certificates, in the case of any
Distribution Date up to and including the first Distribution Date after the
Step-Up Date, 5.49% per annum, and in the case of any Distribution Date after
the first Distribution Date after the Step-Up Date, 5.99% per annum, or the Net
WAC Rate, if less; and
With respect to the Class A-5 Certificates, 5.31% per annum or the Net
WAC Rate, if less.
With respect to the Class SB Certificates or the REMIC II Regular
Interest SB-IO and any Distribution Date, a rate per annum equal to the
percentage equivalent of a fraction, the numerator of which is the sum of the
amounts calculated pursuant to clauses (i) through (iii) below, and the
denominator of which is the aggregate principal balance of the REMIC I Regular
Interests relating to the Mortgage Loans. For purposes of calculating the
Pass-Through Rate for the Class SB Certificates, the numerator is equal to the
sum of the following components:
(i) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT1 minus the Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT1;
(ii) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT2 minus the Marker Rate, applied to a notional amount equal
to the Uncertificated Principal Balance of REMIC I Regular Interest LT2;
and
(iii) the Uncertificated REMIC I Pass-Through Rate for REMIC I Regular
Interest LT4 minus twice the Marker Rate, applied to a notional amount
equal to the Uncertificated Principal Balance of REMIC I Regular
Interest LT4.
Paying Agent: JPMorgan Chase Bank, N.A. or any successor Paying Agent
appointed by the Trustee.
Percentage Interest: With respect to any Class A Certificate, the
undivided percentage ownership interest in the related Class evidenced by such
Certificate, which percentage ownership interest shall be equal to the Initial
Certificate Principal Balance thereof divided by the aggregate Initial
Certificate Principal Balance of all of the Certificates of the same Class. The
Percentage Interest with respect to a Class SB or Class R Certificate shall be
stated on the face thereof.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by
the United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United
States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to
repurchase such obligations are at the time rated by each Rating Agency
in its highest short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits,
time deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case of bankers'
acceptances, shall in no event have an original maturity of more than
365 days or a remaining maturity of more than 30 days) denominated in
United States dollars of any U.S. depository institution or trust
company incorporated under the laws of the United States or any state
thereof or of any domestic branch of a foreign depository institution or
trust company; provided that the debt obligations of such depository
institution or trust company at the date of acquisition thereof have
been rated by each Rating Agency in its highest short-term rating
available; and, provided further that, if the original maturity of such
short-term obligations of a domestic branch of a foreign depository
institution or trust company shall exceed 30 days, the short-term rating
of such institution shall be A-1+ in the case of Standard & Poor's if
Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original
maturities of not more than 365 days) of any corporation incorporated
under the laws of the United States or any state thereof which on the
date of acquisition has been rated by each Rating Agency in its highest
short-term rating available; provided that such commercial paper and
demand notes shall have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by
each Rating Agency in its highest long-term rating available (which may
be managed by the Trustee or one of its Affiliates); and
(vi) other obligations or securities that are acceptable to each
Rating Agency and the Credit Enhancer as a Permitted Investment
hereunder and will not reduce the rating assigned to any Class of
Certificates by such Rating Agency below the then-current rating
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.
Policy: The financial guaranty insurance policy provided by the Credit
Enhancer, dated as of January 27, 2006, with respect to the Class A
Certificates.
Pool Principal Balance: As to any date of determination, the aggregate
Principal Balances of the Mortgage Loans as of the last day of the Collection
Period preceding the month of such date of determination.
Premium: As defined in the Insurance Agreement.
Prepayment Assumption: With respect to the Class A Certificates and
Class SB 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 assumes a constant
prepayment rate of 15% per annum of the then outstanding principal balance of
the Mortgage Loans in the first month of the life of the Mortgage Loans, and an
additional approximate 2.2727% per annum in each month thereafter until the
twelfth month, and then beginning in the twelfth month and in each month
thereafter until the twenty-fourth month, a constant prepayment rate of 40% per
annum each month. Beginning in the twenty-fourth month, the prepayment
assumption assumes a constant prepayment rate of 40% per annum of the then
outstanding principal balance of the Mortgage Loans, decreasing approximately
0.4167% per annum in each month thereafter until the thirty-sixth month, and
then beginning in the thirty-sixth month and in each month thereafter during the
life of the Mortgage Loans, a constant prepayment rate of 35% per annum each
month.
Prepayment Interest Shortfall: As to any Distribution Date and any
Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that was
the subject of (a) a Principal Prepayment in Full during the related Collection
Period, an amount equal to the excess of one month's interest at the Net
Mortgage Rate on the unpaid principal balance of such Mortgage Loan as of the
most recent Due Date over the amount of interest (adjusted to the Net Mortgage
Rate) paid by the Mortgagor in such Collection 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 Net Mortgage Rate on the
amount of such Curtailment.
Principal Balance: As to any Outstanding Mortgage Loan, the unpaid
principal balance as of the Cut-off Date, minus all collections credited against
the principal balance of the Mortgage Loan in accordance with the related
Mortgage Note prior to that date, and as to any Liquidated Mortgage Loan, $0.00.
Principal Collection Distribution Amount. With respect to any
Distribution Date, the lesser of (a) the excess of (i) the Available
Distribution Amount (other than amounts payable under the Policy) over (ii) the
Interest Distribution Amount and (b) the sum of:
(i) the principal portion of each Monthly Payment received
with respect to the related Collection Period on each
Outstanding Mortgage Loan;
(ii) the Principal Balance of any Mortgage Loan repurchased
during the related Collection Period (or deemed to have
been so repurchased in accordance with Section 3.07(b))
pursuant to Section 2.02, 2.03, 2.05 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 2.05 during the related
Collection Period;
(iii) the principal portion of all other unscheduled collections
on the Mortgage Loans (including, without limitation,
Principal Prepayments in Full, Curtailments, Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received
during the related Collection Period (or deemed to have
been so received) to the extent not distributed on the
preceding Distribution Date; and
(iv) the Realized Loss Distribution Amount;
provided however, on any Distribution Date on which the Overcollateralization
Amount that would result without application of this proviso exceeds the
Required Overcollateralization Amount, the Principal Collection Distribution
Amount shall be reduced by the amount of such excess to an amount not less than
zero.
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, the
sum of the amounts described in clauses (b)(i), (ii) and (iii) of the definition
of Principal Collection Distribution Amount for that Distribution Date.
Program Guide: Together, Residential Funding Corporation's Seller Guide
and Servicing Guide, as in effect from time to time.
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
or 4.07, an amount equal to the sum of (i) 100% of the Principal Balance thereof
and (ii) unpaid accrued interest at the Adjusted Mortgage Rate (or at the Net
Mortgage Rate plus the Credit Enhancer Premium Rate in the case of a purchase
made by the Master Servicer) on the Principal Balance thereof to the first day
of the month following the month of purchase from the Due Date to which interest
was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Company 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 received 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 principal balance of the Deleted Mortgage
Loan as of the last day of the related Collection Period (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 Combined Loan-to-Value Ratio at the time of
substitution no higher than that of the Deleted Mortgage Loan at the time of
substitution; (iv) have a remaining term to stated maturity not greater than
(and not more than one year less than) that of the Deleted Mortgage Loan; and
(v) comply with each representation and warranty set forth in Sections 2.03 and
2.04 hereof and Section 4 of the Assignment Agreement (other than the
representations and warranties set forth therein with respect to the number of
loans (including the related percentage) in excess of zero which meet or do not
meet specified criteria).
Rating Agency: Each of Moody's and Standard & Poor'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 Company,
notice of which designation shall be given to the Trustee and the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property) as
to which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the principal balance of the Mortgage Loan (or REO
Property) as of the date of Cash Liquidation or REO Disposition plus accrued and
unpaid interest thereon, minus (ii) the proceeds, if any, received during the
month in which such Cash Liquidation (or REO Disposition) occurred, to the
extent applied as recoveries to principal of the Mortgage Loan, net of the
portion thereof reimbursable to the Master Servicer or any Subservicer with
respect to related 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 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 the related Mortgage Loan is not in default with
regard to payments due thereunder.
Realized Loss Distribution Amount: With respect to any Distribution
Date, an amount equal to the lesser of (x) Excess Interest plus any draw on the
Policy in respect of Realized Losses on the Mortgage Loans and (y) (A) 100% of
the principal portion of the Realized Losses incurred with respect to the
Mortgage Loans during the related Collection Period, plus (B) any Realized
Losses remaining undistributed from any preceding Distribution Date; provided
that any Realized Losses described in clause (B) will not be required to be paid
to the extent that the applicable Realized Loss was paid on the Class A
Certificates by Excess Interest, or a draw on the Policy, or was reflected in
the reduction of the Overcollateralization Amount.
Record Date: With respect to each Distribution Date and any
Certificates, other than the Class A-1 Certificates, the close of business on
the last Business Day of the month next preceding the month in which the related
Distribution Date occurs. With respect to the Class A-1 Certificates and any
Distribution Date, the close of business on the day prior to that Distribution
Date.
Reference Bank Rate: As defined in Section 1.02.
Regular Certificates: The Class A Certificates and Class SB
Certificates.
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 Shortfalls: With respect to any Distribution Date, for any
Mortgage Loan as to which there has been a reduction in the amount of interest
collectible thereon for the related Collection Period as a result of the
application of the Servicemembers Civil Relief Act or any other similar federal
or state law, the shortfall, if any, equal to (i) one month's interest on the
Principal Balance of such Mortgage Loan at the applicable Mortgage Rate, without
application of such Act, over (ii) the interest collectible on such Mortgage
Loan during such Collection Period.
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 or
REMIC II.
REMIC Administrator: Residential Funding Corporation. If Residential
Funding Corporation is found by a court of competent jurisdiction to no longer
be able to fulfill its obligations as REMIC Administrator under this Agreement
the Master Servicer or Trustee acting as Master Servicer shall appoint a
successor REMIC Administrator, subject to assumption of the REMIC Administrator
obligations under this Agreement.
REMIC I: The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of:
(i) the Mortgage Loans and the related Mortgage Files;
(ii) all payments and collections in respect of the Mortgage Loans
received on or after the Cut-off Date as shall be on deposit in
the Custodial Account or in the Certificate Account and
identified as belonging to the Trust Fund;
(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) any insurance policies relating to the Mortgage Loans; and
(v) all proceeds of clauses (i) through (iv) above.
REMIC I Principal Reduction Amounts: For any Distribution Date, the
amounts by which the principal balances of the REMIC I Regular Interests LT1,
LT2, LT3 and LT4 respectively will be reduced on such Distribution Date by the
allocation of Realized Losses and the distribution of principal, determined as
follows:
For purposes of the succeeding formulas the following symbols shall have
the meanings set forth below:
Y1 = the principal balance of the REMIC I Regular Interest LT1 after
distributions on the prior Distribution Date.
Y2 = the principal balance of the REMIC I Regular Interest LT2 after
distributions on the prior Distribution Date.
Y3 = the principal balance of the REMIC I Regular Interest LT3 after
distributions on the prior Distribution Date.
Y4 = the principal balance of the REMIC I Regular Interest LT4 after
distributions on the prior Distribution Date (note: Y3 = Y4).
(DELTA)Y1 = the REMIC I Regular Interest LT1 Principal Reduction Amount.
(DELTA)Y2 = the REMIC I Regular Interest LT2 Principal Reduction Amount.
(DELTA)Y3 = the REMIC I Regular Interest LT3 Principal Reduction Amount.
(DELTA)Y4 = the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 = the aggregate principal balance of the REMIC I Regular Interest
LT1, REMIC I Regular Interest LT2, REMIC I Regular Interest LT3,
and REMIC I Regular Interest LT4 after distributions and the
allocation of Realized Losses on the prior Distribution Date.
P1 = the aggregate principal balance of the REMIC I Regular Interest
LT1, REMIC I Regular Interest LT2, REMIC I Regular Interest LT3
and REMIC I Regular Interest 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 I Regular Interest LT1,
REMIC I Regular Interest LT2, REMIC I Regular Interest LT3 and
REMIC I Regular Interest LT4 Principal Reduction Amounts.
=the aggregate of the principal portions of Realized Losses to be
allocated to, and the principal distributions to be made on, the
Certificates on such Distribution Date (including distributions
of accrued and unpaid interest on the Class SB Certificates for
prior Distribution Dates).
R0 = the Net WAC Rate (stated as a monthly rate) after giving effect
to amounts distributed and Realized Losses allocated on the prior
Distribution Date.
R1 = the Net WAC 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 (x) the product for each
Class of (i) the monthly interest rate for such Class applicable
for distributions to be made on such Distribution Date, as
limited by the Net WAC Rate if applicable, and (ii) the aggregate
Certificate Principal Balance for such Class after distributions
and the allocation of Realized Losses on the prior Distribution
Date and (y) any Net WAC Cap Shortfall for such class remaining
unpaid after the 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 (x) the product for each
Class of (i) the monthly interest rate for such Class applicable
for distributions to be made on the next succeeding Distribution
Date, as limited by the Net WAC Rate if applicable, 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 (y) any Net WAC Cap Shortfall for such
Class remaining unpaid after the distributions and the
allocations on such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4;
(DELTA)Y2 = (x/0){( (xxxxx)0X0 - (xxxxx)0X0)/X0X0};
(XXXXX)X0 = (alpha)(DELTA)P - (DELTA)Y2; and
(DELTA)Y4 = (DELTA)Y3.
if both (DELTA)Y2 and (DELTA)Y3, as so determined, are non-negative numbers.
Otherwise:
(1) If (DELTA)Y2, as so determined, is negative, then
(DELTA)Y2 = 0;
(DELTA)Y3 = {2(alpha)(DELTA)PY2R1R0 - (alpha)(2)P0(alpha)(2)P0)}/{2(alpha)Y2R1R0
- (alpha)((gamma)0R1 - (gamma)1R0)};
(DELTA)Y4 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
(2) If (DELTA)Y3, as so determined, is negative, then
(DELTA)Y3 = 0;
(DELTA)Y2 = {(alpha)(2)P0((gamma)0R1 - (gamma)1R0) -
2(alpha)(DELTA)PY2R1R0/{2(alpha)Y2R1R0- 2(alpha)(DELTA)PR1R1R0 +
(alpha)((gamma)0R1 - (gamma)1R0)};
(DELTA)Y4 = (DELTA)Y3; and
(DELTA)Y1 = (DELTA)P - (DELTA)Y2 - (DELTA)Y3 - (DELTA)Y4.
REMIC I Realized Losses: For any Distribution Date, Realized Losses on
the Mortgage Loans for the related Due Period shall be allocated, as follows:
The Interest Realized Losses, if any, shall be allocated pro rata to accrued
interest on the REMIC I Regular Interest to the extent of such accrued interest.
Any remaining Interest Realized Losses and any Principal Realized Losses shall
be treated as Principal Realized Losses and allocated (i) to the REMIC I Regular
Interest LT2, REMIC I Regular Interest LT3 and REMIC I Regular Interest LT4
REMIC I Regular Interests pro rata according to their respective Principal
Reduction Amounts, provided that such allocation to each of the REMIC I Regular
Interest LT2, REMIC I Regular Interest LT3 and REMIC I Regular Interest LT4
shall not exceed their respective Principal Reduction Amounts for such
Distribution Date, and (ii) any Realized Losses not allocated to either the
REMIC I Regular Interest LT2, REMIC I Regular Interest LT3, or REMIC I Regular
Interest LT4 pursuant to the proviso of clause (i) shall be allocated to the
REMIC I Regular Interest LT1.
REMIC I Regular Interest LT1: A regular interest in REMIC I that is held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT1 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest LT1
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC I Regular Interest LT1 on such Distribution Date.
REMIC I Regular Interest LT2: A regular interest in REMIC I that is
held as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT2 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest LT2
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC I Regular Interest LT2 on such Distribution Date.
REMIC I Regular Interest LT3: A regular interest in REMIC I that is held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT3 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest LT3
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC I Regular Interest LT3 on such Distribution Date.
REMIC I Regular Interest LT4: A regular interest in REMIC I that is held
as an asset of REMIC II, that has an initial principal balance equal to the
related Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest LT4 Principal Distribution Amount: For any
Distribution Date, the excess, if any, of the REMIC I Regular Interest LT4
Principal Reduction Amount for such Distribution Date over the Realized Losses
allocated to the REMIC I Regular Interest LT4 on such Distribution Date.
REMIC I Regular Interests: REMIC I Regular Interests LT1, LT2, LT3 and
LT4.
REMIC II: The segregated pool of assets subject hereto, constituting a
portion of the primary trust created hereby and to be administered hereunder,
with respect to which a separate REMIC election is to be made, consisting of the
REMIC I Regular Interests.
REMIC II Regular Interest SB-PO: A separate non-certificated beneficial
ownership interests in REMIC II issued hereunder and designated as a Regular
Interest in REMIC II. REMIC II 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 II Regular Interest SB-IO: A separate non-certificated beneficial
ownership interests in REMIC II issued hereunder and designated as a Regular
Interest in REMIC II. REMIC II 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 II Regular Interests: REMIC II Regular Interests SB-IO and SB-PO,
together with the Class A-1, Class A-2, Class A-3, Class A-4 and Class A-5
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 3.13.
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 and the
Credit Enhancer through foreclosure or deed in lieu of foreclosure in connection
with a defaulted Mortgage Loan.
Request for Release: A request for release, the form of which is
attached as Exhibit E 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 prior to the Stepdown Date, an amount equal to 3.15% of the aggregate
Principal Balance of the Mortgage Loans as of the Cut-off Date. With respect to
any Distribution Date on or after the Stepdown Date, the lesser of (a) the
initial Required Overcollateralization Amount and (b) the greater of (x) 6.30%
of the aggregate Principal Balance of the Mortgage Loans after applying payments
received in the related Collection Period and (y) the Overcollateralization
Floor; provided that, if a Trigger Event has occurred and is continuing on such
Distribution Date, the Required Overcollateralization Amount will equal the
Required Overcollateralization Amount for the immediately preceding Distribution
Date. The Required Overcollateralization Amount may be reduced at any time
without Certificateholder consent, with the prior written consent of the Credit
Enhancer so long as written confirmation is obtained from each Rating Agency
that the reduction will not reduce the rating assigned to any Class of
Certificates by that rating agency below the lower of the then-current rating or
the rating assigned to those Certificates as of the Closing Date by that Rating
Agency without taking into account the Policy.
Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the Company and
any successor thereto.
Responsible Officer: When used with respect to the Trustee, any officer
of the Corporate Trust Department of the Trustee, including any Senior Vice
President, any Vice President, any Assistant Vice President, any Assistant
Secretary, any Trust Officer or Assistant Trust Officer with particular
responsibility for this transaction, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers to whom, with respect to a particular matter, such matter is
referred.
Rolling Three Month Delinquency Percentage: With respect to any
Distribution Date and the Mortgage Loans, the arithmetic average of the
Delinquency Percentages determined for such Distribution Date and for each of
the two preceding Distribution Dates.
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 Company.
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 and (iv) compliance with the
obligations under Sections 3.01, 3.08, 3.11(a) and 3.13, 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 of 0.08%.
Servicing Modification: Any reduction of the interest rate on or the
outstanding principal balance of a Mortgage Loan that is in default, or for
which, in the judgment of the Master Servicer, default is reasonably
foreseeable, pursuant to a modification of such Mortgage Loan in accordance with
Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer, as such list may from time to time be
amended.
Servicing Trigger: As of any Distribution Date, for purposes of Section
7.05 hereof, the occurrence of any of the following scenarios:
(a) the Sixty-Plus Delinquency Percentage is greater than 27.00% for the
then-current Distribution Date; or
(b) on or after the Distribution Date in July 2008, 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:
July 2008 to December 2008: 2.00% with respect to July 2008, plus an
additional 1/6th of 1.50% for each month thereafter.
January 2009 to December 2009: 3.50% with respect to January 2009, plus
an additional 1/12th of 2.00% for each month thereafter.
January 2010 to December 2010: 5.50% with respect to January 2010, plus
an additional 1/12th of 1.25% for each month thereafter.
January 2010 to December 2011: 6.75% with respect to January 2010, plus
an additional 1/12th of 0.75% for each month thereafter.
January 2011 and thereafter: 7.50%.
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date
and the Mortgage Loans, the arithmetic average, for each of the three
Distribution Dates ending with such Distribution Date, of the fraction,
expressed as a percentage, equal to (x) the aggregate 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, over (y) the aggregate Principal Balance of all of the Mortgage Loans
immediately preceding that Distribution Date.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The
XxXxxx-Xxxx Companies, Inc., or its successor in interest.
Startup Date: The day designated as such pursuant to Article X hereof.
Stated Value: For any Mortgage Loan, the value of the related Mortgaged
Property as stated by the related Mortgagor in his or her loan application.
Step-Up Date: The second Distribution Date on which the principal
balance (after giving effect to distributions to be made on such Distribution
Date) of the Mortgage Loans is less than 10% of the Cut-off Date Principal
Balance.
Stepdown Date: The later to occur of (x) the Distribution Date in August
2008 and (y) the first Distribution Date on which the aggregate Principal
Balance of the Mortgage Loans after applying payments received in the related
Collection Period is less than 50% of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date.
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.
Subservicing Account: An account established by a Subservicer in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Company.
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly to
the related Subservicer (or, in the case of a Nonsubserviced Mortgage Loan, to
the Master Servicer) in respect of subservicing and other compensation that
accrues with respect to each Distribution Date at an annual rate of 0.50%.
Tax Returns: The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of REMIC I and REMIC II due to their classification as REMICs under
the REMIC Provisions, together with any and all other information, reports or
returns that may be required to be furnished to the Certificateholders or filed
with the Internal Revenue Service or any other governmental taxing authority
under any applicable provisions of federal, state or local tax laws.
Telerate Screen Page 3750: As defined in Section 1.02.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation
or other form of assignment of any Ownership Interest in a Certificate.
Transfer Affidavit and Agreement: As defined in Section 5.02(g).
Transferee: Any Person who is acquiring by Transfer any Ownership
Interest in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date on or after the Stepdown Date if any of the following
conditions are met:
(i) if the Distribution Date is occurring on or after the Distribution
Date in August 2008 and before the Distribution Date in February 2009, the
aggregate amount of Realized Losses on the Mortgage Loans since the Cut-off Date
exceeds 1.25% plus 1/6th of 0.60% of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date;
(ii) if the Distribution Date is occurring on or after the Distribution
Date in February 2009 and before the Distribution Date in February 2010, the
aggregate amount of Realized Losses on the Mortgage Loans since the Cut-off Date
exceeds 1.85% plus 1/12th of 0.40% of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date;
(iii) if the Distribution Date is occurring on or after the Distribution
Date in February 2010 and before the Distribution Date in February 2011, the
aggregate amount of Realized Losses on the Mortgage Loans since the Cut-off Date
exceeds 2.25% plus 1/12th of 0.25% of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date;
(iv) if the Distribution Date is occurring on or after the Distribution
Date in February 2011 and before the Distribution Date in February 2012, the
aggregate amount of Realized Losses on the Mortgage Loans since the Cut-off Date
exceeds 2.50% plus 1/12th of 0.25% of the aggregate Principal Balance of the
Mortgage Loans as of the Cut-off Date;
(v) if the Distribution Date is occurring on or after the Distribution
Date in February 2012, the aggregate amount of Realized Losses on the Mortgage
Loans since the Cut-off Date exceeds 2.75% of the aggregate Principal Balance of
the Mortgage Loans as of the Cut-off Date; or
(vi) if on any Distribution Date on or after the Stepdown Date, the
Rolling Three Month Delinquency Percentage is equal to or in excess of 3.25%.
Trust Fund: Collectively, the assets of REMIC I and REMIC II and the
Policy.
Uncertificated Accrued Interest: With respect to any Uncertificated
Regular Interest for any Distribution Date, one month's interest at the related
Uncertificated REMIC I 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 relating to the
Mortgage Loans for any Distribution Date shall be allocated among REMIC I
Regular Interests LT1, LT2, LT3 and LT4, pro rata based on, and to the extent
of, Uncertificated Accrued Interest, as calculated without application of this
sentence. Uncertificated Interest on REMIC II Regular Interest SB-PO shall be
zero. Uncertificated Interest on the REMIC II Regular Interest SB-IO for each
Distribution Date shall equal Accrued Certificate Interest for the Class SB
Certificates.
Uncertificated Notional Amount: With respect to REMIC II Regular
Interest SB-IO, the Notional Amount for such Class.
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 the REMIC II Regular Interest SB-PO the initial
amount set forth with respect thereto in the Preliminary Statement as reduced by
distributions deemed made in respect thereof pursuant to Section 4.02 and
Realized Losses allocated thereto pursuant to Section 4.05.
Uncertificated REMIC I Pass-Through Rate: With respect to REMIC I
Regular Interest LT1 and REMIC I Regular Interest LT2, and any Distribution
Date, a per annum rate equal to the Net WAC Rate; with respect to REMIC I
Regular Interest LT3 and any Distribution Date, 0.00%; and with respect to REMIC
I Regular Interest LT4 and any Distribution Date, a per annum rate equal to
twice the Net WAC Rate.
Uncertificated Regular Interests: The REMIC I Regular Interests.
Uniform Single Attestation Program for Mortgage Bankers: The Uniform
Single Attestation Program for Mortgage Bankers, as published by the Mortgage
Bankers Association of America and effective with respect to fiscal periods
ending on or after December 15, 1995.
Uninsured Cause: Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity (treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations), provided that, for purposes solely of the restrictions on
the transfer of Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate that is described
in Section 7701(a)(30)(D) of the Code, or a trust that is described in Section
7701(a)(30)(E) of the Code.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. 98.00% of all of the Voting
Rights shall be allocated among Holders of the Class A Certificates, in
proportion to their then outstanding Certificate Principal Balances of their
respective Certificates; 1.0% of all of the Voting Rights shall be allocated
among the Holders of the Class SB Certificates; and 0.5% and 0.5% of all Voting
Rights will be allocated among holders of the Class R-I Certificates and the
Class R-II Certificates, respectively, in proportion to the Percentage Interests
evidenced by their respective Certificates provided, that as long as there is no
Credit Enhancer Default, the Voting Rights of the Class A Certificateholders may
be exercised by the Credit Enhancer without the consent of such Holders and may
only be exercised by such Holders with the prior written consent of the Credit
Enhancer.
Weighted Average Net Mortgage Rate: For any Distribution Date, the
weighted average of the Net Mortgage Rates of the Mortgage Loans as of the first
day of the month preceding the month in which such Distribution Date occurs.
Section 1.02 Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rates on the
Class A-1 Certificates, if any, for any Interest Accrual Period (including the
initial Interest Accrual Period) will be determined as described below:
On each LIBOR Rate Adjustment Date, LIBOR shall be established by the
Trustee and, as to any Interest Accrual Period, will equal the rate for one
month United States dollar deposits that appears on the Telerate Screen Page
3750 of the Moneyline Telerate Capital Markets Report as of 11:00 a.m., London
time, on the second LIBOR Business Day prior to the first day of such Interest
Accrual Period ("LIBOR Rate Adjustment Date"). "Telerate Screen Page 3750" means
the display designated as page 3750 on the Telerate Service (or such other page
as may replace page 3750 on that service for the purpose of displaying London
interbank offered rates of major banks). If such rate does not appear on such
page (or such other page as may replace that page on that service, or if such
service is no longer offered, LIBOR shall be so established by use of such other
service for displaying LIBOR or comparable rates as may be selected by the
Trustee after consultation with the Master Servicer), the rate will be the
Reference Bank Rate. The "Reference Bank Rate" will be determined on the basis
of the rates at which deposits in U.S. Dollars are offered by the reference
banks (which shall be any three major banks that are engaged in transactions in
the London interbank market, selected by the Trustee after consultation with the
Master Servicer) as of 11:00 a.m., London time, on the LIBOR Rate Adjustment
Date to prime banks in the London interbank market for a period of one month in
amounts approximately equal to the Certificate Principal Balance of the Class
A-1 Certificates then outstanding. The Trustee will request the principal London
office of each of the reference banks to provide a quotation of its rate. If at
least two such quotations are provided, the rate will be the arithmetic mean of
the quotations rounded up to the next multiple of 1/16%. If on such date fewer
than two quotations are provided as requested, the rate will be the arithmetic
mean of the rates quoted by one or more major banks in New York City, selected
by the Trustee after consultation with the Master Servicer, as of 11:00 a.m.,
New York City time, on such date for loans in U.S. Dollars to leading European
banks for a period of one month in amounts approximately equal to, with respect
to the Class A-1 Certificates, the Certificate Principal Balance of the Class
A-1 Certificates then outstanding. If no such quotations can be obtained, the
rate will be LIBOR for the prior Distribution Date, provided however, if, under
the priorities described above, LIBOR for a Distribution Date would be based on
LIBOR for the previous Distribution Date for the third consecutive Distribution
Date, the Trustee 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. "LIBOR Business Day" means any day other than (i) a Saturday or a Sunday
or (ii) a day on which banking institutions in the city of London, England are
required or authorized by law to be closed.
The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Trustee's subsequent calculation of the Pass-Through Rates
applicable to the Class A-1 Certificates for the relevant Interest Accrual
Period, in the absence of manifest error, will be final and binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date. Furthermore, the Trustee will supply to any Certificateholder so
requesting by calling the Bondholder Inquiry Line at (000) 000-0000 the
Pass-Through Rates on the Class A-1 Certificates for the current and the
immediately preceding Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee without recourse all the right, title and
interest of the Company in and to the Mortgage Loans, including all interest and
principal received on or with respect to the Mortgage Loans on or after the
Cut-off Date.
(b) In connection with such assignment and contemporaneously with the
delivery of this Agreement, and except as set forth in Section 2.01(c) below,
the Company does hereby deliver to, and deposit with, the Trustee, or to and
with one or more Custodians, as the duly appointed agent or agents of the
Trustee for such purpose, the following documents or instruments (or copies
thereof as permitted by this Section) with respect to each Mortgage Loan so
assigned:
(i) The original Mortgage Note, endorsed without recourse to the
order of the Trustee and showing an unbroken chain of endorsements from
the originator thereof to the Person endorsing it to the Trustee, or
with respect to any Destroyed Mortgage Note, an original lost note
affidavit from the related Seller or Residential Funding stating that
the original Mortgage Note was lost, misplaced or destroyed, together
with a copy of the related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM
Loan if the Mortgage Loan is a MOM Loan, with evidence of recording
indicated thereon or a copy of the Mortgage with evidence of recording
indicated thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R)
System, an original Assignment of the Mortgage to the Trustee with
evidence of recording indicated thereon or a copy of such assignment
with evidence of recording indicated thereon;
(iv) The original recorded assignment or assignments of the
Mortgage showing an unbroken chain of title from the originator to the
Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) with
evidence of recordation noted thereon or attached thereto, or a copy of
such assignment or assignments of the Mortgage with evidence of
recording indicated thereon; and
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan or a
copy of each modification, assumption agreement or preferred loan
agreement.
(c) The Company may, in lieu of delivering the original of the documents
set forth in Section 2.01(b)(ii), (iii), (iv) and (v) (or copies thereof as
permitted by Section 2.01(b)) to the Trustee or the Custodian or Custodians,
deliver such documents to the Master Servicer, and the Master Servicer shall
hold such documents in trust for the use and benefit of all present and future
Certificateholders until such time as is set forth in the next sentence. Within
thirty Business Days following the earlier of (i) the receipt of the original of
each of the documents or instruments set forth in Section 2.01(b)(ii), (iii),
(iv) and (v) (or copies thereof as permitted by such Section) for any Mortgage
Loan and (ii) a written request by the Trustee to deliver those documents with
respect to any or all of the Mortgage Loans then being held by the Master
Servicer, the Master Servicer shall deliver a complete set of such documents to
the Trustee or the Custodian or Custodians that are the duly appointed agent or
agents of the Trustee.
(d) Notwithstanding the provisions of Section 2.01(c), in the event
that in connection with any Mortgage Loan the Company cannot deliver the
original of the Mortgage, any assignment, modification, assumption agreement or
preferred loan agreement (or copy thereof as permitted by Section 2.01(b)) with
evidence of recording thereon concurrently with the execution and delivery of
this Agreement because of (i) a delay caused by the public recording office
where such Mortgage, assignment, modification, assumption agreement or preferred
loan agreement as the case may be, has been delivered for recordation, or (ii) a
delay in the receipt of certain information necessary to prepare the related
assignments, the Company shall deliver or cause to be delivered to the Trustee
or the respective Custodian a copy of such Mortgage, assignment, modification,
assumption agreement or preferred loan agreement.
The Company shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment referred to in clause
(iii) of Section 2.01(b), except (a) in states where, in the Opinion of Counsel
acceptable to the Credit Enhancer, the Trustee and the Master Servicer, such
recording is not required to protect the Trustee's interests in the Mortgage
Loan against the claim of any subsequent transferee or any successor to or
creditor of the Company or the originator of such Mortgage Loan or (b) if MERS
is identified on the Mortgage or on a properly recorded assignment of the
Mortgage as the mortgagee of record solely as nominee for the Seller and its
successors and assigns. If any Assignment is lost or returned unrecorded to the
Company because of any defect therein, the Company 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 Company shall promptly
deliver or cause to be delivered to the Trustee or the respective Custodian such
Mortgage or Assignment (or copy thereof as permitted by Section 2.01(b)) with
evidence of recording indicated thereon at the time specified in Section
2.01(c).
If the Company delivers to the Trustee or Custodian any Mortgage Note or
Assignment of Mortgage in blank, the Company shall, or shall cause the Custodian
to, complete the endorsement of the Mortgage Note and the Assignment of Mortgage
in the name of the Trustee in conjunction with the Interim Certification issued
by the Custodian, as contemplated by Section 2.02.
Any of the items set forth in Sections 2.01(b)(ii), (iii), (iv) and (v)
and that may be delivered as a copy rather than the original may be delivered to
the Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Company further agrees that it will cause, at the Company's
own expense, within 30 Business Days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Company to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Company further agrees that it will
not, and will not permit the Master Servicer to, and the Master Servicer agrees
that it will not, alter the codes referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
(e) It is intended that the conveyances by the Company to the Trustee
of the Mortgage Loans as provided for in this Section 2.01 and the
Uncertificated REMIC I Regular Interests be construed as a sale by the Company
to the Trustee of the Mortgage Loans and the Uncertificated REMIC I 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 REMIC I Regular Interests by the Company to the Trustee to secure
a debt or other obligation of the Company. Nonetheless, (a) this Agreement is
intended to be and hereby is a security agreement within the meaning of Articles
8 and 9 of the New York Uniform Commercial Code and the Uniform Commercial Code
of any other applicable jurisdiction; (b) the conveyances provided for in this
Section 2.01 shall be deemed to be (1) a grant by the Company to the Trustee of
a security interest in all of the Company's right (including the power to convey
title thereto), title and interest, whether now owned or hereafter acquired, in
and to (A) the Mortgage Loans, including the related Mortgage Note, the
Mortgage, any insurance policies and all other documents in the related Mortgage
File, (B) all amounts payable pursuant to the Mortgage Loans in accordance with
the terms thereof, (C) the Uncertificated REMIC I Regular Interests 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 invested in the Certificate Account or the Custodial Account,
whether in the form of cash, instruments, securities or other property and (2)
an assignment by the Company to the Trustee of any security interest in any and
all of Residential Funding's right (including the power to convey title
thereto), title and interest, whether now owned or hereafter acquired, in and to
the property described in the foregoing clauses (1)(A), (B), (C) and (D) granted
by Residential Funding to the Company pursuant to the Assignment Agreement; (c)
the possession by the Trustee, the Custodian or any other agent of the Trustee
of Mortgage Notes or such other items of property as constitute instruments,
money, payment intangibles, negotiable documents, goods, deposit accounts,
letters of credit, advices of credit, investment property, certificated
securities or chattel paper shall be deemed to be "possession by the secured
party," or possession by a purchaser or a person designated by such secured
party, for purposes of perfecting the security interest pursuant to the
Minnesota Uniform Commercial Code and the Uniform Commercial Code of any other
applicable jurisdiction as in effect (including, without limitation, Sections
8-106, 9-313 and 9-106 thereof); and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents of, or persons
holding for, (as applicable) the Trustee for the purpose of perfecting such
security interest under applicable law.
The Company and, at the Company's direction, Residential Funding and the
Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans and the
Uncertificated REMIC I 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 Company shall prepare and deliver to the Trustee not less than 15 days prior
to any filing date and the Trustee shall forward for filing, or shall cause to
be forwarded for filing, at the expense of the Company, all filings necessary to
maintain the effectiveness of any original filings necessary under the Uniform
Commercial Code as in effect in any jurisdiction to perfect the Trustee's
security interest in or lien on the Mortgage Loans and the Uncertificated REMIC
I Regular Interests, as evidenced by an Officer's Certificate of the Company,
with a copy delivered to the Credit Enhancer, including without limitation (x)
continuation statements, and (y) such other statements as may be occasioned by
(1) any change of name of Residential Funding, the Company or the Trustee (such
preparation and filing shall be at the expense of the Trustee, if occasioned by
a change in the Trustee's name), (2) any change of location of the place of
business or the chief executive office of Residential Funding or the Company,
(3) any transfer of any interest of Residential Funding or the Company in any
Mortgage Loan or (4) any transfer of any interest of Residential Funding or the
Company in any Uncertificated REMIC I 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 declares that it, or a Custodian as
its agent, holds and will hold such documents and the other documents
constituting a part of the Mortgage Files delivered to it, or a Custodian as its
agent, in trust for the use and benefit of all present and future
Certificateholders and the Credit Enhancer. The Trustee or Custodian (such
Custodian being so obligated under a Custodial Agreement) agrees, for the
benefit of Certificateholders and the Credit Enhancer, to review each Mortgage
File delivered to it pursuant to Section 2.01(b) within 45 days after the
Closing Date to ascertain that all required documents (specifically as set forth
in Section 2.01(b)), have been executed and received, and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule, as
supplemented, that have been conveyed to it, and to deliver to the Trustee a
certificate (the "Interim Certification") to the effect that all documents
required to be delivered pursuant to Section 2.01(b) above have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, except for any exceptions listed on Schedule A
attached to such Interim Certification. Upon delivery of the Mortgage Files by
the Company or the Master Servicer, the Trustee shall acknowledge receipt (or,
with respect to Mortgage Loans subject to a Custodial Agreement, and based
solely upon a receipt or certification executed by the Custodian, receipt by the
respective Custodian as the duly appointed agent of the Trustee) of the
documents referred to in Section 2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or
documents constituting a part of a Mortgage File to be missing or defective,
upon receipt of notification from the Custodian as specified in the succeeding
sentence, the Trustee shall promptly so notify or cause the Custodian to so
notify the Master Servicer, Residential Funding, and the Company. Pursuant to
Section 2.3 of the Custodial Agreement, the Custodian will notify the Master
Servicer, the Company and the Trustee of any such omission or defect found by it
in respect of any Mortgage File held by it in respect of the items received by
it pursuant to the Custodial Agreement. If such omission or defect materially
and adversely affects the interests in the related Mortgage Loan of the
Certificateholders or the Credit Enhancer, the Master Servicer shall promptly
notify Residential Funding of such omission or defect and request that
Residential Funding correct or cure such omission or defect within 60 days from
the date the Master Servicer was notified of such omission or defect and, if
Residential Funding does not correct or cure such omission or defect within such
period, that Residential Funding 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 or any Custodian, as the case
may be, shall release to Residential Funding the related Mortgage File and the
Trustee shall execute and deliver such instruments of transfer or assignment
prepared by the Master Servicer, in each case without recourse, as shall be
necessary to vest in Residential Funding or its designee, 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
2.05, if Residential Funding at the time that it repurchases the Mortgage Loan
is not a member of MERS and the Mortgage is registered on the MERS(R) System,
the Master Servicer, at its own expense and without any right of reimbursement,
shall cause MERS to execute and deliver an assignment of the Mortgage in
recordable form to transfer the Mortgage from MERS to 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 Residential Funding to so cure or purchase any Mortgage Loan
as to which a material and adverse defect in or omission of a constituent
document exists shall constitute the sole remedy respecting such defect or
omission available to Certificateholders or the Trustee on behalf of
Certificateholders (except for the Credit Enhancer's rights under the Insurance
Agreement)..
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to the Trustee
for the benefit of the Certificateholders and the Credit Enhancer that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and is or will be in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to
ensure the enforceability of each Mortgage Loan in accordance with the
terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's Certificate of
Incorporation or Bylaws or constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a
material default) under, or result in the material breach of, any
material contract, agreement or other instrument to which the Master
Servicer is a party or which may be applicable to the Master Servicer or
any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Company, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any
order or decree of any court or any order, regulation or demand of any
federal, state, municipal or governmental agency, which default might
have consequences that would materially and adversely affect the
condition (financial or other) or operations of the Master Servicer or
its properties or might have consequences that would materially
adversely affect its performance hereunder;
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vi) The Master Servicer will comply in all material respects in
the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement
furnished in writing or report delivered to the Company, any Affiliate
of the Company or the Trustee by the Master Servicer will, to the
knowledge of the Master Servicer, contain any untrue statement of a
material fact or omit a material fact necessary to make the information,
certificate, statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing Agreement and
each designated Subservicer are acceptable to the Master Servicer and
any new Subservicing Agreements will comply with the provisions of
Section 3.02;
(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 Mortgage
Files to the Trustee or any Custodian.
Upon discovery by either the Company, the Master Servicer, the Credit
Enhancer, the Trustee or any Custodian of a breach of any representation or
warranty set forth in this Section 2.03(a) which materially and adversely
affects the interests of the Certificateholders or the Credit Enhancer in any
Mortgage Loan, the party discovering such breach shall give prompt written
notice to such other parties (any Custodian being so obligated under a Custodial
Agreement). Within 90 days of its discovery or its receipt of notice of such
breach, the Master Servicer shall either (i) cure such breach in all material
respects or (ii) to the extent that such breach is with respect to a Mortgage
Loan or a related document, purchase such Mortgage Loan from the Trust Fund at
the Purchase Price and in the manner set forth in Section 2.02; provided that if
the omission or defect would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or repurchase must occur within 90 days from the date such breach was
discovered. The obligation of the Master Servicer to cure such breach or to so
purchase such Mortgage Loan shall constitute the sole remedy in respect of a
breach of a representation and warranty set forth in this Section 2.03(a)
available to the Certificateholders or the Trustee on behalf of the
Certificateholders (except for the Credit Enhancer's rights under Section 3.03
of the Insurance Agreement).
(b) The Company hereby represents and warrants to the Trustee for the
benefit of the Certificateholders and the Credit Enhancer 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
Company had good title to, and was the sole owner of, each Mortgage Loan free
and clear of any pledge, lien, encumbrance or security interest (other than
rights to servicing and related compensation) and such 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 Mortgage Files to the Trustee or any Custodian.
Upon discovery by any of the Company, the Master Servicer, the Credit
Enhancer, the Trustee or any Custodian of a breach of any of the representations
and warranties set forth in this Section 2.03(b) which materially and adversely
affects the interests of the Certificateholders or the Credit Enhancer in any
Mortgage Loan, the party discovering such breach shall give prompt written
notice to the other parties and the Credit Enhancer (any Custodian being so
obligated under a Custodial Agreement); provided, however, that in the event of
a breach of the representation and warranty set forth in Section 2.03(b)(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 Company shall either (i) cure such breach in all material respects or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase Price and in the
manner set forth in Section 2.02; provided that the Company shall have the
option to substitute a Qualified Substitute Mortgage Loan or Loans for such
Mortgage Loan if such substitution occurs within two years following the Closing
Date; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure, repurchase or substitution must occur within 90 days from
the date such breach was discovered. Any such substitution shall be effected by
the Company under the same terms and conditions as provided in Section 2.04 for
substitutions by Residential Funding. It is understood and agreed that the
obligation of the Company to cure such breach or to so purchase or substitute
for any Mortgage Loan as to which such a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders (other than the Credit Enhancer) or the Trustee on behalf of
the Certificateholders (other than the Credit Enhancer).
Section 2.04. Representations and Warranties of Residential Funding.
The Company, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders and the Credit Enhancer all of its right, title and interest
in respect of the Assignment Agreement applicable to a Mortgage Loan as and to
the extent set forth in the Assignment Agreement. Insofar as the Assignment
Agreement relates to the representations and warranties made by Residential
Funding in respect of such Mortgage Loan and any remedies provided thereunder
for any breach of such representations and warranties, such right, title and
interest may be enforced by the Master Servicer on behalf of the Trustee, the
Credit Enhancer and the Certificateholders. Upon the discovery by the Company,
the Master Servicer, the Credit Enhancer, the Trustee or any Custodian of a
breach of any of the representations and warranties made in the Assignment
Agreement in respect of any Mortgage Loan or of any Repurchase Event which
materially and adversely affects the interests of the Certificateholders or the
Credit Enhancer in such Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties and the Credit Enhancer (any
Custodian being so obligated under a Custodial Agreement). The Master Servicer
shall promptly notify Residential Funding of such breach or Repurchase Event and
request that Residential Funding either (i) cure such breach or Repurchase Event
in all material respects within 90 days from the date the Master Servicer was
notified of such breach or Repurchase Event or (ii) purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section
2.02; provided that 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 (h) 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
received 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 Certificateholders will include the Monthly Payment received 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 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
Section 2.03(b).
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate principal balance of all such Deleted Mortgage Loans (in each
case after application of the principal portion of the Monthly Payments received
in the month of substitution that are to be distributed to Certificateholders in
the month of substitution). Residential Funding shall deposit the amount of such
shortfall into the Custodial Account on the day of substitution, without any
reimbursement therefor. Residential Funding shall give notice in writing to the
Trustee of such event, which notice shall be accompanied by an Officers'
Certificate as to the calculation of such shortfall and (subject to Section
10.01(f)) by an Opinion of Counsel to the effect that such substitution will not
cause (a) any federal tax to be imposed on the Trust Fund, including without
limitation, any federal tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or on "contributions after the startup date" under
Section 860G(d)(1) of the Code or (b) any portion of REMIC I or REMIC II to fail
to qualify as a REMIC at any time that any Certificate is outstanding.
It is understood and agreed that the obligation of Residential Funding
to cure such breach or purchase or 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 (h) of Section 4 thereof shall
constitute the sole remedy respecting such breach available to the
Certificateholders (other than the Credit Enhancer) or the Trustee on behalf of
the Certificateholders (other than the Credit Enhancer). If the Master Servicer
is Residential Funding, then the Trustee shall also have the right and, upon
written direction of the Credit Enhancer, the obligation, to give the
notification and require the purchase or substitution provided for in the second
preceding paragraph in the event of such a breach of a representation or
warranty made by Residential Funding in the Assignment Agreement. In connection
with the purchase of or substitution for any such Mortgage Loan by Residential
Funding, the Trustee shall assign to Residential Funding all of the Trustee's
right, title and interest in respect of the Assignment Agreement applicable to
such Mortgage Loan.
Section 2.05 Execution and Authentication of Certificates; Conveyance of
Uncertificated REMIC Regular Interests.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery of the Mortgage Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the Trustee, pursuant
to the written request of the Company executed by an officer of the Company has
executed and caused to be authenticated and delivered to or upon the order of
the Company the Certificates in authorized denominations which evidence
ownership of the entire Trust Fund.
(b) The Company, 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 Company in and
to the REMIC I Regular Interests for the benefit of the holders of the Regular
Certificates and the Class R-II Certificates. The Trustee acknowledges receipt
of the REMIC I Regular Interests (each of which are uncertificated) and declares
that it holds and will hold the same in trust for the exclusive use and benefit
of the holders of the Regular Certificates and the Class R-II Certificates. The
interests evidenced by the Class R-II Certificates, together with the Regular
Certificates, constitute the entire beneficial ownership interest in REMIC II.
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 Company in exchange for the Mortgage Loans;
(b) to enter into and perform its obligations under this Agreement;
(c) to engage in those activities that are necessary, suitable or convenient to
accomplish the foregoing or are incidental thereto or connected therewith; and
(d) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities. Notwithstanding the provisions of Section 11.01, the trust shall not
engage in any activity other than in connection with the foregoing or other than
as required or authorized by the terms of this Agreement while any Certificate
is outstanding, and this Section 2.06 may not be amended, without the consent of
the Certificateholders evidencing a majority of the aggregate Voting Rights of
the Certificates.
Section 2.07. Agreement Regarding Ability to Disclose.
The Company, the Master Servicer and the Trustee hereby agree
that, notwithstanding any other express or implied agreement to the contrary,
any and all Persons, and any of their respective employees, representatives, and
other agents may disclose, immediately upon commencement of discussions, to any
and all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure. For purposes of this paragraph, the terms "tax,"
"tax treatment," "tax structure," and "tax benefit" are defined under treasury
regulation ss. 1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 The 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 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 such Mortgage Loan that is treated as a Principal Prepayment in
Full pursuant to Section 3.12(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 not customarily provided by
servicers of mortgage loans, and shall be entitled to reasonable compensation
therefor in accordance with Section 3.10 and (ii) may, at its own discretion and
on behalf of the Trustee, obtain credit information in the form of a "credit
score" from a credit repository.
If the Mortgage relating to a Mortgage Loan did not have a lien
senior to the Mortgage Loan on the related Mortgaged Property as of the Cut-off
Date, then the Master Servicer, in such capacity, may not consent to the placing
of a lien senior to that of the Mortgage on the related Mortgaged Property. If
the Mortgage relating to a Mortgage Loan had a lien senior to the Mortgage Loan
on the related Mortgaged Property as of the Cut-off Date, then the Master
Servicer, in such capacity, may consent to the refinancing of such prior senior
lien, provided that the following requirements are met:
(i) (A) the Mortgagor's debt-to-income ratio resulting
from such refinancing is less than the original
debt-to-income ratio as set forth on the Mortgage Loan
Schedule; provided, however, that in no instance shall the
resulting Combined Loan-to-Value Ratio of such Mortgage
Loan be higher than that permitted by the Program Guide;
or (B) the resulting Combined Loan-to-Value Ratio of such
Mortgage Loan is no higher than the Combined Loan-to-Value
Ratio prior to such refinancing; provided, however, if
such refinanced mortgage loan is a "rate and term"
mortgage loan (meaning, the Mortgagor does not receive any
cash from the refinancing), the Combined Loan-to-Value
Ratio may increase to the extent of either (a) the
reasonable closing costs of such refinancing or (b) any
decrease in the value of the related Mortgaged Property,
if the Mortgagor is in good standing as defined by the
Program Guide;
(ii) the interest rate, or, in the case of an adjustable
rate existing senior lien, the maximum interest rate, for
the loan evidencing the refinanced senior lien is no more
than 2.0% higher than the interest rate or the maximum
interest rate, as the case may be, on the loan evidencing
the existing senior lien immediately prior to the date of
such refinancing; provided, however (a) if the loan
evidencing the existing senior lien prior to the date of
refinancing has an adjustable rate and the loan evidencing
the refinanced senior lien has a fixed rate, then the
current interest rate on the loan evidencing the
refinanced senior lien may be up to 2.0% higher than the
then-current loan rate of the loan evidencing the existing
senior lien and (b) if the loan evidencing the existing
senior lien prior to the date of refinancing has a fixed
rate and the loan evidencing the refinanced senior lien
has an adjustable rate, then the maximum interest rate on
the loan evidencing the refinanced senior lien shall be
less than or equal to (x) the interest rate on the loan
evidencing the existing senior lien prior to the date of
refinancing plus (y) 2.0%; and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
(b) 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 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 relationship of the Master Servicer (and of any successor to the
Master Servicer) to the Company under this Agreement is intended by the parties
to be that of an independent contractor and not that of a joint venturer,
partner or agent.
(d) The Master Servicer shall comply with the terms of Section 9 of the
Assignment Agreement.
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the execution and
delivery of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, and in either case shall be a
Xxxxxxx Mac, Xxxxxx Xxx or HUD approved mortgage servicer. Each Subservicer of a
Mortgage Loan shall be entitled to receive and retain, as provided in the
related Subservicing Agreement and in Section 3.07, the related Subservicing Fee
from payments of interest received on such Mortgage Loan after payment of all
amounts required to be remitted to the Master Servicer in respect of such
Mortgage Loan. For any Mortgage Loan that is a Nonsubserviced Mortgage Loan, the
Master Servicer shall be entitled to receive and retain an amount equal to the
Subservicing Fee from payments of interest. Unless the context otherwise
requires, references in this Agreement to actions taken or to be taken by the
Master Servicer in servicing the Mortgage Loans include actions taken or to be
taken by a Subservicer on behalf of the Master Servicer. Each Subservicing
Agreement will be upon such terms and conditions as are generally required by,
permitted by or consistent with the Program Guide and are not inconsistent with
this Agreement and as the Master Servicer and the Subservicer have agreed. With
the approval of the Master Servicer, a Subservicer may delegate its servicing
obligations to third-party servicers, but such Subservicer will remain obligated
under the related Subservicing Agreement. The Master Servicer and a Subservicer
may enter into amendments thereto or a different form of Subservicing Agreement,
and the form referred to or included in the Program Guide is merely provided for
information and shall not be deemed to limit in any respect the discretion of
the Master Servicer to modify or enter into different Subservicing Agreements;
provided, however, that any such amendments or different forms shall be
consistent with and not violate the provisions of either this Agreement or the
Program Guide in a manner which would materially and adversely affect the
interests of the Certificateholders or the Credit Enhancer. The Program Guide
and any other Subservicing Agreement entered into between the Master Servicer
and any Subservicer shall require the Subservicer to accurately and fully report
its borrower credit files to each of the Credit Repositories in a timely manner.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee, the Certificateholders and the Credit Enhancer,
shall use its best reasonable efforts to enforce the obligations of each
Subservicer under the related Subservicing Agreement, to the extent that the
non-performance of any such obligation would have a material and adverse effect
on a Mortgage Loan. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements as appropriate,
and the pursuit of other appropriate remedies, shall be in such form and carried
out to such an extent and at such time as the Master Servicer would employ in
its good faith business judgment and which are normal and usual in its general
mortgage servicing activities. The Master Servicer shall pay the costs of such
enforcement at its own expense, and shall be reimbursed therefor only (i) from a
general recovery resulting from such enforcement to the extent, if any, that
such recovery exceeds all amounts due in respect of the related Mortgage Loan or
(ii) from a specific recovery of costs, expenses or attorneys fees against the
party against whom such enforcement is directed.
Section 3.03 Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to have the
successor Subservicer assume liability for the representations and warranties
made by the terminated Subservicer in respect of the related Mortgage Loans and,
in the event of any such assumption by the successor Subservicer, the Master
Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of
this Agreement relating to agreements or arrangements between the Master
Servicer or a Subservicer or reference to actions taken through a Subservicer or
otherwise, the Master Servicer shall remain obligated and liable to the Trustee,
Certificateholders and the Credit Enhancer for the servicing and administering
of the Mortgage Loans in accordance with the provisions of Section 3.01 without
diminution of such obligation or liability by virtue of such Subservicing
Agreements or arrangements or by virtue of indemnification from the Subservicer
or the Company and to the same extent and under the same terms and conditions as
if the Master Servicer alone were servicing and administering the Mortgage
Loans. The Master Servicer shall be entitled to enter into any agreement with a
Subservicer or Seller for indemnification of the Master Servicer and nothing
contained in this Agreement shall be deemed to limit or modify such
indemnification.
Section 3.05 No Contractual Relationship Between Subservicer and Trustee, Credit
Enhancer 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, the Credit
Enhancer 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.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee.
(a) In the event the Master Servicer shall for any reason no longer be
the master servicer (including by reason of an Event of Default), the Trustee,
as successor Master Servicer, its designee or its successor shall thereupon
assume all of the rights and obligations of the Master Servicer under each
Subservicing Agreement that may have been entered into. The Trustee, its
designee or the successor servicer for the Trustee shall be deemed to have
assumed all of the Master Servicer's interest therein and to have replaced the
Master Servicer as a party to the Subservicing Agreement to the same extent as
if the Subservicing Agreement had been assigned to the assuming party except
that the Master Servicer shall not thereby be relieved of any liability or
obligations under the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
each Subservicing Agreement to the assuming party.
(c) Unless a Credit Enhancer Default exists, the Master Servicer will,
if it is authorized to do so under the relevant Subservicing Agreement, upon
request of the Credit Enhancer at a time when the Credit Enhancer may remove the
Master Servicer under the terms hereof, terminate any Subservicing Agreement.
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account.
(a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement,
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 (subject to the terms and conditions of the Assignment Agreement) (i)
waive any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment of a Mortgage Loan and (ii) extend the Due Date
for payments due on a Mortgage Loan in accordance with the Program Guide;
provided, however, that the Master Servicer shall first determine that any such
waiver or extension will not 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. Consistent with
the terms of this Agreement, the Master Servicer may also waive, modify or vary
any term of any Mortgage Loan or consent to the postponement of strict
compliance with any such term or in any manner grant indulgence to any Mortgagor
if in the Master Servicer's determination such waiver, modification,
postponement or indulgence is not materially adverse to the interests of the
Certificateholders or the Credit Enhancer (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. 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 re-amortization 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 on or after the Cut-off Date:
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans 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, or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has
occurred;
(iii) Insurance Proceeds 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 (h) of Section 4 of the Assignment Agreement) and all amounts
required to be deposited in connection with the substitution of a
Qualified Substitute Mortgage Loan pursuant to Section 2.03 or 2.04; and
(v) Any amounts required to be deposited pursuant to Section
3.07(c) and any payments or collections received in the nature of
prepayment charges.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of 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
and the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.03, 2.04 and 4.07 received in any calendar month, the Master Servicer may
elect to treat such amounts as included in the Available Distribution Amount for
the Distribution Date in the month of receipt, but is not obligated to do so. If
the Master Servicer so elects, such amounts will be deemed to have been received
(and any related Realized Loss shall be deemed to have occurred) on the last day
of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the
institution maintaining the Custodial Account to invest the funds in the
Custodial Account attributable to the Mortgage Loans in Permitted Investments
which shall mature not later than the Certificate Account Deposit Date next
following the date of such investment (with the exception of the Amount Held for
Future Distribution) and which shall not be sold or disposed of prior to their
maturities. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of any such investments attributable to the
investment of amounts in respect of the Mortgage Loans shall be deposited in the
Custodial Account by the Master Servicer out of its own funds immediately as
realized without any right of reimbursement.
(d) The Master Servicer shall give notice to the Trustee and the Company
of any change in the location of the Custodial Account and the location of the
Certificate Account prior to the use thereof.
Section 3.08 Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to establish and maintain
one or more Subservicing Accounts which shall be an Eligible Account or, if such
account is not an Eligible Account, shall generally satisfy the requirements of
the Program Guide and be otherwise acceptable to the Master Servicer, the Credit
Enhancer 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.
(b) 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 for the payment of taxes, assessments, hazard insurance premiums,
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, or
comparable items, to reimburse the Master Servicer or Subservicer out of related
collections for any payments made pursuant to Section 3.11(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.
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 or expenses made pursuant to Sections
3.01, 3.08, 3.11(a) and 3.13 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 or 4.07)
which represent 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 3.13 and 3.15, 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 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;
(vi) to pay to itself, a Subservicer, Residential Funding, the
Company or any other appropriate Person, as the case may be, with
respect to each Mortgage Loan or property acquired in respect thereof
that has been purchased or otherwise transferred pursuant to Sections
2.02, 2.03, 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 principal balance or Purchase Price is determined;
(vii) to reimburse itself or the Company for expenses incurred by
and reimbursable to it or the Company pursuant to Sections 3.13(c),
6.03, 10.01 or otherwise, or in connection with enforcing any
repurchase, substitution or indemnification obligation of any Seller
(other than the Company or an Affiliate of the Company) pursuant to the
related Seller's Agreement;
(viii) to reimburse itself for amounts expended by it (a)
pursuant to Section 3.13 in good faith in connection with the
restoration of property damaged by an Uninsured Cause, and (b) in
connection with the liquidation of a Mortgage Loan or disposition of an
REO Property to the extent not otherwise reimbursed pursuant to clause
(ii) or (vii) above; and
(ix) 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. Notwithstanding any other provision
of this Agreement, the Master Servicer shall be entitled to reimburse itself for
any previously unreimbursed expenses incurred pursuant to Section 3.10 or
otherwise reimbursable pursuant to the terms of this Agreement that the Master
Servicer determines to be otherwise nonrecoverable (except with respect to any
Mortgage Loan as to which the Purchase Price has been paid), by withdrawal from
the Custodial Account of amounts on deposit therein attributable to the Mortgage
Loans on any Business Day prior to the Distribution Date succeeding the date of
such determination.
Section 3.11 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 combined principal balance owing on such Mortgage Loan and any
mortgage loan senior to such Mortgage Loan from time to time or 100 percent of
the insurable value of the improvements; provided, however, that such coverage
may not be less than the minimum amount required to fully compensate for any
loss or damage on a replacement cost basis. To the extent it may do so without
breaching the related Subservicing Agreement, the Master Servicer shall replace
any Subservicer that does not cause such insurance, to the extent it is
available, to be maintained. The Master Servicer shall also cause to be
maintained on property acquired upon foreclosure, or deed in lieu of
foreclosure, of any Mortgage Loan, fire insurance with extended coverage in an
amount which is at least equal to the amount necessary to avoid the application
of any co-insurance clause contained in the related hazard insurance policy.
Pursuant to Section 3.07, any amounts collected by the Master Servicer under any
such policies (other than amounts to be applied to the restoration or repair of
the related Mortgaged Property or property thus acquired or amounts released to
the Mortgagor in accordance with the Master Servicer's normal servicing
procedures) shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.10. Any cost incurred by the Master Servicer in
maintaining any such insurance shall not, for the purpose of calculating monthly
distributions to Certificateholders, be added to the amount owing under the
Mortgage Loan, notwithstanding that the terms of the Mortgage Loan so permit.
Such costs shall be recoverable by the Master Servicer out of related late
payments by the Mortgagor or out of Insurance Proceeds and Liquidation Proceeds
to the extent permitted by Section 3.10. It is understood and agreed that no
earthquake or other additional insurance is to be required of any Mortgagor or
maintained on property acquired in respect of a Mortgage Loan other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance. Whenever the improvements
securing a Mortgage Loan are located at the time of origination of such Mortgage
Loan in a federally designated special flood hazard area, the Master Servicer
shall cause flood insurance (to the extent available) to be maintained in
respect thereof. Such flood insurance shall be in an amount equal to the lesser
of (i) the amount required to compensate for any loss or damage to the Mortgaged
Property on a replacement cost basis and (ii) the maximum amount of such
insurance 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
3.11(a), it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.11(a) and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made on the Certificate Account Deposit Date next preceding the Distribution
Date which occurs in the month following the month in which payments under any
such policy would have been deposited in the Custodial Account. In connection
with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and
Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own expense and
keep in full force and effect throughout the term of this Agreement a blanket
fidelity bond and an errors and omissions insurance policy covering the Master
Servicer's officers and employees and other persons acting on behalf of the
Master Servicer in connection with its activities under this Agreement. The
amount of coverage shall be at least equal to the coverage that would be
required by Xxxxxx Xxx or Xxxxxxx Mac, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the
Mortgage Loans for Xxxxxx Mae or Xxxxxxx Mac. In the event that any such bond or
policy ceases to be in effect, the Master Servicer shall obtain a comparable
replacement bond or policy from an issuer or insurer, as the case may be,
meeting the requirements, if any, of the Program Guide and acceptable to the
Company. Coverage of the Master Servicer under a policy or bond obtained by an
Affiliate of the Master Servicer and providing the coverage required by this
Section 3.11(b) shall satisfy the requirements of this Section 3.11(b).
Section 3.12 Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master
Servicer or Subservicer, to the extent it has knowledge of such conveyance,
shall enforce any due-on-sale clause contained in any Mortgage Note or Mortgage,
to the extent permitted under applicable law and governmental regulations, but
only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing:
(i) the Master Servicer shall not be deemed to be in default
under this Section 3.12(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 3.12(a), in any case in which a
Mortgaged Property is to be conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption or modification agreement or supplement to the
Mortgage Note or Mortgage which requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor
from liability on the Mortgage Loan, the Master Servicer is authorized, subject
to the requirements of the sentence next following, to execute and deliver, on
behalf of the Trustee, the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person; provided, however, none of
such terms and requirements shall both constitute a "significant modification"
effecting an exchange or reissuance of such Mortgage Loan under the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) and
cause any of REMIC I or REMIC II to fail to qualify as REMICs under the Code or
the imposition of any tax on "prohibited transactions" or (ii) constitute
"contributions" after the start-up date under the REMIC Provisions. The Master
Servicer shall execute and deliver such documents only if it reasonably
determines that (i) its execution and delivery thereof will not conflict with or
violate any terms of this Agreement or cause the unpaid balance and interest on
the Mortgage Loan to be uncollectible in whole or in part, (ii) any required
consents of insurers under any Required Insurance Policies have been obtained
and (iii) subsequent to the closing of the transaction involving the assumption
or transfer (A) such transaction will not adversely affect the coverage under
any Required Insurance Policies, (B) the Mortgage Loan will fully amortize over
the remaining term thereof, (C) 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 (D) if the seller/transferor of the Mortgaged
Property is to be released from liability on the Mortgage Loan, such release
will not (based on the Master Servicer's or Subservicer's good faith
determination) adversely affect the collectability of the Mortgage Loan. Upon
receipt of appropriate instructions from the Master Servicer in accordance with
the foregoing, the Trustee shall execute any necessary instruments prepared by
the Master Servicer for such assumption or substitution of liability as directed
in writing by the Master Servicer. Upon the closing of the transactions
contemplated by such documents, the Master Servicer shall cause the originals or
true and correct copies of the assumption agreement, the release (if any), or
the modification or supplement to the Mortgage Note or Mortgage to be delivered
to the Trustee or the Custodian and deposited with the Mortgage File for such
Mortgage Loan. Any fee collected by the Master Servicer or such related
Subservicer for entering into an assumption or substitution of liability
agreement will be retained by the Master Servicer or such Subservicer as
additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for a partial release of
the related Mortgaged Property, the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged Property
or other similar matters if it has determined, exercising its good faith
business judgment in the same manner as it would if it were the owner of the
related Mortgage Loan, that the security for, and the timely and full
collectability of, such Mortgage Loan would not be adversely affected thereby
and that each of REMIC I or REMIC II would not fail to continue to qualify as a
REMIC under the Code as a result thereof and (subject to Section 10.01(f)) that
no tax on "prohibited transactions" or "contributions" after the startup day
would be imposed on any of REMIC I or REMIC II as a result thereof. A partial
release pursuant to this Section 3.12 shall be permitted only if the Combined
Loan-to-Value Ratio for such Mortgage Loan after such partial release does not
exceed the Combined Loan-to-Value Ratio for such Mortgage Loan as of the Cut-off
Date. 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 L, in
form and substance satisfactory to the Trustee and Master Servicer, providing
the following: (i) that the Mortgage Loan is secured by Mortgaged Property
located in a jurisdiction in which an assignment in lieu of satisfaction is
required to preserve lien priority, minimize or avoid mortgage recording taxes
or otherwise comply with, or facilitate a refinancing under, the laws of such
jurisdiction; (ii) that the substance of the assignment is, and is intended to
be, a refinancing of such Mortgage Loan and that the form of the transaction is
solely to comply with, or facilitate the transaction under, such local laws;
(iii) that the Mortgage Loan following the proposed assignment will have a rate
of interest at least 0.25 percent below or above the rate of interest on such
Mortgage Loan prior to such proposed assignment; and (iv) that such assignment
is at the request of the borrower under the related Mortgage Loan. Upon approval
of an assignment in lieu of satisfaction with respect to any Mortgage Loan, the
Master Servicer shall receive cash in an amount equal to the unpaid principal
balance of and accrued interest on such Mortgage Loan and the Master Servicer
shall treat such amount as a Principal Prepayment in Full with respect to such
Mortgage Loan for all purposes hereof.
Section 3.13 Realization Upon Defaulted Mortgage Loans.
(a) In the event of default on any of the Mortgage Loans, the Master
Servicer shall decide whether to (i) foreclose upon the Mortgaged Properties
securing such Mortgage Loans (which may include an REO Acquisition), (ii) write
off the unpaid principal balance of the Mortgage Loans as bad debt, (iii) take a
deed in lieu of foreclosure, (iv) accept a short sale, (v) arrange for a
repayment plan, (vi) agree to a modification in accordance with this Agreement
or (vii) take an unsecured note, in each case subject to the rights of any
related first lienholder. In connection with such foreclosure or other
conversion, the Master Servicer shall follow such practices (including, in the
case of any default on a related senior mortgage loan, the advancing of funds to
correct such default if deemed to be appropriate by the Master Servicer) and
procedures as it shall deem necessary or advisable, as shall be normal and usual
in its general mortgage servicing activities and as shall be required or
permitted by the Program Guide; provided that the Master Servicer shall not be
liable in any respect hereunder if the Master Servicer is acting in connection
with any such foreclosure or other conversion or action in a manner that is
consistent with the provisions of this Agreement. The Master Servicer, however,
shall not be required to expend its own funds or incur other reimbursable
charges in connection with any foreclosure, or attempted foreclosure which is
not completed, or towards the correction of any default on a related senior
mortgage loan or towards the restoration of any property unless it shall
determine (i) that such restoration and/or foreclosure will increase the
proceeds of liquidation of the Mortgage Loan to Holders of Certificates of one
or more Classes after reimbursement to itself for such expenses or charges and
(ii) that such expenses and charges will be recoverable to it through
Liquidation Proceeds, Insurance Proceeds, or REO Proceeds (respecting which it
shall have priority for purposes of withdrawals from the Custodial Account
pursuant to Section 3.10, whether or not such expenses and charges are actually
recoverable from related Liquidation Proceeds, Insurance Proceeds or REO
Proceeds). In the event of such a determination by the Master Servicer pursuant
to this Section 3.13(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. However, the Master Servicer is not required
to continue to pursue both foreclosure (or similar remedies) with respect to the
Mortgage Loans and remedies in connection with a breach of a representation and
warranty if the Master Servicer determines in its reasonable discretion that one
such remedy is more likely to result in a greater recovery as to the Mortgage
Loan. Upon the occurrence of a Cash Liquidation or REO Disposition, following
the deposit in the Custodial Account of all Insurance Proceeds, Liquidation
Proceeds and other payments and recoveries referred to in the definition of
"Cash Liquidation" or "REO Disposition," as applicable, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Trustee or any Custodian, as the case may be, shall release to the Master
Servicer the related Mortgage File and the Trustee shall execute and deliver
such instruments of transfer or assignment prepared by the Master Servicer, in
each case without recourse, representation or warranty 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;
provided, however, a Cash Liquidation or REO Disposition shall be deemed to have
occurred with respect to any Mortgage Loan that is 180 days or more delinquent
as of the end of the related Collection Period; provided further, however, any
subsequent collections with respect to any such Mortgage Loan shall be deposited
to the Custodial Account, and (ii) for purposes of determining the amount of any
Liquidation Proceeds, Insurance Proceeds, REO Proceeds or any other unscheduled
collections or the amount of any Realized Loss, the Master Servicer may take
into account minimal amounts of additional receipts expected to be received or
any estimated additional liquidation expenses expected to be incurred in
connection with the related defaulted Mortgage Loan or REO Property.
(b) In the event that title to any Mortgaged Property is acquired by the
Trust Fund as an REO Property by foreclosure or by deed in lieu of foreclosure,
the deed or certificate of sale shall be issued to the Trustee or to its nominee
on behalf of Certificateholders. Notwithstanding any such acquisition of title
and cancellation of the related Mortgage Loan, such REO Property shall (except
as otherwise expressly provided herein) be considered to be an Outstanding
Mortgage Loan held in the Trust Fund until such time as the REO Property shall
be sold. Consistent with the foregoing for purposes of all calculations
hereunder so long as such REO Property shall be considered to be an Outstanding
Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness
evidenced by the related Mortgage Note shall have been discharged, such Mortgage
Note and the related amortization schedule in effect at the time of any such
acquisition of title (after giving effect to any previous Curtailments and
before any adjustment thereto by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period) remain in effect.
(c) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer on behalf of the Trust Fund shall dispose of
such REO Property as soon as practicable, giving due consideration to the
interests of the Certificateholders, but in all cases within three full years
after the taxable year of its acquisition by the Trust Fund for purposes of
Section 860G(a)(8) of the Code (or such shorter period as may be necessary under
applicable state (including any state in which such property is located) law to
maintain the status of each of REMIC I or REMIC II as a REMIC under applicable
state law and avoid taxes resulting from such property failing to be foreclosure
property under applicable state law) or, at the expense of the Trust Fund,
request, more than 60 days before the day on which such grace period would
otherwise expire, an extension of such grace period unless the Master Servicer
(subject to Section 10.01(f)) obtains for the Trustee and the Credit Enhancer an
Opinion of Counsel, addressed to the Trustee, the Credit Enhancer 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 the
Trust Fund 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 REMIC I or REMIC II 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) Liquidation Proceeds with respect to a Liquidated Mortgage Loan 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) for
any Liquidation Expenses; second, to the Master Servicer or the related
Subservicer, all unpaid Servicing Fees through the date of receipt of the final
Liquidation Proceeds; third, to the Certificateholders as a recovery of
principal on the Mortgage Loan (or REO Property), up to an amount equal to the
Principal Balance of the related Mortgage Loan immediately prior to the date it
became a Liquidated Mortgage Loan; fourth, to the Certificateholders to the
extent of accrued and unpaid interest on the Mortgage Loans at the Net Mortgage
Rate through the date of receipt of the final Liquidation Proceeds; and fifth,
to Foreclosure Profits.
Proceeds and other recoveries from a Mortgage Loan after it becomes a
Liquidated Mortgage Loan 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) for any expenses previously unreimbursed from
Liquidation Proceeds or otherwise; second, to the Master Servicer or the related
Subservicer, all unpaid Servicing Fees payable thereto through the date of
receipt of the proceeds previously unreimbursed from Liquidation Proceeds or
otherwise; third, to the Certificateholders to the extent of accrued and unpaid
interest on the Mortgage Loans, up to an amount equal to the sum of (a) the
Principal Balance of the related Mortgage Loan immediately prior to the date it
became a Liquidated Mortgage Loan, less any Net Liquidation Proceeds previously
received with respect to such Mortgage Loan and applied as a recovery of
principal, and (b) accrued and unpaid interest on the related Mortgage Loan at
the Net Mortgage Rate through the date of receipt of the proceeds; and fourth,
to Foreclosure Profits.
(e) In the event of a default on a Mortgage Loan one or more of whose
obligors is a Non-United States Person, in connection with any foreclosure or
acquisition of a deed in lieu of foreclosure (together, "foreclosure") in
respect of such Mortgage Loan, the Master Servicer will cause compliance with
the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto) necessary to assure that no withholding tax obligation arises with
respect to the proceeds of such foreclosure except to the extent, if any, that
proceeds of such foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
Section 3.14 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Master Servicer of a notification that payment in full
will be escrowed in a manner customary for such purposes, or that substantially
all Liquidation Proceeds which have been determined by the Master Servicer in
its reasonable judgment to be finally recoverable have been recovered, the
Master Servicer will immediately notify the Trustee (if it holds the related
Mortgage File) or the Custodian by a certification of a Servicing Officer (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment or Liquidation Proceeds 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 E, or, in the case of the Custodian, an electronic request in a form
acceptable to the Custodian, requesting delivery to it of the Mortgage File.
Upon receipt of such certification and request, the Trustee shall promptly
release, or cause the Custodian to release, the related Mortgage File to the
Master Servicer. The Master Servicer is authorized to execute and deliver to the
Mortgagor the request for reconveyance, deed of reconveyance or release or
satisfaction of mortgage or such instrument releasing the lien of the Mortgage,
together with the Mortgage Note with, as appropriate, written evidence of
cancellation thereon and to cause the removal from the registration on the
MERS(R) System of such Mortgage and to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release, including any
applicable UCC termination statements. No expenses incurred in connection with
any instrument of satisfaction or deed of reconveyance shall be chargeable to
the Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure
of any Mortgage 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 E 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 Mortgage File be released to the
Master Servicer and certifying as to the reason for such release and that such
release will not invalidate any insurance coverage provided in respect of the
Mortgage Loan under any Required Insurance Policy. Upon receipt of the
foregoing, the Trustee shall deliver, or cause the Custodian to deliver, the
Mortgage File or any document therein to the Master Servicer. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Trustee, or the Custodian as agent for the Trustee when the
need therefor by the Master Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the Mortgage File or
such document has been delivered directly or through a Subservicer to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered directly or through a Subservicer to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. In the event of the liquidation of
a Mortgage Loan, the Trustee shall deliver the Request for Release with respect
thereto to the Master Servicer upon 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 will not invalidate any
insurance coverage under any Required Insurance Policy or invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
Section 3.15 Servicing and Other Compensation.
(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). The amount of servicing
compensation provided for in such clauses shall be accounted for on a Mortgage
Loan-by-Mortgage Loan basis. Subject to Section 3.13(d), 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, 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 and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.10 and 3.13.
(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.
Section 3.16 Reports to the Trustee and the Company.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee, the Credit Enhancer and the Company a
statement, certified by a Servicing Officer, setting forth the status of the
Custodial Account as of the close of business on 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 3.17 Annual Statement as to Compliance and Servicing Assessment.
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The Master Servicer shall deliver to the Company, the Credit Enhancer
and the Trustee on or before the earlier of (a) March 31 of each year or (b)
with respect to any calendar year during which the Company's annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, the date on which the annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, 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.
(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 3.18 Annual Independent Public Accountants' Servicing Report.
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On or before the earlier of (a) March 31 of each year or (b) with
respect to any calendar year during which the Company's annual report on Form
10-K is required to be filed in accordance with the Exchange Act and the rules
and regulations of the Commission, the date on which the annual report 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 Company,
the Credit Enhancer 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 3.19 Rights of the Company in Respect of the Master Servicer.
The Master Servicer shall afford the Company 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 Company with its most recent
financial statements and such other information as the Master Servicer possesses
regarding its business, affairs, property and condition, financial or otherwise.
The Master Servicer shall also cooperate with all reasonable requests for
information including, but not limited to, notices, tapes and copies of files,
regarding itself, the Mortgage Loans or the Certificates from any Person or
Persons identified by the Company or Residential Funding. The Credit Enhancer
hereby is so identified. The Company may, but is not obligated to, enforce the
obligations of the Master Servicer hereunder and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer hereunder or exercise the rights of the Master Servicer hereunder;
provided that the Master Servicer shall not be relieved of any of its
obligations hereunder by virtue of such performance by the Company or its
designee. Neither the Company nor the Trustee shall have the responsibility or
liability for any action or failure to act by the Master Servicer and the
Company is not obligated to supervise the performance of the Master Servicer
under this Agreement or otherwise.
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 amount required to be deposited in
the Certificate Account pursuant to Section 3.11(a), (ii) any amount required to
be deposited in the Certificate Account pursuant to Section 4.07, (iii) any
amount required to be paid pursuant to Section 9.01, (iv) all other amounts
constituting the Available Distribution Amount for the immediately succeeding
Distribution Date and (v) without duplication, an amount equal to the Premium
for the Policy payable for such Distribution Date, and (vi) any payments or
collections in the nature of prepayment charges received on the Mortgage Loans
by the Master Servicer in respect of the related Collection Period. In addition,
as and to the extent required pursuant to Section 4.10(b), the Trustee shall
withdraw from the Insurance Account any Insured Payment then on deposit in the
Insurance Account and deposit such amount into the Certificate Account.
(b) On each Distribution Date, after making any distributions in respect
of the Class A Interest Distribution Amount and the Principal Collection
Distribution Amount, the Trustee shall withdraw from the Certificate Account and
pay to the Credit Enhancer, by wire transfer of immediately available funds to
the Credit Enhancer, the Premium for the Policy for such Distribution Date.
(c) Upon written request from the Master Servicer, the Trustee shall
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders and the Credit
Enhancer, which shall mature not later than the Business Day next preceding the
Distribution Date next following the date of such investment (except that (i) if
such Permitted Investment is an obligation of the institution that maintains
such account or fund for which such institution serves as custodian, then such
Permitted Investment may mature on such Distribution Date and (ii) any other
investment may mature on such Distribution Date if the Trustee shall advance
funds on such Distribution Date to the Certificate Account in the amount payable
on such investment on such Distribution Date, pending receipt thereof to the
extent necessary to make distributions on the Certificates) and shall not be
sold or disposed of prior to maturity. All income and gain realized from any
such investment shall be for the benefit of the Master Servicer and shall be
subject to its withdrawal or order from time to time. The amount of any losses
incurred in respect of any such investments shall be deposited in the
Certificate Account by the Master Servicer out of its own funds immediately as
realized without any right of reimbursement.
Section 4.02 Distributions.
(a) On each Distribution Date, the Trustee (or the Paying Agent on
behalf of the Trustee) shall allocate and distribute the Available Distribution
Amount , if any, for such date to the interests issued in respect of REMIC I and
REMIC II as specified in this Section.
(b) (1) On each Distribution Date, the following amounts, in the
following order of priority, shall be distributed by REMIC I to REMIC II on
account of the REMIC I Regular Interests:
(i) to the Holders of REMIC I Regular Interest LT1, REMIC
I Regular Interest LT2, REMIC I Regular Interest LT3 and REMIC I
Regular Interest LT4, pro rata, in an amount equal to(A) their
Uncertificated Accrued Interest for such Distribution Date, plus
(B) any amounts in respect thereof remaining unpaid from previous
Distribution Dates; and
(ii) on each Distribution Date, to the Holders of REMIC I
Regular Interests, in an amount equal to the remainder of the
Available Distribution Amount after the distributions made
pursuant to clause (i) above, allocated as follows (except as
provided below):
(A) to the Holders of the REMIC I Regular Interest
LT2, REMIC I Regular Interest LT3 and REMIC I Regular Interest
LT4, their respective Principal Distribution Amounts;
(B) to the Holders of the REMIC I Regular Interest
LT1 any remainder until the Uncertificated Principal Balance
thereof is reduced to zero;
(C) any remainder to the Holders of the REMIC I
Regular Interest LT2, REMIC I Regular Interest LT3 and REMIC I
Regular Interest 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) any remaining amounts to the Holders of the
Class R-I Certificates.
(2) Notwithstanding the distributions described in this Section
4.02(b), distribution of funds from the Certificate Account shall be made only
in accordance with Section 4.02(c).
(c) On each Distribution Date, the Master Servicer on behalf of the
Trustee or 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:
(1) to the Class A Certificateholders, Accrued Certificate
Interest payable on such Certificates with respect to such Distribution
Date, plus any Accrued Certificate Interest remaining unpaid from any
prior Distribution Date (the "Class A Interest Distribution Amount"),
with such amount allocated among the Class A Certificateholders on a pro
rata basis in proportion to Accrued Certificate Interest owed pursuant
to this clause (1) to each such Class;
(2) from the amount, if any, of the Available Distribution Amount
remaining after the foregoing distributions, the Class A Principal
Distribution Amount, which shall be distributed: first, to the Class A-5
Certificates, in an amount equal to the Class A-5 Lockout Distribution
Amount for that Distribution Date, until the Certificate Principal
Balance of the Class A-5 Certificates has been reduced to zero; second,
to the Class A-1 Certificateholders, until the Certificate Principal
Balance of the Class A-1 Certificates has been reduced to zero; third,
to Class A-2 Certificateholders, until the Certificate Principal Balance
of the Class A-2 Certificates has been reduced to zero; fourth, to the
Class A-3 Certificateholders, until the Certificate Principal Balance of
the Class A-3 Certificates has been reduced to zero; fifth, to the Class
A-4 Certificateholders, until the Certificate Principal Balance of the
Class A-4 Certificates has been reduced to zero; and sixth, to the Class
A-5 Certificateholders, until the Certificate Principal Balance of the
Class A-5 Certificates has been reduced to zero;
(3) to the Class A Certificateholders and the Credit Enhancer
from the amount, if any, of the Available Distribution Amount remaining
after the foregoing distributions, the amounts set forth in Section
4.02(g) to the extent not distributed pursuant to the preceding
paragraphs of this subsection 4.02(c);
(4) to the Class SB Certificates, from the amount, if any, of the
Available Distribution Amount remaining after the foregoing
distributions, Accrued Certificate Interest thereon and the amount of
any Overcollateralization Reduction Amount for such Distribution Date,
amounts payable to the Class SB Certificateholders pursuant to this
clause (5) being deemed paid: first, in respect of the REMIC II Regular
Interest SB-IO in respect of Accrued Certificate Interest thereon for
the current Distribution Date; second, in respect of the REMIC II
Regular Interest SB-PO in reduction of the principal balance thereof
until such principal balance is reduced to zero; and third, in respect
of the REMIC II Regular Interest SB-IO in respect of unpaid Accrued
Certificate Interest thereon for prior Distribution Dates and in
addition to the foregoing to the Class SB Certificateholders, the amount
of any payments or collections in the nature of prepayment charges
received on the Mortgage Loans by the Master Servicer in respect of the
related Collection Period; and
(6) to the Class R-II Certificateholders, the balance, if any, of
the Available Distribution Amount.
(d) In addition to the foregoing distributions, with respect to any
Mortgage Loan that was previously the subject of a Cash Liquidation or an REO
Disposition that resulted in a Realized Loss, in the event that within three
years of the date on which such Realized Loss was determined to have occurred
the Master Servicer receives amounts, which the Master Servicer reasonably
believes to represent subsequent recoveries (net of any related liquidation
expenses), or determines that it holds surplus amounts previously reserved to
cover estimated expenses, specifically related to such Mortgage Loan, the Master
Servicer shall distribute such amounts to the applicable Certificateholders of
the Class or Classes to which such Realized Loss was allocated (with the amounts
to be distributed allocated among such Classes in the same proportions as such
Realized Loss was allocated), and within each such Class to the
Certificateholders of record as of the Record Date immediately preceding the
date of such distribution (or if such Class of Certificates is no longer
outstanding, to the Certificateholders of record at the time that such Realized
Loss was allocated); provided that no such distribution to any Class of
Certificates of subsequent recoveries related to a Mortgage Loan shall exceed,
either individually or in the aggregate and together with any other amounts paid
in reimbursements therefor, the amount of the related Realized Loss that was
allocated to such Class of Certificates.
(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 Company, the Credit Enhancer 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).
(g) Excess Interest will be allocated on any Distribution Date first, to
pay the holders of the Class A Certificates the Realized Loss Distribution
Amount for such Distribution Date, as part of the Principal Collection
Distribution Amount, second, to the Credit Enhancer, the amount of the Premium
for the Policy and any previously unpaid premiums for the Policy, with interest
thereon as provided in the Insurance Agreement, third to the Credit Enhancer, to
reimburse it for prior draws made on the Policy with interest thereon as
provided in the Insurance Agreement, fourth, to pay any Overcollateralization
Increase Amount, as part of the Principal Collection Distribution Amount, fifth,
to the Credit Enhancer, any other amounts owed to the Credit Enhancer pursuant
to the Insurance Agreement, sixth, to pay to the holders of the Class A
Certificates pro rata based on Accrued Certificate Interest, the amount of any
Prepayment Interest Shortfalls allocable thereto with respect to the Mortgage
Loans on that Distribution Date, seventh, to pay to the holders of the Class A
Certificates pro rata based on Accrued Certificate Interest, the amount of any
unpaid Prepayment Interest Shortfalls allocated thereto on prior Distribution
Dates, together with interest thereon at the related Pass-Through Rate, eighth,
to the holders of the Class A Certificates, their respective amounts of Net WAC
Cap Shortfalls for such Distribution Date, if any, and respective amounts of Net
WAC Cap Shortfalls for any previous Distribution Date and not previously paid,
if any, plus interest on any previously unpaid amount from the date of the
shortfall at the applicable Pass-Through Rate (as adjusted from time to time),
on a pro rata basis in accordance with their respective amounts of Net WAC Cap
Shortfalls remaining unpaid, ninth, to the holders of the Class A Certificates,
any Relief Act Shortfalls with respect to the Mortgage Loans incurred during the
related Collection Period, on a pro rata basis in accordance with the amount of
accrued interest payable on that Class for such Distribution Date, and tenth, to
pay to the holders of the Class SB Certificates any balance remaining, in
accordance with the terms of Section 4.02(c)(4).
Section 4.03 Statements to Certificateholders.
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(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 at xxx.xxxxxxxx.xxx/xxx to each Holder,
the Credit Enhancer and the Company a statement setting forth the following
information as to each Class of Certificates to the extent applicable:
(i) the applicable Record Date, Determination Date and
Distribution Date, and the date on which the applicable Interest Accrual
Period commenced;
(ii) the aggregate amount of payments received with respect to
the Mortgage Loans, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the
Master Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the
identity of the party receiving such fees or expenses;
(v) (a) the amount of such distribution to the Certificateholders
of such Class applied to reduce the Certificate Principal Balance
thereof, and (b) the aggregate amount included therein representing
Principal Prepayments;
(vi) the amount of such distribution to Holders of such Class of
Certificates allocable to interest ;
(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 aggregate Certificate Principal Balance of the Class A
Certificates as of the Closing Date;
(x) the number and Principal Balance of the Mortgage Loans after
giving effect to the distribution of principal on such Distribution Date
and the number of Mortgage Loans at the beginning and end of the related
Collection Period;
(xi) on the basis of the most recent reports furnished to it by
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 3.01 and the amount of all Advances
that have been reimbursed during the related Collection Period;
(xiii) any material modifications, extensions or waivers to the
terms of the Mortgage Loans during the Collection Period or that have
cumulatively become material over time;
(xiv) any material breaches of Mortgage Loan representations or
warranties or covenants in the Agreement;
(xv) the number, aggregate principal balance 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 any Insured Payment paid on such
Distribution Date and the portion paid to each Class A Certificate, the
amount of any reimbursement payment made to the Credit Enhancer on such
Distribution Date pursuant to Section 4.02(g);
(xviii) the Pass-Through Rate on each Class of Certificates and
the Net WAC Rate, and with respect to the Class A-1 Certificates, the
Pass-Through Rate for such Distribution Date;
(xix) the aggregate amount of Realized Losses for such
Distribution Date and the aggregate amount of Realized Losses on the
Mortgage Loans incurred since the Cut-off Date and the aggregate
percentage of Realized Losses on the Mortgage Loans incurred since the
Cut-off Date;
(xx) the weighted average remaining term to maturity of the
Mortgage Loans after giving effect to the amounts distributed on such
Distribution Date;
(xxi) the Weighted Average Net Mortgage Rates of the Mortgage
Loans after giving effect to the amounts distributed on such
Distribution Date; and
(xxii) the Overcollateralization Amount and the Required
Overcollateralization Amount following such Distribution Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination. In addition to the statement provided to the Trustee as set
forth in this Section 4.03(a), the Master Servicer shall provide to any manager
of a trust fund consisting of some or all of the Certificates, upon reasonable
request, such additional information as is reasonably obtainable by the Master
Servicer at no additional expense to the Master Servicer.
(b) Within a reasonable period of time after it receives a written
request from a Holder of a Certificate, other than a Class R Certificate, the
Master Servicer shall prepare, or cause to be prepared, and the Trustee shall
forward, or cause to be forwarded, to each Person who at any time during the
calendar year was the Holder of a Certificate, other than a Class R Certificate,
a statement containing the information set forth in clauses (i) and (ii) of
subsection (a) above aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Master Servicer and the Trustee shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Master
Servicer and the Trustee pursuant to any requirements of the Code.
(c) Within a reasonable period of time after it receives a written
request from any Holder of a Class R Certificate, 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 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 and the Trustee
pursuant to any requirements of the Code.
(d) Upon the written request of any Certificateholder, the Master
Servicer, as soon as reasonably practicable, shall provide the requesting
Certificateholder with such information as is necessary and appropriate, in the
Master Servicer's sole discretion, for purposes of satisfying applicable
reporting requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Company and in respect
of the Trust Fund, sign and cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act, and the
rules and regulations of the Commission thereunder, including without
limitation, reports on Form 10-K, Form 10-D and Form 8-K. In connection with the
preparation and filing of such periodic reports, the Trustee shall timely
provide to the Master Servicer (I) a list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Trustee, as trustee hereunder, or the Trust
Fund that are received by the Trustee, (III) notice of all matters that, to the
actual knowledge of a Responsible Officer of the Trustee, have been submitted to
a vote of the Certificateholders, other than those matters that have been
submitted to a vote of the Certificateholders at the request of the Company or
the Master Servicer, and (IV) notice of any failure of the Trustee to make any
distribution to the Certificateholders as required pursuant to this Agreement.
Neither the Master Servicer nor the Trustee shall have any liability with
respect to the Master Servicer's failure to properly prepare or file such
periodic reports resulting from or relating to the Master Servicer's inability
or failure to obtain any information not resulting from the Master Servicer's
own negligence or willful misconduct.
(f) Any Form 10-K filed with the Commission in connection with this
Section 4.03 shall include, with respect to the Certificates relating to such
10-K:
(i) A certification, signed by the senior officer in charge of
the servicing functions of the Master Servicer, in the form attached as Exhibit
P-1 hereto or such other form as may be required or permitted by the Commission
(the "Form 10-K Certification"), in compliance with Rules 13a-14 and 15d-14
under the Exchange Act and any additional directives of the Commission.
(ii) A report regarding its assessment of compliance during the
preceding calendar year with all applicable servicing criteria set forth in
relevant Commission regulations with respect to mortgage-backed securities
transactions taken as a whole involving the Master Servicer that are backed by
the same types of assets as those backing the certificates, as well as similar
reports on assessment of compliance received from other parties participating in
the servicing function as required by relevant Commission regulations, as
described in Item 1122(a) of Regulation AB. The Master Servicer shall obtain
from all other parties participating in the servicing function any required
assessments.
(iii) With respect to each assessment report described
immediately above, a report by a registered public accounting firm that attests
to, and reports on, the assessment made by the asserting party, as set forth in
relevant Commission regulations, as described in Regulation 1122(b) of
Regulation AB and Section 3.18.
(iv) The servicer compliance certificate required to be delivered
pursuant Section 3.17.
(g) In connection with the Form 10-K Certification, the Trustee shall
provide the Master Servicer with a back-up certification substantially in the
form attached hereto as Exhibit P-2.
(h) This Section 4.03 may be amended in accordance with this Agreement
without the consent of the Certificateholders.
(i) The Trustee shall make available on the Trustee's internet website
each of the reports filed with the Commission by or on behalf of the Depositor
under the Exchange Act, as soon as reasonably practicable upon delivery of such
reports to the Trustee.
Section 4.04 Distribution of Reports to the Trustee and the Company.
(a) Prior to the close of business on the Business Day next succeeding
each Determination Date, the Master Servicer shall furnish a written statement
to the Trustee (which may be in a mutually agreeable electronic format), the
Credit Enhancer, any Paying Agent and the Company (the information in such
statement to be made available to Certificateholders by the Master Servicer on
request) setting forth (i) the Available Distribution Amount, (ii) the amounts
required to be withdrawn from the Custodial Account and deposited into the
Certificate Account on the immediately succeeding Certificate Account Deposit
Date pursuant to clause (iii) of Section 4.01(a) and (iii) the amount of
Prepayment Interest Shortfalls, (iv) the Premium for the Policy and, if the
Master Servicer determines that an Insured Payment exists for such Distribution
Date, the amounts needed to complete the Notice related to such Insured Payment,
and (v) the amount, if any, payable to the Trustee by a Derivative Counterparty.
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, absent
manifest error, without any independent check or verification.
The Trustee shall deposit all funds it receives pursuant to this Section
4.04 into the Certificate Account.
Section 4.05 Allocation of Realized Losses.
(a) Prior to each Distribution Date, the Master Servicer shall determine
the total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Servicing Modifications, Debt Service Reduction, Deficient
Valuation or REO Disposition that occurred during the related Collection Period.
The amount of each Realized Loss shall be evidenced by an Officers' Certificate.
The principal portion of all Realized Losses on the Mortgage Loans shall be
allocated as follows: first, to the Excess Interest, by increasing the amount of
clause (iv) of the definition of Principal Collection Distribution Amount,
second, by reduction of the Overcollateralization Amount, until such amount has
been reduced to zero; and thereafter, to the Class A Certificates on a pro rata
basis, based on their respective aggregate Certificate Principal Balances.
(b) Any allocation of the principal portion of Realized Losses (other
than Debt Service Reductions) to the Class A Certificates shall be made by
reducing the Certificate Principal Balance thereof by the amount so allocated,
which allocation shall be deemed to have occurred on such Distribution Date.
Allocations of the interest portions of Realized Losses shall be made by
operation of the definition of "Accrued Certificate Interest" and by operation
of the priority of payment provisions of Section 4.02(c). All Realized Losses
and all other losses allocated to a Class of Certificates hereunder will be
allocated among the Certificates of such Class in proportion to the Percentage
Interests evidenced thereby
(c) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the REMIC I Regular Interests as provided in the definition
of REMIC I Realized Losses.
(d) Realized Losses allocated to the Excess Interest or the
Overcollateralization Amount pursuant to paragraphs (a) or (b) 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 II
Regular Interest SB-IO. Realized Losses allocated to the Excess Interest
pursuant to paragraph (a) shall be deemed to reduce Accrued Certificate Interest
on the REMIC II Regular Interest SB-IO. Realized Losses allocated to the
Overcollateralization Amount pursuant to paragraph (a) shall be deemed first to
reduce the principal balance of the REMIC II Regular Interest SB-PO until such
principal balance shall have been reduced to zero and thereafter to reduce
accrued and unpaid interest on the REMIC II 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.
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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. 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 prepared by
the Master Servicer at the request of the Master Servicer without recourse,
representation or warranty to the Master Servicer which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
Section 4.08: Limited Mortgage Loan Repurchase Right.
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The Limited Repurchase Right Holder will have the option at any time to
purchase any of the Mortgage Loans from the Trustee at the Purchase Price, up to
a maximum of five Mortgage Loans. In the event that this option is exercised as
to any five Mortgage Loans in the aggregate, this option will thereupon
terminate. If at any time the Limited Repurchase Right Holder makes a payment to
the Certificate Account covering the amount of the Purchase Price for such a
Mortgage Loan, and the Limited Repurchase Right Holder 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 Limited
Repurchase Right Holder without recourse to the Limited Repurchase Right Holder
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 Limited
Repurchase Right Holder will thereupon own such Mortgage, and all such security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto. Any tax on "prohibited transactions"
(as defined in Section 860F(a)(2) of the Code) imposed on any REMIC resulting
from the exercise of the optional repurchase in this Section 4.08 shall in no
event be payable by the Trustee.
Section 4.09. Derivative Contracts.
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(a) The Trustee shall, at the written direction of the Master Servicer,
on behalf of the Trust Fund, enter into Derivative Contracts, solely for the
benefit of the Class SB Certificates. Any such Derivative Contract shall
constitute a fully prepaid agreement. The Master Servicer shall determine, in
its sole discretion, whether any Derivative Contract conforms to the
requirements of clauses (b) and (c) of this Section 4.09. Any acquisition of a
Derivative Contract shall be accompanied by an appropriate amendment to this
Agreement, including an Opinion of Counsel, as provided in Section 11.01, and
either (i) an Opinion of Counsel to the effect that the existence of the
Derivative Contract will not adversely affect the availability of the exemptive
relief afforded under ERISA by U.S. Department of Labor Prohibited Transaction
Exemption ("PTE") 94-29, as most recently amended, 67 Fed. Reg. 54487 (Aug. 22,
2002), to the Holders of the Class A Certificates, as of the date the Derivative
Contract is acquired by the Trustee; or (ii) the consent of each holder of a
Class A Certificate to the acquisition of such Derivative Contract. All
collections, proceeds and other amounts in respect of the Derivative Contracts
payable by the Derivative Counterparty shall be distributed to the Class SB
Certificates on the Distribution Date following receipt thereof by the Trustee.
In no event shall such an instrument constitute a part of any REMIC created
hereunder. In addition, in the event any such instrument is deposited, the Trust
Fund shall be deemed to be divided into two separate and discrete sub-trusts.
The assets of one such sub-trust shall consist of all the assets of the Trust
Fund other than such instrument and the assets of the other sub-trust shall
consist solely of such instrument.
(b) Any Derivative Contract that provides for any payment obligation on
the part of the Trust Fund must (i) be without recourse to the assets of the
Trust Fund, (ii) contain a non-petition covenant provision from the Derivative
Counterparty, (iii) limit payment dates thereunder to Distribution Dates and
(iv) contain a provision limiting any cash payments due to the Derivative
Counterparty on any day under such Derivative Contract solely to funds available
therefor in the Certificate Account to make payments to the Holders of the Class
SB Certificates on such Distribution Date.
(c) Each Derivative Contract must (i) provide for the direct payment of
any amounts by the Derivative Counterparty thereunder to the Certificate Account
at least one Business Day prior to the related Distribution Date, (ii) contain
an assignment of all of the Trust Fund's rights (but none of its obligations)
under such Derivative Contract to the Trustee on behalf the Class SB
Certificates and shall include an express consent of the Derivative Counterparty
to such assignment, (iii) provide that in the event of the occurrence of an
Event of Default, such Derivative Contract shall terminate upon the direction of
a majority Percentage Interest of the Class SB Certificates, and (iv) prohibit
the Derivative Counterparty from "setting-off" or "netting" other obligations of
the Trust Fund and its Affiliates against such Derivative Counterparty's payment
obligations thereunder.
Section 4.10. The Policy.
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(a) If pursuant to Section 4.04(a)(iv), the Master Servicer determines
and notifies a Responsible Officer of the Trustee in writing that an Insured
Payment is required and the amount of such Insured Payment for any Distribution
Date, the Trustee shall complete the Notice and submit such Notice in accordance
with the Policy to the Credit Enhancer no later than 12:00 P.M., New York City
time, on the second Business Day immediately preceding each Distribution Date,
as a claim for an Insured Payment in an amount equal to such Insured Payment.
(b) The Trustee shall establish and maintain the Insurance Account on
behalf of the Holders of the Class A Certificates. Upon receipt of an Insured
Payment from the Credit Enhancer on behalf of the Class A Certificates, the
Trustee shall deposit such Insured Payment in the Insurance Account. All amounts
on deposit in the Insurance Account shall remain uninvested with no liability
for interest or other compensation thereon. On each Distribution Date, the
Trustee shall transfer any Insured Payment then on deposit in the Insurance
Account to the Certificate Account and distribute such Insured Payment pursuant
to Section 4.02.
(c) The Trustee shall (i) receive as attorney-in-fact of each Class A
Certificateholder any Insured Payment from the Credit Enhancer and (ii)
distribute such Insured Payment to the Class A Certificates as set forth in
subsection (b) above. Insured Payments disbursed by the Trustee from proceeds of
the Policy shall not be considered payment by the Trust Fund with respect to the
Class A Certificates, nor shall such disbursement of such Insured Payments
discharge the obligations of the Trust Fund with respect to the amounts thereof,
and the Credit Enhancer shall become owner of such amounts to the extent covered
by such Insured Payments as the deemed assignee of such Class A
Certificateholders. The Trustee hereby agrees on behalf of each Class A
Certificateholder (and each Class A Certificateholder, by its acceptance of its
Class A Certificates, as applicable, hereby agrees) for the benefit of the
Credit Enhancer that the Trustee shall recognize that to the extent the Credit
Enhancer pays Insured Payments, either directly or indirectly (as by paying
through the Trustee), to the Class A Certificates, the Credit Enhancer will be
entitled to be subrogated to the rights of the Class A Certificateholders to the
extent of such payments.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Class A Certificates, Class SB Certificates and Class R
Certificates shall be substantially in the forms set forth in Exhibits X-0, X-0
and B, respectively, and shall, on original issue, be executed and delivered by
the Trustee to the Certificate Registrar for authentication and delivery to or
upon the order of the Company upon receipt by the Trustee or one or more
Custodians of the documents specified in Section 2.01. The Class A Certificates
shall be issuable in minimum dollar denominations of $100,000 by Certificate
Principal Balance, and integral multiples of $1 in excess thereof. The Class SB
Certificates shall be issuable in registered, certificated form in minimum
percentage interests of 5.00% and integral multiples of 0.01% in excess thereof.
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 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 of the Class A Certificates, through the book-entry facilities of the
Depository and, except as provided below, shall not be entitled to Definitive
Certificates in respect of such Ownership Interests. All transfers by
Certificate Owners of their respective Ownership Interests in the Book-Entry
Certificates shall be made in accordance with the procedures established by the
Depository Participant or brokerage firm representing such Certificate Owner.
Each Depository Participant shall transfer the Ownership Interests only in the
Book-Entry Certificates of Certificate Owners it represents or of brokerage
firms for which it acts as agent in accordance with the Depository's normal
procedures.
The Trustee, the Master Servicer and the Company may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If with respect to any Book-Entry Certificate (i)(A) the Company advises
the Trustee in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository with respect to such
Book-Entry Certificate and (B) the Company is unable to locate a qualified
successor, or (ii) (A) the Company 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 Company's election to terminate the book-entry system for such
Book-Entry Certificate, the Depository Participants holding beneficial interests
in such Book-Entry Certificates agree to initiate such termination, the Trustee
shall notify all Certificate Owners of such Book-Entry Certificate, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates.
In addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such Certificate Owner's Percentage
Interest in the related Class of Certificates. In order to make such request,
such Certificate Owner shall, subject to the rules and procedures of the
Depository, provide the Depository or the related Depository Participant with
directions for the Certificate Registrar to exchange or cause the exchange of
the Certificate Owner's interest in such Class of Certificates for an equivalent
Percentage Interest in fully registered definitive form. Upon receipt by the
Certificate Registrar of instructions from the Depository directing the
Certificate Registrar to effect such exchange (such instructions to contain
information regarding the Class of Certificates and the Certificate Principal
Balance being exchanged, the Depository Participant account to be debited with
the decrease, the registered holder of and delivery instructions for the
Definitive Certificate, and any other information reasonably required by the
Certificate Registrar), (i) the Certificate Registrar shall instruct the
Depository to reduce the related Depository Participant's account by the
aggregate Certificate Principal Balance of the Definitive Certificate, (ii) the
Trustee shall execute and the Certificate Registrar shall authenticate and
deliver, in accordance with the registration and delivery instructions provided
by the Depository, a Definitive Certificate evidencing such Certificate Owner's
Percentage Interest in such Class of Certificates and (iii) the Trustee shall
execute and the Certificate Registrar shall authenticate a new Book Entry
Certificate reflecting the reduction in the aggregate Certificate Principal
Balance of such Class of Certificates by the amount of the Definitive
Certificates.
Neither the Company, 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, 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.
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(a) The Trustee shall cause to be kept at one of the offices or agencies
to be appointed by the Trustee in accordance with the provisions of Section 8.12
a Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. The Trustee
is initially appointed Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided. The
Certificate Registrar, or the Trustee, shall provide the Master Servicer with a
certified list of Certificateholders as of each Record Date prior to the related
Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at
any office or agency of the Trustee maintained for such purpose pursuant to
Section 8.12 and, in the case of any Class SB Certificate or Class R
Certificate, upon satisfaction of the conditions set forth below, the Trustee
shall execute and the Certificate Registrar shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new
Certificates of a like Class and aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be
exchanged for other Certificates of authorized denominations of a like Class and
aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Certificates of such Class which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class SB
Certificate or Class R Certificate shall be made unless such transfer, sale,
pledge or other disposition is exempt from the registration requirements of the
Securities Act of 1933 (the "1933 Act"), as amended, and any applicable state
securities laws or is made in accordance with said Act and laws. In the event
that a transfer of a Class SB Certificate or Class R Certificate is to be made
either (i)(A) the Trustee shall require a written Opinion of Counsel acceptable
to and in form and substance satisfactory to the Trustee and the Company that
such transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer (except that, if such
transfer is made by the Company or the Master Servicer or any Affiliate thereof,
the Company or the Master Servicer shall provide such Opinion of Counsel at
their own expense); provided that such Opinion of Counsel will not be required
in connection with the initial transfer of any such Certificate by the Company
or any Affiliate thereof to the Company or an Affiliate of the Company and (B)
the Trustee shall require the transferee to execute a representation letter,
substantially in the form of Exhibit H hereto, and the Trustee shall require the
transferor to execute a representation letter, substantially in the form of
Exhibit I hereto, each acceptable to and in form and substance satisfactory to
the Company and the Trustee certifying to the Company and the Trustee the facts
surrounding such transfer, which representation letters shall not be an expense
of the Trustee, the Company or the Master Servicer; provided, however, that such
representation letters will not be required in connection with any transfer of
any such Certificate by the Company or any Affiliate thereof to the Company or
an Affiliate of the Company, and the Trustee shall be entitled to conclusively
rely upon a representation (which, upon the request of the Trustee, shall be a
written representation) from the Company, of the status of such transferee as an
Affiliate of the Company or (ii) the prospective transferee of such a
Certificate shall be required to provide the Trustee, the Company and the Master
Servicer with an investment letter substantially in the form of Exhibit M
attached hereto (or such other form as the Company in its sole discretion deems
acceptable), which investment letter shall not be an expense of the Trustee, the
Company or the Master Servicer, and which investment letter states that, among
other things, such transferee (A) is a "qualified institutional buyer" as
defined under Rule 144A, acting for its own account or the accounts of other
"qualified institutional buyers" as defined under Rule 144A, and (B) is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act of 1933, as amended, provided by Rule
144A. The Holder of any such Certificate desiring to effect any such transfer,
sale, pledge or other disposition shall, and does hereby agree to, indemnify the
Trustee, the Company, the Credit Enhancer, the Master Servicer and the
Certificate Registrar against any liability that may result if the transfer,
sale, pledge or other disposition is not so exempt or is not made in accordance
with such federal and state laws.
(e) [Reserved]
(f) In the case of any Class SB Certificate or Class R Certificate
presented for registration in the name of any Person, either (i) the Trustee
shall require an Opinion of Counsel acceptable to and in form and substance
satisfactory to the Trustee, the Company, the Credit Enhancer and the Master
Servicer to the effect that the purchase or holding of such Class SB Certificate
or Class R Certificate is permissible under applicable law, will not constitute
or result in any non-exempt prohibited transaction under Section 406 of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Company, the Master Servicer,
the Credit Enhancer or the Trust Fund to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in this Agreement, which Opinion of Counsel shall not be an
expense of the Trustee, the Company, the Master Servicer, the Credit Enhancer or
the Trust Fund or (ii) the prospective transferee shall be required to provide
the Trustee, the Company, the Credit Enhancer and the Master Servicer with a
certification to the effect set forth in Exhibit H or Exhibit M (with respect to
a Class SB Certificate) or in paragraph fourteen of Exhibit G-1 (with respect to
a Class R Certificate), which the Trustee may rely upon without further inquiry
or investigation, or such other certifications as the Trustee may deem desirable
or necessary in order to establish that such transferee or the Person in whose
name such registration is requested is not an employee benefit plan or other
plan subject to the prohibited transaction provisions of ERISA or Section 4975
of the Code, or any Person (including an insurance company investing its general
accounts, an investment manager, a named fiduciary or a trustee of any such
plan) who is using "plan assets" of any such plan to effect such acquisition.
(g) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as a
Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery to
it, and shall not register the Transfer of any Class R Certificate until
its receipt of, (I) an affidavit and agreement (a "Transfer Affidavit
and Agreement," in the form attached hereto as Exhibit G-1) from the
proposed Transferee, in form and substance satisfactory to the Master
Servicer, representing and warranting, among other things, that it is a
Permitted Transferee, that it is not acquiring its Ownership Interest in
the Class R Certificate that is the subject of the proposed Transfer as
a nominee, trustee or agent for any Person who is not a Permitted
Transferee, that for so long as it retains its Ownership Interest in a
Class R Certificate, it will endeavor to remain a Permitted Transferee,
and that it has reviewed the provisions of this Section 5.02(g) and
agrees to be bound by them, and (II) a certificate, in the form attached
hereto as Exhibit G-2, from the Holder wishing to transfer the Class R
Certificate, in form and substance satisfactory to the Master Servicer,
representing and warranting, among other things, that no purpose of the
proposed Transfer is to impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee who is assigned to this Agreement has
actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Class R
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer Affidavit and
Agreement from any other Person to whom such Person attempts to transfer
its Ownership Interest in a Class R Certificate and (y) not to transfer
its Ownership Interest unless it provides a certificate to the Trustee
in the form attached hereto as Exhibit G-2.
(E) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary Treasury
Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an
Ownership Interest in a Class R Certificate, if it is, or is holding an
Ownership Interest in a Class R Certificate on behalf of, a
"pass-through interest holder."
(ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have received the Transfer Affidavit and Agreement, a
certificate of the Holder requesting such transfer in the form attached hereto
as Exhibit G-2 and all of such other documents as shall have been reasonably
required by the Trustee as a condition to such registration. Transfers of the
Class R Certificates to Non-United States Persons and Disqualified Organizations
(as defined in Section 860E(e)(5) of the Code) are prohibited.
(iii) (A) If any Disqualified Organization shall become a holder of a
Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a Non-United States Person shall become a holder of a
Class R Certificate, then the last preceding United States Person shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored, to the
extent permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Class R
Certificate. The Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact not permitted
by this Section 5.02(g) 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(g)
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 neither
the Master Servicer nor the Trustee shall be liable to any Person having
an Ownership Interest in a Class R Certificate as a result of the Master
Servicer's exercise of such discretion.
(iv) The Master Servicer, on behalf of the Trustee, shall make
available, upon written request from the Trustee, all information necessary to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Class R Certificate to any Person who is a Disqualified Organization,
including the information regarding "excess inclusions" of such Class R
Certificates required to be provided to the Internal Revenue Service and certain
Persons as described in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and (B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust, estate or
organization described in Section 1381 of the Code that holds an Ownership
Interest in a Class R Certificate having as among its record holders at any time
any Person who is a Disqualified Organization. Reasonable compensation for
providing such information may be required by the Master Servicer from such
Person.
(v) The provisions of this Section 5.02(g) 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 consent of the Credit Enhancer and written
notification from each Rating Agency to the effect that the
modification, addition to or elimination of such provisions will not
cause such Rating Agency to downgrade its then-current ratings, if any,
of the Class A Certificates below the lower of the then-current rating
or the rating assigned to such Certificates as of the Closing Date by
such Rating Agency; and
(B) subject to Section 10.01(g), a certificate of the Master
Servicer stating that the Master Servicer has received an Opinion of
Counsel, in form and substance satisfactory to the Master Servicer, to
the effect that such modification, addition to or absence of such
provisions will not cause any of REMIC I or REMIC II to cease to qualify
as a REMIC and will not cause (x) any of REMIC I or REMIC II 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.
(h) 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.
(i) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
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If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04 Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Company, the Master Servicer, the Trustee, the Credit Enhancer, the
Certificate Registrar and any agent of the Company, the Master Servicer, the
Trustee, the Credit Enhancer or the Certificate Registrar may treat the Person
in whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions pursuant to Section 4.02 and for all
other purposes whatsoever, except as and to the extent provided in the
definition of "Certificateholder", and in Section 4.08, and neither the Company,
the Master Servicer, the Credit Enhancer, the Trustee, the Certificate Registrar
nor any agent of the Company, the Master Servicer, the Credit Enhancer, the
Trustee or the Certificate Registrar shall be affected by notice to the contrary
except as provided in Section 5.02(g).
Section 5.05 Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.02. In the event of
any such appointment, on or prior to each Distribution Date the Master Servicer
on behalf of the Trustee shall deposit or cause to be deposited with the Paying
Agent a sum sufficient to make the payments to Certificateholders in the amounts
and in the manner provided for in Section 4.02, such sum to be held in trust for
the benefit of Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent will hold all sums held by it for the payment to
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. Any sums so
held by such Paying Agent shall be held only in Eligible Accounts to the extent
such sums are not distributed to the Certificateholders on the date of receipt
by such Paying Agent.
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01 Respective Liabilities of the Company and the Master Servicer.
The Company and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Company and the Master Servicer herein. By
way of illustration and not limitation, the Company is not liable for the
servicing and administration of the Mortgage Loans, nor is it obligated by
Sections 7.01 or 10.01 to assume any obligations of the Master Servicer or to
appoint a designee to assume such obligations, nor is it liable for any other
obligation hereunder that it may, but is not obligated to, assume unless it
elects to assume such obligation in accordance herewith.
Section 6.02 Merger or Consolidation of the Company or the Master
Servicer; Assignment of Rights and Delegation of Duties by
Master Servicer.
(a) The Company and the Master Servicer will each keep in full effect
its existence, rights and franchises as a corporation under the laws of the
state of its incorporation, and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Company or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Company or the Master Servicer shall be a party, or
any Person succeeding to the business of the Company or the Master Servicer,
shall be the successor of the Company or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
Xxxxxx Xxx or Xxxxxxx Mac; and provided further that each Rating Agency's
ratings, if any, of the Class A Certificates in effect immediately prior to such
merger or consolidation (without taking into account the Policy)will not be
qualified, reduced or withdrawn as a result thereof (as evidenced by a letter to
such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04
to the contrary, the Master Servicer may assign its rights and delegate its
duties and obligations under this Agreement; provided that the Person accepting
such assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of Xxxxxx Mae or Xxxxxxx Mac, is reasonably
satisfactory to the Trustee, the Credit Enhancer and the Company, is willing to
service the Mortgage Loans and executes and delivers to the Company, the Credit
Enhancer and the Trustee an agreement, in form and substance reasonably
satisfactory to the Company, the Credit Enhancer and the Trustee, which contains
an assumption by such Person of the due and punctual performance and observance
of each covenant and condition to be performed or observed by the Master
Servicer under this Agreement; provided further that each Rating Agency's rating
of the Classes of Certificates that have been rated in effect immediately prior
to such assignment and delegation (without taking into account the Policy) will
not be qualified, reduced or withdrawn as a result of such assignment and
delegation (as evidenced by a letter to such effect from each Rating Agency). In
the case of any such assignment and delegation, the Master Servicer shall be
released from its obligations under this Agreement, except that the Master
Servicer shall remain liable for all liabilities and obligations incurred by it
as Master Servicer hereunder prior to the satisfaction of the conditions to such
assignment and delegation set forth in the next preceding sentence.
Notwithstanding the foregoing, in the event of a pledge or assignment by the
Master Servicer solely of its rights to purchase all assets of the Trust Fund
under Section 9.01(a) (or, if so specified in Section 9.01(a), its rights to
purchase the Mortgage Loans and property acquired related to such Mortgage Loans
or its rights to purchase the Certificates related thereto), the provisos of the
first sentence of this paragraph will not apply.
Section 6.03 Limitation on Liability of the Company, the Master Servicer
and Others.
Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company, the Master Servicer or any such Person
against any breach of warranties, 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 Company, the Master
Servicer and any director, officer, employee or agent of the Company or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Company, the Master Servicer and any director, officer, employee
or agent of the Company or the Master Servicer shall be indemnified by the Trust
Fund and held harmless against any loss, liability or expense incurred in
connection with any legal action relating to this Agreement or the Certificates,
other than any loss, liability or expense related to any specific Mortgage Loan
or Mortgage Loans (except as any such loss, liability or expense shall be
otherwise reimbursable pursuant to this Agreement) and any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder.
Neither the Company nor the Master Servicer shall be under any
obligation to appear in, prosecute or defend any legal or administrative action,
proceeding, hearing or examination that is not incidental to its respective
duties under this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Company or the Master Servicer
may in its discretion undertake any such action, proceeding, hearing or
examination that it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders or the Credit Enhancer hereunder. In such event, the legal
expenses and costs of such action, proceeding, hearing or examination and any
liability resulting therefrom shall be expenses, costs and liabilities of the
Trust Fund, and the Company and the Master Servicer shall be entitled to be
reimbursed therefor out of amounts attributable to the Mortgage Loans on deposit
in the Custodial Account as provided by Section 3.10 and, on the Distribution
Date(s) following such reimbursement, the aggregate of such expenses and costs
shall be allocated in reduction of the Accrued Certificate Interest on each
Class entitled thereto in the same manner as if such expenses and costs
constituted a Prepayment Interest Shortfall.
Section 6.04 Company and Master Servicer Not to Resign.
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Subject to the provisions of Section 6.02, neither the Company nor the
Master Servicer shall resign from its respective obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Company or the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning party) to such effect
delivered to the Trustee and the Credit Enhancer. No such resignation by the
Master Servicer shall become effective until the Trustee or a successor servicer
shall have assumed the Master Servicer's responsibilities and obligations in
accordance with Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to distribute or cause to be
distributed to Holders of Certificates of any Class any distribution
required to be made under the terms of the Certificates of such Class
and this Agreement and, in either case, such failure shall continue
unremedied for a period of 5 days after the date upon which written
notice of such failure, requiring such failure to be remedied, shall
have been given to the Master Servicer by the Trustee, the Credit
Enhancer or the Company or to the Master Servicer, the Company and the
Trustee by the Holders of Certificates of such Class evidencing
Percentage Interests aggregating not less than 25%; or
(ii) the Master Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in the Certificates of any Class or in
this Agreement and such failure shall continue unremedied for a period
of 30 days (except that such number of days shall be 15 in the case of a
failure to pay the premium for any Required Insurance Policy) after the
date on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Master Servicer by the Trustee,
the Credit Enhancer or the Company, or to the Master Servicer, the
Company and the Trustee by the Holders of Certificates of any Class
evidencing, as to such Class, Percentage Interests aggregating not less
than 25%; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case
under any present or future federal or state bankruptcy, insolvency or
similar law or appointing a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities
or similar proceedings, or for the winding-up or liquidation of its
affairs, shall have been entered against the Master Servicer and such
decree or order shall have remained in force undischarged or unstayed
for a period of 60 days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of,
or relating to, the Master Servicer or of, or relating to, all or
substantially all of the property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to
pay its debts generally as they become due, file a petition to take
advantage of, or commence a voluntary case under, any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors, or voluntarily suspend payment of its obligations.
If an Event of Default shall occur, then, and in each and every such
case, so long as such Event of Default shall not have been remedied, either the
Company or the Trustee shall at the written direction of the Credit Enhancer
(unless a Credit Enhancer Default is continuing, in which case at the direction
of the Holders of Certificates entitled to at least 51% of the Voting Rights),
by notice in writing to the Master Servicer (and to the Company and the Credit
Enhancer if given by the Trustee or to the Master Servicer, the Trustee and the
Credit Enhancer if given by the Company), terminate all of the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that the successor to the Master
Servicer appointed pursuant to Section 7.02 shall have accepted the duties of
Master Servicer effective upon the resignation of the Master Servicer. On or
after the receipt by the Master Servicer of such written notice, all authority
and power of the Master Servicer under this Agreement, whether with respect to
the Certificates (other than as a Holder thereof) or the Mortgage Loans or
otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or
the Trustee's designee appointed pursuant to Section 7.02; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee or its designee for administration by it of all cash
amounts which shall at the time be credited to the Custodial Account or the
Certificate Account or thereafter be received with respect to the Mortgage
Loans. No such termination shall release the Master Servicer for any liability
that it would otherwise have hereunder for any act or omission prior to the
effective time of such termination.
Notwithstanding any termination of the activities of Residential Funding
in its capacity as Master Servicer hereunder, Residential Funding shall be
entitled to receive, out of any late collection of a Monthly Payment on a
Mortgage Loan which was due prior to the notice terminating Residential
Funding's rights and obligations as Master Servicer hereunder and received after
such notice, that portion to which Residential Funding would have been entitled
pursuant to Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing Fee in
respect thereof, and any other amounts payable to Residential Funding hereunder
the entitlement to which arose prior to the termination of its activities
hereunder. Upon the termination of Residential Funding as Master Servicer
hereunder, the Company shall deliver to the Trustee a copy of the Program Guide
and upon the request of the Credit Enhancer, a copy of the Program Guide to the
Credit Enhancer.
Section 7.02 Trustee or Company to Act; Appointment of Successor.
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(a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 or resigns in accordance with Section 6.04,
so long as no Credit Enhancer Default exists, the Credit Enhancer may appoint a
successor Master Servicer, and if the Credit Enhancer fails to do so within 30
days or a Credit Enhancer Default exists, the Trustee or, upon notice to the
Credit Enhancer and the Company and with the Company's consent and, so long as
no Credit Enhancer Default exists, the Credit Enhancer's consent (which consent
shall not be unreasonably withheld) a designee (which meets the standards set
forth below) of the Trustee, shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer (except for the responsibilities, duties and liabilities contained in
Sections 2.02 and 2.03(a), excluding the duty to notify related Subservicers as
set forth in such Sections, and its obligations to deposit amounts in respect of
losses incurred prior to such notice or termination on the investment of funds
in the Custodial Account or the Certificate Account pursuant to Sections 3.07(c)
and 4.01(c) by the terms and provisions hereof); provided, however, that any
failure to perform such duties or responsibilities caused by the preceding
Master Servicer's failure to provide information required by Section 4.04 shall
not be considered a default by the Trustee hereunder as successor Master
Servicer. As compensation therefor, the Trustee as successor Master Servicer
shall be entitled to all funds relating to the Mortgage Loans which the Master
Servicer would have been entitled to charge to the Custodial Account or the
Certificate Account if the Master Servicer had continued to act hereunder and,
in addition, shall be entitled to the income from any Permitted Investments made
with amounts attributable to the Mortgage Loans held in the Custodial Account or
the Certificate Account. If the Trustee has become the successor to the Master
Servicer in accordance with Section 6.04 or Section 7.01, then notwithstanding
the above, so long as no Credit Enhancer Default exists, the Credit Enhancer may
appoint a successor Master Servicer, and if the Credit Enhancer fails to do so
within 30 days or a Credit Enhancer Default exists, the Trustee may, if it shall
be unwilling to so act, or shall, if it is unable to so act, appoint, or
petition a court of competent jurisdiction to appoint, any established housing
and home finance institution, which is also a Xxxxxx Xxx- or Xxxxxxx
Mac-approved mortgage loan or home equity loan servicing institution, having a
net worth of not less than $10,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, the Trustee shall become successor
to the Master Servicer and shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the initial Master Servicer
hereunder. The Company, the Trustee, the Custodian and such successor shall take
such action, consistent with this Agreement, as shall be necessary to effectuate
any such succession. The Servicing Fee for any successor Master Servicer
appointed pursuant to this Section 7.02 will be lowered with respect to those
Mortgage Loans, if any, where the Subservicing Fee accrues at a rate of less
than 0.20% per annum in the event that the successor Master Servicer is not
servicing such Mortgage Loans directly and it is necessary to raise the related
Subservicing Fee to a rate of 0.20% per annum in order to hire a Subservicer
with respect to such Mortgage Loans.
(b) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS'
rules and regulations, or (ii) the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (b). The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03 Notification to Certificateholders.
----------------------------------
(a) Upon any such termination or appointment of a successor to the
Master Servicer, the Trustee shall give prompt written notice thereof to the
Credit Enhancer and to the Certificateholders, at their respective addresses
appearing in the Certificate Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates and the Credit
Enhancer 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 Credit Enhancer or the Holders representing at least 66% of the
Voting Rights of Certificates affected by a default or Event of Default
hereunder, with the written consent of the Credit Enhancer, which consent shall
not be unreasonably withheld, may waive any default or Event of Default;
provided, however, that (a) a default or Event of Default under clause (i) of
Section 7.01 may be waived with the written consent of the Credit Enhancer, only
by all of the Holders of Certificates affected by such default or Event of
Default (which Voting Rights of the Class A Certificateholders may be exercised
by the Credit Enhancer without the consent of such Holders and may only be
exercised by such Holders with the prior written consent of the Credit Enhancer
so long as there is no Credit Enhancer 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 Credit Enhancer or the Holders representing the
requisite percentage of Voting Rights of Certificates affected by such default
or Event of Default with the consent of the Credit Enhancer, which consent shall
not be unreasonably withheld, such default or Event of Default shall cease to
exist and shall be deemed to have been remedied for every purpose hereunder. No
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon except to the extent expressly so waived.
Section 7.05 Servicing Trigger; Removal of Master Servicer .
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(a) Upon determination by the Credit Enhancer that a Servicing Trigger
has occurred, the Credit Enhancer shall give written notice of such Servicing
Trigger to the Master Servicer, the Depositor, the Trustee and to each Rating
Agency.
(b) At any time after such determination and while a Servicing Trigger
is continuing, the Credit Enhancer may direct the Trustee in writing to remove
the Master Servicer if the Credit Enhancer makes a determination that the manner
of master servicing was a factor contributing to the size of the delinquencies
or losses incurred in the Trust Fund.
(c) Upon receipt of directions to remove the Master Servicer pursuant to
the preceding clause (b), the Trustee shall notify the Master Servicer that it
has been terminated and the Master Servicer shall be terminated in the same
manner as specified in Sections 7.01 and 7.02.
(d) After notice of occurrence of a Servicing Trigger has been given and
while a Servicing Trigger is continuing, until and unless the Master Servicer
has been removed as provided in clause (b), the Master Servicer covenants and
agrees to act as the Master Servicer for a term from the occurrence of the
Servicing Trigger to the end of the calendar quarter in which such Servicing
Trigger occurs, which term may at the Credit Enhancer's discretion be extended
by written notice to the Trustee and the Master Servicer for successive terms of
three (3) calendar months each, until the termination of the Trust Fund. The
Master Servicer will, upon the receipt of each such notice of extension (a
"Master Servicer Extension Notice") become bound for the duration of the term
covered by such Master Servicer Extension Notice to continue as Master Servicer
subject to and in accordance with this Agreement. If, as of the fifteenth (15th)
day prior to the last day of any term as the Master Servicer, the Trustee shall
not have received any Master Servicer Extension Notice from the Credit Enhancer,
the Trustee shall, within five (5) days thereafter, give written notice of such
nonreceipt to the Credit Enhancer and the Master Servicer. If any such term
expires without a Master Servicer Extension Notice then the Trustee shall act as
successor Master Servicer as provided in Section 7.02.
(e) No provision of this Section 7.05 shall have the effect of limiting
the rights of the Depositor, the Trustee, the Certificateholders or the Credit
Enhancer under Section 7.01.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and
after the curing 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 and the Credit Enhancer 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 in the Trustee's possession as
the Master Servicer may reasonably request from time to time for the Master
Servicer to fulfill its duties as set forth in this Agreement and the Trustee
shall furnish in a timely fashion to the Credit Enhancer such information in its
possession as the Credit Enhancer may reasonably request from time to time for
the Credit Enhancer to protect its interests and to fulfill its duties under the
Policy. The Trustee covenants and agrees that it shall perform its obligations
hereunder in a manner so as to maintain the status of each of REMIC I and REMIC
II as a REMIC under the REMIC Provisions and (subject to Section 10.01(f)) to
prevent the imposition of any federal, state or local income, prohibited
transaction, contribution or other tax on the Trust Fund to the extent that
maintaining such status and avoiding such taxes are reasonably within the
control of the Trustee and are reasonably within the scope of its duties under
this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred,
the duties and obligations of the Trustee shall be determined solely by
the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and,
in the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee by the Company or the Master Servicer and which
on their face, do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be 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 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 Credit Enhancer or the Certificateholders
holding Certificates which evidence Percentage Interests aggregating not
less than 25% of the affected Classes as to the time, method and place
of conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any
default (other than a default in payment to the Trustee) specified in
clauses (i) and (ii) of Section 7.01 or an Event of Default under
clauses (iii), (iv) and (v) of Section 7.01 unless a Responsible Officer
of the Trustee assigned to and working in the Corporate Trust Office
obtains actual knowledge of such failure or event or the Trustee
receives written notice of such failure or event at its Corporate Trust
Office from the Master Servicer, the Credit Enhancer, the Company or any
Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision
in this Agreement shall require the Trustee to expend or risk its own
funds or otherwise incur any personal financial liability in the
performance of any of its duties as Trustee hereunder, or in the
exercise of any of its rights or powers, if the Trustee shall have
reasonable grounds for believing that repayment of funds or adequate
indemnity against such risk or liability is not reasonably assured to
it.
(d) The Trustee shall timely pay, from its own funds, the amount of any
and all federal, state and local taxes imposed on the Trust Fund or its assets
or transactions including, without limitation, (A) "prohibited transaction"
penalty taxes as defined in Section 860F of the Code, if, when and as the same
shall be due and payable, (B) any tax on contributions to a REMIC after the
Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code, but
only if such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
Section 8.02 Certain Matters Affecting the Trustee.
-------------------------------------
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or
other paper or document believed by it to be genuine and to have been
signed or presented by the proper party or parties;
(ii) The Trustee may consult with counsel, and any Opinion of
Counsel shall be full and complete authorization and protection in
respect of any action taken or suffered or omitted by it hereunder in
good faith and in accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of
the trusts or powers vested in it by this Agreement or to institute,
conduct or defend any litigation hereunder or in relation hereto at the
request, order or direction of the Credit Enhancer or any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
(a) the Credit Enhancer or such Certificateholders, as applicable, shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby
and (b) so long as no Credit Enhancer Default exists, the Credit
Enhancer has given its consent; nothing contained herein shall, however,
relieve the Trustee of the obligation, upon the occurrence of an Event
of Default (which has not been cured), to exercise such of the rights
and powers vested in it by this Agreement, and to use the same degree of
care and skill in their exercise as a prudent investor would exercise or
use under the circumstances in the conduct of such investor's own
affairs;
(iv) The Trustee shall not be 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
Credit Enhancer or the Holders of Certificates of any Class evidencing,
as to such Class, Percentage Interests, aggregating not less than 50%
with the written consent of the Credit Enhancer; provided, however, that
if the payment within a reasonable time to the Trustee of the costs,
expenses or liabilities likely to be incurred by it in the making of
such investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the terms of
this Agreement, the Trustee may require reasonable indemnity against
such expense or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Master
Servicer, if an Event of Default shall have occurred and is continuing,
and otherwise by the Certificateholder requesting the investigation (or
the Credit Enhancer, if the Credit Enhancer requested the
investigation);
(vi) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys provided that the Trustee shall remain
liable for any acts of such agents or attorneys; and
(vii) To the extent authorized under the Code and the regulations
promulgated thereunder, each Holder of a Class R Certificate hereby
irrevocably appoints and authorizes the Trustee to be its
attorney-in-fact for purposes of signing any Tax Returns required to be
filed on behalf of the Trust Fund. The Trustee shall sign on behalf of
the Trust Fund and deliver to the Master Servicer in a timely manner any
Tax Returns prepared by or on behalf of the Master Servicer that the
Trustee is required to sign as determined by the Master Servicer
pursuant to applicable federal, state or local tax laws, provided that
the Master Servicer shall indemnify the Trustee for signing any such Tax
Returns that contain errors or omissions.
(b) Following the issuance of the Certificates (and except as provided
for in Section 2.04), the Trustee shall not accept any contribution of assets to
the Trust Fund unless (subject to Section 10.01(f)) it shall have obtained or
been furnished with an Opinion of Counsel to the effect that such contribution
will not (i) cause any of REMIC I or REMIC II to fail to qualify as a REMIC at
any time that any Certificates are outstanding or (ii) cause the Trust Fund to
be subject to any federal tax as a result of such contribution (including the
imposition of any federal tax on "prohibited transactions" imposed under Section
860F(a) of the Code).
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
-----------------------------------------------------
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Company or the Master
Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document, or of MERS
or the MERS(R) System.. Except as otherwise provided herein, the Trustee shall
not be accountable for the use or application by the Company or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Company or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account or the Certificate Account by the Company or the Master
Servicer.
Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights it would have if it were not
Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification.
(a) The Master Servicer covenants and agrees to pay to the Trustee and
any co-trustee from time to time, and the Trustee and any co-trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by each of them in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee and any co-trustee, and the Master Servicer will pay or
reimburse the Trustee and any co-trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or any
co-trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ, and the expenses incurred by the
Trustee or any co-trustee in connection with the appointment of an office or
agency pursuant to Section 8.12) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee for, and to hold
the Trustee harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part, arising out of, or in connection
with, the acceptance and administration of the Trust Fund and the administration
of the Custodial Account, including the costs and expenses (including reasonable
legal fees and expenses) of defending itself against any claim in connection
with the exercise or performance of any of its powers or duties under this
Agreement, provided that:
(i) with respect to any such claim, the Trustee shall have given
the Master Servicer written notice thereof promptly after the Trustee
shall have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Master Servicer in preparing
such defense; and
(iii) notwithstanding anything in this Agreement to the contrary,
the Master Servicer shall not be liable for settlement of any claim by
the Trustee entered into without the prior consent of the Master
Servicer which consent shall not be unreasonably withheld.
No termination of this Agreement shall affect the obligations created by
this Section 8.05(b) of the Master Servicer to indemnify the Trustee under the
conditions and to the extent set forth herein.
Notwithstanding the foregoing, the indemnification provided by the
Master Servicer in this 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 Company and organized and doing business under
the laws of such state or the United States of America, authorized under such
laws to exercise corporate trust powers, having a combined capital and surplus
of at least $50,000,000 and subject to supervision or examination by federal or
state authority. If such corporation or national banking association publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section the combined capital and surplus of such corporation shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
Section 8.07 Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Company, the Master
Servicer and the Credit Enhancer. Upon receiving such notice of resignation, the
Company shall promptly appoint a successor trustee acceptable to the Credit
Enhancer 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 Credit
Enhancer may appoint a successor trustee and if the Credit Enhancer fails to do
so within 30 days, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Credit Enhancer or the Company with the consent of the
Credit Enhancer, which such consent shall not be unreasonably withheld, or if at
any time the Trustee shall become incapable of acting, or shall be adjudged
bankrupt or insolvent, or a receiver of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Credit Enhancer or the Company (with the consent of the
Credit Enhancer, which such consent shall not be unreasonably withheld), may
remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee. In addition, in the event that
the Credit Enhancer or the Company determines that the Trustee has failed (i) to
make a required claim under the Policy of which it has been notified pursuant to
Section 4.10(a) or failed to distribute or cause to be distributed to
Certificateholders any amount required to be distributed hereunder (including
any Insured Payment), if such amount is held by the Trustee or its Paying Agent
(other than the Master Servicer or the Company) for distribution or (ii) to
otherwise observe or perform in any material respect any of its covenants,
agreements or obligations hereunder, and such failure shall continue unremedied
for a period of 5 days (in respect of clause (i) above) or 30 days (in respect
of clause (ii) above) after the date on which written notice of such failure,
requiring that the same be remedied, shall have been given to the Trustee by the
Company or the Credit Enhancer, then the Company with the consent of the Credit
Enhancer, 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 Company shall, on or
before the date on which any such appointment becomes effective, obtain from
each Rating Agency written confirmation that the appointment of any such
successor trustee will not result in the reduction of the ratings on any Class
of the Certificates below the lesser of the then current or original ratings on
such Certificates (without taking into account the Policy).
(c) During the continuance of a Credit Enhancer Default, the Holders of
Certificates entitled to at least 51% of the Voting Rights may at any time
remove the Trustee and appoint a successor trustee by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to the
Company, one complete set to the Trustee so removed and one complete set to the
successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
Section 8.08 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Company, the Credit Enhancer and its
predecessor trustee an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor trustee shall become
effective and such successor trustee shall become effective and such successor
trustee, without any further act, deed or conveyance, shall become fully vested
with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee herein. The
predecessor trustee shall deliver to the successor trustee all Mortgage Files
and related documents and statements held by it hereunder (other than any
Mortgage Files at the time held by a Custodian, which shall become the agent of
any successor trustee hereunder), and the Company, the Master Servicer and the
predecessor trustee shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee all such rights, powers, duties and
obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Company fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Company.
Section 8.09 Merger or Consolidation of Trustee.
----------------------------------
Any corporation or national banking association into which the Trustee
may be merged or converted or with which it may be consolidated or any
corporation or national banking association resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation or national banking association succeeding to the business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation or national banking association shall be eligible under the
provisions of Section 8.06, without the execution or filing of any paper or any
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding. The Trustee shall mail notice of any such merger or
consolidation to the Certificateholders at their address as shown in the
Certificate Register.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer, the Credit
Enhancer and the Company, or shall, at the direction of the Master Servicer, the
Credit Enhancer and the Company, appoint one or more Custodians who are not
Affiliates of the Company or the Master Servicer to hold all or a portion of the
Mortgage Files as agent for the Trustee, by entering into a Custodial Agreement.
The Trustee is hereby directed to enter into a Custodial Agreement with Xxxxx
Fargo Bank, N.A. Subject to Article VIII, the Trustee agrees to comply with the
terms of each Custodial Agreement and to enforce the terms and provisions
thereof against the Custodian for the benefit of the Certificateholders. Each
Custodian shall be a depository institution subject to supervision by federal or
state authority, shall have a combined capital and surplus of at least
$15,000,000 and shall be qualified to do business in the jurisdiction in which
it holds any Mortgage File. Each Custodial Agreement may be amended only as
provided in Section 11.01. The Trustee shall notify the Certificateholders of
the appointment of any Custodian (other than the Custodian appointed as of the
Closing Date) pursuant to this Section 8.11.
Section 8.12 Appointment of Office or Agency.
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The Trustee will maintain an office or agency in the City of New York
where Certificates may be surrendered for registration of transfer or exchange.
The Trustee initially designates its offices located at 000 Xxxxxx Xxxxxx, 0xx
Xxxxx, Xxxxxxx, Xxxxx 00000 for the purpose of keeping the Certificate Register.
The Trustee will maintain an office at the address stated in Section 11.05(c)
hereof where notices and demands to or upon the Trustee in respect of this
Agreement may be served.
ARTICLE IX
TERMINATION
Section 9.01 Optional Purchase by the Master Servicer of All
Certificates; Termination Upon Purchase by the Master
Servicer or Liquidation of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby in respect of the Certificates (other than the obligation of the Trustee
to make certain payments after the Final Distribution Date to Certificateholders
and the Credit Enhancer and the obligation of the Company to send certain
notices as hereinafter set forth) shall terminate upon the last action required
to be taken by the Trustee on the Final Distribution Date pursuant to this
Article IX following the earlier of:
(i) the later of the final payment or other liquidation of the
last Mortgage Loan remaining in the Trust Fund or the disposition of all
property acquired upon foreclosure or deed in lieu of foreclosure of any
Mortgage Loan, or
(ii) the purchase by the Master Servicer of all Mortgage Loans
and all property acquired in respect of any Mortgage Loan remaining in
the Trust Fund at a price equal to 100% of the unpaid principal balance
of each Mortgage Loan or, if less than such unpaid principal balance,
the fair market value of any REO Property if such fair market value is
less than such unpaid principal balance on the day of purchase, plus
accrued interest on each Mortgage Loan at the Net Mortgage Rate to, but
not including, the first day of the month in which such purchase price
is distributed, including payments of any amounts due to the Credit
Enhancer pursuant to the Insurance Agreement; provided, however, that in
no event shall the trust created hereby continue beyond the expiration
of 21 years from the death of the last survivor of the descendants of
Xxxxxx X. Xxxxxxx, the late ambassador of the United States to the Court
of St. Xxxxx, living on the date hereof; and provided further that the
purchase price set forth above shall be increased as is necessary, as
determined by the Master Servicer, to avoid disqualification of any of
REMIC I or REMIC II as a REMIC .
The purchase price paid by the Master Servicer pursuant to Section
9.01(a)(ii) shall also include any amounts owed by Residential Funding pursuant
to the last paragraph of Section 4 of the Assignment Agreement in respect of any
liability, penalty or expense that resulted from a breach of the representation
and warranty set forth in clause (h) of Section 4 of the Assignment Agreement
that remain unpaid on the date of such purchase.
The right of the Master Servicer to purchase all the assets of the Trust
Fund relating to the Mortgage Loans pursuant to clause (ii) above is conditioned
upon the Pool Principal Balance, after giving effect to distributions to be made
on such Distribution Date, being less than ten percent of the Cut-off Date
Principal Balance of the Mortgage Loans. In addition, the Master Servicer shall
provide to the Trustee the certification required by Section 3.14 and the
Trustee and any Custodian shall, promptly following payment of the purchase
price, release to the Master Servicer the Mortgage Files pertaining to the
Mortgage Loans being purchased. No purchase pursuant to clause (ii) of this
Section 9.01(a) is permitted if it would result in a draw on the Policy, or
would result in any amounts owing to the Credit Enhancer remaining unreimbursed,
unless, in either case, the Credit Enhancer consents in writing.
In addition to the foregoing, on any Distribution Date on which the Pool
Principal Balance is less than ten percent of the Cut-off Date Principal Balance
of the Mortgage Loans, the Master Servicer shall have the right, at its option,
to purchase the Class A Certificates in whole, but not in part, at a price equal
to the outstanding Certificate Principal Balance of such Certificates plus the
sum of one month's Accrued Certificate Interest thereon for the related Interest
Accrual Period and any previously unpaid Accrued Certificate Interest and any
unpaid Prepayment Interest Shortfalls plus accrued interest thereon at the
related Pass-Through Rate. If the Master Servicer exercises this right to
purchase the outstanding Certificates, the Master Servicer will promptly
terminate the respective obligations and responsibilities created hereby in
respect of the Certificates pursuant to this Article IX.
(b) The Master Servicer shall give the Trustee and the Credit Enhancer
not less than 60 days' prior notice of the Distribution Date on which the Master
Servicer anticipates that the final distribution will be made to
Certificateholders (whether as a result of the exercise by the Master Servicer
of its right to purchase the assets of the Trust Fund or otherwise) or on which
the Master Servicer anticipates that the Certificates will be purchased (as a
result of the exercise by the Master Servicer to purchase the outstanding
Certificates). Notice of any termination, specifying the anticipated Final
Distribution Date (which shall be a date that would otherwise be a Distribution
Date) upon which the Certificateholders may surrender their Certificates to the
Trustee for payment of the final distribution and cancellation or notice of any
purchase of the outstanding Certificates, specifying the Distribution Date upon
which the Holders may surrender their Certificates to the Trustee for payment,
shall be given promptly by the Master Servicer (if it is exercising its right to
purchase the assets of the Trust Fund or to purchase the outstanding
Certificates), or by the Trustee (in any other case) by letter to
Certificateholders (with a copy to the Certificate Registrar, the Credit
Enhancer and each Rating Agency) 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 or, in the case of the purchase by the Master
Servicer of the outstanding Certificates, the Distribution Date on which
such purchase is to be made,
(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 aforesaid, it shall give such notice to the Certificate
Registrar at the time such notice is given to Certificateholders and, if the
Master Servicer is exercising its rights to purchase the outstanding
Certificates, it shall give such notice to each Rating Agency at the time such
notice is given to Certificateholders. As a result of the exercise by the Master
Servicer of its right to purchase the assets of the Trust Fund, the Master
Servicer shall deposit in the Certificate Account, before the Final Distribution
Date in immediately available funds an amount equal to the purchase price for
the assets of the Trust Fund, computed as provided above. As a result of the
exercise by the Master Servicer of its right to purchase the outstanding
Certificates, the Master Servicer shall deposit in an Eligible Account,
established by the Master Servicer on behalf of the Trustee and separate from
the Certificate Account in the name of the Trustee in trust for the registered
holders of the Certificates, before the Distribution Date on which such purchase
is to occur in immediately available funds an amount equal to the purchase price
for the Certificates, computed as above provided, and provide notice of such
deposit to the Trustee and the Credit Enhancer. The Trustee will withdraw from
such account the amount specified in subsection (c) below and distribute such
amount to the Certificateholders as specified in subsection (c) below. The
Master Servicer shall provide to the Trustee written notification of any change
to the anticipated Final Distribution Date as soon as practicable. If the Trust
Fund is not terminated on the anticipated Final Distribution Date, for any
reason, the Trustee shall promptly mail notice thereof to each affected
Certificateholder.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders, the Trustee shall distribute to the Certificateholders (i)
the amount otherwise distributable on such Distribution Date in accordance with
Section 4.02, if not in connection with the Master Servicer's election to
repurchase the assets of the Trust Fund or the outstanding Certificates, or (ii)
if the Master Servicer elected to so repurchase the assets of the Trust Fund or
the outstanding Certificates, an amount equal to the price paid pursuant to
Section 9.01(a), as follows: first, to the Class A Certificates on a pro rata
basis, the outstanding Certificate Principal Balance thereof plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and any
previously unpaid Accrued Certificate Interest and any unpaid Prepayment
Interest Shortfalls and accrued interest thereon at the applicable Pass-Through
Rate, second, to the Credit Enhancer, the amount of any cumulative Insured
Payments by the Credit Enhancer under the Policy to the extent not previously
reimbursed and any other amounts owed to the Credit Enhancer under the Insurance
Agreement, and third, to the Class SB Certificates.
(d) In the event that any Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before the Final
Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders
to be withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Master Servicer (if it exercised its right to
purchase the assets of the Trust Fund), or the Trustee (in any other case) shall
give a second written notice to the remaining Certificateholders to surrender
their Certificates for cancellation and receive the final distribution with
respect thereto. If within six months after the second notice any Certificate
shall not have been surrendered for cancellation, the Trustee shall take
appropriate steps as directed by the Master Servicer to contact the remaining
Certificateholders concerning surrender of their Certificates. The costs and
expenses of maintaining the escrow account and of contacting Certificateholders
shall be paid out of the assets which remain in the escrow account. If within
nine months after the second notice any Certificates shall not have been
surrendered for cancellation, the Trustee shall pay to the Master Servicer all
amounts distributable to the holders thereof and the Master Servicer shall
thereafter hold such amounts until distributed 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.
Section 9.02 Additional Termination Requirements.
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(a) Each of REMIC I and REMIC II, as the case may be, shall be
terminated in accordance with the following additional requirements, unless the
Trustee, the Credit Enhancer and the Master Servicer have received an Opinion of
Counsel (which Opinion of Counsel shall not be an expense of the Trustee or the
Credit Enhancer) to the effect that the failure of any of REMIC I and REMIC II,
as the case may be, to comply with the requirements of this Section 9.02 will
not (i) result in the imposition on the Trust Fund of taxes on "prohibited
transactions," as described in Section 860F of the Code, or (ii) cause any of
REMIC I or REMIC II to fail to qualify as a REMIC at any time that any
Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation
period for each of REMIC I and REMIC II and specify the first day of
such period in a statement attached to the Trust Fund's final Tax Return
pursuant to Treasury regulations 1.860F-1. The Master Servicer also
shall satisfy all of the requirements of a qualified liquidation for
each of REMIC I and REMIC II under Section 860F of the Code and the
regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the
commencement of such 90-day liquidation period and, at or prior to the
time of making of the final payment on the Certificates, the Trustee
shall sell or otherwise dispose of all of the remaining assets of the
Trust Fund in accordance with the terms hereof; and
(iii) If the Master Servicer or the Company is exercising its
right to purchase the assets of the Trust Fund, the Master Servicer
shall, during the 90-day liquidation period and at or prior to the Final
Distribution Date, purchase all of the assets of the Trust Fund for
cash.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Master Servicer as its attorney-in-fact to adopt a
plan of complete liquidation for each of REMIC I and REMIC II at the expense of
the Trust Fund in accordance with the terms and conditions of this Agreement.
ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC Administration.
(a) The REMIC Administrator shall make an election to treat each of
REMIC I and REMIC II as a REMIC under the Code and, if necessary, under
applicable state law. Such election will be made on Form 1066 or other
appropriate federal tax or information return (including Form 8811) or any
appropriate state return for the taxable year ending on the last day of the
calendar year in which the Certificates are issued. The REMIC I Regular
Interests shall be designated as the "regular interests" and the Class R-I
Certificates shall be designated as the sole Class of "residual interests" in
REMIC I. The Class A-1, Class A-2, Class A-3, Class A-4, Class A-5 and Class SB
Certificates shall be designated as the "regular interests" and the Class R-II
Certificates shall be designated as the sole Class of "residual interests" in
REMIC II. The REMIC Administrator and the Trustee shall not permit the creation
of any "interests" (within the meaning of Section 860G of the Code) in REMIC I
or REMIC II other than the REMIC I Regular Interests and the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each
of REMIC I and REMIC II within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate in each
REMIC representing at least a 0.01% Percentage Interest of the Class R
Certificates in each REMIC, and shall be designated as "the tax matters person"
with respect to each of REMIC I and REMIC II in the manner provided under
Treasury regulations section 1.860F-4(d) and Treasury regulations section
301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall (i) act
on behalf of each of REMIC I and REMIC II 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 the REMIC Administrator
without any right of reimbursement therefor. The REMIC Administrator agrees to
indemnify and hold harmless the Trustee with respect to any tax or liability
arising from the Trustee's signing of Tax Returns that contain errors or
omissions. The Trustee and Master Servicer shall promptly provide the REMIC
Administrator with such information as the REMIC Administrator may from time to
time request for the purpose of enabling the REMIC Administrator to prepare Tax
Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a
Class R Certificate such information as is necessary for the application of any
tax relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee and the Trustee shall forward to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of each REMIC created
hereunder.
(f) The Master Servicer and the REMIC Administrator shall take such
actions and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Master Servicer's or the REMIC Administrator's control and
the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status thereof as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). In performing their duties as more specifically
set forth herein, the Master Servicer and the REMIC Administrator shall not
knowingly or intentionally take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action reasonably
within their respective control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any of REMIC I or REMIC II as a
REMIC or (ii) result in the imposition of a tax upon any of REMIC I or REMIC II
(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 Credit
Enhancer and the Master Servicer or the REMIC Administrator, as applicable, has
received an Opinion of Counsel (at the expense of the party seeking to take such
action or, if such party fails to pay such expense, and the Master Servicer or
the REMIC Administrator, as applicable, determines that taking such action is in
the best interest of the Trust Fund and the Certificateholders (and is not
adverse to the interests of the Credit Enhancer), at the expense of the Trust
Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to the Trust Fund created hereunder, endanger such status or,
unless the Master Servicer or the REMIC Administrator or both, as applicable,
determine in its or their sole discretion to indemnify the Trust Fund against
the imposition of such a tax, result in the imposition of such a tax. Wherever
in this Agreement a contemplated action may not be taken because the timing of
such action might result in the imposition of a tax on the Trust Fund, or may
only be taken pursuant to an Opinion of Counsel that such action would not
impose a tax on the Trust Fund, such action may nonetheless be taken provided
that the indemnity given in the preceding sentence with respect to any taxes
that might be imposed on the Trust Fund has been given and that all other
preconditions to the taking of such action have been satisfied. The Trustee
shall not take or fail to take any action (whether or not authorized hereunder)
as to which the Master Servicer or the REMIC Administrator, as applicable, has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event could occur with respect to such action or failure
to take such action. In addition, prior to taking any action with respect to the
Trust Fund or its assets, or causing the Trust Fund to take any action, which is
not expressly permitted under the terms of this Agreement, the Trustee will
consult with the Credit Enhancer and the Master Servicer or the REMIC
Administrator, as applicable, or its designee, in writing, with respect to
whether such action could cause an Adverse REMIC Event to occur with respect to
the Trust Fund, and the Trustee shall not take any such action or cause the
Trust Fund to take any such action as to which the Master Servicer or the REMIC
Administrator, as applicable, has advised it in writing that an Adverse REMIC
Event could occur. The Master Servicer or the REMIC Administrator, as
applicable, may consult with counsel to make such written advice, and the cost
of same shall be borne by the party seeking to take the action not expressly
permitted by this Agreement, but in no event at the expense of the Master
Servicer or the REMIC Administrator. At all times as may be required by the
Code, the Master Servicer or the REMIC Administrator, as applicable, will to the
extent within its control and the scope of its duties more specifically set
forth herein, maintain substantially all of the assets of the REMIC as
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of any REMIC as defined in Section
860G(c) of the Code, on any contributions to any REMIC after the startup day
therefor pursuant to Section 860G(d) of the Code, or any other tax imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Master Servicer, if such tax arises out of or results from
a breach by the Master Servicer of any of its obligations under this Agreement
or the Master Servicer has in its sole discretion determined to indemnify the
Trust Fund against such tax, (ii) to the Trustee, if such tax arises out of or
results from a breach by the Trustee of any of its obligations under this
Article X, or (iii) otherwise against amounts on deposit in the Custodial
Account as provided by Section 3.10 and on the Distribution Date(s) following
such reimbursement the aggregate of such taxes shall be allocated in reduction
of the Accrued Certificate Interest on each Class entitled thereto in the same
manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC
Provisions.
(i) Following the startup day, neither the Master Servicer nor the
Trustee shall accept any contributions of assets to any REMIC unless (subject to
Section 10.01(f)) the Master Servicer, the Credit Enhancer and the Trustee shall
have received an Opinion of Counsel (at the expense of the party seeking to make
such contribution) to the effect that the inclusion of such assets in any REMIC
will not cause any of REMIC I or REMIC II to fail to qualify as a REMIC at any
time that any Certificates are outstanding or subject any such REMIC to any tax
under the REMIC Provisions or other applicable provisions of federal, state and
local law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to
Section 10.01(f)) enter into any arrangement by which any of REMIC I or REMIC II
will receive a fee or other compensation for services nor permit any of REMIC I
or REMIC II to receive any income from assets other than "qualified mortgages"
as defined in Section 860G(a)(3) of the Code or "permitted investments" as
defined in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the
Treasury Regulations, the "latest possible maturity date" by which the principal
balance of each regular interest in each REMIC would be reduced to zero is
February 25, 2036, which is the Distribution Date in the month following the
latest scheduled maturity of any Mortgage Loan.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for the Trust Fund.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of
or substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of the Trust Fund, (iii) the
termination of any REMIC pursuant to Article IX of this Agreement or (iv) a
purchase of Mortgage Loans pursuant to Article II or III of this Agreement) or
acquire any assets for any REMIC, or sell or dispose of any investments in the
Custodial Account or the Certificate Account for gain or accept any
contributions to any REMIC after the Closing Date unless it and the Credit
Enhancer have received an Opinion of Counsel that such sale, disposition,
substitution or acquisition will not (a) affect adversely the status of any of
REMIC I or REMIC II 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 Credit Enhancer,
the Company, the REMIC Administrator and the Master Servicer for any taxes and
costs including, without limitation, any reasonable attorneys fees imposed on or
incurred by the Trust Fund, the Credit Enhancer, the Company or the Master
Servicer, as a result of a breach of the Trustee's covenants set forth in
Article VIII or this Article X. 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
Company, the Credit Enhancer, 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 Credit Enhancer, the Company, the
Master Servicer or the Trustee, as a result of a breach of the REMIC
Administrator's covenants set forth in this Article X with respect to compliance
with the REMIC Provisions, including without limitation, any penalties arising
from the Trustee's execution of Tax Returns prepared by the REMIC Administrator
that contain errors or omissions; provided, however, that such liability will
not be imposed to the extent such breach is a result of an error or omission in
information provided to the REMIC Administrator by the Master Servicer in which
case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the Credit
Enhancer, the Company, the REMIC Administrator and the Trustee for any taxes and
costs (including, without limitation, any reasonable attorneys' fees) imposed on
or incurred by the Trust Fund, the Credit Enhancer, the Company, the REMIC
Administrator or the Trustee, as a result of a breach of the Master Servicer's
covenants set forth in this Article X or in Article III with respect to
compliance with the REMIC Provisions, including without limitation, any
penalties arising from the Trustee's execution of Tax Returns prepared by the
Master Servicer that contain errors or omissions.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time
to time by the Company, the Master Servicer and the Trustee, with the consent of
the Credit Enhancer but without the consent of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein,
which may be inconsistent with any other provisions herein or therein or
to correct any error,
(iii) to modify, eliminate or add to any of its provisions to
such extent as shall be necessary or desirable to maintain the
qualification of REMIC I or REMIC II as REMICs at all times that any
Certificate is outstanding or to avoid or minimize the risk of the
imposition of any tax on the Trust Fund pursuant to the Code that would
be a claim against the Trust Fund, provided that the Trustee has
received an Opinion of Counsel to the effect that (A) such action is
necessary or desirable to maintain such qualification or to avoid or
minimize the risk of the imposition of any such tax and (B) such action
will not adversely affect in any material respect the interests of any
Certificateholder,
(iv) to change the timing and/or nature of deposits into the
Custodial Account or the Certificate Account or to change the name in
which the Custodial Account is maintained, provided that (A) the
Certificate Account Deposit Date shall in no event be later than the
related Distribution Date, (B) such change shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder and (C) such change shall not result
in a reduction of the rating assigned to any Class of Certificates below
the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date (without taking into account the
Policy), after notice to Moody's or as evidenced by a letter from
Standard & Poor's to such effect,
(v) to modify, eliminate or add to the provisions of Section
5.02(g) or any other provision hereof restricting transfer of the Class
R Certificates by virtue of their being the "residual interests" in the
Trust Fund provided that (A) such change shall not result in reduction
of the rating assigned to any such Class of Certificates below the lower
of the then-current rating or the rating assigned to such Certificates
as of the Closing Date, as evidenced by a letter from each Rating Agency
to such effect, and (B) such change shall not (subject to Section
10.01(f)), as evidenced by an Opinion of Counsel (at the expense of the
party seeking so to modify, eliminate or add such provisions), cause the
Trust Fund or any of the Certificateholders (other than the transferor)
to be subject to a federal tax caused by a transfer to a Person that is
not a Permitted Transferee, or
(vi) to make any other provisions with respect to matters or
questions arising under this Agreement or such Custodial Agreement which
shall not be materially inconsistent with the provisions of this
Agreement, provided that such action shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the
interests of any Certificateholder and is authorized or permitted under
Section 11.09(d).
(b) This Agreement or any Custodial Agreement may also be amended from
time to time by the Company, the Master Servicer and the Trustee and the Holders
of Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates affected thereby for the purpose of
adding any provisions to or changing in any manner or eliminating any of the
provisions of this Agreement or such Custodial Agreement or of modifying in any
manner the rights of the Holders of Certificates of such Class; provided,
however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate, 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 and the
Credit Enhancer shall have first received an Opinion of Counsel (subject to
Section 10.01(f) and at the expense of the party seeking such amendment) to the
effect that such amendment or the exercise of any power granted to the Master
Servicer, the Company or the Trustee in accordance with such amendment is
permitted pursuant to the provisions of this Agreement and will not result in
the imposition of a federal tax on the Trust Fund or cause REMIC I or REMIC II
to fail to qualify as REMICs at any time that any Certificate is outstanding.
The Trustee may but shall not be obligated to enter into any amendment pursuant
to this Section that affects its rights, duties and immunities and this
agreement or otherwise; provided however, such consent shall not be unreasonably
withheld.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(e) The Company shall have the option, in its sole discretion, to obtain
and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for the
purpose of protecting the Holders of the Class 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 the 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 the REMIC, (ii) any such reserve fund
shall be owned by the Company, and (iii) amounts transferred by the REMIC to any
such reserve fund shall be treated as amounts distributed by the REMIC to the
Company 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 Company 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
Credit Enhancer, the Master Servicer or the Trustee, as applicable; provided
that the Company obtains (subject to Section 10.01(f)) an Opinion of Counsel
(which need not be an opinion of Independent counsel) to the effect that any
such amendment will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code and (b) any of REMIC I or
REMIC II to fail to qualify as a REMIC at any time that any Certificate is
outstanding.
(f) In addition to the foregoing, any amendment of Section 4.08 of this
Agreement shall require the consent of the Limited Repurchase Right Holder as a
third-party beneficiary of Section 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 Credit Enhancer or Holders of Certificates entitled to at least
25% of the Voting Rights), but only upon direction accompanied by an Opinion of
Counsel to the effect that such recordation materially and beneficially affects
the interests of the Certificateholders or the Credit Enhancer.
(b) For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
------------------------------------------
(a) The death or incapacity of any Certificateholder shall not operate
to terminate this Agreement or the Trust Fund, nor entitle such
Certificateholder's legal representatives or heirs to claim an accounting or to
take any action or proceeding in any court for a partition or winding up of the
Trust Fund, nor otherwise affect the rights, obligations and liabilities of any
of the parties hereto.
(b) No Certificateholder shall have any right to vote (except as
expressly provided herein) or in any manner otherwise control the operation and
management of the Trust Fund, or the obligations of the parties hereto, nor
shall anything herein set forth, or contained in the terms of the Certificates,
be construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee and the Credit Enhancer 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, the Credit Enhancer 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, without regard to the conflict of laws principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
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
Company, 0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000, Xxxxxxxxxxx, Xxxxxxxxx
00000, Attention: President, or such other address as may hereafter be furnished
to the Master Servicer and the Trustee in writing by the Company, (b) in the
case of the Master Servicer, 0000 Xxxxx Xxxxxxx Xxxxxx, Xxxxxxx, Xxxxxxxxxx
00000-0000, Attention: Bond Administration or such other address as may be
hereafter furnished to the Company and the Trustee by the Master Servicer in
writing, (c) in the case of the Trustee, 000 Xxxxxx Xxxxxx, 0xx Xxxxx, Xxxxxxx,
Xxxxx 00000, Attention: RFMSII Series 2006-HSA1 Trust or such other address as
may hereafter be furnished to the Company and the Master Servicer in writing by
the Trustee, (d) in the case of Moody's, 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: ABS Monitoring Department, or such other address as may
hereafter be furnished to the Company, the Trustee and the Master Servicer in
writing by Moody's, (e) in the case of Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 Attention: Mortgage Surveillance or such other address as
may be hereafter furnished to the Company, the Trustee and the Master Servicer
by Standard & Poor's, and (f) in the case of the Credit Enhancer, 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Structured Finance Surveillance, or
such other address as may be hereafter furnished to the Company, the Trustee and
the Master Servicer in writing by the Credit Enhancer. 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 Agency and the Credit Enhancer.
------------------------------------------------
The Company, the Master Servicer or the Trustee, as applicable, shall
notify each Rating Agency, the Credit Enhancer and each Subservicer at such time
as it is otherwise required pursuant to this Agreement to give notice of the
occurrence of, any of the events described in clause (a), (b), (c), (d), (g),
(h), (i) or (j) below or provide a copy to each Rating Agency and the Credit
Enhancer at such time as otherwise required to be delivered pursuant to this
Agreement of any of the statements described in clauses (f) and (i) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) the termination or appointment of a successor Master Servicer or
Trustee or a change in the majority ownership of the Trustee,
(d) the filing of any claim under the Master Servicer's blanket fidelity
bond and the errors and omissions insurance policy required by Section 3.11 or
the cancellation or modification of coverage under any such instrument,
(e) the statement required to be delivered to the Holders of each Class
of Certificates pursuant to Section 4.03,
(f) the statements required to be delivered pursuant to Sections 3.17
and 3.18,
(g) a change in the location of the Custodial Account or the Certificate
Account,
(h) the occurrence of the Final Distribution Date, and
(i) the purchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the
events described in clause (d), (g) or (h) above, the Master Servicer shall
provide prompt written notice to each Rating Agency, the Credit Enhancer and the
Subservicer of any such event known to the Master Servicer.
Section 11.07 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof or the
Credit Enhancer.
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 Company or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Company may deposit such Resecuritized
Certificates into a new REMIC, grantor trust, FASIT or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Company, the Master Servicer and the Trustee; provided, that neither the
Master Servicer nor the Trustee shall withhold their consent thereto if their
respective interests would not be materially adversely affected thereby. To the
extent that the terms of the Supplemental Article do not in any way affect any
provisions of this Agreement as to any of the Certificates initially issued
hereunder, the adoption of the Supplemental Article shall not constitute an
"amendment" of this Agreement.
Each Supplemental Article shall set forth all necessary provisions
relating to the holding of the Resecuritized Certificates by the Trustee, the
establishment of the Restructuring Vehicle, the issuing of various classes of
new certificates by the Restructuring Vehicle and the distributions to be made
thereon, and any other provisions necessary to the purposes thereof. In
connection with each Supplemental Article, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the Restructuring Vehicle
will qualify as a REMIC, grantor trust, FASIT or other entity not subject to
taxation for federal income tax purposes and (ii) the adoption of the
Supplemental Article will not endanger the status of REMIC I or REMIC II as a
REMIC or (subject to Section 10.01(f)) result in the imposition of a tax upon
the Trust Fund (including but not limited to the tax on prohibited transactions
as defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC as set forth in Section 860(G)(d) of the Code).
Section 11.09 [Reserved].
Section 11.10 No Petition.
The Trustee agrees that it will not petition or otherwise invoke or
cause the Trust Fund or any Certificateholders to petition or otherwise invoke
the process of any court or governmental authority for the purpose of
instituting against or joining any other person in instituting against the Trust
Fund any bankruptcy, reorganization, arrangement, insolvency or liquidation
proceeding, or other proceeding under any federal or state bankruptcy or similar
law in connection with any obligation with respect to the Certificates or this
Agreement.
Section 11.11.Third-Party Beneficiary.
The Limited Repurchase Right Holder is an express third-party
beneficiary of Section 4.08 of this Agreement, and shall have the right to
enforce the related provisions of Section 4.08 of this Agreement as if it were a
party hereto.
Section 11.12.Rights of the Credit Enhancer.
(a) The Credit Enhancer is an express third-party beneficiary of this
Agreement.
(b) The Trustee shall provide to the Credit Enhancer copies of any
report, notice, Opinion of Counsel, Officers' Certificate, request for consent
or request for amendment to any document related hereto promptly upon the
Trustee's production or receipt thereof.
(c) Unless a Credit Enhancer Default exists, the Trustee and the Company
shall not agree to any amendment to this Agreement without first having obtained
the prior written consent of the Credit Enhancer.
(d) So long as there does not exist a failure by the Credit Enhancer to
make a required payment under either Policy, the Credit Enhancer shall have the
right to exercise all rights of the Holders of the Class A Certificates under
this Agreement without any consent of such Holders, and such Holders may
exercise such rights only with the prior written consent of the Credit Enhancer,
except as provided herein.
(e) The Credit Enhancer shall not be entitled to exercise any of its
rights hereunder so long as there exists a failure by the Credit Enhancer to
make a required payment under the Policy.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01.Intent of Parties; Reasonableness.
---------------------------------
The Company, the Trustee and the Master Servicer acknowledge and agree
that the purpose of this Article XII is to facilitate compliance by the Company
with the provisions of Regulation AB and related rules and regulations of the
Commission. The Company shall not exercise its right to request delivery of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the 1933 Act, the Exchange Act
and the rules and regulations of the Commission under the 1933 Act and the
Exchange Act. Each of the Master Servicer and the Trustee acknowledges that
interpretations of the requirements of Regulation AB may change over time,
whether due to interpretive guidance provided by the Commission or its staff,
consensus among participants in the mortgage-backed securities markets, advice
of counsel, or otherwise, and agrees to comply with reasonable requests made by
the Company in good faith for delivery of information under these provisions on
the basis of evolving interpretations of Regulation AB. Each of the Master
Servicer and the Trustee shall cooperate reasonably with the Company to deliver
to the Company (including any of its assignees or designees), any and all
disclosure, statements, reports, certifications, records and any other
information necessary in the reasonable, good faith determination of the Company
to permit the Company to comply with the provisions of Regulation AB.
Section 12.02.Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent to the Company as of the
date hereof and on each date on which information is provided to the Company
under Sections 12.01, 12.02(b) or 12.03 that, except as disclosed in writing to
the Company prior to such date: (i) it is not aware and has not received notice
that any default, early amortization or other performance triggering event has
occurred as to any other Securitization Transaction due to any default of the
Trustee; (ii) there are no aspects of its financial condition that could have a
material adverse effect on the performance by it of its trustee obligations
under this Agreement; (iii) there are no material legal or governmental
proceedings pending (or known to be contemplated) against it that would be
material to Certificateholders; (iv) there are no relationships or transactions
(as described in Item 1119(b) of Regulation AB) relating to the Trustee with
respect to the Company or any sponsor, issuing entity, servicer, trustee,
originator, significant obligor, enhancement or support provider or other
material transaction party (as each of such terms are used in Regulation AB)
relating to the Securitization Transaction contemplated by the Agreement, as
identified by the Company to the Trustee in writing as of the Closing Date
(each, a "Transaction Party") that are outside the ordinary course of business
or on terms other than would be obtained in an arm's length transaction with an
unrelated third party, apart from the Securitization Transaction, and that are
material to the investors' understanding of the Certificates; and (v) the
Trustee is not an affiliate of any Transaction Party (as contemplated by Item
1119(a) of Regulation AB). The Company shall notify the Trustee of any change in
the identity of a Transaction Party after the Closing Date.
(b) If so requested by the Company on any date following the Closing
Date, the Trustee shall, within five Business Days following such request,
confirm in writing the accuracy of the representations and warranties set forth
in paragraph (a) of this Section or, if any such representation and warranty is
not accurate as of the date of such confirmation, provide the pertinent facts,
in writing, to the Company. Any such request from the Company shall not be given
more than once each calendar quarter, unless the Company shall have a reasonable
basis for a determination that any of the representations and warranties may not
be accurate.
Section 12.03.Information to be Provided by the Trustee.
(a) For so long as the Company is subject to Exchange Act reporting
requirements with respect to the Trust Fund, for the purpose of satisfying the
Company's reporting obligation under the Exchange Act with respect to any class
of Certificates, the Trustee shall provide to the Company a written description
of (a) any litigation or governmental proceedings pending against the Trustee as
of the last day of each calendar month that would be material to
Certificateholders, and (b) any affiliations or relationships (as described in
Item 1119 of Regulation AB) that develop following the Closing Date between the
Trustee and any Transaction Party of the type described in Section 12.02(a)(iv)
or 12.02(a)(v) as of the last day of each calendar year. Any descriptions
required with respect to legal proceedings, as well as updates to previously
provided descriptions, under this Section 12.03 shall be given no later than
five Business Days prior to the Determination Date following the month in which
the relevant event occurs, and any notices and descriptions required with
respect to affiliations, as well as updates to previously provided descriptions,
under this Section 12.03 shall be given no later than January 31 of the calendar
year following the year in which the relevant event occurs. As of the related
Distribution Date with respect to each Report on Form 10-D with respect to the
Certificates filed by or on behalf of the Depositor, and as of March 15
preceding the date each Report on Form 10-K with respect to the Certificates is
filed, the Trustee will be deemed to represent that any information previously
provided by the Trustee under this Article XII is materially correct and does
not have any material omissions unless the Trustee has provided an update to
such information. The Company will allow the Trustee to review any disclosure
relating to material litigation against the Trustee prior to filing such
disclosure with the Commission to the extent the Company changes the information
provided by the Trustee.
Section 00.00.Xxxxxx on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, for so long as the Company
is subject to Exchange Act reporting requirements with respect to the Trust
Fund, the Trustee shall:
(a) deliver to the Company a report (in form and substance reasonably
satisfactory to the Company) regarding the Trustee's assessment of compliance
with the Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be signed by an authorized officer of the
Trustee, and shall address each of the Servicing Criteria specified on Exhibit O
hereto; and
(b) deliver to the Company a report of a registered public accounting
firm satisfying the requirements of Rule 2-01 of Regulation S-X under the
Securities Act and the Exchange Act that attests to, and reports on, the
assessment of compliance made by the Trustee and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the 1933 Act and the Exchange
Act.
Section 12.05.Indemnification; Remedies.
(a) The Trustee shall indemnify the Company, each affiliate of the
Company, the Master Servicer and each affiliate of the Master Servicer, and the
respective present and former directors, officers, employees and agents of each
of the foregoing, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or
alleged to be contained in any information, report, certification or other
material provided under this Article XII (other than the attestation delivered
under Section 12.04(b)) by the Trustee (collectively, the "Trustee
Information"), or (B) the omission or alleged omission to state in the Trustee
Information a material fact required to be stated in the Trustee Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or
(ii) any failure by the Trustee to deliver any information,
report, certification, or other material when and as required under this Article
XII, other than a failure by the Trustee to deliver an accountants' attestation
under Section 12.04(b);
provided, however, that in no event will the Trustee be liable for any
consequential, indirect or punitive damages pursuant to this Section 12.05(a),
even if advised of the possibility of such damages.
(b) In the case of any failure of performance described in clause (ii)
of Section 12.05(a), the Trustee shall (i) promptly reimburse the Company for
all costs reasonably incurred by the Company in order to obtain the information,
report, certification, accountants' attestation or other material not delivered
as required by the Trustee and (ii) cooperate with the Company to mitigate any
damages that may result from such failure.
(c) The Company and the Master Servicer shall indemnify the Trustee,
each affiliate of the Trustee or each Person who controls the Trustee (within
the meaning of Section 15 of the Securities Act and Section 20 of the Exchange
Act); and the respective present and former directors, officers, employees and
agents of the Trustee, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon (i) any untrue statement of a
material fact contained or alleged to be contained in any information provided
under this Agreement by or on behalf of the Company or Master Servicer for
inclusion in any report filed with Commission under the Exchange Act
(collectively, the "RFC Information"), or (ii) the omission or alleged omission
to state in the RFC Information a material fact required to be stated in the RFC
Information or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that in no event will the Company or the Master Servicer be liable for
any consequential, indirect or punitive damages pursuant to this Section
12.05(c), even if advised of the possibility of such damages.
IN WITNESS WHEREOF, the Company, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the date and year first above written.
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
[Seal]
By:/s/Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Vice President
Attest: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Vice President
RESIDENTIAL FUNDING CORPORATION
[Seal]
By: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Associate
Attest: /s/Xxx Xxxxxxxx
Name: Xxx Xxxxxxxx
Title: Associate
JPMORGAN CHASE BANK, N.A.,
as Trustee
[Seal]
By: /s/Xxxxxx Xxxxxx
Name: Xxxxxx Xxxxxx
Title: Asst. Vice President
Attest: /s/ Xxxxxxxx Xxxxxxx
Name: Xxxxxxxx Xxxxxxx
Title: Trust Officer
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 27th day of January, 2006 before me, a notary public in and for
said State, personally appeared__Tim Jacobson__, known to me to be a(n)_Vice
President__ of Residential Funding Mortgage Securities II, Inc., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Xxx Xxxxx
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 27th day of January, 2006 before me, a notary public in and for
said State, personally appeared___Benita Bjorgo__, known to me to be
a(n)__Associate___ of Residential Funding Corporation, one of the corporations
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Xxx Xxxxx
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF XXXXXX )
On the 27th day of January, 2006 before me, a notary public in and for
said State, personally appeared ___Joanne Murray_____, known to me to be a(n)
___Asst. V.P.___ of JPMorgan Chase Bank, N.A., a national banking association
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/Xxx Xxxxx
Notary Public
[Notarial Seal]
EXHIBIT A-1
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.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
Certificate No. % Pass-Through Rate
Class [A-__] Senior
Date of Pooling and Servicing
Agreement:
January 1, 2006 Percentage Interest: ______%
Aggregate Initial Certificate Principal
Balance
of Class [A-__] Certificates
First Distribution Date:
February 27, 2006 $______________
Initial Certificate Principal
Master Servicer: Balance of this Certificate
Residential Funding $___________________
Corporation
Assumed Final
Distribution Date: CUSIP
[-------------]
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
SERIES 2006-HSA1
evidencing a percentage interest in any distributions allocable to the Class A-
Certificates with respect to the Trust Fund consisting primarily of a pool of
closed end, fixed interest rate, fully-amortizing and balloon payment, one- to
four-family, primarily second lien home equity mortgage loans sold by
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Funding
Mortgage Securities II, Inc., the Master Servicer, the Trustee referred to below
or GMAC Mortgage Group, Inc. or any of their affiliates. Neither this
Certificate nor the underlying Mortgage Loans are guaranteed or insured by any
governmental agency or instrumentality or by Residential Funding Mortgage
Securities II, Inc., the Master Servicer, the Trustee or GMAC Mortgage Group,
Inc. or any of their affiliates. None of Residential Funding Mortgage Securities
II, Inc., the Master Servicer, GMAC Mortgage Group, Inc. or any of their
affiliates will have any obligation with respect to any certificate or other
obligation secured by or payable from payments on the Certificates.
This certifies that CEDE & CO. 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 closed end, fixed interest rate,
fully-amortizing and balloon payment, one- to four-family, primarily second lien
home equity mortgage loans (the "Mortgage Loans"), formed and sold by
Residential Funding Mortgage Securities II, Inc. (hereinafter called the
"Company", which term includes any successor entity under the Agreement referred
to below). The Trust Fund was created pursuant to a Pooling and Servicing
Agreement dated as specified above (the "Agreement") among the Company, the
Master Servicer and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"), a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution, or, for so long as
this Certificate is a Book-Entry Certificate, as of the Business Day immediately
preceding 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. The Pass-Through Rate on this Certificate is subject to the
Net WAC Rate set forth in the Agreement.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Home Equity Loan 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.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of certain expenses
incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
to (i) purchase at a price determined as provided in the Agreement all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
purchase in whole, but not in part, all of the Certificates from the Holders
thereof; provided, that any such option may only be exercised if the Pool
Principal Balance of the Mortgage Loans as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January 27, 2006 JPMORGAN CHASE BANK, N.A., as Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A., as Certificate
Registrar
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto __________________________________________________________________(Please
print or typewrite name and address including postal zip code of assignee) a
Percentage Interest evidenced by the within Home Equity Loan Pass-Through
Certificate and hereby authorizes the transfer of registration of such interest
to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following
address:________________________________
Dated:__________________ _______________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________ for the account of ___________
account number _____________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________.
This information is provided by ____________, the assignee named above,
or_________________, as its agent.
EXHIBIT A-2
FORM OF CLASS SB CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A 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.
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 HEREIN SHALL BE MADE TO ANY PLAN
SUBJECT TO TITLE I OF ERISA OR SECTION 4975 OF THE CODE, ANY PERSON ACTING,
DIRECTLY OR INDIRECTLY, ON BEHALF OF ANY SUCH PLAN OR ANY PERSON ACQUIRING SUCH
CERTIFICATES WITH "PLAN ASSETS" OF A PLAN 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 OF THIS CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN ANY PROHIBITED TRANSACTION
UNDER ERISA OR SECTION 4975 OF THE CODE 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.
Certificate No. 1
Class SB Subordinate
Date of Pooling and Servicing Percentage Interest: 100%
and Cut-off Date:
January 1, 2006
First Distribution Date: Aggregate Initial Certificate Principal Balance
February 27, 2006 of the Class SB Certificates:
$-----------
Master Servicer: Initial Certificate Principal Balance
Residential Funding Corporation of this Certificate: $___________
Final Scheduled Distribution Date: CUSIP: ____________
[___________]
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 2006-HSA1
evidencing a percentage interest in the distributions allocable
to the Class SB Certificates with respect to a Trust Fund
consisting primarily of a pool closed end, fixed interest rate,
fully-amortizing and balloon payment, one-to-four-family,
primarily second lien home equity mortgage loans sold by
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
This Certificate is payable solely from the assets of the Trust Fund,
and does not represent an obligation of or interest in Residential Funding
Mortgage Securities II, 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 Funding Mortgage Securities II, Inc., the Master Servicer, the
Trustee or any of their affiliates. None of Residential Funding Mortgage
Securities II, Inc., 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 PRAMWAVE & CO. is the registered owner of the
Percentage Interest evidenced by this Certificate in certain distributions with
respect to the Trust Fund consisting primarily of an interest in a pool of
closed end, fixed interest rate, fully-amortizing and balloon payment,
one-to-four-family, primarily second lien home equity mortgage loans (the
"Mortgage Loans"), sold by Residential Funding Mortgage Securities II, Inc.
(hereinafter called the "Company ," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Company, the Master Servicer and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution (the "Record Date"),
from the Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class 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 City and State of New York. The Notional
Amount of this Class SB Certificate as of any date of determination will be
calculated as described in the Agreement. The Notional Amount hereof will be
reduced by interest shortfalls on the Mortgage Loans including any Prepayment
Interest Shortfalls not covered by Excess Interest, and the interest portion of
any Realized Losses incurred in respect thereof. This Class SB Certificate will
accrue interest at the Pass-Through Rate on the Notional Amount as indicated in
the definition of Accrued Certificate Interest in the Agreement. This Class SB
Certificate will not accrue interest on its Certificate Principal Balance.
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 Company may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Company that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Company, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws.
No transfer of this Certificate or any interest herein shall be made
unless the Company, the Trustee and the Master Servicer are provided with (i) an
Opinion of Counsel which establishes to the satisfaction of the Company, the
Trustee and the Master Servicer that the purchase of this Certificate is
permissible under applicable law, will not constitute or result in any
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Company, 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 Company, the Master
Servicer, the Trustee or the Trust Fund, or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Home Equity Loan 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.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of certain expenses
incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee, the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
(i) to purchase, at a price determined as provided in the Agreement, all
remaining Mortgage Loans and all property acquired in respect of any Mortgage
Loan or (ii) to purchase in whole, but not in part, all of the Class A and Class
SB Certificates from the Holders thereof; provided, that any such option may
only be exercised if the aggregate principal balance of the Mortgage Loans as of
the Distribution Date upon which the proceeds of any such purchase are
distributed is less than ten percent of the Cut-off Date Principal Balance of
the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January 27, 2006 JPMORGAN CHASE BANK, N.A., as Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A., as Certificate
Registrar
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto __________________________________________________________________(Please
print or typewrite name and address including postal zip code of assignee) a
Percentage Interest evidenced by the within Home Equity Loan Pass-Through
Certificate and hereby authorizes the transfer of registration of such interest
to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new
Certificate of a like denomination and Class, to the above named assignee and
deliver such Certificate to the following
address:________________________________
Dated:__________________ _______________________________
Signature by or on behalf of assignor
_________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _______________ for the account of ___________
account number _____________, or, if mailed by check, to ___________________.
Applicable statements should be mailed to ___________________.
This information is provided by ____________, the assignee named above,
or_________________, as its agent.
EXHIBIT B
FORM OF CLASS R-[I][II] CERTIFICATE
THE CLASS [R-I] [R-II] 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-I] [R-II] CERTIFICATE IS SUBORDINATE TO THE CLASS A 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 MAY BE MADE TO ANY PERSON, UNLESS THE TRANSFEREE
PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(f) OF THE AGREEMENT OR
AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE COMPANY AND THE
TRUSTEE THAT THE PURCHASE OF THIS CERTIFICATE WILL NOT CONSTITUTE OR RESULT IN A
NON-EXEMPT PROHIBITED TRANSACTION UNDER SECTION 406 OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
AND WILL NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY
OBLIGATION OR LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER
AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE
OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES, OR ANY
AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN INSTRUMENTALITY
WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO TAX AND EXCEPT
FOR XXXXXXX MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT SELECTED BY SUCH
GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR
ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C) ANY ORGANIZATION
(OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE (INCLUDING
THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS TAXABLE
INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN SECTION
1381(a)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER SECTION
775(a) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B),
(C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), OR
(F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE OF SUCH TRANSFER IS
TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
Class [R-I][R-II] Certificate No.
Residual
Date of Pooling and Servicing
Agreement and Cut-off Date:
January 1, 2006 Percentage Interest: %
----------------
First Distribution Date:
February 27, 2006 Initial Certificate
Principal Balance of this Certificate: $0.00
Master Servicer:
Residential Funding Corporation
Assumed Final Distribution Date: CUSIP: ____________
[_____________]
HOME EQUITY LOAN PASS-THROUGH CERTIFICATE
SERIES 2006-HSA1
evidencing a percentage interest in any distributions allocable to the Class
[R-I][R-II] Certificates with respect to the Trust Fund consisting primarily of
a pool of closed end, fixed interest rate, fully-amortizing and balloon payment,
one- to four-family, primarily second lien home equity mortgage loans sold by
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
This Certificate is payable solely from the assets of the Trust Fund and
does not represent an obligation of or interest in Residential Funding Mortgage
Securities II, Inc., the Master Servicer, the Trustee referred to below, GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Funding Mortgage Securities II,
Inc., the Master Servicer, the Trustee, GMAC Mortgage Group, Inc. or any of
their affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group,
Inc. or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that RESIDENTIAL FUNDING CORPORATION is the registered
owner of the Percentage Interest evidenced by this Certificate (as specified
above) in certain distributions with respect to the Trust Fund consisting
primarily of a pool of closed end, fixed interest rate, fully-amortizing and
balloon payment, one- to four-family, primarily second lien home equity mortgage
loans (the "Mortgage Loans") sold by Residential Funding Mortgage Securities II,
Inc. (hereinafter called the "Company," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Company, the Master Servicer and JPMorgan Chase Bank, N.A., as trustee (the
"Trustee"), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on
the 25th day of each month or, if such 25th day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the last day (or if such last day is not
a Business Day, the Business Day immediately preceding such last day) of the
month immediately preceding the month of such distribution, or, for so long as
this Certificate is a Book-Entry Certificate, as of the Business Day immediately
preceding 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 required to be distributed to
Holders of Class [R-I][R-II] Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be
bound by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Holder of
this Certificate may have additional obligations with respect to this
Certificate, including tax liabilities.
No transfer of this Class R-[I][II] Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee or the Company may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Company that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Company, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws.
No transfer of this Certificate or any interest herein shall be made
unless the Company, the Trustee and the Master Servicers are provided with (i)
an Opinion of Counsel which establishes to the satisfaction of the Company, the
Trustee and the Master Servicers that the purchase of this Certificate is
permissible under applicable law, will not constitute or result in any
prohibited transaction under ERISA or Section 4975 of the Code and will not
subject the Company, 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 Company, the Master
Servicer, the Trustee or the Trust Fund, or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates
issued in several Classes designated as Home Equity Loan 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.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of certain expenses
incurred by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Company, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with
the laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
from the Trust Fund of all remaining Mortgage Loans and all property acquired in
respect of such Mortgage Loans, thereby effecting early retirement of the
Certificates. The Agreement permits, but does not require, the Master Servicer
(i) to purchase, at a price determined as provided in the Agreement, all
remaining Mortgage Loans and all property acquired in respect of any Mortgage
Loan or (ii) to purchase in whole, but not in part, all of the Certificates from
the Holders thereof; provided, that any such option may only be exercised if the
Pool Principal Balance of the Mortgage Loans as of the Distribution Date upon
which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: January 27, 2006 JPMORGAN CHASE BANK, N.A., as Trustee
By:
----------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class A- Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A., as Certificate
Registrar
By:
----------------------------------------
Authorized Signatory
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto __________________________________________________________________(Please
print or typewrite name and address including postal zip code of assignee) a
Percentage Interest evidenced by the within Home Equity Loan 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 CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time
to time, the "Agreement"), dated as of January 1, 2006, by and among JPMORGAN
CHASE BANK, N.A., as Trustee (including its successors under the Pooling
Agreement defined below, the "Trustee"), RESIDENTIAL FUNDING MORTGAGE SECURITIES
II, INC. (together with any successor in interest, the "Company"), RESIDENTIAL
FUNDING CORPORATION, as master servicer (together with any successor in interest
or successor under the Pooling Agreement referred to below, the "Master
Servicer"), and XXXXX FARGO BANK, NATIONAL ASSOCIATION (together with any
successor in interest or any successor appointed hereunder, the "Custodian").
W I T N E S S E T H T H A T :
- - - - - - - - - -- - - - -
WHEREAS, the Company, the Master Servicer, and the Trustee have
entered into a Pooling and Servicing Agreement, dated as of January 1, 2006,
relating to the issuance of Residential Funding Mortgage Securities II, Inc.,
Home Equity Loan Pass-Through Certificates, Series 2006-HSA1 (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 Mortgage
Files. The Custodian, as the duly appointed agent of the Trustee for these
purposes, acknowledges receipt of the Mortgage Files relating to the Mortgage
Loans identified on the schedule attached hereto (the "Mortgage Files") and
declares that it holds and will hold the Mortgage Files as agent solely for the
Trustee, in trust, for the use and benefit of all present and future
Certificateholders.
Section 2.2. Recordation of Assignments. If any Mortgage 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 Mortgage Files.
------------------------
(a) On or prior to the Closing Date, the Custodian shall deliver
to the Trustee and the Credit Enhancer an Initial Certification in the form
annexed hereto as Exhibit One evidencing receipt of a Mortgage 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 on Schedule A to Exhibit
One.
(b) Within 45 days after the Closing Date, the Custodian agrees,
for the benefit of Certificateholders, to review each Mortgage 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 Mortgage 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 and the Credit Enhancer, to review each such document, and
upon the written request of the Trustee to deliver to the Trustee and the Credit
Enhancer 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 Mortgage 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, the Trustee and the Credit Enhancer.
(c) Upon receipt of all documents required to be in the Mortgage
Files the Custodian shall deliver to the Trustee and the Credit Enhancer a Final
Certification in the form annexed hereto as Exhibit Three evidencing the
completeness of the Mortgage 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 Mortgage 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 Mortgage File, the Custodian shall give prompt
written notice to the Company, the Master Servicer, the Trustee and the Credit
Enhancer.
Section 2.5. Custodian to Cooperate; Release of Mortgage 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 Mortgage File. The Custodian
agrees, upon receipt of such Request for Release, promptly to release to the
Master Servicer the related Mortgage File.
Upon receipt of a Request for Release from the Master Servicer,
signed by a Servicing Officer, 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
promptly release to the Master Servicer the related Mortgage 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 Mortgage 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 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 Mortgage File or
such document to the Master Servicer. All Mortgage 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 Mortgage 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 Mortgage File or such document has been delivered to an attorney, or to
a public trustee or other public official as required by law, for purposes of
initiating or pursuing legal action or other proceedings for the foreclosure of
the Mortgaged Property either judicially or non-judicially, and the Master
Servicer has delivered to the Custodian an updated Request for Release signed by
a Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Immediately upon receipt of any Mortgage File returned to the
Custodian by the Master Servicer, the Custodian shall deliver a signed
acknowledgement to the Master Servicer, confirming receipt of such Mortgage
File.
Upon the written request of the Master Servicer, the Custodian
will send to the Master Servicer copies of any documents contained in the
Mortgage 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 Mortgage File and, for all
purposes, shall be considered a part of such Mortgage 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
Mortgage 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
Mortgage File shall be delivered by the Custodian to the Company or the Master
Servicer or otherwise released from the possession of the Custodian.
The Master Servicer shall promptly notify the Custodian in
writing if it shall no longer be a member of MERS, or if it otherwise shall no
longer be capable of registering and recording Mortgage Loans using MERS. In
addition, the Master Servicer shall (i) promptly notify the Custodian in writing
when a MERS Mortgage Loan is no longer registered with and recorded under MERS
and (ii) concurrently with any such deregistration of a MERS Mortgage Loan,
prepare, execute and record an original assignment from MERS to the Trustee and
deliver such assignment to the Custodian.
Section 3.2. Indemnification. The Company hereby agrees to
indemnify and hold the Custodian harmless from and against all claims,
liabilities, losses, actions, suits or proceedings at law or in equity, or any
other expenses, fees or charges of any character or nature, which the Custodian
may incur or with which the Custodian may be threatened by reason of its acting
as custodian under this Agreement, including indemnification of the Custodian
against any and all expenses, including attorney's fees if counsel for the
Custodian has been approved by the Company, and the cost of defending any
action, suit or proceedings or resisting any claim. Notwithstanding the
foregoing, it is specifically understood and agreed that in the event any such
claim, liability, loss, action, suit or proceeding or other expense, fee or
charge shall have been caused by reason of any negligent act, negligent failure
to act or willful misconduct on the part of the Custodian, or which shall
constitute a willful breach of its duties hereunder, the indemnification
provisions of this Agreement shall not apply.
Section 3.3. Custodian May Own Certificates. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.
Section 3.4. Master Servicer to Pay Custodian's Fees and
Expenses. The Master Servicer covenants and agrees to pay to the Custodian from
time to time, and the Custodian shall be entitled to, reasonable compensation
for all services rendered by it in the exercise and performance of any of the
powers and duties hereunder of the Custodian, and the Master Servicer shall pay
or reimburse the Custodian upon its request for all reasonable expenses,
disbursements and advances incurred or made by the Custodian in accordance with
any of the provisions of this Agreement (including the reasonable compensation
and the expenses and disbursements of its counsel and of all persons not
regularly in its employ), except any such expense, disbursement or advance as
may arise from its negligence or bad faith.
Section 3.5. Custodian May Resign; Trustee May Remove Custodian.
The Custodian may resign from the obligations and duties hereby imposed upon it
as such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage 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 Mortgage 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 may remove the Custodian at any time. In such event,
the Trustee shall appoint, or petition a court of competent jurisdiction to
appoint, a successor Custodian hereunder. Any successor Custodian shall be a
depository institution subject to supervision or examination by federal or state
authority and shall be able to satisfy the other requirements contained in
Section 3.7 and shall be unaffiliated with the Master Servicer or the Company.
Any resignation or removal of the Custodian and appointment of a
successor Custodian pursuant to any of the provisions of this Section 3.5 shall
become effective upon acceptance of appointment by the successor Custodian. The
Trustee shall give prompt notice to the Company and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company and the
Master Servicer.
Section 3.6. Merger or Consolidation of Custodian. Any Person
into which the Custodian may be merged or converted or with which it may be
consolidated, or any Person resulting from any merger, conversion or
consolidation to which the Custodian shall be a party, or any Person succeeding
to the business of the Custodian, shall be the successor of the Custodian
hereunder, without the execution or filing of any paper or any further act on
the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided that such successor is a depository institution
subject to supervision or examination by federal or state authority and is able
to satisfy the other requirements contained in Section 3.7 and is unaffiliated
with the Master Servicer or the Company.
Section 3.7. Representations of the Custodian. The Custodian
hereby represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.
ARTICLE IV
Compliance with Regulation AB
Section 4.1. Intent of the Parties; Reasonableness. The parties
hereto acknowledge and agree that the purpose of this Article IV is to
facilitate compliance by the Company with the provisions of Regulation AB and
related rules and regulations of the Commission. The Company shall not exercise
its right to request delivery of information or other performance under these
provisions other than in good faith, or for purposes other than compliance with
the Securities Act, the Exchange Act and the rules and regulations of the
Commission under the Securities Act and the Exchange Act. Each of the parties
hereto acknowledges that interpretations of the requirements of Regulation AB
may change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Company in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. The
Custodian shall cooperate reasonably with the Company to deliver to the Company
(including any of its assignees or designees), any and all disclosure,
statements, reports, certifications, records and any other information necessary
in the reasonable, good faith determination of the Company to permit the Company
to comply with the provisions of Regulation AB.
Section 4.2. Additional Representations and Warranties of the
Custodian.
(a) The Custodian hereby represents and warrants that the
information set forth under the caption "Pooling and Servicing Agreement -
Custodial Arrangements" in the Prospectus Supplement (the "Custodian
Disclosure") in the Preliminary Prospectus Supplement dated January 19, 2006 and
the Prospectus Supplement dated January 25, 2006 relating to the Certificates
does not contain any untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading.
(b) The Custodian shall be deemed to represent to the Company as
of the date hereof and on each date on which information is provided to the
Company under Section 4.3 that, except as disclosed in writing to the Company
prior to such date: (i) there are no aspects of its financial condition that
could have a material adverse effect on the performance by it of its Custodian
obligations under this Agreement or any other Securitization Transaction as to
which it is the custodian; (ii) there are no material legal or governmental
proceedings pending (or known to be contemplated) against it; and (iii) there
are no affiliations, relationships or transactions relating to the Custodian
with respect to the Company or any sponsor, issuing entity, servicer, trustee,
originator, significant obligor, enhancement or support provider or other
material transaction party (as such terms are used in Regulation AB) relating to
the Securitization Transaction contemplated by the Agreement, as identified by
the Company to the Custodian in writing as of the Closing Date (each, a
"Transaction Party").
(c) If so requested by the Company on any date following the
Closing Date, the Custodian shall, within five Business Days following such
request, confirm in writing the accuracy of the representations and warranties
set forth in paragraph (a) of this Section or, if any such representation and
warranty is not accurate as of the date of such confirmation, provide reasonably
adequate disclosure of the pertinent facts, in writing, to the requesting party.
Any such request from the Company shall not be given more than once each
calendar quarter, unless the Company shall have a reasonable basis for a
determination that any of the representations and warranties may not be
accurate.
Section 4.3. Additional Information to Be Provided by the
Custodian. For so long as the Certificates are outstanding, for the purpose of
satisfying the Company's reporting obligation under the Exchange Act with
respect to any class of Certificates, the Custodian shall (a) notify the Company
in writing of any material litigation or governmental proceedings pending
against the Custodian that would be material to Certificateholders, and (b)
provide to the Company a written description of such proceedings. Any notices
and descriptions required under this Section 4.3 shall be given no later than
five Business Days prior to the Determination Date following the month in which
the Custodian has knowledge of the occurrence of the relevant event. As of the
date the Company or Master Servicer files each Report on Form 10-D or Form 10-K
with respect to the Certificates, the Custodian will be deemed to represent that
any information previously provided under this Section 4.3, if any, is
materially correct and does not have any material omissions unless the Custodian
has provided an update to such information.
Section 4.4. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Custodian shall:
(a) deliver to the Company a report (in form and substance
reasonably satisfactory to the Company) regarding the Custodian's assessment of
compliance with the Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be addressed to the Company and signed
by an authorized officer of the Custodian, and shall address each of the
Servicing Criteria specified on a certification substantially in the form of
Exhibit Five hereto; and
(b) deliver to the Company a report of a registered public
accounting firm reasonably acceptable to the Company that attests to, and
reports on, the assessment of compliance made by the Custodian and delivered
pursuant to the preceding paragraph. Such attestation shall be in accordance
with Rules 1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and
the Exchange Act.
Section 4.5. Indemnification; Remedies.
(a) The Custodian shall indemnify the Company, each affiliate of
the Company, the Master Servicer and each broker dealer acting as underwriter,
placement agent or initial purchaser of the Certificates or each Person who
controls any of such parties (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i)(A) any untrue statement of a material fact contained or
alleged to be contained in the Custodian Disclosure and any information, report,
certification, accountants' attestation or other material provided under this
Article IV by or on behalf of the Custodian (collectively, the "Custodian
Information"), or (B) the omission or alleged omission to state in the Custodian
Information a material fact required to be stated in the Custodian Information
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or
(ii) any failure by the Custodian to deliver any information, report,
certification, accountants' attestation or other material when and as required
under this Article IV.
(b) In the case of any failure of performance described in clause
(ii) of Section 4.5(a), the Custodian shall promptly reimburse the Company for
all costs reasonably incurred by the Company in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required by the Custodian.
ARTICLE V
Miscellaneous Provisions
Section 5.1. Notices. All notices, requests, consents and demands
and other communications required under this Agreement or pursuant to any other
instrument or document delivered hereunder shall be in writing and, unless
otherwise specifically provided, may be delivered personally, by telegram or
telex, or by registered or certified mail, postage prepaid, return receipt
requested, at the addresses specified on the signature page hereof (unless
changed by the particular party whose address is stated herein by similar notice
in writing), in which case the notice will be deemed delivered when received.
Section 5.2. Amendments. No modification or amendment of or
supplement to this Agreement shall be valid or effective unless the same is in
writing and signed by all parties hereto, and neither the Company, the Master
Servicer nor the Trustee shall enter into any amendment of or supplement to this
Agreement except as permitted by the Pooling Agreement. The Trustee shall give
prompt notice to the Custodian of any amendment or supplement to the Pooling
Agreement and furnish the Custodian with written copies thereof.
Section 5.3. Governing Law. This Agreement 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 5.4. Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer and at its expense on
direction by the Trustee (pursuant to the request of holders of Certificates
evidencing undivided interests in the aggregate of not less than 25% of the
Trust Fund), but only upon direction accompanied by an Opinion of Counsel
reasonably satisfactory to the Master Servicer to the effect that the failure to
effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 5.5. Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall be for
any reason whatsoever held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
IN WITNESS WHEREOF, this Agreement is executed as of the date
first above written.
Address: JPMORGAN CHASE BANK, N.A.,
as Trustee
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
By:
--------------------------------
Name:
Title:
Address: RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
By:
--------------------------------
Name:
Title:
Address: RESIDENTIAL FUNDING CORPORATION,
as Master Servicer
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
By:
--------------------------------
Name:
Title:
Address:
XXXXX FARGO BANK, NATIONAL ASSOCIATION
Mortgage Document Custody
One Xxxxxxxx Xxxxxxxxx, Xxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxx 00000
By:
--------------------------------
Name: X.X. Xxxxxx
Title: Assistant Vice President
STATE OF TEXAS )
) ss.:
COUNTY OF XXXXXX )
On the 27th day of January, 2006, before me, a notary public in
and for said State, personally appeared __________________________, known to me
to be a(n) ___________________ of JPMorgan Chase Bank, N.A., a national banking
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 27th day of January, 2006, before me, a notary public in
and for said State, personally appeared X.X. Xxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank, National Association, a national
association that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national association, and acknowledged
to me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 27th day of January, 2006, before me, a notary public in
and for said State, personally appeared_____________, known to me to be a(n)
______________ of Residential Funding Mortgage Securities II, 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 27th day of January, 2006, before me, a notary public in
and for said State, personally appeared______________, known to me to be a(n)
____________ of Residential Funding Corporation, one of the corporations that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
[Notarial Seal]
EXHIBIT ONE
FORM OF CUSTODIAN INITIAL CERTIFICATION
January 27, 2006
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: RFMSII Series 2006-HSA1 Trust
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Custodial Agreement dated as of January 1, 2006, by and among JPMorgan
Chase Bank, N.A., Residential Funding Mortgage Securities II, Inc.,
Residential Funding Corporation and Xxxxx Fargo Bank, National
Association, relating to Home Equity Loan Pass-Through Certificates,
Series 2006-HSA1
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 Mortgage File
(which contains an original Mortgage Note or an original lost note affidavit
with a copy of the related Mortgage Note) to the extent required in Section
2.01(b) of the Pooling Agreement with respect to each Mortgage Loan listed in
the Mortgage Loan Schedule, with any exceptions listed on Schedule A attached
hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Title:
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
[date]
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: RFMSII Series 2006-HSA1 Trust
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Custodial Agreement dated as of January 1, 2006, by and among JPMorgan
Chase Bank, N.A., Residential Funding Mortgage Securities II, Inc.,
Residential Funding Corporation and Xxxxx Fargo Bank, National
Association, relating to Home Equity Loan Pass-Through Certificates,
Series 2006-HSA1
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 Mortgage 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 Mortgage File and the Mortgage Loan Schedule
and has determined that: all required documents have been executed and received
and that such documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Title:
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
[date]
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: RFMSII Series 2006-HSA1 Trust
Financial Guaranty Insurance Company
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Custodial Agreement dated as of January 1, 2006, by and among JPMorgan
Chase Bank, N.A., Residential Funding Mortgage Securities II, Inc.,
Residential Funding Corporation and Xxxxx Fargo Bank, National
Association, relating to Home Equity Loan Pass-Through Certificates,
Series 2006-HSA1
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 Mortgage File with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule and it has reviewed the Mortgage File and the Mortgage Loan Schedule
and has determined that: all required documents referred to in Section 2.01(b)
of the Pooling Agreement have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
---------------------------------------
Name:
Title:
EXHIBIT FOUR
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement Dated:
Series #:
Account #:
Pool #:
Loan #:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
Residential Funding Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents
being enclosed with a copy of this form. You should retain this form for your
files in accordance with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name
Title
Date
-------------------------------------------------------------------------- ------------------
Applicable
Servicing
Servicing Criteria Criteria
-------------------------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Reference Criteria
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
General Servicing Considerations
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted
to monitor the third party's performance and
compliance with such servicing activities.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to
maintain a back-up servicer for the pool assets are
maintained.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing
function throughout the reporting period in the amount
of coverage required by and otherwise in accordance
with the terms of the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
Cash Collection and Administration
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(2)(i) Payments on pool assets are deposited into the
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 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, 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 Commission as required by its rules and
regulations; and (D) agree with investors' or the
trustee's records as to the total unpaid principal
balance and number of pool assets serviced by the
servicer.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within
two business days to the servicer's investor records,
or such other number of days specified in the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(3)(iv) Amounts remitted to investors per 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 assets is maintained as |X|
required by the transaction agreements or related
asset pool documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(ii) Pool assets and related documents are safeguarded as |X|
required by the transaction agreements
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance
with any conditions or requirements in the transaction
agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made
in accordance with the related pool asset documents
are posted to the servicer's obligor records
maintained no more than two business days after
receipt, or such other number of days specified in the
transaction agreements, and allocated to principal,
interest or other items (e.g., escrow) in accordance
with the related pool asset documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(v) The servicer's records regarding the pool assets agree
with the servicer's records with respect to an
obligor's unpaid principal balance.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an
obligor's pool asset (e.g., loan modifications or
re-agings) are made, reviewed and approved by
authorized personnel in accordance with the
transaction agreements and related pool asset
documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with
the timeframes or other requirements established by
the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a pool asset is delinquent in
accordance with the transaction agreements. Such
records are maintained on at least a monthly basis, or
such other period specified in the transaction
agreements, and describe the entity's activities in
monitoring delinquent pool assets including, for
example, phone calls, letters and payment rescheduling
plans in cases where delinquency is deemed temporary
(e.g., illness or unemployment).
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for
pool assets with variable rates are computed based on
the related pool asset documents.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such
as escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's pool asset documents, on
at least an annual basis, or such other period
specified in the transaction agreements; (B) interest
on such funds is paid, or credited, to obligors in
accordance with applicable pool asset documents and
state laws; and (C) such funds are returned to the
obligor within 30 calendar days of full repayment of
the related pool asset, or such other number of days
specified in the transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments,
provided that such support has been received by the
servicer at least 30 calendar days prior to these
dates, or such other number of days specified in the
transaction agreements.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
1122(d)(4)(xii) Any late payment penalties in connection with any
payment to be made on behalf of an obligor are paid
from the servicer's funds and not charged to the
obligor, unless the late payment was due to the
obligor's error or omission.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
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.
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
----------------- -------------------------------------------------------- ------------------
EXHIBIT D
MORTGAGE LOAN SCHEDULE
(AVAILABLE UPON REQUEST)
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 Corporation
Authorized Signature
******************************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents
being enclosed with a copy of this form. You should retain this form for your
files in accordance with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name
Title
Date
EXHIBIT F
[RESERVED]
EXHIBIT G-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he/she is [Title of Officer] of [Name of Owner] (record
or beneficial owner of the Home Equity Loan Pass-Through Certificates, Series
2006-HSA1 Class [R-I][R-II] (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/she makes this affidavit and agreement.
2. That the Owner (i) is not and will not be, as of January 27,
2006, a "disqualified organization" or an electing large partnership as of [date
of transfer] within the meanings of Section 860E(e)(5) and Section 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-I][R-II] Certificates, and (iii)
is acquiring the Class [R-I][R-II] 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-I][R-II] Certificates to disqualified organizations or
electing large partnerships, under the Code, that applies to all transfers of
Class [R-I][R-II] 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-I][R-II] Certificates may be "noneconomic
residual interests" within the meaning of Treasury Regulations promulgated
pursuant to the Code and that the transferor of a noneconomic residual interest
will remain liable for any taxes due with respect to the income on such residual
interest, unless no significant purpose of the transfer was to impede the
assessment or collection of tax.
4. That the Owner is aware of the tax imposed on a "pass-through
entity" holding Class [R-I][R-II] Certificates if the pass-through entity is an
electing large partnership under Section 775 of the Code if at any time during
the taxable year of the pass-through entity a disqualified organization is the
record holder of an interest in such entity. (For this purpose, a "pass through
entity" includes a regulated investment company, a real estate investment trust
or common trust fund, a partnership, trust or estate, and certain cooperatives.)
5. The Owner is a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in, or under the
laws of, the United States or any political subdivision thereof (except in the
case of a partnership, to the extent provided in Treasury regulations), 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.
6. That the Owner is aware that the Trustee will not register the
transfer of any Class [R-I][R-II] 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.
7. That the Owner has reviewed the restrictions set forth on the
face of the Class [R-I][R-II] Certificates and the provisions of Section 5.02(g)
of the Pooling and Servicing Agreement under which the Class [R-I][R-II]
Certificates were issued (in particular, clause (iii)(A) and (iii)(B) of Section
5.02(g) 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(g)). The Owner expressly
agrees to be bound by and to comply with such restrictions and provisions.
8. 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-I][R-II] Certificates will
only be owned, directly or indirectly, by an Owner that is not a disqualified
organization.
9. The Owner's Taxpayer Identification Number is _____________.
10. This affidavit and agreement relates only to the Class
[R-I][R-II] Certificates held by the Owner and not to any other holder of the
Class [R-I][R-II] Certificates. The Owner understands that the liabilities
described herein relate only to the Class [R-I][R-II] Certificates.
11. That no purpose of the Owner relating to the transfer of any
of the Class [R-I][R-II] Certificates by the Owner is or will be to impede the
assessment or collection of any tax.
12. 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-I][R-II]
Certificate that the Owner intends to pay taxes associated with holding such
Class [R-I][R-II] Certificate as they become due, fully understanding that it
may incur tax liabilities in excess of any cash flows generated by the Class
[R-I][R-II] Certificate.
13. 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-I][R-II] Certificates remain outstanding.
14. The Purchaser is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any such plan within the meaning of the Department of Labor
regulation at 29 C.F.R. ss. 2510.3-101.
IN WITNESS WHEREOF, the Owner has caused this instrument to be
executed on its behalf, pursuant to the authority of its Board of Directors, by
its [Title of Officer] and its corporate seal to be hereunto attached, attested
by its [Assistant] Secretary, this day of , 200 .
[NAME OF OWNER]
By:
-------------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer],
known or proved to me to be the same person who executed the foregoing
instrument and to be the [Title of Officer] of the Owner, and acknowledged to me
that he executed the same as his free act and deed and the free act and deed of
the Owner.
Subscribed and sworn before me this _____day of _________, 200-___.
NOTARY PUBLIC
COUNTY OF
STATE OF
My Commission expires the _____ day of _____,
20___.
EXHIBIT G-2
FORM OF TRANSFEROR CERTIFICATE
, 20
------------ ----
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: RFMSII Series 2006-HSA1 Trust
Re: Home Equity Loan Pass-Through Certificates,
Series 2006-HSA1, Class [R-I][R-II]
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 Home Equity Loan Pass-Through Certificates, Series 2006-HSA1, Class
[R-I][R-II] (the "Certificates"), pursuant to Section 5.02 of the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of January
1, 2006, among Residential Funding Mortgage Securities II, Inc., as seller (the
"Company"), Residential Funding Corporation, as 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 Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the
Certificate by the Seller to the Purchaser is or will be to impede the
assessment or collection of any tax.
2. The Seller understands that the Purchaser has delivered to the
Trustee and the Master Servicer a transfer affidavit and agreement in the form
attached to the Pooling and Servicing Agreement as Exhibit G-1. The Seller does
not know or believe that any representation contained therein is false.
3. The Seller, at the time of the transfer, has 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-I][R-II] Certificate may not be respected for United States income tax
purposes (and the Seller may continue to be liable for United States income
taxes associated therewith) unless the Seller has conducted such an
investigation.
4. The Seller has no actual knowledge that the proposed
Transferee is not both a United States Person and a Permitted Transferee.
Very truly yours,
(Seller)
By:
----------------------------------------
[Name of Officer]
[Title of Officer]
EXHIBIT H
FORM OF INVESTOR REPRESENTATION LETTER
, 20
------------ ----
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
Residential Funding Corporation
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx, Xxxxx 000
Xxxxxxxxxxx, XX 00000
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: RFMSII Series 2006-HSA1 Trust
RE: Home Equity Loan Pass-Through Certificates,
Series 2006-HSA1, [Class SB]
Ladies and Gentlemen:
(the "Purchaser") intends to purchase from (the "Seller") a
$[______] initial Certificate Principal Balance of Home Equity Loan Pass-Through
Certificates, Series 2006-HSA1, Class (the "Certificates"), issued pursuant to
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of January 1, 2006 among Residential Funding Mortgage Securities II,
Inc., as seller (the "Company"), Residential Funding Corporation, 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 Company, the
Trustee and the Master Servicer that:
1. The Purchaser understands that (a) the Certificates have not
been and will not be registered or qualified under the Securities Act of
1933, as amended (the "Act") or any state securities law, (b) the
Company is not required to so register or qualify the Certificates, (c)
the Certificates may be resold only if registered and qualified pursuant
to the provisions of the Act or any state securities law, or if an
exemption from such registration and qualification is available, (d) the
Pooling and Servicing Agreement contains restrictions regarding the
transfer of the Certificates and (e) the Certificates will bear a legend
to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own
account for investment only and not with a view to or for sale in
connection with any distribution thereof in any manner that would
violate the Act or any applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters, and, in particular, in such matters related to
securities similar to the Certificates, such that it is capable of
evaluating the merits and risks of investment in the Certificates, (b)
able to bear the economic risks of such an investment and (c) an
"accredited investor" within the meaning of Rule 501(a) promulgated
pursuant to the Act.
4. The Purchaser has been furnished with, and has had an
opportunity to review (a) [a copy of the Private Placement Memorandum,
dated ________, 20 __, relating to the Certificates (b)] a copy of the
Pooling and Servicing Agreement and [b] [c] such other information
concerning the Certificates, the Mortgage Loans and the Company as has
been requested by the Purchaser from the Company or the Seller and is
relevant to the Purchaser's decision to purchase the Certificates. The
Purchaser has had any questions arising from such review answered by the
Company or the Seller to the satisfaction of the Purchaser. [If the
Purchaser did not purchase the Certificates from the Seller in
connection with the initial distribution of the Certificates and was
provided with a copy of the Private Placement Memorandum (the
"Memorandum") relating to the original sale (the "Original Sale") of the
Certificates by the Company, the Purchaser acknowledges that such
Memorandum was provided to it by the Seller, that the Memorandum was
prepared by the Company solely for use in connection with the Original
Sale and the Company did not participate in or facilitate in any way the
purchase of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and not to the
Company with respect to any damage, liability, claim or expense arising
out of, resulting from or in connection with (a) error or omission, or
alleged error or omission, contained in the Memorandum, or (b) any
information, development or event arising after the date of the
Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any offer to
buy or to accept a pledge, disposition of other transfer of any
Certificate, any interest in any Certificate or any other similar
security from any person in any manner, (c) otherwise approach or
negotiate with respect to any Certificate, any interest in any
Certificate or any other similar security with any person in any manner,
(d) make any general solicitation by means of general advertising or in
any other manner or (e) take any other action, that (as to any of (a)
through (e) above) would constitute a distribution of any Certificate
under the Act, that would render the disposition of any Certificate a
violation of Section 5 of the Act or any state securities law, or that
would require registration or qualification pursuant thereto. The
Purchaser will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing
Agreement.
6. The Purchaser
(a) is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (a "Plan"), or any other
person (including an investment manager, 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 regulation at 29 C.F.R. ss. 2510.3-101; or
(b) has provided the Trustee, the Company and the Master Servicer
with an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Company and the Master Servicer to the
effect that the purchase of Certificates is permissible under applicable
law, will not constitute or result in any non-exempt prohibited
transaction under ERISA or Section 4975 of the Code and will not subject
the Trustee, the Company or the Master Servicer to any obligation or
liability (including obligations or liabilities under ERISA or Section
4975 of the Code) in addition to those undertaken in the Pooling and
Servicing Agreement.
In addition, the Purchaser hereby certifies, represents and
warrants to, and covenants with, the Company, the Trustee and the Master
Servicer that the Purchaser will not transfer such Certificates to any
Plan or person unless such Plan or person meets the requirements set
forth in either 6(a) or (b) above.
Very truly yours,
By:
-----------------------------
Name:
Title:
EXHIBIT I
FORM OF TRANSFEROR REPRESENTATION LETTER
, 20
----------- ----
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, XX 00000
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: RFMSII Series 2006-HSA1 Trust
Re: Home Equity Loan Pass-Through Certificates, Series
2006-HSA1, [Class SB]
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the
"Purchaser") of a ___% Percentage Interest of Home Equity Loan Pass-Through
Certificates, Series 2006-HSA1, Class (the "Certificates"), issued pursuant to
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of January 1, 2006 among Residential Funding Mortgage Securities II,
Inc., as seller (the "Company"), Residential Funding Corporation, as master
servicer, and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"). The Seller
hereby certifies, represents and warrants to, and covenants with, the Company
and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a)
offered, pledged, sold, disposed of or otherwise transferred any Certificate,
any interest in any Certificate or any other similar security to any person in
any manner, (b) has solicited any offer to buy or to accept a pledge,
disposition or other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c) has
otherwise approached or negotiated with respect to any Certificate, any interest
in any Certificate or any other similar security with any person in any manner,
(d) has made any general solicitation by means of general advertising or in any
other manner, or (e) has taken any other action, that (as to any of (a) through
(e) above) would constitute a distribution of the Certificates under the
Securities Act of 1933 (the "Act"), that would render the disposition of any
Certificate a violation of Section 5 of the Act or any state securities law, or
that would require registration or qualification pursuant thereto.
The Seller will not act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Seller has not and will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
Very truly yours,
(Seller)
By:
----------------------------------------
Name:
Title:
EXHIBIT J
[RESERVED]
EXHIBIT K
[RESERVED]
EXHIBIT L
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF
MORTGAGE LOAN
, 20
----------- ----
Residential Funding Mortgage Securities II, Inc.
0000 Xxxxxxxxxx Xxxx Xxxxxxxxx
Xxxxx 000
Xxxxxxxxxxx, Xxxxxxxxx 00000
JPMorgan Chase Bank, N.A.
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxx, Xxxxx 00000
Attention: RFMSII Series 2006-HSA1 Trust
Re: Home Equity Loan Pass-Through Certificates,
Series 2006-HSA1, 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 3.12(d) of the Pooling and Servicing Agreement (the "Pooling and
Servicing Agreement"), dated as of January 1, 2006 among Residential Funding
Mortgage Securities II, Inc., as seller (the "Company"), Residential Funding
Corporation, as master servicer, and the Trustee. All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Lender hereby certifies, represents and warrants to, and
covenants with, the Master Servicer and the Trustee that:
(i) the Mortgage Loan is secured by Mortgaged Property located in
a jurisdiction in which an assignment in lieu of satisfaction is required to
preserve lien priority, minimize or avoid mortgage recording taxes or otherwise
comply with, or facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a
refinancing of such Mortgage Loan and the form of the transaction is solely to
comply with, or facilitate the transaction under, such local laws;
(iii) the Mortgage Loan following the proposed assignment will be
modified to have a rate of interest at least 0.25 percent below or above the
rate of interest on such Mortgage Loan prior to such proposed assignment; and
(iv) such assignment is at the request of the borrower under the
related Mortgage Loan.
Very truly yours,
(Lender)
By:
----------------------------------------
Name:
Title:
EXHIBIT M
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
=================================================
=================================================
The undersigned seller, as registered holder (the "Seller"),
intends to transfer the Rule 144A Securities described above to the undersigned
buyer (the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner,
or made any general solicitation by means of general advertising or in any
other manner, or taken any other action, that would constitute a distribution
of the Rule 144A Securities under the Securities Act of 1933, as amended (the
"1933 Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant
thereto, and that the Seller has not offered the Rule 144A Securities to any
person other than the Buyer or another "qualified institutional buyer" as
defined in Rule 144A under the 0000 Xxx.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee and the Master Servicer (as defined in the Pooling and
Servicing Agreement (the "Agreement"), dated as of January 1, 2006 among
Residential Funding Corporation as Master Servicer, Residential Funding
Mortgage Securities II, Inc. as depositor pursuant to Section 5.02 of the
Agreement and JPMorgan Chase Bank, N.A. 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 Purchaser is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the
Internal Revenue Code of 1986, as amended (the "Code"), or an investment
manager, named fiduciary or a trustee of any such plan, or any other Person
acting, directly or indirectly, on behalf of or purchasing any Certificate with
"plan assets" of any such plan within the meaning of the Department of Labor
regulation at 29 C.F.R. ss. 2510.3-101.
4. This document may be executed in one or more counterparts and
by the different parties hereto on separate counterparts, each of which, when
so executed, shall be deemed to be an original; such counterparts, together,
shall constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this
document as of the date set forth below.
PRINT NAME OF SELLER PRINT NAME OF BUYER
By: By:
------------------------------------------ ---------------------------
Name:
Name: Title:
Title:
Taxpayer Identification No Taxpayer Identification No
Date: Date:
------------------------------------- __________________________
ANNEX 1 TO EXHIBIT M
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule 144A
Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
2. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested
on a discretionary basis $ in securities (except for the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A) and (ii) the Buyer
satisfies the criteria in the category marked below.
Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of
the Internal Revenue Code.
Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the
District of Columbia, the business of which is
substantially confined to banking and is supervised by the
State or territorial banking commission or similar
official or is a foreign bank or equivalent institution,
and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial statements,
a copy of which is attached hereto.
Savings and Loan . The Buyer (a) is a savings and loan
association, building and loan association, cooperative
bank, homestead association or similar institution, which
is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a
foreign savings and loan association or equivalent
institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements.
Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15
of the Securities Exchange Act of 1934.
Insurance Depositor. The Buyer is an insurance company whose primary
and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by
insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency
of a State or territory or the District of Columbia.
State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any
agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees.
ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income
Security Act of 1974.
Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
SBIC The Buyer is a Small Business Investment Company licensed
by the U.S. Small Business Administration under Section
301(c) or (d) of the Small Business Investment Act of
1958.
Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisers Act of 1940.
Trust Fund . The Buyer is a trust fund whose trustee is a bank
or trust company and whose participants are exclusively
(a) plans established and maintained by a State, its
political subdivisions, or any agency or instrumentality
of the State or its political subdivisions, for the
benefit of its employees, or (b) employee benefit plans
within the meaning of Title I of the Employee Retirement
Income Security Act of 1974, but is not a trust fund that
includes as participants individual retirement accounts or
H.R. 10 plans.
3. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) bank deposit notes and certificates of deposit, (iv) loan
participations, (v) repurchase agreements, (vi) securities owned but subject to
a repurchase agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities
owned and/or invested on a discretionary basis by the Buyer, the Buyer used the
cost of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
Will the Buyer be purchasing the Rule 144A
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Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer
agrees that, in connection with any purchase of securities sold to the Buyer for
the account of a third party (including any separate account) in reliance on
Rule 144A, the Buyer will only purchase for the account of a third party that at
the time is a "qualified institutional buyer" within the meaning of Rule 144A.
In addition, the Buyer agrees that the Buyer will not purchase securities for a
third party unless the Buyer has obtained a current representation letter from
such third party or taken other appropriate steps contemplated by Rule 144A to
conclude that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice is given, the Buyer's purchase of Rule 144A Securities will
constitute a reaffirmation of this certification as of the date of such
purchase.
Print Name of Buyer
By:
----------------------------------------
Name:
Title:
ANNEX 2 TO EXHIBIT M
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 purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
Print Name of Buyer
By:
------------------------------
Name:
Title:
IF AN ADVISER:
Print Name of Buyer
Date:
-----------------------------
EXHIBIT N
[RESERVED]
EXHIBIT O
SERVICING CRITERIA
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Trustee shall
address, at a minimum, the criteria identified as below as "Applicable Servicing
Criteria":
APPLICABLE
SERVICING
SERVICING CRITERIA CRITERIA
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REFERENCE CRITERIA
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GENERAL SERVICING CONSIDERATIONS
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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.
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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.
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1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the pool assets are maintained.
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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.
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CASH COLLECTION AND ADMINISTRATION
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1122(d)(2)(i) Payments on pool assets are deposited into the |X| (as to
appropriate custodial bank accounts and related bank clearing
accounts no more than two business days following receipt, or
such other number of days accounts held by specified in the
transaction agreements. Trustee)
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1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an |X| (as
to obligor or to an investor are made only by authorized
investors only) personnel.
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1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees charged
for such advances, are made, reviewed and approved as
specified in the transaction agreements.
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The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of |X| (as to
overcollateralization, are separately maintained accounts held by
(e.g., with respect to commingling of cash) as set Trustee)
1122(d)(2)(iv) forth in the transaction agreements.
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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.
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1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
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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.
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INVESTOR REMITTANCES AND REPORTING
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1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance with
timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number of
pool assets serviced by the servicer.
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1122(d)(3)(ii) Amounts due to investors are allocated and remitted in |X|
accordance with timeframes, distribution priority and
other terms set forth in the transaction agreements.
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Disbursements made to an investor are posted within two
business days to the servicer's investor records, or such
other number of days specified in the |X|
1122(d)(3)(iii) transaction agreements.
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Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, |X|
1122(d)(3)(iv) or custodial bank statements.
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POOL ASSET ADMINISTRATION
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1122(d)(4)(i) Collateral or security on pool assets is maintained as
required by the transaction agreements or related asset pool
documents.
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Pool assets and related documents are safeguarded as
1122(d)(4)(ii) required by the transaction agreements
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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.
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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.
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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.
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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.
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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.
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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).
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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.
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1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's pool asset documents, on at least an annual
basis, or such other period specified in the transaction
agreements; (B) interest on such funds is paid, or credited,
to obligors in accordance with applicable pool asset documents
and state laws; and (C) such funds are returned to the obligor
within 30 calendar days of full repayment of the related pool
asset, or such other number of days specified in the
transaction agreements.
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1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has been
received by the servicer at least 30 calendar days prior to
these dates, or such other number of days specified in the
transaction agreements.
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1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
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Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of
1122(d)(4)(xiii) days specified in the transaction agreements.
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1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
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Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the |X|
1122(d)(4)(xv) transaction agreements.
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EXHIBIT P-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
1. I have reviewed the annual report on Form 10-K for the fiscal year [____],
and all reports on Form 8-K containing distribution or servicing reports filed
in respect of periods included in the year covered by that annual report, of the
trust (the "Trust") created pursuant to the Pooling and Servicing Agreement
dated as of January 1, 2006 (the "P&S Agreement") among Residential Funding
Mortgage Securities II, Inc. (the "Company"), Residential Funding Corporation
(the "Master Servicer") and JPMorgan Chase Bank, N.A. (the "Trustee");
2. Based on my knowledge, the information in these reports, taken as a whole,
does not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading as of the
last day of the period covered by this annual report;
3. Based on my knowledge, the servicing information required to be provided to
the Trustee by the Master Servicer under the P&S Agreement for inclusion in
these reports is included in these reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer under the P&S Agreement and based upon my knowledge and the annual
compliance review required under the P&S Agreement, and, except as disclosed in
the reports, the Master Servicer has fulfilled its obligations under the P&S
Agreement; and
5. The reports disclose all significant deficiencies relating to the Master
Servicer's compliance with the minimum servicing standards based upon the report
provided by an independent public accountant, after conducting a review in
compliance with the Uniform Single Attestation Program for Mortgage Bankers as
set forth in the P&S Agreement, that is included in these reports.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
IN WITNESS WHEREOF, I have duly executed this certificate as of
_________, 20__.
----------------------------
Name:
Title:
* to be signed by the senior officer in charge of the
servicing functions of the Master Servicer
EXHIBIT P-2
FORM OF BACK-UP CERTIFICATE TO FORM 10-K CERTIFICATION
The undersigned, a Responsible Officer of [______________] (the
"Trustee") certifies that:
1. The Trustee has performed all of the duties specifically required to be
performed by it pursuant to the provisions of the Pooling and Servicing
Agreement dated as of January 1, 2006 (the "Agreement") by and among
Residential Funding Mortgage Securities II, Inc., as company,
Residential Funding Corporation, as master servicer, and the Trustee in
accordance with the standards set forth therein.
2. Based on my knowledge, the list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year that is
provided by the Trustee pursuant to Section 4.03(e)(I) of the Agreement
is accurate as of the last day of the 20[ ] calendar year.
Capitalized terms used and not defined herein shall have the meanings
given such terms in the Agreement.
IN WITNESS WHEREOF, I have duly executed this certificate as of
_________, 20__.
---------------------
Name:
Title:
EXHIBIT Q
[RESERVED]
EXHIBIT R
ASSIGNMENT AGREEMENT
[ON FILE WITH THE TRUSTEE]