EXHIBIT 4.1
FORM OF POOLING AND SERVICING AGREEMENT
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.,
Depositor,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
[______],
Trustee and Supplemental Interest Trust Trustee
POOLING AND SERVICING AGREEMENT
DATED AS OF [______] 1, 20[__]
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
Series 20[__]-[___]
TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS................................................. 3
Section 1.01. Definitions....................................... 3
Section 1.02. Determination of LIBOR........................... 51
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE
OF CERTIFICATES............................................ 52
Section 2.01. Conveyance of Mortgage Loans..................... 52
Section 2.02. Acceptance by Trustee............................ 57
Section 2.03. Representations, Warranties and Covenants
of the Master Servicer and the Depositor......... 58
Section 2.04. Representations and Warranties of
Residential Funding.............................. 61
Section 2.05. Execution and Authentication of Certificates;
Conveyance of REMIC Regular Interests............ 63
Section 2.06. Purposes and Powers of the Trust................. 64
Section 2.07. Agreement Regarding Ability to Disclose.......... 64
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS............. 64
Section 3.01. Master Servicer to Act as Servicer............... 64
Section 3.02. Subservicing Agreements Between Master Servicer
and Subservicers; Enforcement of Subservicers'
Obligations...................................... 67
Section 3.03. Successor Subservicers........................... 68
Section 3.04. Liability of the Master Servicer................. 68
Section 3.05. No Contractual Relationship Between Subservicer
and Trustee or Certificateholders................ 69
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee............................ 69
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to Custodial Account.................... 69
Section 3.08. Subservicing Accounts; Servicing Accounts........ 72
Section 3.09. Access to Certain Documentation and Information
Regarding the Mortgage Loans..................... 74
Section 3.10. Permitted Withdrawals from the Custodial
Account.......................................... 74
Section 3.11. Maintenance of Primary Insurance Coverage........ 76
Section 3.12. Maintenance of Fire Insurance and Omissions
and Fidelity Coverage............................ 76
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TABLE OF CONTENTS
(continued)
Page
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption
and Modification Agreements; Certain
Assignments...................................... 78
Section 3.14. Realization Upon Defaulted Mortgage Loans........ 80
Section 3.15. Trustee to Cooperate; Release of Custodial
Files............................................ 82
Section 3.16. Servicing and Other Compensation; Eligible
Master Servicing Compensation.................... 84
Section 3.17. Reports to the Trustee and the Depositor......... 85
Section 3.18. Annual Statement as to Compliance and
Servicing Assessment............................. 85
Section 3.19. Annual Independent Public Accountants'
Servicing Report................................. 85
Section 3.20. Right of the Depositor in Respect of the
Master Servicer.................................. 86
Section 3.21. Advance Facility................................. 86
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS............................. 90
Section 4.01. Certificate Account.............................. 90
Section 4.02. Distributions.................................... 91
Section 4.03. Statements to Certificateholders; Statements to
Rating Agencies; Exchange Act Reporting.......... 97
Section 4.04. Distribution of Reports to the Trustee and the
Depositor; Advances by the Master Servicer...... 102
Section 4.05. Allocation of Realized Losses................... 103
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property.............................. 106
Section 4.07. Optional Purchase of Defaulted Mortgage Loans... 106
Section 4.08. [Reserved]...................................... 107
Section 4.09. The Swap Agreement.............................. 107
Section 4.10. Posted Collateral Account....................... 110
Section 4.11. [Reserved]...................................... 110
Section 4.12. Tax Treatment of Swap Payments and Swap
Termination Payments............................ 111
ARTICLE V THE CERTIFICATES.......................................... 112
Section 5.01. The Certificates................................ 112
Section 5.02. Registration of Transfer and Exchange of
Certificates.................................... 114
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates.................................... 123
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TABLE OF CONTENTS
(continued)
Page
Section 5.04. Persons Deemed Owners........................... 123
Section 5.05. Appointment of Paying Agent..................... 124
ARTICLE VI THE DEPOSITOR AND THE MASTER SERVICER..................... 124
Section 6.01. Respective Liabilities of the Depositor
and the Master Servicer......................... 124
Section 6.02. Merger or Consolidation of the Depositor or
the Master Servicer; Assignment of Rights
and Delegation of Duties by Master Servicer..... 124
Section 6.03. Limitation on Liability of the Depositor,
the Master Servicer and Others.................. 125
Section 6.04. Depositor and Master Servicer Not to Resign..... 126
ARTICLE VII DEFAULT................................................... 126
Section 7.01. Events of Default............................... 126
Section 7.02. Trustee or Depositor to Act; Appointment
of Successor.................................... 128
Section 7.03. Notification to Certificateholders.............. 129
Section 7.04. Waiver of Events of Default..................... 130
ARTICLE VIII CONCERNING THE TRUSTEE.................................... 130
Section 8.01. Duties of Trustee............................... 130
Section 8.02. Certain Matters Affecting the Trustee........... 132
Section 8.03. Trustee Not Liable for Certificates
or Mortgage Loans............................... 133
Section 8.04. Trustee May Own Certificates.................... 133
Section 8.05. Master Servicer to Pay Trustee's Fees and
Expenses; Indemnification....................... 134
Section 8.06. Eligibility Requirements for Trustee............ 135
Section 8.07. Resignation and Removal of the Trustee.......... 135
Section 8.08. Successor Trustee............................... 136
Section 8.09. Merger or Consolidation of Trustee.............. 136
Section 8.10. Appointment of Co-Trustee or Separate Trustee... 137
Section 8.11. Appointment of the Custodian.................... 138
Section 8.12. Appointment of Office or Agency................. 138
Section 8.13. DTC Letter of Representations................... 138
Section 8.14. Swap Agreement.................................. 138
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TABLE OF CONTENTS
(continued)
ARTICLE IX TERMINATION............................................... 138
Section 9.01. Termination Upon Purchase by Residential
Funding or Liquidation of All Mortgage Loans.... 138
Section 9.02. Additional Termination Requirements............. 144
ARTICLE X REMIC PROVISIONS.......................................... 144
Section 10.01. REMIC Administration............................ 144
Section 10.02. Master Servicer, REMIC Administrator and
Trustee Indemnification......................... 148
ARTICLE XI MISCELLANEOUS PROVISIONS.................................. 149
Section 11.01. Amendment....................................... 149
Section 11.02. Recordation of Agreement; Counterparts.......... 151
Section 11.03. Limitation on Rights of Certificateholders...... 152
Section 11.04. Governing Law................................... 153
Section 11.05. Notices......................................... 153
Section 11.06. Notices to Rating Agencies...................... 153
Section 11.07. Severability of Provisions...................... 154
Section 11.08. Supplemental Provisions for Resecuritization.... 154
Section 11.09. [Reserved]...................................... 155
Section 11.10. Third Party Beneficiaries....................... 155
ARTICLE XII COMPLIANCE WITH REGULATION AB............................. 155
Section 12.01. Intent of Parties; Reasonableness............... 155
Section 12.02. Additional Representations and Warranties
of the Trustee.................................. 155
Section 12.03. Information to be Provided by the Trustee....... 156
Section 12.04. Report on Assessment of Compliance and
Attestation..................................... 157
Section 12.05. Indemnification; Remedies....................... 157
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TABLE OF CONTENTS
(continued)
Exhibits
Exhibit A Form of Class A Certificate
Exhibit B Form of Class M Certificate
Exhibit C-1 Form of Rule 144A Global Class B Certificate
Exhibit C-2 Form of Temporary Regulation S Global Class B Certificate
Exhibit C-3 Form of Permanent Regulation S Global Class B Certificate
Exhibit D-1 Form of Rule 144A Global Class SB Certificate
Exhibit D-2 Form of Temporary Regulation S Global Class SB Certificate
Exhibit D-3 Form of Permanent Regulation S Global Class SB Certificate
Exhibit E Form of Class R Certificate
Exhibit F Form of Custodial Agreement
Exhibit G Mortgage Loan Schedule
Exhibit H Form of Request for Release
Exhibit I-1 Form of Transfer Affidavit and Agreement
Exhibit I-2 Form of Transferor Certificate
Exhibit J Form of Investor Representation Letter
Exhibit K Form of Transferor Representation Letter
Exhibit L Text of Amendment to Pooling and Servicing Agreement Pursuant
to Section 11.01(e) for a Limited Guaranty
Exhibit M Form of Limited Guaranty
Exhibit N Form of Lender Certification for Assignment of Mortgage Loan
Exhibit O Form of Rule 144A Investment Representation
Exhibit P [Reserved]
Exhibit Q-1 Form of ERISA Representation Letter [Class B Certificates]
Exhibit Q-2 Form of ERISA Representation Letter [Class A Certificates and
Class M Certificates]
Exhibit R-1 Form 10-K Certification
Exhibit R-2 Form 10-K Back-up Certification
Exhibit S Information to be Provided by the Master Servicer to the
Rating Agencies Relating to Reportable Modified Mortgage Loans
Exhibit T Schedule of Swap Agreement Notional Balances
Exhibit U Swap Agreement
Exhibit V Servicing Criteria To Be Addressed In Assessment of Compliance
Exhibit W-1 Form of Certificate to be Given by Certificate Owner
Exhibit W-2 Form of Certificate to be Given by Euroclear or Cedel
Exhibit X Form of Certificate to be Given by Transferee of Beneficial
Interest in a Regulation S Book-Entry Certificate
Exhibit Y Form of Transfer Certificate for Exchange or Transfer from
144A Book-Entry Certificate to Regulation S Book-Entry
Certificate
Exhibit Z Form of Initial Purchaser Exchange Instructions
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This Pooling and Servicing Agreement, effective as of [____] 1, 20[__],
among RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC., as depositor (together
with its permitted successors and assigns, the "Depositor"), RESIDENTIAL FUNDING
COMPANY, LLC, as master servicer (together with its permitted successors and
assigns, the "Master Servicer"), and [______], a national association organized
under the laws of the United States, as trustee and supplemental interest trust
trustee (together with its permitted successors and assigns, the "Trustee" and
the "Supplemental Interest Trust Trustee", respectively).
PRELIMINARY STATEMENT:
The Depositor intends to sell home equity loan pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in [seventeen]
Classes, which in the aggregate will evidence the entire beneficial ownership
interest in the Mortgage Loans (as defined herein) and certain other related
assets.
REMIC I
As provided herein, the REMIC Administrator will make an election to treat
the segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Supplemental Interest Trust Account and the
Swap Agreement) subject to this Agreement as a real estate mortgage investment
conduit (a "REMIC") for federal income tax purposes, and such segregated pool of
assets will be designated as "REMIC I." The Class R-I Certificates will
represent the sole Class of "residual interests" in REMIC I for purposes of the
REMIC Provisions (as defined herein) under federal income tax law. The following
table irrevocably sets forth the designation, remittance rate (the
"Uncertificated REMIC I Pass-Through Rate") and initial Uncertificated Principal
Balance for each of the "regular interests" in REMIC I (the "REMIC I Regular
Interests"). The "latest possible maturity date" (determined for purposes of
satisfying Treasury regulation Section 1.860G-1(a)(4)(iii)) for the REMIC I
Regular Interests shall be the Distribution Date immediately succeeding the
360th Distribution Date. The REMIC I Regular Interests will not be certificated.
Initial
Uncertificated Uncertificated
REMIC I REMIC I Latest Possible
Designation Pass-Through Rate Principal Balance Maturity Date
----------- ----------------- ----------------- ------------------
[AA Variable(1) $[___] [_____ __], 20[__]
A-1 Variable(1) $[___] [_____ __], 20[__]
A-2 Variable(1) $[___] [_____ __], 20[__]
A-3 Variable(1) $[___] [_____ __], 20[__]
A-4 Variable(1) $[___] [_____ __], 20[__]
M-1S Variable(1) $[___] [_____ __], 20[__]
M-2S Variable(1) $[___] [_____ __], 20[__]
M-3S Variable(1) $[___] [_____ __], 20[__]
M-4 Variable(1) $[___] [_____ __], 20[__]
M-5 Variable(1) $[___] [_____ __], 20[__]
M-6 Variable(1) $[___] [_____ __], 20[__]
M-7 Variable(1) $[___] [_____ __], 20[__]
M-8 Variable(1) $[___] [_____ __], 20[__]
M-9 Variable(1) $[___] [_____ __], 20[__]
B Variable(1) $[___] [_____ __], 20[__]
ZZ] Variable(1) $[___] [_____ __], 20[__]
(1) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
REMIC II
As provided herein, the REMIC Administrator will elect 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 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, 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 for purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii)) for each Class of
REMIC II Regular Interests shall be the Distribution Date immediately succeeding
the 360th Distribution Date.
Aggregate Initial
Certificate Final Scheduled
Designation Type Pass-Through Rate Principal Balance Distribution Date Initial Ratings
------------- ---------- ----------------- ----------------- ----------------- -------------------
▇▇▇▇▇'▇ S&P
[Class A-1(1) Senior Adjustable(2) (3) $[___] [_____ __], 20[__] Aaa AAA
Class A-2(1) Senior Adjustable(2) (3) $[___] [_____ __], 20[__] Aaa AAA
Class A-3(1) Senior Adjustable(2) (3) $[___] [_____ __], 20[__] Aaa AAA
Class A-4(1) Senior Adjustable(2) (3) $[___] [_____ __], 20[__] Aaa AAA
Class M-1S(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] Aa1 AA+
Class M-2S(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] Aa2 AA
Class M-3S(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] Aa3 AA-
Class M-4(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] A1 A+
2
Aggregate Initial
Certificate Final Scheduled
Designation Type Pass-Through Rate Principal Balance Distribution Date Initial Ratings
------------- ---------- ----------------- ----------------- ----------------- -------------------
▇▇▇▇▇'▇ S&P
Class M-5(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] A2 A
Class M-6(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] A3 A-
Class M-7(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] Baa1 BBB+
Class M-8(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] Baa2 BBB
Class M-9(1) Mezzanine Adjustable(2) (3) $[___] [_____ __], 20[__] Baa# BBB-
Class B Subordinate Adjustable(2) (3) $[___] [_____ __], 20[__] Ba1 BB+
Class SB Interest Subordinate Variable(4) $[___] N/A N/R N/R
Class R-I Residual N/A N/A N/A N/R N/R
Class R-II] Residual N/A N/A N/A N/R N/R
(1) The Class A Certificates, Class M Certificates and Class B Certificates will
represent ownership of REMIC II Regular Interests together with certain rights
to payments to be made from amounts received under the Swap Agreement, the
payments on which will be deemed made for federal income tax purposes outside of
REMIC II by the Holder of the Class SB Certificates as the Owner of the Swap
Agreement.
(2) The REMIC II Regular Interests, the ownership of which is represented by the
Class A Certificates, Class M Certificates and Class B Certificates, will accrue
interest at a per annum rate equal to LIBOR plus the applicable Margin, each
subject to payment caps as described in the definition of "Pass-Through Rate"
and the provisions for the payment of Class A Basis Risk Shortfall Carry-Forward
Amounts, Class M Basis Risk Shortfall Carry-Forward Amounts and Class B Basis
Risk Shortfall Carry-Forward Amounts herein, which payments will not be part of
the entitlement of the REMIC II Regular Interests related to such Certificates.
(3) The Class A Certificates, Class M Certificates and Class B Certificates will
also entitle their holders to certain payments from the Holder of the Class SB
Certificates from amounts to which the related REMIC II Regular Interest
component is entitled, which will not be a part of their ownership of the REMIC
II Regular Interests.
(4) The Class SB Certificates will accrue interest as described in the
definition of Accrued Certificate Interest. The Class SB Certificates do not
have a Certificate Principal Balance. The Class SB Certificates will be
comprised of two REMIC II regular interests, a principal only regular interest
designated component SB-PO and an interest only regular interest component
designated as SB-IO which will be entitled to distributions as set forth herein.
The REMIC 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 the aggregate amount equal to the initial
Overcollateralization Amount pursuant to the terms and conditions hereof. The
rights of the Holder of the Class SB Certificates to payments from the Swap
Agreement shall be outside and apart from its rights under the REMIC II Regular
Interests SB-IO and SB-PO.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance equal
to $[___]. The Mortgage Loans are fixed-rate and adjustable-rate, fully
amortizing, first and junior lien mortgage loans having terms to maturity at
origination or modification of generally not more than 30 years.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01. Definitions
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
3
Accrued Certificate Interest: With respect to each Distribution Date and
the Class A Certificates, Class M Certificates and Class B Certificates,
interest accrued during the related Interest Accrual Period on the Certificate
Principal Balance thereof immediately prior to such Distribution Date at the
related Pass-Through Rate for that Distribution Date.
The amount of Accrued Certificate Interest on each Class of Certificates
shall be reduced by the amount of Prepayment Interest Shortfalls on the Mortgage
Loans during the prior calendar month (to the extent not covered by Eligible
Master Servicing Compensation pursuant to Section 3.16) and by the amount of
Relief Act Shortfalls on the Mortgage Loans during the related Due Period, in
each case to the extent allocated to that Class of Certificates pursuant to
Section 4.02(g). Accrued Certificate Interest for each Class on any Distribution
Date shall be further reduced by the interest portion of Realized Losses
allocated to any Class of Certificates pursuant to Section 4.05.
With respect to each Distribution Date and the Class SB Certificates,
interest accrued during the preceding Interest Accrual Period at the related
Pass Through Rate for that Distribution Date on the Uncertificated Notional
Amount as specified in the definition of Pass Through Rate, immediately prior to
such Distribution Date, reduced by any interest shortfalls with respect to the
Mortgage Loans, including Prepayment Interest Shortfalls to the extent not
covered by Eligible Master Servicing Compensation pursuant to Section 3.16 or by
the Excess Cash Flow pursuant to clauses (xvi) and (xvii) of Section 4.02(c) or
by the Swap Agreement pursuant to clauses (iii) and (iv) of Section 4.09(c). 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
interest portion of Realized Losses allocated to the Overcollateralization
Amount pursuant to Section 4.05 hereof. Accrued Certificate Interest on the
Class A Certificates, Class M Certificates and Class B Certificates shall accrue
on the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period. Accrued Certificate Interest on the Class SB
Certificates shall accrue on the basis of a 360 day year consisting of twelve 30
day months.
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
related Subservicing Fee Rate.
Adjustment Date: With respect to each adjustable-rate Mortgage Loan, each
date set forth in the related Mortgage Note on which an adjustment to the
interest rate on such Mortgage Loan becomes effective.
Advance: With respect to any Mortgage Loan, any advance made by the Master
Servicer, pursuant to Section 4.04.
Affected Party: As defined in the Swap Agreement.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For 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.
4
Agreement: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
Amount Held for Future Distribution: With respect to any Distribution
Date, the total of the amounts held in the Custodial Account at the close of
business on the preceding Determination Date on account of (i) Liquidation
Proceeds, Subsequent Recoveries, REO Proceeds, Insurance Proceeds, Principal
Prepayments, Mortgage Loan purchases made pursuant to Section 2.02, 2.03, 2.04
or 4.07 and Mortgage Loan substitutions made pursuant to Section 2.03 or 2.04
received or made in the month of such Distribution Date (other than such
Liquidation Proceeds, Insurance Proceeds, REO Proceeds, Subsequent Recoveries
and purchases of Mortgage Loans that the Master Servicer has deemed to have been
received in the preceding month in accordance with Section 3.07(b)) and (ii)
payments which represent early receipt of scheduled payments of principal and
interest due on a date or dates subsequent to the Due Date in the related Due
Period.
Appraised Value: With respect to any Mortgaged Property, one of the
following: (i) the lesser of (a) the appraised value of such Mortgaged Property
based upon the appraisal made at the time of the origination of the related
Mortgage Loan, and (b) the sales price of the Mortgaged Property at such time of
origination, (ii) in the case of a Mortgaged Property securing a refinanced or
modified Mortgage Loan, one of (1) the appraised value based upon the appraisal
made at the time of origination of the loan which was refinanced or modified,
(2) the appraised value determined in an appraisal made at the time of
refinancing or modification or (3) the sales price of the Mortgaged Property, or
(iii) with respect to the Mortgage Loans for which a broker's price opinion was
obtained, the value contained in such opinion.
Assignment: An assignment of the Mortgage, notice of transfer or
equivalent instrument, in recordable form, sufficient under the laws of the
jurisdiction wherein the related Mortgaged Property is located to reflect of
record the sale of the Mortgage Loan to the Trustee for the benefit of
Certificateholders, which assignment, notice of transfer or equivalent
instrument may be in the form of one or more blanket assignments covering
Mortgages secured by Mortgaged Properties located in the same county, if
permitted by law and accompanied by an Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the
Closing Date, between Residential Funding and the Depositor relating to the
transfer and assignment of the Mortgage Loans.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment of the related Cooperative Lease from the Mortgagor to the originator
of the Cooperative Loan.
Available Distribution Amount: With respect to any Distribution Date, an
amount equal to (a) the sum of (i) the amount relating to the Mortgage Loans on
deposit in the Custodial Account as of the close of business on the immediately
preceding Determination Date, including any Subsequent Recoveries, and amounts
deposited in the Custodial Account in connection with the substitution of
Qualified Substitute Mortgage Loans, (ii) the amount of any Advance made on the
immediately preceding Certificate Account Deposit Date with respect to the
Mortgage Loans, (iii) any amount deposited in the Certificate Account on the
related Certificate Account
5
Deposit Date pursuant to Section 3.12(a) in respect of the Mortgage Loans, (iv)
any amount that the Master Servicer is not permitted to withdraw from the
Custodial Account pursuant to Section 3.16(e) in respect of the Mortgage Loans,
(v) any amount deposited in the Certificate Account pursuant to Section 4.07 and
any amounts deposited in the Custodial Account pursuant to Section 9.01 and (vi)
any amount described in clauses (i) and (ii) of Section 4.09(c), reduced by (b)
the sum as of the close of business on the immediately preceding Determination
Date of: (w) any payments or collections consisting of prepayment charges on the
Mortgage Loans that were received during the related Prepayment Period, (x) the
Amount Held for Future Distribution, (y) amounts permitted to be withdrawn by
the Master Servicer from the Custodial Account pursuant to clauses (ii)-(xi),
inclusive, of Section 3.10(a) and (z) any Net Swap Payments owed to the Swap
Counterparty and Swap Termination Payments owed to the Swap Counterparty not due
to Swap Counterparty Trigger Event for such Distribution Date.
Balloon Loan: Each of the Mortgage Loans having an original term to
maturity that is shorter than the related amortization term.
Balloon Payment: With respect to any Balloon Loan, the related Monthly
Payment payable on the stated maturity date of such Balloon Loan.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basis Risk Shortfall: Any Class A Basis Risk Shortfall, Class M Basis Risk
Shortfall or Class B Basis Risk Shortfall, as applicable.
Basis Risk Shortfall Carry-Forward Amount: Any Class A Basis Risk
Shortfall Carry-Forward Amount, Class M Basis Risk Shortfall Carry-Forward
Amount or Class B Basis Risk Shortfall Carry-Forward Amount, as applicable.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the States of California, New York, Minnesota,
Illinois, Texas or Michigan (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.
Call Rights: As defined in Section 9.01(e).
Capitalization Reimbursement Amount: With respect to any Distribution
Date, the amount of unreimbursed Advances or Servicing Advances that were added
to the Stated Principal Balance of the related Mortgage Loans during the
preceding calendar month and reimbursed to the Master Servicer or Subservicer
pursuant to Section 3.10(a)(vii) on or prior to such Distribution Date.
Cash Liquidation: With respect to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries
6
which the Master Servicer reasonably and in good faith expects to be finally
recoverable with respect to such Mortgage Loan.
Certificate: Any Class A Certificate, Class M Certificate, Class B
Certificate, Class SB Certificate or Class R Certificate.
Certificate Account: The account or accounts created and maintained
pursuant to Section 4.01, which shall be entitled "[______] as trustee, in trust
for the registered holders of Residential Funding Mortgage Securities II, Inc.,
Home Equity Loan Pass-Through Certificates, Series 20[__]-[___]" and which
account shall be held for the benefit of the Certificateholders and which must
be an Eligible Account.
Certificate Account Deposit Date: With respect to any Distribution Date,
the Business Day prior thereto.
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, Class M or
Class B Certificate, on any date of determination, an amount equal to (i) the
Initial Certificate Principal Balance of such Certificate as specified on the
face thereof minus (ii) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor Certificate)
and applied to reduce the Certificate Principal Balance thereof pursuant to
Section 4.02(c) and 4.02(d) and (y) the aggregate of all reductions in
Certificate Principal Balance deemed to have occurred in connection with
Realized Losses which were previously allocated to such Certificate (or any
predecessor Certificate) pursuant to Section 4.05, provided, that with respect
to any Distribution Date, the Certificate Principal Balance of each class of
Class A Certificates or Class M Certificates and Class B Certificates to which a
Realized Loss was previously allocated and remains unreimbursed will be
increased, sequentially, as follows: first, the Class A Certificates on a pro
rata basis, then the Class M-1S, Class M-2S, Class M-3S, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9 and Class B Certificates, in that
order, to the extent of Realized Losses previously allocated thereto and
remaining unreimbursed, but only to the extent of Subsequent Recoveries received
during the previous calendar month and available for distribution pursuant to
Section 4.02(c)(xii).
Certificate Register and Certificate Registrar: The register maintained
and the registrar appointed pursuant to Section 5.02.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-United States Person shall be a holder of a Class R
Certificate for any purpose hereof. Solely for the purpose of giving any consent
or direction pursuant to this Agreement, any Certificate, other than a Class R
Certificate, registered in the name of the Depositor, the Master Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be outstanding and
the Percentage Interest or Voting Rights evidenced thereby shall not be taken
into account in determining whether the requisite
7
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.
Class: Collectively, all of the Certificates or uncertificated interests
bearing the same designation.
Class A Basis Risk Shortfall: With respect to each Class of the Class A
Certificates and any Distribution Date for which the Pass-Through Rate for any
such Class of Certificates is equal to the Net WAC Cap Rate, an amount equal to
the excess of (x) Accrued Certificate Interest on that Class of Certificates on
such Distribution Date, calculated at a rate (not to exceed the Maximum Mortgage
Loan Rate) equal to LIBOR plus the related Class A Margin, as calculated for
such Distribution Date over (y) Accrued Certificate Interest on such Class of
Class A Certificates for such Distribution Date calculated at the Net WAC Cap
Rate.
Class A Basis Risk Shortfall Carry-Forward Amount: With respect to each
Class of Class A Certificates and any Distribution Date, the sum of (a) the
aggregate amount of Class A Basis Risk Shortfall for such Class on such
Distribution Date plus (b) any Class A Basis Risk Shortfall Carry-Forward Amount
for such Class remaining unpaid from the preceding Distribution Date, plus (c)
one month's interest on the amount in clause (b) (based on the number of days in
the preceding Interest Accrual Period), to the extent previously unreimbursed by
the Excess Cash Flow pursuant to Section 4.02(c)(xvii) or amounts received under
the Swap Agreement pursuant to Section 4.09(c)(v), at a rate equal to the
related Pass-Through Rate.
Class A Certificate: Any one of the Class A-1, Class A-2, Class A-3 or
Class A-4 Certificates.
Class A Interest Distribution Amount: With respect to each Class of Class
A Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of each such Class of
Class A Certificates for such Distribution Date, plus any related Accrued
Certificate Interest thereon remaining unpaid from any prior Distribution Date.
Class A Margin: With respect to the Class A-1 Certificates, initially
[___]% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, [___]% per
annum. With respect to the Class A-2 Certificates, initially [___]% per annum,
and on any Distribution Date on or after the second Distribution Date after the
first possible Optional Termination Date, [___]% per annum. With respect to the
Class A-3 Certificates, initially [___]% per annum, and on any Distribution Date
on or after the second Distribution Date after the first possible Optional
Termination Date, [___]% per annum. With respect to the Class A-4 Certificates,
initially [___]% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, [___]% per
annum.
8
Class A Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the Principal
Distribution Amount for that Distribution Date or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the Principal Distribution Amount for that Distribution Date;
and
(ii) the excess, if any, of (A) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) approximately [___]%
and (2) the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date and
(y) the excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
Class A-1 Certificate: Any one of the Class A-1 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class B, Class SB and
Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class A Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
Class A-2 Certificate: Any one of the Class A-2 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class B, Class SB and
Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class A Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
Class A-3 Certificate: Any one of the Class A-3 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class B, Class SB and
Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class A Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
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, senior to the Class M, Class B, Class SB and
Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class A Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
9
Class B Basis Risk Shortfall: With respect to the Class B Certificates and
any Distribution Date for which the Pass-Through Rate for any such Class of
Certificates is equal to the Net WAC Cap Rate, an amount equal to the excess of
(x) Accrued Certificate Interest on that Class of Certificates on such
Distribution Date, calculated at a rate (not to exceed the Maximum Mortgage Loan
Rate) equal to LIBOR plus the related Class B Margin, as calculated for such
Distribution Date over (y) Accrued Certificate Interest on such Class of
Certificates for such Distribution Date calculated at the Net WAC Cap Rate.
Class B Basis Risk Shortfall Carry-Forward Amount: With respect to the
Class B Certificates and any Distribution Date, the sum of (a) the aggregate
amount of Class B Basis Risk Shortfall for such Class on such Distribution Date
plus (b) any Class B Basis Risk Shortfall Carry-Forward Amount for such Class
remaining unpaid from the preceding Distribution Date, plus (c) one month's
interest on the amount in clause (b) (based on the number of days in the
preceding Interest Accrual Period), to the extent previously unreimbursed by the
Excess Cash Flow pursuant to Section 4.02(c)(xviii) or amounts received under
the Swap Agreement pursuant to Section 4.09(c)(v), at a rate equal to the
related Pass-Through Rate.
Class B Certificate: Any one of the Class B Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit C-1, C-2 or C-3, as provided in Section 5.02(e)
hereof, senior to the Class SB and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to receive the Class
B Basis Risk Shortfall Carry-Forward Amount from the Excess Cash Flow, the
Supplemental Interest Trust Account and the Swap Agreement to the extent
described herein.
Class B Margin: With respect to the Class B Certificates, initially [___]%
per annum, and on any Distribution Date on or after the second Distribution Date
after the first possible Optional Termination Date, [___]% per annum.
Class B Interest Distribution Amount: With respect to the Class B
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class B Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Sequential Class M Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5 Principal Distribution
Amount, Class M-6 Principal Distribution Amount, Class M-7 Principal
Distribution Amount, Class M-8 Principal Distribution Amount and Class M-9
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount, Sequential Class M Principal
10
Distribution Amount, Class M-4 Principal Distribution Amount, Class M-5
Principal Distribution Amount, Class M-6 Principal Distribution Amount,
Class M-7 Principal Distribution Amount, Class M-8 Principal Distribution
Amount and Class M-9 Principal Distribution Amount;
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1SS, Class M-2SS,
Class M-3SS, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and
Class M-9 Certificates (after taking into account the payment of the Class
A Principal Distribution Amount, Sequential Class M Principal Distribution
Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount, Class M-6 Principal Distribution Amount, Class M-7
Principal Distribution Amount, Class M-8 Principal Distribution Amount and
Class M-9 Principal Distribution Amount for that Distribution Date) and
(2) the Certificate Principal Balance of the Class B Certificates
immediately prior to that Distribution Date over (B) the lesser of (x) the
product of (1) approximately [___]% and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M Basis Risk Shortfall: With respect to the Class M-1S, Class M-2S,
Class M-3S, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates and any Distribution Date for which the Pass-Through Rate for any
such Class of Certificates is equal to the Net WAC Cap Rate, an amount equal to
the excess of (x) Accrued Certificate Interest on that Class of Certificates on
such Distribution Date calculated at a rate (not to exceed the Maximum Mortgage
Loan Rate) equal to LIBOR plus the related Class M Margin, as calculated for
such Distribution Date over (y) Accrued Certificate Interest on such Class of
Class M Certificates for such Distribution Date calculated at the Net WAC Cap
Rate.
Class M Basis Risk Shortfall Carry-Forward Amount: With respect to the
Class M-1S, Class M-2S, Class M-3S, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9 Certificates and any Distribution Date, the sum of (a)
the aggregate amount of Class M Basis Risk Shortfall for each such Class on such
Distribution Date plus (b) any Class M Basis Risk Shortfall Carry-Forward Amount
for such Classes remaining unpaid from the preceding Distribution Date, plus (c)
one month's interest on the amount in clause (b) (based on the number of days in
the preceding Interest Accrual Period), to the extent previously unreimbursed by
the Excess Cash Flow pursuant to Section 4.02(c)(xvii) or amounts received under
the Swap Agreement pursuant to Section 4.09(c)(v), at a rate equal to the
related Pass-Through Rate.
Class M Certificate: Any one of the Class M-1S, Class M-2S, Class M-3S,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 or Class M-9 Certificates.
Class M Margin: With respect to the Class M-1S Certificates, initially
[___]% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, [___]% per
annum. With respect to the Class M-2S Certificates, initially [___]% per annum,
and on any Distribution Date on or after the second
11
Distribution Date after the first possible Optional Termination Date, [___]% per
annum. With respect to the Class M-3S Certificates, initially [___]% per annum,
and on any Distribution Date on or after the second Distribution Date after the
first possible Optional Termination Date, [___]% per annum. With respect to the
Class M-4 Certificates, initially [___]% per annum, and on any Distribution Date
on or after the second Distribution Date after the first possible Optional
Termination Date, [___]% per annum. With respect to the Class M-5 Certificates,
initially 0.380% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, [___]% per
annum. With respect to the Class M-6 Certificates, initially [___]% per annum,
and on any Distribution Date on or after the second Distribution Date after the
first possible Optional Termination Date, [___]% per annum. With respect to the
Class M-7 Certificates, initially [___]% per annum, and on any Distribution Date
on or after the second Distribution Date after the first possible Optional
Termination Date, [___]% per annum. With respect to the Class M-8 Certificates,
initially [___]% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, [___]% per
annum. With respect to the Class M-9 Certificates, initially [___]% per annum,
and on any Distribution Date on or after the second Distribution Date after the
first possible Optional Termination Date, [___]% per annum.
Class M-1S Certificate: Any one of the Class M-1S Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-2S, Class M-3S, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class B, Class SB
and Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class M Basis Risk Shortfall
Carry-Forward Amount from the Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
Class M-1S Interest Distribution Amount: With respect to the Class M-1S
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-2S Certificate: Any one of the Class M-2S Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-3S, Class ▇-▇, ▇▇▇▇▇
▇-▇, Class M-6, Class M-7, Class M-8, Class M-9, Class B, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from
Excess Cash Flow, the Supplemental Interest Trust Account and the Swap Agreement
to the extent described herein.
Class M-2S Interest Distribution Amount: With respect to the Class M-2S
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
12
Class M-3S Certificate: Any one of the Class M-3S Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class B, Class SB and Class R Certificates with
respect to distributions and the allocation of Realized Losses as set forth in
Section 4.05, and evidencing (i) an interest designated as a "regular interest"
in REMIC II for purposes of the REMIC Provisions and (ii) the right to receive
the Class M Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow, the
Supplemental Interest Trust Account and the Swap Agreement to the extent
described herein.
Class M-3S Interest Distribution Amount: With respect to the Class M-3S
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-4 Certificate: Any one of the Class M-4 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class B, Class SB and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to receive the Class
M Basis Risk Shortfall Carry-Forward Amount from the Excess Cash Flow and the
Swap Agreement to the extent described herein.
Class M-4 Interest Distribution Amount: With respect to the Class M-4
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount and Sequential Class M Principal Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount and Sequential Class M Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1SS, Class M-2SS and
Class M-3SS Certificates (after taking into account the payment of the
Class A Principal Distribution Amount and Sequential Class M Principal
Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-4 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1)
approximately [___]% and (2) the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the
13
aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-6, Class M-7, Class M-8,
Class M-9, Class B, Class SB and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to receive the Class
M Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow, the
Supplemental Interest Trust Account and the Swap Agreement to the extent
described herein.
Class M-5 Interest Distribution Amount: With respect to the Class M-5
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Sequential Class M Principal Distribution Amount
and Class M-4 Principal Distribution Amount or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount, Sequential Class M Principal Distribution Amount and Class M-4
Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1SS, Class M-2SS,
Class M-3SS and Class M-4 Certificates (after taking into account the
payment of the Class A Principal Distribution Amount, Sequential Class M
Principal Distribution Amount and Class M-4 Principal Distribution Amount
for that Distribution Date) and (2) the Certificate Principal Balance of
the Class M-5 Certificates immediately prior to that Distribution Date
over (B) the lesser of (x) the product of (1) approximately [___]% and (2)
the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-6 Certificate: Any one of the Class M-6 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-7, Class M-8, Class M-9,
Class B, Class SB and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i)
an interest designated as a "regular interest" in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive the Class M Basis Risk Shortfall
14
Carry-Forward Amount from Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
Class M-6 Interest Distribution Amount: With respect to the Class M-6
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Sequential Class M Principal Distribution Amount,
Class M-4 Principal Distribution Amount and Class M-5 Principal Distribution
Amount or (ii) on or after the Stepdown Date if a Trigger Event is not in effect
for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount, Sequential Class M Principal Distribution Amount, Class M-4
Principal Distribution Amount and Class M-5 Principal Distribution Amount;
and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1SS, Class M-2SS,
Class M-3SS, Class M-4 and Class M-5 Certificates (after taking into
account the payment of the Class A Principal Distribution Amount,
Sequential Class M Principal Distribution Amount, Class M-4 Principal
Distribution Amount and Class M-5 Principal Distribution Amount for that
Distribution Date) and (2) the Certificate Principal Balance of the Class
M-6 Certificates immediately prior to that Distribution Date over (B) the
lesser of (x) the product of (1) approximately [___]% and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-7 Certificate: Any one of the Class M-7 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-8, Class M-9, Class B,
Class SB and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i)
an interest designated as a "regular interest" in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive the Class M Basis Risk Shortfall
Carry Forward Amount from the Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
Class M-7 Interest Distribution Amount: With respect to the Class M-7
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
15
Class M-7 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Sequential Class M Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5 Principal Distribution Amount
and Class M-6 Principal Distribution Amount or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount, Sequential Class M Principal Distribution Amount, Class M-4
Principal Distribution Amount, Class M-5 Principal Distribution Amount and
Class M-6 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1SS, Class M-2SS,
Class M-3SS, Class M-4, Class M-5 and Class M-6 Certificates (after taking
into account the payment of the Class A Principal Distribution Amount,
Sequential Class M Principal Distribution Amount, Class M-4 Principal
Distribution Amount, Class M-5 Principal Distribution Amount and Class M-6
Principal Distribution Amount for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-7 Certificates immediately
prior to that Distribution Date over (B) the lesser of (x) the product of
(1) approximately [___]% and (2) the aggregate Stated Principal Balance of
the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-8 Certificate: Any one of the Class M-8 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-9, Class B, Class SB and
Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class M Basis Risk Shortfall
Carry-Forward Amount from the Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
Class M-8 Interest Distribution Amount: With respect to the Class M-8
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-8 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Sequential Class M Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5 Principal Distribution
Amount, Class M-6 Principal Distribution Amount and Class ▇-▇ ▇▇▇▇▇▇▇▇▇
▇▇
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇ (▇▇) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount, Sequential Class M Principal Distribution Amount, Class M-4
Principal Distribution Amount, Class M-5 Principal Distribution Amount,
Class M-6 Principal Distribution Amount and Class M-7 Principal
Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1SS, Class M-2SS,
Class M-3SS, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates
(after taking into account the payment of the Class A Principal
Distribution Amount, Sequential Class M Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5 Principal Distribution
Amount, Class M-6 Principal Distribution Amount and Class M-7 Principal
Distribution Amount for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-8 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1)
approximately [___]% and (2) the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-9 Certificate: Any one of the Class M-9 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class B Certificates, Class SB
Certificates and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i)
an interest designated as a "regular interest" in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive the Class M Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow, the Supplemental Interest Trust
Account and the Swap Agreement to the extent described herein.
Class M-9 Interest Distribution Amount: With respect to the Class M-9
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-9 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount, Sequential Class M Principal Distribution Amount,
Class M-4 Principal Distribution Amount, Class M-5 Principal Distribution
Amount, Class M-6 Principal Distribution Amount, Class M-7 Principal
Distribution Amount and Class M-8 Principal Distribution Amount or (ii) on or
after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
17
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount, Sequential Class M Principal Distribution Amount, Class M-4
Principal Distribution Amount, Class M-5 Principal Distribution Amount,
Class M-6 Principal Distribution Amount, Class M-7 Principal Distribution
Amount and Class M-8 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1SS, Class M-2SS,
Class M-3SS, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8
Certificates (after taking into account the payment of the Class A
Principal Distribution Amount, Sequential Class M Principal Distribution
Amount, Class M-4 Principal Distribution Amount, Class M-5 Principal
Distribution Amount, Class M-6 Principal Distribution Amount, Class M-7
Principal Distribution Amount and Class M-8 Principal Distribution Amount
for that Distribution Date) and (2) the Certificate Principal Balance of
the Class M-9 Certificates immediately prior to that Distribution Date
over (B) the lesser of (x) the product of (1) approximately [___]% and (2)
the aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class R Certificates: Collectively, the Class R-I Certificates and the
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 E 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 E 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 D, subordinate to the Class A Certificates, Class M
Certificates and Class B Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing an
interest comprised of "regular interests" in REMIC II, together with certain
rights to payments under the Swap Agreement for purposes of the REMIC
Provisions.
Clearing System Certificate: As defined in Section 5.02(e) and
substantially in the form of Exhibit W- hereto.
Clearstream: Clearstream Banking, societe anonyme.
Closing Date: [____ __], 20[__].
Code: The Internal Revenue Code of 1986, as amended.
18
Commission: The Securities and Exchange Commission.
Cooperative: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building owned
or leased by a Cooperative, which unit the Mortgagor has an exclusive right to
occupy pursuant to the terms of a proprietary lease or occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
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 [______], [______], Attention: Structured
Finance/RFMSII Series 20[__]-[___].
Credit Repository: Equifax, Transunion and Experian, or their successors
in interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and
maintained pursuant to Section 3.07 in the name of a depository institution, as
custodian for the holders of the Certificates, for the holders of certain other
interests in mortgage loans serviced or sold by the Master Servicer and for the
Master Servicer, into which the amounts set forth in Section 3.07 shall be
deposited directly. Any such account or accounts shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the
Depositor, the Master Servicer, the Trustee and a Custodian in substantially the
form of Exhibit F hereto.
19
Custodial File: Any mortgage loan document in the Mortgage File that is
required to be delivered to the Trustee or the Custodian pursuant to Section
2.01(b) of this Agreement.
Custodian: [__________], or any successor custodian appointed pursuant to
a Custodial Agreement.
Cut-off Date: [____] 1, 20[__].
Cut-off Date Balance: $[__________].
Cut-off Date Principal Balance: With respect to any Mortgage Loan, the
unpaid principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due on or prior thereto (or due during the month of
the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Defaulting Party: As defined in the Swap Agreement.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to 59
days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the next following monthly
scheduled due date; "60 to 89 days" or "60 or more days" delinquent when a
payment due on any scheduled due date remains unpaid as of the close of business
on the second following monthly scheduled due date; and so on. The determination
as to whether a Mortgage Loan falls into these categories is made as of the
close of business on the last business day of each month. For example, a
Mortgage Loan with a payment due on July 1 that remained unpaid as of the close
of business on August 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and
prepared as of the close of business on the last business day immediately prior
to the Cut-off Date.
Depositor: As defined in the preamble hereto.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that
20
are to be Book-Entry Certificates is Cede & Co. The Depository shall at all
times be a "clearing corporation" as defined in Section 8-102(a)(5) of the
Uniform Commercial Code of the State of New York and a "clearing agency"
registered pursuant to the provisions of Section 17A of the Exchange Act.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
Determination Date: With respect to any Distribution Date, the 20th day
(or if such 20th day is not a Business Day, the Business Day immediately
following such 20th day) of the month of the related Distribution Date.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for ▇▇▇▇▇▇▇ 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.
DTC Letter: The Letter of Representations, dated [____ __], 20[__],
between the Trustee, on behalf of the Trust Fund, and the Depository.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which the Monthly Payment is due.
Due Period: With respect to any Distribution Date, the calendar month of
such Distribution Date.
21
Eligible Account: An account that is any of the following: (i) maintained
with a depository institution the debt obligations of which have been rated by
each Rating Agency in its highest rating available, or (ii) an account or
accounts in a depository institution in which such accounts are fully insured to
the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a
claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case of the Custodial Account, a trust account or
accounts maintained in the corporate trust department of [______], or (iv) in
the case of the Certificate Account, a trust account or accounts maintained in
the corporate trust department of [______], or (v) an account or accounts of a
depository institution acceptable to each Rating Agency (as evidenced in writing
by each Rating Agency that use of any such account as the Custodial Account or
the Certificate Account will not reduce the rating assigned to any Class of
Certificates by such Rating Agency below the lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date by such Rating
Agency).
Eligible Master Servicing Compensation: With respect to any Distribution
Date, an amount equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments in Full or Curtailments during the related Prepayment Period, but
not more than the lesser of (a) one-twelfth of 0.125% of the Stated Principal
Balance of the Mortgage Loans immediately preceding such Distribution Date and
(b) the sum of the Servicing Fee, all income and gain on amounts held in the
Custodial Account and the Certificate Account and amounts payable to the
Certificateholders with respect to such Distribution Date and servicing
compensation to which the Master Servicer may be entitled pursuant to Section
3.10(a)(v) and (vi) provided that for purposes of this definition the amount of
the Servicing Fee will not be reduced pursuant to Section 7.02(a) except as may
be required pursuant to the last sentence of such Section 7.02(a).
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Euroclear: Euroclear Bank, S.A./NA, as operator of The Euroclear System.
Event of Default: As defined in Section 7.01.
Excess Cash Flow: With respect to the Mortgage Loans and any Distribution
Date, an amount equal to the sum of (A) the excess of (1) the Available
Distribution Amount (other than the portion of the Available Distribution Amount
described in clause (a)(vi) of the definition of Available Distribution Amount)
for that Distribution Date over (2) the sum of (x) the Interest Distribution
Amount for that Distribution Date and (y) the lesser of (i) the aggregate
Certificate Principal Balance of the Class A Certificates, Class M Certificates
and Class B Certificates immediately prior to such Distribution Date and (ii)
the Principal Remittance Amount for that Distribution Date to the extent not
used to pay interest on the Class A Certificates and Class M Certificates on
such Distribution Date and (B) the Overcollateralization Reduction Amount, if
any, for that Distribution Date.
22
Excess Overcollateralization Amount: With respect to any Distribution
Date, the excess, if any, of (a) the Overcollateralization Amount on such
Distribution Date over (b) the Required Overcollateralization Amount for such
Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Exchange Date: As defined in Section 5.02(e)(ii).
▇▇▇▇▇▇ Mae: ▇▇▇▇▇▇ ▇▇▇, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FHA: The Federal Housing Administration, or its successor.
Final Certification: As defined in Section 2.02.
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, the
Distribution Date in [____] 20[__]; with respect to the Class A-2 Certificates,
the Distribution Date in [____] 20[__]; with respect to each of the Class A-3
Certificates, the Distribution Date in [____] 20[__]; with respect to each of
the Class A-4 Certificates, the Distribution Date in [____] 20[__]; with respect
to the Class M-1S Certificates, the Distribution Date in [____] 20[__]; with
respect to the Class M-2S Certificates, the Distribution Date in [____] 20[__];
with respect to the Class M-3S Certificates, the Distribution Date in [____]
20[__]; with respect to the Class M-4 Certificates, the Distribution Date in
[____] 20[__]; with respect to the Class M-5 Certificates, the Distribution Date
in[____] 20[__]; with respect to the Class M-6 Certificates, the Distribution
Date in [____] 20[__]; with respect to the Class M-7 Certificates, the
Distribution Date in[____] 20[__]; with respect to the Class M-8 Certificates,
the Distribution Date in[____] 20[__]; with respect to the Class M-9
Certificates, the Distribution Date in[____] 20[__]; with respect to the Class B
Certificates, the Distribution Date in[____] 20[__]; and with respect to the
Class SB Certificates, the Distribution Date in[____] 20[__]. No event of
default under this Agreement will arise or become applicable solely by reason of
the failure to retire the entire Certificate Principal Balance of any Class of
Class A Certificates or Class M Certificates on or before its Final Scheduled
Distribution Date.
Fixed Swap Payment: With respect to any Distribution Date on or prior to
the Distribution Date in [_____] 20[__], an amount equal to the product of (x) a
fixed rate equal to [___]% per annum, (y) the Swap Agreement Notional Balance
for that Distribution Date and (z) a fraction, the numerator of which is equal
to the number of days in the related calculation period as provided in the Swap
Agreement, the number of days to be calculated on the basis of a year of 360
days with 12 30-day months, and the denominator of which is 360.
23
Floating Swap Payment: With respect to any Distribution Date on or prior
to the Distribution Date in [_____] 20[__], an amount equal to the product of
(x) Swap LIBOR, (y) the Swap Agreement Notional Balance for that Distribution
Date and (z) a fraction, the numerator of which is equal to the number of days
in the related calculation period as provided in the Swap Agreement and the
denominator of which is 360.
Foreclosure Profits: With respect to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition occurred in the
related Prepayment Period over the sum of the unpaid principal balance of such
Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the
fixed percentage set forth in the related Mortgage Note and indicated in Exhibit
G hereto as the "NOTE MARGIN," which percentage is added to the related Index on
each Adjustment Date to determine (subject to rounding in accordance with the
related Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the
Minimum Mortgage Rate) the interest rate to be borne by such Mortgage Loan until
the next Adjustment Date.
Independent: When used with respect to any specified Person, means such a
Person who (i) is in fact independent of the Depositor, the Master Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any direct financial
interest or any material indirect financial interest in the Depositor, the
Master Servicer or the Trustee or in an Affiliate thereof, and (iii) is not
connected with the Depositor, the Master Servicer or the Trustee as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
Index: With respect to any adjustable rate Mortgage Loan and as to any
Adjustment Date therefor, the related index as stated in the related Mortgage
Note.
Initial Certificate Principal Balance: With respect to each Class of
Certificates (other than the Class R Certificates), the Certificate Principal
Balance of such Class of Certificates as of the Closing Date as set forth in the
Preliminary Statement hereto.
Initial Purchaser: [________], as initial purchaser of the Class B
Certificates and the Class SB Certificates.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans
pursuant to any Primary Insurance Policy or any other related insurance policy
covering a Mortgage Loan, to the extent such proceeds are payable to the
mortgagee under the Mortgage, any Subservicer, the
24
Master Servicer or the Trustee and are not applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with the
procedures that the Master Servicer would follow in servicing mortgage loans
held for its own account.
Interest Accrual Period: With respect to the Class A Certificates, Class M
Certificates and Class B Certificates, (i) with respect to the Distribution Date
in [____] 20[__], the period commencing on the Closing Date and ending on the
day preceding the Distribution Date in[____] 20[__], and (ii) with respect to
any Distribution Date after the Distribution Date in[____] 20[__], the period
commencing on the Distribution Date in the month immediately preceding the month
in which such Distribution Date occurs and ending on the day preceding such
Distribution Date. With respect to the Class SB Certificates and any
Distribution Date, the prior calendar month.
Interest Distribution Amount: The sum of the Class A, Class M-1S, Class
M-2S, Class M-3S, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9 and Class B Interest Distribution Amounts.
Interested Person: As of any date of determination, the Depositor, the
Master Servicer, the Trustee, any Mortgagor, any Manager of a Mortgaged
Property, or any Person known to a Responsible Officer of the Trustee to be an
Affiliate of any of them.
Interim Certification: As defined in Section 2.02.
Late Collections: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or (ii) a
day on which banking institutions in London, England are required or authorized
to by law to be closed.
LIBOR Rate Adjustment Date: With respect to each Distribution Date, the
second LIBOR Business Day immediately preceding the commencement of the related
Interest Accrual Period.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received by
the Master Servicer in connection with the taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or in
connection with the liquidation of a defaulted Mortgage Loan through trustee's
sale, foreclosure sale or otherwise, other than REO Proceeds and Subsequent
Recoveries.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination (plus, in the case of a
junior lien Mortgage Loan, the principal balance of the
25
Senior Mortgage Loan on the Related Mortgaged Property) and the denominator of
which is the Appraised Value of the related Mortgaged Property.
Marker Rate: With respect to the Class SB Certificates or the REMIC II
Regular Interest SB-IO and any Distribution Date, a per annum rate equal to two
(2) multiplied by the weighted average of the Uncertificated REMIC I
Pass-Through Rates for each REMIC I Regular Interest (other than the REMIC I
Regular Interest AA) with the rates on each such REMIC I Regular Interest (other
than REMIC I Regular Interest ZZ) subject to a cap equal to the Pass-Through
Rate for the corresponding Class for such REMIC I Regular Interest, and the rate
on REMIC I Regular Interest ZZ subject to a cap of zero, in each case for
purposes of this calculation.
Maturity Date: With respect to each Class of Certificates representing
ownership of regular interest or Uncertificated 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, the Distribution Date in[____] 20[__], which is the
Distribution Date occurring in the month following the last scheduled monthly
payment of the Mortgage Loans.
Maximum Mortgage Loan Rate: With respect to the Class A, Class M and Class
B Certificates and any Interest Accrual Period, [___]% per annum.
Maximum Mortgage Rate: With respect to any adjustable rate Mortgage Loan,
the rate indicated in Exhibit G hereto as the "NOTE CEILING," which rate is the
maximum interest rate that may be applicable to such adjustable rate Mortgage
Loan at any time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: With respect to any adjustable rate Mortgage
Loan and any date of determination, the Maximum Mortgage Rate minus the sum of
(i) the Subservicing Fee Rate and (ii) the Servicing Fee Rate.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R)System.
Minimum Mortgage Rate: With respect to any adjustable rate Mortgage Loan,
the greater of (i) the Note Margin and (ii) the rate indicated in Exhibit G
hereto as the "NOTE FLOOR", which rate may be applicable to such adjustable rate
Mortgage Loan at any time during the life of such adjustable rate Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a
Servicing Modification.
26
Modified Mortgage Rate: With respect to any Mortgage Loan that is the
subject of a Servicing Modification, the Mortgage Rate, minus the rate per annum
by which the Mortgage Rate on such Mortgage Loan was reduced.
Modified Net Mortgage Rate: With respect to any Mortgage Loan that is the
subject of a Servicing Modification, the Net Mortgage Rate, minus the rate per
annum by which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and the Due Date in any Due Period, the payment of principal and
interest due thereon in accordance with the amortization schedule at the time
applicable thereto (after adjustment, if any, for Curtailments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, or similar proceeding or any moratorium or similar waiver or grace
period and before any Servicing Modification that constitutes a reduction of the
interest rate on such Mortgage Loan).
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or its successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan,
the mortgage, deed of trust or other comparable instrument creating a first or
junior lien on an estate in fee simple or leasehold interest in real property
securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining to
a particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached hereto as
Exhibit G (as amended from time to time to reflect the addition of Qualified
Substitute Mortgage Loans), which lists shall set forth at a minimum the
following information as to each Mortgage Loan:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) [reserved];
(iii) the maturity of the Mortgage Note ("MATURITY DATE" or
"MATURITY DT") for Mortgage Loans;
(iv) the Mortgage Rate as of origination ("ORIG RATE");
(v) the Mortgage Rate as of the Cut-off Date for an adjustable rate
Mortgage Loan ("CURR RATE");
(vi) the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
27
(vii) the scheduled monthly payment of principal, if any, and
interest as of the Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I" for
the adjustable rate Mortgage Loans);
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T", "BT" or "CT" under the column "LN FEATURE,"
indicating that the Mortgage Loan is secured by a second or vacation
residence (the absence of any such code means the Mortgage Loan is secured
by a primary residence);
(xi) a code "N" under the column "OCCP CODE", indicating that the
Mortgage Loan is secured by a non-owner occupied residence (the absence of
any such code means the Mortgage Loan is secured by an owner occupied
residence);
(xii) the Maximum Mortgage Rate for the adjustable rate Mortgage
Loans ("NOTE CEILING");
(xiii) the Maximum Net Mortgage Rate for the adjustable rate
Mortgage Loans ("NET CEILING");
(xiv) the Note Margin for the adjustable rate Mortgage Loans ("NOTE
MARGIN");
(xv) the first Adjustment Date after the Cut-off Date for the
adjustable rate Mortgage Loans ("NXT INT CHG DT");
(xvi) the Periodic Cap for the adjustable rate Mortgage Loans
("PERIODIC DECR" or "PERIODIC INCR"); and
(xvii) (the rounding of the semi-annual or annual adjustment to the
Mortgage Rate with respect to the adjustable rate Mortgage Loans ("NOTE
METHOD").
Such schedules may consist of multiple reports that collectively set forth
all of the information required.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to Section 2.01 as from time to time are held or deemed to be
held as a part of the Trust Fund, the Mortgage Loans originally so held being
identified in the initial Mortgage Loan Schedule, and Qualified Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto.
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Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with any modification thereto.
Mortgage Rate: With respect to any Mortgage Loan, the interest rate borne
by the related Mortgage Note, or any modification thereto other than a Servicing
Modification. The Mortgage Rate on the adjustable rate Mortgage Loans will
adjust on each Adjustment Date to equal the sum (rounded to the nearest multiple
of one-eighth of one percent (0.125%) or up to the nearest one-eighth of one
percent, which are indicated by a "U" on Exhibit G, except in the case of the
adjustable rate Mortgage Loans indicated by an "X" on Exhibit G or hereto under
the heading "NOTE METHOD"), of the related Index plus the Note Margin, in each
case subject to the applicable Periodic Cap, Maximum Mortgage Rate and Minimum
Mortgage Rate.
Mortgaged Property: The underlying real property securing a Mortgage Loan
or, with respect to a Cooperative Loan, the related Cooperative Lease and
Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: With respect to any Mortgage Loan as of any date of
determination, a per annum rate equal to the Mortgage Rate for such Mortgage
Loan as of such date minus the sum of (i) the related Servicing Fee Rate and
(ii) the related Subservicing Fee Rate.
Net Swap Payment: With respect to each Distribution Date, the net payment
required to be made pursuant to the terms of the Swap Agreement by either the
Swap Counterparty or the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, which net payment shall not take into account any
Swap Termination Payment.
Net WAC Cap Rate: With respect to any Distribution Date and the Class A,
Class M and Class B Certificates, a per annum rate (which will not be less than
zero) equal to the excess, if any, of (I), the product of (A) the weighted
average of the Net Mortgage Rates (or, if applicable, the Modified Net Mortgage
Rates) of the Mortgage Loans using the Net Mortgage Rates in effect for the
Monthly Payments due on such Mortgage Loans during the related Due Period and
(B) a fraction expressed as a percentage, the numerator of which is 30 and the
denominator of which is the actual number of days in the related Interest
Accrual Period, over (II) the product of (A) a fraction expressed as a
percentage, the numerator of which is any Net Swap Payments owed to the Swap
Counterparty or Swap Termination Payment not due to a Swap Counterparty Trigger
Event owed to the Swap Counterparty as of such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans before giving effect to distributions of principal to be made on such
Distribution Date and (B) a fraction expressed as a percentage, the numerator of
which is 360 and the denominator of which is the actual number of days in the
related Interest Accrual Period. For federal income tax purposes, however, with
respect to any Distribution Date and the REMIC II Regular Interests the
ownership of which is represented by the Class A Certificates, Class M
Certificates and Class B Certificates, a per annum rate equal to the weighted
average of the Uncertificated REMIC I Pass-Through Rates for the REMIC I Regular
Interests, weighted on the basis of the Uncertificated Principal Balance of each
such REMIC I Regular Interest immediately prior to such Distribution Date,
multiplied by a
29
fraction, the numerator of which is 30, and the denominator of which is the
actual number of days in the related Interest Accrual Period.
Non-Primary Residence Loans: The Mortgage Loans designated as secured by
second or vacation residences, or by non-owner occupied residences, on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be made
by the Master Servicer or Subservicer in respect of a Mortgage Loan (other than
a Deleted Mortgage Loan) which, in the good faith judgment of the Master
Servicer, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds or REO Proceeds. To the extent that any
Mortgagor is not obligated under the related Mortgage documents to pay or
reimburse any portion of any Servicing Advances that are outstanding with
respect to the related Mortgage Loan as a result of a modification of such
Mortgage Loan by the Master Servicer, which forgives amounts which the Master
Servicer or Subservicer had previously advanced, and the Master Servicer
determines that no other source of payment or reimbursement for such advances is
available to it, such Servicing Advances shall be deemed to be Nonrecoverable
Advances. The determination by the Master Servicer that it has made a
Nonrecoverable Advance shall be evidenced by an Officer's Certificate delivered
to the Depositor, the Trustee and the Master Servicer setting forth such
determination, which shall include any other information or reports obtained by
the Master Servicer such as property operating statements, rent rolls, property
inspection reports and engineering reports, which may support such
determinations. Notwithstanding the above, the Trustee shall be entitled to rely
upon any determination by the Master Servicer that any Advance previously made
is a Nonrecoverable Advance or that any proposed Advance, if made, would
constitute a Nonrecoverable Advance.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Note Margin: With respect to each adjustable rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note and indicated in Exhibit G
hereto as the "NOTE MARGIN," which percentage is added to the Index on each
Adjustment Date to determine (subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum
Mortgage Rate) the interest rate to be borne by such adjustable rate Mortgage
Loan until the next Adjustment Date.
Notional Amount: With respect to the Class SB Certificates, $[___].
Officer's Certificate: A certificate signed by the Chairman of the Board,
the President, a Vice President, Assistant Vice President, Director, Managing
Director, the Treasurer, the Secretary, an Assistant Treasurer or an Assistant
Secretary of the Depositor or the Master Servicer, as the case may be, and
delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the Trustee
and the Master Servicer, who may be counsel for the Depositor or the Master
Servicer, provided that any opinion of counsel (i) referred to in the definition
of "Disqualified Organization" or (ii) relating
30
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.
Optional Termination Date: Any Distribution Date on or after which the
Stated Principal Balance (after giving effect to distributions to be made on
such Distribution Date) of the Mortgage Loans is less than 10.00% of the Cut-off
Date Balance.
Outstanding Mortgage Loan: With respect to the Due Date in any Due Period,
a Mortgage Loan (including an REO Property) that was not the subject of a
Principal Prepayment in Full, Cash Liquidation or REO Disposition and that was
not purchased, deleted or substituted for prior to such Due Date pursuant to
Section 2.02, 2.03, 2.04 or 4.07.
Overcollateralization Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans before giving effect to distributions of principal to be made on such
Distribution Date over (b) the aggregate Certificate Principal Balance of the
Class A Certificates, Class M Certificates and Class B Certificates as of such
date, before taking into account distributions of principal to be made on that
Distribution Date.
Overcollateralization Floor: An amount equal to the product of [___]% and
the Cut-off Date Balance.
Overcollateralization Increase Amount: With respect to any Distribution
Date, an amount equal to the lesser of (i) the Excess Cash Flow for that
Distribution Date available to make payments pursuant to Section 4.02(c)(xv) 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.
Overcollateralization Reduction Amount: With respect to any Distribution
Date for which the Excess Overcollateralization Amount is, or would be, after
taking into account all other distributions to be made on such Distribution
Date, greater than zero, an amount equal to the lesser of (i) the Excess
Overcollateralization Amount for that Distribution Date and (ii) the Principal
Remittance Amount for such Distribution Date.
Ownership Interest: With respect to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to the Class A Certificates and each
Interest Accrual Period, a per annum rate equal to the least of (i) LIBOR plus
the related Class A Margin, (ii) the Maximum Mortgage Loan Rate and (iii) the
Net WAC Cap Rate. With respect to the Class M Certificates and each Interest
Accrual Period, a per annum rate equal to the least of (i) LIBOR plus the
related Class M Margin, (ii) the Maximum Mortgage Loan Rate and (iii) the Net
WAC Cap Rate. With respect to the Class B Certificates and each Interest Accrual
Period, a per annum rate equal to the least of (i) LIBOR plus the Class B
Margin, (ii) the Maximum Mortgage Loan Rate and (iii) the Net WAC Cap Rate.
31
With respect to the Class SB Certificates or the REMIC II Regular Interest
SB-IO, a per annum rate equal to the percentage equivalent of a fraction, the
numerator of which is (x) the sum, for each REMIC I Regular Interest, of the
excess of the Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular
Interest over the Marker Rate, applied to a notional amount equal to the
Uncertificated Principal Balance of the applicable REMIC Regular Interest and
the denominator of which is (y) the Uncertificated Notional Amount.
Paying Agent: [______], or any successor Paying Agent appointed by the
Trustee.
Percentage Interest: With respect to any Class A, Class M or Class B
Certificate, the undivided percentage ownership interest in the related Class
evidenced by such Certificate, which percentage ownership interest shall be
equal to the Initial Certificate Principal Balance thereof divided by the
aggregate Initial Certificate Principal Balance of all of the Certificates of
the same Class. The Percentage Interest with respect to a Class SB Certificate
or Class R Certificate shall be stated on the face thereof.
Periodic Cap: With respect to each adjustable rate Mortgage Loan, the
periodic rate cap that limits the increase or the decrease of the related
Mortgage Rate on any Adjustment Date pursuant to the terms of the related
Mortgage Note.
Permanent Regulation S Global Offered Certificate: Any one of the Class B
Certificates substantially in the form of Exhibit C-3 hereto or any one of the
Class SB Certificates substantially in the form of Exhibit D-3 hereto, and, in
both cases, more fully described in Section 5.02(e) hereof.
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
32
of such institution shall be A-1+ in the case of Standard & Poor's if
Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original maturities
of not more than 365 days) of any corporation incorporated under the laws
of the United States or any state thereof which on the date of acquisition
has been rated by each Rating Agency in its highest short-term rating
available; provided that such commercial paper and demand notes shall have
a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each
Rating Agency in its highest long-term rating available (which may be
managed by the Trustee or one of its Affiliates); and
(vi) other obligations or securities that are acceptable to each
Rating Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency below
the then-current rating 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.
33
Pool Stated Principal Balance: With respect to any date of determination,
the aggregate of the Stated Principal Balances of each Mortgage Loan that was an
Outstanding Mortgage Loan on the Due Date immediately preceding the Due Period
preceding such date of determination.
Posted Collateral Account: The separate account created and maintained by
the Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, pursuant to Section 4.10(e).
Prepayment Assumption: With respect to the Class A, Class M and Class B
Certificates, the prepayment assumption to be used for determining the accrual
of original issue discount and premium and market discount on such Certificates
for federal income tax purposes, which assumes a prepayment rate of 20% HEP with
respect to the fixed-rate Mortgage Loans, and 100% PPC with respect to the
adjustable-rate Mortgage Loans.
Prepayment Interest Shortfall: With respect to any Distribution Date and
any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that
was the subject of (a) a Principal Prepayment in Full during the related
Prepayment Period, an amount equal to the excess of one month's interest at the
related Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) on the Stated Principal Balance of such Mortgage Loan
over the amount of interest (adjusted to the related Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan)) paid by the
Mortgagor for such Prepayment Period to the date of such Principal Prepayment in
Full or (b) a Curtailment during the prior calendar month, an amount equal to
one month's interest at the related Net Mortgage Rate (or Modified Net Mortgage
Rate in the case of a Modified Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: With respect to any Distribution Date, the calendar
month preceding the month of distribution.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance as indicated by a numeric code on Exhibit G with the exception of
either code "23" or "96" under the column "MI CO CODE".
Principal Distribution Amount: With respect to any Distribution Date, the
lesser of (a) the excess of (i) the Available Distribution Amount over (ii) the
Interest Distribution Amount and (b) the sum of:
(i) the principal portion of each Monthly Payment received or
Advanced with respect to the related Due Period on each Outstanding
Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan repurchased
during the related Prepayment Period (or deemed to have been so
repurchased in accordance with Section 3.07(b)) pursuant to Section 2.02,
2.03, 2.04 or 4.07, the amount of any shortfall deposited in the Custodial
Account in connection with the substitution of a Deleted Mortgage Loan
pursuant to Section 2.03 or 2.04 during the related Prepayment Period and
the Stated Principal Balance of Mortgage Loans purchased pursuant to
Section 9.01 in connection with such Distribution Date, if applicable;
34
(iii) the principal portion of all other unscheduled collections,
other than Subsequent Recoveries, on the Mortgage Loans (including,
without limitation, Principal Prepayments in Full, Curtailments, Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during the
related Prepayment Period to the extent applied by the Master Servicer as
recoveries of principal of the Mortgage Loans pursuant to Section 3.14;
(iv) the lesser of (a) Subsequent Recoveries for such Distribution
Date and (b) the principal portion of any Realized Losses allocated to any
Class of Certificates on a prior Distribution Date and remaining unpaid;
(v) the sum of (I) the lesser of (a) the Excess Cash Flow for that
Distribution Date (to the extent not used pursuant to clause (iv) of this
definition on such Distribution Date) and (b) the principal portion of any
Realized Losses incurred (or deemed to have been incurred) on any Mortgage
Loans in the calendar month preceding such Distribution Date to the extent
covered by Excess Cash Flow for that Distribution Date and (II) any amount
described in Clause (i) of Section 4.09(c); and (vi) the sum of (I) the
lesser of (a) the Excess Cash Flow for such Distribution Date (to the
extent not used to cover Realized Losses pursuant to clause (iv) and (v)
of this definition on such Distribution Date) and (b) the
Overcollateralization Increase Amount for such Distribution Date to the
extent covered by Excess Cash Flow for that Distribution Date and (II) any
amount described in Clause (ii) of Section 4.09(c);
minus
(vii) the amount of any Overcollateralization Reduction Amount for
such Distribution Date;
(viii) the amount of any Capitalization Reimbursement Amount for
such Distribution Date; and
(ix) any Net Swap Payments or Swap Termination Payment not due to a
Swap Counterparty Trigger Event due to the Swap Counterparty to the extent
not previously paid from interest or principal collections on the Mortgage
Loans;
provided, however, that the Principal Distribution Amount on any Distribution
Date shall not be less than zero or greater than the aggregate Certificate
Principal Balance of the Class A, Class M and Class B Certificates.
Principal Prepayment: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire principal balance of a Mortgage Loan.
35
Principal Remittance Amount: With respect to any Distribution Date, the
sum of the amounts described in clauses (b)(i), (b)(ii) and (b)(iii) of the
definition of Principal Distribution Amount for that Distribution Date.
Private Offered Certificates: The Class B Certificates and the Class SB
Certificates, collectively.
Program Guide: The Residential Funding Seller Guide for mortgage
collateral sellers that participate in Residential Funding's standard mortgage
programs, and Residential Funding's Servicing Guide and any other subservicing
arrangements which Residential Funding has arranged to accommodate the servicing
of the Mortgage Loans.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to Section 2.02,
2.03, 2.04, 4.07 or 4.08, an amount equal to the sum of (i) (a) if such Mortgage
Loan (or REO Property) is being purchased pursuant to Sections 2.02, 2.03, 2.04
or 4.07 of this Agreement, 100% of the Stated Principal Balance thereof plus the
principal portion of any related unreimbursed Advances or (b) if such Mortgage
Loan (or REO Property) is being purchased pursuant to Section 4.08 of this
Agreement, the greater of (1) 100% of the Stated Principal Balance thereof plus
the principal portion of any related unreimbursed Advances on such Mortgage Loan
(or REO Property) and (2) the fair market value thereof plus the principal
portion of any related unreimbursed Advances and (ii) unpaid accrued interest at
the Adjusted Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) plus the rate per annum at which the Servicing Fee is
calculated, or (b) in the case of a purchase made by the Master Servicer, at the
Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan), in each case on the Stated Principal Balance thereof to, but not
including, 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 Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a FNMA- or
FHLMC-approved mortgage insurer or having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Depositor for a Deleted Mortgage Loan which must, on
the date of such substitution, as confirmed in an Officers' Certificate
delivered to the Trustee, (i) have an outstanding principal balance, after
deduction of the principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one Mortgage Loan
for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after
such deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by Residential
Funding, in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more
36
than 1% per annum higher than the Mortgage Rate and Net Mortgage Rate,
respectively, of the Deleted Mortgage Loan as of the date of substitution; (iii)
have a Loan-to-Value Ratio at the time of substitution no higher than that of
the Deleted Mortgage Loan at the time of substitution; (iv) have a remaining
term to stated maturity not greater than (and not more than one year less than)
that of the Deleted Mortgage Loan; (v) comply with each representation and
warranty set forth in Sections 2.03 and 2.04 hereof and Section 4 of the
Assignment Agreement; and (vi) in the case of the adjustable rate Mortgage
Loans, (w) have a Mortgage Rate that adjusts with the same frequency and based
upon the same Index as that of the Deleted Mortgage Loan, (x) have a Note Margin
not less than that of the Deleted Mortgage Loan; (y) have a Periodic Rate Cap
that is equal to that of the Deleted Mortgage Loan; and (z) have a next
Adjustment Date no later than that of the Deleted Mortgage Loan.
Rating Agency: 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 Depositor, notice
of which designation shall be given to the Trustee and the Master Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property) as to
which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) from the Due
Date as to which interest was last paid or advanced to Certificateholders up to
the last day of the month in which the Cash Liquidation (or REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied as recoveries
of interest at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case
of a Modified Mortgage Loan) and to principal of the Mortgage Loan, net of the
portion thereof reimbursable to the Master Servicer or any Subservicer with
respect to related Advances, Servicing Advances or other expenses as to which
the Master Servicer or Subservicer is entitled to reimbursement thereunder but
which have not been previously reimbursed. With respect to each Mortgage Loan
which is the subject of a Servicing Modification, (a) (1) the amount by which
the interest portion of a Monthly Payment or the principal balance of such
Mortgage Loan was reduced or (2) the sum of any other amounts owing under the
Mortgage Loan that were forgiven and that constitute Servicing Advances that are
reimbursable to the Master Servicer or a Subservicer, and (b) any such amount
with respect to a Monthly Payment that was or would have been due in the month
immediately following the month in which a Principal Prepayment or the Purchase
Price of such Mortgage Loan is received or is deemed to have been received. With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the object of a Debt Service Reduction,
the amount of such Debt Service Reduction attributable to interest.
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
37
with the representations and warranties made regarding the related Mortgage Loan
and either (A) the related Mortgage Loan is not in default with regard to
payments due thereunder or (B) delinquent payments of principal and interest
under the related Mortgage Loan and any premiums on any applicable primary
hazard insurance policy and any related escrow payments in respect of such
Mortgage Loan are being advanced on a current basis by the Master Servicer or a
Subservicer, in either case without giving effect to any Debt Service Reduction.
Record Date: With respect to each Distribution Date and the Class A, Class
M and Class B Certificates which are Book-Entry Certificates, the close of
business on the Business Day prior to such Distribution Date.
With respect to each Distribution Date and the Certificates (other than
the Class A, Class M and Class B Certificates), the close of business on the
last Business Day of the month next preceding the month in which the related
Distribution Date occurs, except in the case of the first Record Date, which
shall be the Closing Date.
Reference Bank Rate: As defined in Section 1.02.
Regular Interest: Any one of the 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.
Regulation S Global Offered Certificate: Any Temporary Regulation S Global
Offered Certificate or Permanent Regulation S Global Offered Certificate.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans resulting
from the Relief Act or similar legislation or regulations.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code. As used herein the term "REMIC" shall mean REMIC I and
REMIC II.
REMIC Administrator: Residential Funding Company, LLC. If Residential
Funding Company, LLC is found by a court of competent jurisdiction to no longer
be able to fulfill its obligations as REMIC Administrator under this Agreement
the Master Servicer or Trustee acting as successor master servicer shall appoint
a successor REMIC Administrator, subject to assumption of the REMIC
Administrator obligations under this Agreement.
REMIC I: The segregated pool of assets subject hereto (exclusive of the
Supplemental Interest Trust Account and Swap Agreement, each of which is not an
asset of any REMIC), constituting a portion of the primary trust created hereby
and to be administered hereunder, with
38
respect to which a separate REMIC election is to be made (exclusive of the
Supplemental Interest Trust Account and Swap Agreement, each of which is not an
asset of any REMIC), consisting of: (i) the Mortgage Loans and the related
Mortgage Files; (ii) all payments on and collections in respect of the Mortgage
Loans due after the Cut-off Date (other than Monthly Payments due in the month
of the Cut-off Date) as shall be on deposit in the Custodial Account or in the
Certificate Account and identified as belonging to the Trust Fund; (iii)
property which secured a Mortgage Loan and which has been acquired for the
benefit of the Certificateholders by foreclosure or deed in lieu of foreclosure;
(iv) the hazard insurance policies and Primary Insurance Policies pertaining to
the Mortgage Loans, if any; and (v) all proceeds of clauses (i) through (iv)
above.
REMIC I Regular Interest: Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular
interest" in REMIC I. Each REMIC I Regular Interest shall accrue interest at the
related Uncertificated REMIC I Pass-Through Rate in effect from time to time,
and shall be entitled to distributions of principal, subject to the terms and
conditions hereof, in an aggregate amount equal to its initial Uncertificated
Principal Balance as set forth in the Preliminary Statement hereto. The
designations for the respective REMIC I Regular Interests are set forth in the
Preliminary Statement hereto.
REMIC I Interest Loss Allocation Amount: With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Uncertificated
Principal Balance of the REMIC I Regular Interests then outstanding and (ii) the
Uncertificated Pass-Through Rate for REMIC I Regular Interest AA minus the
Marker Rate, divided by (b) 12.
REMIC I Overcollateralized Amount: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC I Regular Interests minus (ii) the aggregate Uncertificated Principal
Balances of the REMIC I Regular Interests (other than REMIC I Regular Interests
AA and ZZ), in each case as of such date of determination.
REMIC I Principal Loss Allocation Amount: With respect to any Distribution
Date, an amount equal to the product of (i) the aggregate Stated Principal
Balance of the Mortgage Loans then outstanding and (ii) 1 minus a fraction, the
numerator of which is two times the sum of the Uncertificated Principal Balances
of REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-1S, M-2S, M-3S, ▇-▇, ▇-▇,
▇-▇, ▇-▇, ▇-▇, M-9 and B and the denominator of which is the sum of the
Uncertificated Principal Balances of REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇,
▇-▇, M-1S, M-2S, M-3S, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇ and ZZ.
REMIC I Regular Interest AA: 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 A-1: 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.
39
REMIC I Regular Interest A-2: 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 A-3: 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 A-4: 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 M-1S: 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 M-2S: 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 M-3S: 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 M-4: 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 M-5: 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 M-6: 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 M-7: 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
40
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 M-8: 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 M-9: 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 B: 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 ZZ: 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 ZZ Maximum Interest Deferral Amount: With respect
to any Distribution Date, the excess of (i) Uncertificated Accrued Interest
calculated with the REMIC I Regular Interest ZZ Uncertificated Pass-Through Rate
and an Uncertificated Principal Balance equal to the excess of (x) the
Uncertificated Principal Balance of REMIC I Regular Interest ZZ over (y) the
REMIC I Overcollateralized Amount, in each case for such Distribution Date, over
(ii) the sum of Uncertificated Accrued Interest on REMIC I Regular Interest A-1
through REMIC I Regular Interest B, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the Pass-Through Rate for the corresponding
Class for the purpose of this calculation.
REMIC II: The segregated pool of assets described in the Preliminary
Statement.
REMIC II Regular Interest: Any "regular interest" issued by REMIC II the
ownership of which is evidenced by a Class A Certificate, a Class M Certificate,
the Class B Certificate or the Class SB Certificate.
REMIC II Regular Interest SB-IO: A separate non-certificated regular
interest of REMIC II designated as a REMIC II Regular Interest. 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 an
aggregate amount equal to interest distributable with respect to the Class SB
Certificate pursuant to the terms and conditions hereof.
REMIC II Regular Interest SB-PO: A separate non-certificated regular
interest of REMIC II designated as a REMIC II Regular Interest. REMIC II Regular
Interest SB-PO shall have no entitlement to interest and shall be entitled to
distributions of principal subject to the
41
terms and conditions hereof, in an aggregate amount equal to principal
distributable with respect to the Class SB Certificates pursuant to the terms
and conditions hereof.
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.
REMIC Regular Interests: the REMIC I Regular Interests and REMIC II
Regular Interests.
REO Acquisition: The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
REO Disposition: With respect to any REO Property, a determination by the
Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.
REO Imputed Interest: With respect to any REO Property, for any period, an
amount equivalent to interest (at a rate equal to the sum of the Net Mortgage
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property or with respect to a Cooperative Loan, the related
Cooperative Apartment) which proceeds are required to be deposited into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer, on
behalf of the Trust Fund for the benefit of the Certificateholders pursuant to
Section 3.14, through foreclosure or deed in lieu of foreclosure in connection
with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been
subject to an interest rate reduction, (ii) has been subject to a term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized by adding such
amount to the Stated Principal Balance of such Mortgage Loan; provided, however,
that a Mortgage Loan modified in accordance with clause (i) above for a
temporary period shall not be a Reportable Modified Mortgage Loan if such
Mortgage Loan has not been delinquent in payments of principal and interest for
six months since the date of such modification if that interest rate reduction
is not made permanent thereafter.
Repurchase Event: As defined in the Assignment Agreement.
42
Request for Release: A request for release, the form of which is attached
as Exhibit H hereto, or an electronic request in a form acceptable to the
Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any
insurance policy which is required to be maintained from time to time under this
Agreement, the Program Guide or the related Subservicing Agreement in respect of
such Mortgage Loan.
Required Overcollateralization Amount: With respect to any Distribution
Date, (a) if such Distribution Date is prior to the Stepdown Date, [___]% of the
Cut-off Date Balance, or (b) if such Distribution Date is on or after the
Stepdown Date, the greater of (i) [___]% of the then current aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the related Due Period
and (ii) the Overcollateralization Floor; provided, however, that if a Trigger
Event is in effect, the Required Overcollateralization Amount shall be equal to
the Required Overcollateralization Amount for the immediately preceding
Distribution Date. The Required Overcollateralization Amount may be reduced from
time to time with notification to the Rating Agencies.
Residential Funding: Residential Funding Company, LLC, a Delaware limited
liability company, in its capacity as seller of the Mortgage Loans to the
Depositor and not in its capacity as Master Servicer, and any successor thereto.
Responsible Officer: When used with respect to the Trustee, any officer of
the Corporate Trust Department of the Trustee, including any Senior Vice
President, any Vice President, any Assistant Vice President, any Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any other officer of
the Trustee, in each case with direct responsibility for the administration of
this Agreement.
RFC Exemption: As defined in Section 5.02(f)(ii).
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect from
time to time.
Rule 144A Global Offered Certificate: Any one of the Class B Certificates
substantially in the form of Exhibit C-1 hereto or any one of the Class SB
Certificates substantially in the form of Exhibit D-1 hereto, and, in both
cases, more fully described in Section 5.02(e) hereof.
Securities Act: Securities Act of 1933, as amended.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
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.
Senior Enhancement Percentage: For any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class M Certificates and Class B
Certificates and (ii) the Overcollateralization Amount, in each case prior to
the distribution of the Principal Distribution Amount on such
43
Distribution Date and the denominator of which is (y) the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to distributions to
be made on that Distribution Date.
Sequential Class M Principal Distribution Amount: With respect to any
Distribution Date (i) prior to the Stepdown Date or on or after the Stepdown
Date if a Trigger Event is in effect for that Distribution Date, the remaining
Principal Distribution Amount for that Distribution Date after distribution of
the Class A Principal Distribution Amount, or (ii) on or after the Stepdown Date
if a Trigger Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date after distribution of the Class A Principal Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount for
that Distribution Date) and (2) the aggregate Certificate Principal
Balance of the Sequential Class M Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1)
approximately [___]% and (2) the aggregate Stated Principal Balance of the
mortgage loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the mortgage loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Servicing Accounts: The account or accounts created and maintained
pursuant to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of
pocket" costs and expenses incurred in connection with a default, delinquency or
other unanticipated event by the Master Servicer or a Subservicer in the
performance of its servicing obligations, including, but not limited to, the
cost of (i) the preservation, restoration and protection of a Mortgaged Property
(or, with respect to a Cooperative Loan, the related Cooperative Apartment),
(ii) any enforcement or judicial proceedings, including foreclosures, including
any expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS System, (iii) the management and
liquidation of any REO Property, (iv) any mitigation procedures implemented in
accordance with Section 3.07 and (v) compliance with the obligations under
Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the Master Servicer
or any Affiliate of the Master Servicer provides services such as appraisals and
brokerage services that are customarily provided by Persons other than servicers
of mortgage loans, reasonable compensation for such services.
Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date,
the fee payable monthly to the Master Servicer in respect of master servicing
compensation that accrues at an annual rate equal to the Servicing Fee Rate
multiplied by the Stated Principal Balance of
44
such Mortgage Loan as of the related Due Date in the related Due Period, as may
be adjusted pursuant to Section 3.16(e).
Servicing Fee Rate: With respect to any Mortgage Loan, the per annum rate
designated on the Mortgage Loan Schedule as the "MSTR SERV FEE" as may be
adjusted with respect to successor Master Servicers as provided in Section 7.02,
which rate shall never be greater than the Mortgage Rate of such Mortgage Loan.
Servicing Modification: Any reduction of the interest rate on or the
Stated Principal Balance of a Mortgage Loan, any extension of the final maturity
date of a Mortgage Loan, and any increase to the Stated Principal Balance of a
Mortgage Loan by adding to the Stated Principal Balance unpaid principal and
interest and other amounts owing under the Mortgage Loan, in each case pursuant
to a modification of a Mortgage Loan that is in default, or for which, in the
judgment of the Master Servicer, default is reasonably foreseeable in accordance
with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee on the Closing Date by the Master Servicer, as such list may from
time to time be amended.
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date
and the Mortgage Loans, the arithmetic average, for each of the three
Distribution Dates ending with such Distribution Date, of the fraction,
expressed as a percentage, equal to (x) the aggregate Stated Principal Balance
of the Mortgage Loans that are 60 or more days delinquent in payment of
principal and interest for that Distribution Date, including Mortgage Loans in
bankruptcy that are 60 or more days delinquent, foreclosure and REO Properties,
over (y) the aggregate Stated Principal Balance of all of the Mortgage Loans
immediately preceding that Distribution Date.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its successors in interest.
Startup Date: The day designated as such pursuant to Article X hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property, at any given time, (i) the sum of (a) the Cut-off Date Principal
Balance of the Mortgage Loan, and (b) any amount by which the Stated Principal
Balance of the Mortgage Loan has been increased pursuant to a Servicing
Modification, minus (ii) the sum of (a) the principal portion of the Monthly
Payments due with respect to such Mortgage Loan or REO Property during each Due
Period commencing on the first Due Period after the Cut-Off Date and ending with
the Due Period related to the previous Distribution Date which were received or
with respect to which an Advance was made, and (b) all Principal Prepayments
with respect to such Mortgage Loan or REO Property, and all Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the Master
Servicer as recoveries of principal in accordance with Section 3.14 with respect
to such Mortgage Loan or REO Property, in each case which were distributed
pursuant to Section 4.02 or 4.03 on any previous Distribution Date, and (c) any
Realized Loss
45
incurred with respect to such Mortgage Loan allocated to Certificateholders with
respect thereto for any previous Distribution Date. Stepdown Date: The
Distribution Date which is the earlier to occur of (i) the Distribution Date
immediately succeeding the Distribution Date on which the aggregate Certificate
Principal Balance of the Class A Certificates has been reduced to zero or (ii)
the later to occur of (x) the Distribution Date occurring in [____] 20[__] and
(y) the first Distribution Date on which the Senior Enhancement Percentage is
equal to or greater than [___]%.
Subordination: The provisions described in Section 4.05 relating to the
allocation of Realized Losses.
Subsequent Recoveries: As of any Distribution Date, amounts received by
the Master Servicer (net of any related expenses permitted to be reimbursed
pursuant to Section 3.10) or surplus amounts held by the Master Servicer to
cover estimated expenses (including, but not limited to, recoveries in respect
of the representations and warranties made by the related Seller pursuant to the
applicable Seller's Agreement and assigned to the Trustee pursuant to Section
2.04) specifically related to a Mortgage Loan that was the subject of a Cash
Liquidation or an REO Disposition prior to the related Prepayment Period and
that resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in
the Program Guide in respect of the qualification of a Subservicer as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and interest
on a Mortgage Loan which is advanced by the related Subservicer (net of its
Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in
accordance with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Depositor.
Subservicing Fee: With respect to any Mortgage Loan, the fee payable
monthly to the related Subservicer (or, in the case of a Nonsubserviced Mortgage
Loan, to the Master Servicer) in respect of subservicing and other compensation
that accrues with respect to each Distribution Date at an annual rate equal to
the Subservicing Fee Rate multiplied by the Stated Principal Balance of such
Mortgage Loan as of the related Due Date in the related Due Period.
46
Subservicing Fee Rate: The per annum rate designated on the Mortgage Loan
Schedule as the "SUBSERV FEE".
Supplemental Interest Trust Account: The separate trust account created
and maintained by the Supplemental Interest Trust Trustee for the benefit of the
Certificateholders pursuant to Section 4.09(a).
Supplemental Interest Trust: The separate trust created and maintained by
the Supplemental Interest Trust Trustee pursuant to Section 4.09(a). The primary
activities of the Supplemental Interest Trust shall be:
(i) holding the Swap Agreement;
(ii) receiving collections or making payments with respect to the
Swap Agreement; and
(iii) engaging in other activities that are necessary or incidental
to accomplish these limited purposes, which activities cannot be contrary
to the status of the Supplemental Interest Trust as a qualified special
purpose entity under existing accounting literature.
Swap Agreement: The interest rate swap agreement between the Swap
Counterparty and the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, which agreement provides for Net Swap Payments and
Swap Termination Payments to be paid, as provided therein, together with any
schedules, confirmations, credit support annexes or other agreements relating
thereto, attached hereto as Exhibit U.
Swap Agreement Notional Balance: As to the Swap Agreement and each
Floating Rate Payer Payment Date (as defined in the Swap Agreement), the amount
set forth on Exhibit T hereto for such Floating Rate Payer Payment Date.
Swap Counterparty: The swap counterparty under the Swap Agreement either
(a) entitled to receive payments from the Supplemental Interest Trust Trustee,
on behalf of the Supplemental Interest Trust, from amounts payable by the
Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, under this Agreement or (b) required to make payments to the Supplemental
Interest Trust Trustee, on behalf of the Supplemental Interest Trust, for
payments to the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, in either case pursuant to the terms of the Swap
Agreement, and any successor in interest or assign. Initially, the Swap
Counterparty shall be Deutsche Bank AG, New York Branch.
Swap LIBOR: LIBOR as determined pursuant to the Swap Agreement.
Swap Counterparty Trigger Event: With respect to any Distribution Date,
(i) an "Event of Default" under the Swap Agreement with respect to which the
Swap Counterparty is a Defaulting Party, (ii) a "Termination Event" under the
Swap Agreement with respect to which the Swap Counterparty is the sole Affected
Party, or (iii) an "Additional Termination Event" under the Swap Agreement with
respect to which the Swap Counterparty is the sole Affected Party.
47
Swap Termination Payment: Upon the designation of an "Early Termination
Date" as defined in the Swap Agreement, the payment to be made by the
Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, to the Swap Counterparty from payments from the Supplemental Interest
Trust, or by the Swap Counterparty to the Supplemental Interest Trust Trustee,
on behalf of the Supplemental Interest Trust for payment to the Supplemental
Interest Trust, as applicable, pursuant to the terms of the Swap Agreement.
Tax Returns: The federal income tax return on Internal Revenue Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed
on behalf of any REMIC due to its classification as a REMIC under the REMIC
Provisions, together with any and all other information, reports or returns that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
Telerate Screen Page 3750: As defined in Section 1.02.
Transaction Party: As defined in Section 12.02(a).
Temporary Regulation S Global Offered Certificate: Any one of the Class B
Certificates substantially in the form of Exhibit C-2 hereto or any one of the
Class SB Certificates substantially in the form of Exhibit D-2 hereto, and, in
both cases, more fully described in Section 5.02(e) hereof.
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or
other form of assignment of any Ownership Interest in a Certificate.
Transfer Affidavit and Agreement: As defined in Section 5.02(f).
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date if either (i) with respect to any Distribution Date, the
three-month average of the Sixty-Plus Delinquency Percentage, as determined on
that Distribution Date and the immediately preceding two Distribution Dates,
equals or exceeds [___]% of the Senior Enhancement Percentage or (ii) the
aggregate amount of Realized Losses on the Mortgage Loans as a percentage of the
Cut-off Date Balance exceeds the applicable amount set forth below:
[_____] 20[__] to [_____] 20[__] [___]% with respect to [_____] 20[__], plus
an additional 1/12th of [___]% for each
month thereafter.
48
[_____] 20[__] to [_____] 20[__] [___]% with respect to [_____] 20[__], plus
an additional 1/12th of [___]% for each
month thereafter.
[_____] 20[__] to [_____] 20[__] [___]% with respect to [_____] 20[__], plus
an additional 1/12th of [___]% for each
month thereafter.
[_____] 20[__] to [_____] 20[__] [___]% with respect to [_____] 20[__], plus
an additional 1/12th of [___]% for each
month thereafter.
[_____] 20[__] to [_____] 20[__] [___]% with respect to [_____] 20[__], plus
an additional 1/12th of [___]% for each
month thereafter.
[_____] 20[__] and thereafter [___]%
Trust Fund: The segregated pool of assets subject hereto, consisting of:
(i) the Mortgage Loans and the related Mortgage Files; (ii) all payments on and
collections in respect of the Mortgage Loans due after the Cut-off Date (other
than Monthly Payments due in the month of the Cut-off Date) as shall be on
deposit in the Custodial Account or in the Certificate Account and identified as
belonging to the Trust Fund; (iii) property which secured a Mortgage Loan and
which has been acquired for the benefit of the Certificateholders by foreclosure
or deed in lieu of foreclosure; (iv) the hazard insurance policies and Primary
Insurance Policies pertaining to the Mortgage Loans, if any; (v) rights under
the Swap Agreement and the Supplemental Interest Trust Account; and (vi) all
proceeds of clauses (i) through (v) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Uncertificated Accrued Interest: With respect to any REMIC I 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
its Uncertificated Principal Balance immediately prior to such Distribution
Date. Uncertificated Accrued Interest for the REMIC I Regular Interests shall
accrue on the basis of a 360-day year consisting of twelve 30-day months. For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests for any Distribution Date, any Prepayment Interest
Shortfalls and Relief Act Shortfalls (to the extent not covered by Compensating
Interest) relating to the Mortgage Loans for any Distribution Date shall be
allocated first, to Uncertificated Accrued Interest payable to REMIC I Regular
Interest AA and REMIC I Regular Interest ZZ up to an aggregate amount equal to
the REMIC I Interest Loss Allocation Amount, 98% and 2%, respectively, and
thereafter any remaining Prepayment Interest Shortfalls (to the extent not
covered by Eligible Master Servicing Compensation) for any Distribution Date
shall be allocated among REMIC I Regular Interest AA, REMIC I Regular Interest
A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest A-3, REMIC I Regular
Interest A-4, REMIC I Regular Interest M -1, REMIC I Regular Interest M-2S,
REMIC I Regular Interest M-3S, REMIC I Regular Interest M-1S, REMIC I Regular
Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest M-6, REMIC
I Regular Interest M-7,
49
REMIC I Regular Interest M-8, REMIC I Regular Interest M-9, REMIC I Regular
Interest B and REMIC I Regular Interest ZZ, pro rata based on, and to the extent
of, Uncertificated Accrued Interest, as calculated without application of this
sentence.
Uncertificated Notional Amount: With respect to the REMIC II Regular
Interest SB-IO component of the Class SB Certificates and any Distribution Date,
an amount equal to the aggregate Uncertificated Principal Balance of the REMIC I
Regular Interests for such Distribution Date.
Uncertificated Principal Balance: As of the Closing Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC I Regular Interest shall be reduced by all
distributions of principal deemed made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 4.02 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.05, and the Uncertificated Principal Balance of
REMIC I Regular Interest ZZ shall be increased by the related interest deferrals
as provided in Section 4.02. The Uncertificated Principal Balance of each REMIC
I Regular Interest shall never be less than zero. With respect to the REMIC II
Regular Interest SB-PO an initial amount equal to the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC II
Regular Interest shall be reduced by all distributions of principal deemed made
on such REMIC Regular Interest on such Distribution Date pursuant to Section
4.02 and, if and to the extent necessary and appropriate, shall be further
reduced on such Distribution Date by Realized Losses as provided in Section
4.05.
Uncertificated REMIC I Pass-Through Rate: With respect to each REMIC I
Regular Interest and any Distribution Date, a per annum rate equal to the
weighted average of the Net Mortgage Rates of the Mortgage Loans in effect for
the scheduled Monthly Payments due on such Mortgage Loans during the related Due
Period.
Uninsured Cause: Any cause of damage to property subject to a Mortgage
such that the complete restoration of such property is not fully reimbursable by
the hazard insurance policies.
United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity (treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations) provided that, for purposes solely of the restrictions on
the transfer of Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate that is described
in Section 7701(a)(30)(D) of the Code, or a trust that is described in Section
7701(a)(30)(E) of the Code.
VA: The Veterans Administration, or its successor.
50
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, Class M and Class B Certificates, in
proportion to the outstanding Certificate Principal Balances of their respective
Certificates; 1% of all of the Voting Rights shall be allocated among the
Holders of the Class SB Certificates; 0.50% and 0.50%, of all of the Voting
Rights shall be allocated to each of the Holders of the Class R Certificates,
respectively; in each case to be allocated among the Certificates of such Class
in accordance with their respective Percentage Interest.
Section 1.02. Determination of LIBOR
LIBOR applicable to the calculation of the Pass-Through Rate on the Class
A, Class M and Class B Certificates for any Interest Accrual Period will be
determined on each LIBOR Rate Adjustment Date. On each LIBOR Rate Adjustment
Date, or if such LIBOR Rate Adjustment Date is not a Business Day, then on the
next succeeding Business Day, LIBOR shall be established by the Trustee and, as
to any Interest Accrual Period, will equal the rate for one month United States
dollar deposits that appears on the Telerate Screen Page 3750 as of 11:00 A.M.,
London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page 3750"
means the display designated as page 3750 on the Bridge Telerate Service (or
such other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, LIBOR shall be so established
by use of such other service for displaying LIBOR or comparable rates as may be
selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on
the basis of the rates at which deposits in U.S. Dollars are offered by the
reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Trustee after
consultation with the Master Servicer) as of 11:00 A.M., London time, on the
LIBOR Rate Adjustment Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A, Class M and Class B Certificates then
outstanding. The Trustee shall request the principal London office of each of
the reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations
rounded up to the next multiple of 1/16%. If on such date fewer than two
quotations are provided as requested, the rate will be the arithmetic mean of
the rates quoted by one or more major banks in New York City, selected by the
Trustee after consultation with the Master Servicer, as of 11:00 A.M., New York
City time, on such date for loans in U.S. Dollars to leading European banks for
a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A, Class M and Class B 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.
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, Class M and Class B Certificates for the relevant Interest
51
Accrual Period, in the absence of manifest error, will be final and binding.
Promptly following each LIBOR Rate Adjustment Date the Trustee shall supply the
Master Servicer with the results of its determination of LIBOR on such date.
Furthermore, the Trustee shall supply to any Certificateholder so requesting by
calling the Trustee at 1-800-934-6802 the Pass-Through Rate on the Class A
Certificates and Class M Certificates for the current and the immediately
preceding Interest Accrual Period.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee without recourse all the right, title and
interest of the Depositor in and to (i) the Mortgage Loans, including all
interest and principal on or with respect to the Mortgage Loans due on or after
the Cut-off Date (other than Monthly Payments due on the Mortgage Loans in the
month of the Cut-off Date); and (ii) all proceeds of the foregoing. In addition,
on the Closing Date, the Supplemental Interest Trust Trustee is hereby directed
to enter into the Swap Agreement on behalf of the Supplemental Interest Trust
with the Swap Counterparty.
The Depositor, the Master Servicer and the Trustee agree that it is
not intended that any mortgage loan be included in the Trust Fund that is either
(i) a "High-Cost Home Loan" as defined in the New Jersey Home Ownership Security
Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the
New Mexico Home Loan Protection Act effective January 1, 2004, (iii) a "High
Cost Home Mortgage Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act effective November 7, 2004 or (iv) a "High-Cost Home Loan" as
defined in the Indiana Home Loan Practices Act effective as of January 1, 2005.
(b) In connection with such assignment, and contemporaneously with the
delivery of this Agreement, the Depositor delivered or caused to be delivered
hereunder to the Trustee or a Custodian, and except as set forth in Section
2.01(c) below and subject to Section 2.01(d) below, the Depositor does hereby
(1) with respect to each Mortgage Loan, deliver to the Master Servicer (or an
Affiliate of the Master Servicer)each of the documents or instruments described
in clause (I)(ii) below (and the Master Servicer shall hold (or cause such
Affiliate to hold) such documents or instruments in trust for the use and
benefit of all present and future Certificateholders), (2) with respect to each
MOM Loan, deliver to and deposit with the Trustee, or the Custodian as the duly
appointed agent of the Trustee for such purpose, the documents or instruments
described in clauses (I)(i) and (v) below, (3) with respect to each Mortgage
Loan that is not a MOM Loan but is registered on the MERS(R) System, deliver to
and deposit with the Trustee, or the Custodian as the duly appointed agent of
the Trustee for such purpose, the documents or instruments described in clauses
(I)(i), (iv) and (v) below and (4) with respect to each Mortgage Loan that is
not a MOM Loan and is not registered on the MERS(R) System, deliver to and
deposit with the Trustee, or the Custodian as the duly appointed agent of the
Trustee for such purpose, the documents or instruments described in clauses
(I)(i), (iii), (iv) and (v) below and clause (II) below:
(I) with respect to each Mortgage Loan (other than a Cooperative Loan) so
assigned:
52
(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 (if the Mortgage Loan is Registered on the MERS(R) System)
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, if the original Mortgage has not yet been returned from the public
recording office, a copy of the original Mortgage with evidence of
recording indicated thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R) System,
the Assignment (which may be included in one or more blanket assignments
if permitted by applicable law) of the Mortgage to the Trustee with
evidence of recording indicated thereon or a copy of such assignment with
evidence of recording indicated thereon;
(iv) The original recorded assignment or assignments of the Mortgage
showing an unbroken chain of title from the originator to the Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) with
evidence of recordation noted thereon or attached thereto, or a copy of
such assignment or assignments of the Mortgage with evidence of recording
indicated thereon; and
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan, or a
copy of each modification, assumption agreement or preferred loan
agreement.
(II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the
order of the Trustee and showing an unbroken chain of endorsements from
the originator thereof to the Person endorsing it to the Trustee, or with
respect to any Destroyed Mortgage Note, an original lost note affidavit
from the related Seller or Residential Funding stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy of
the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee or a copy of such Cooperative Lease and
Assignment of Proprietary Lease and copies of any such intervening
assignments;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument)
executed in blank or copies thereof;
53
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative Loan or
a copy thereof;
(v) The Security Agreement or a copy thereof;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative Loan
as secured party, each with evidence of recording thereof, evidencing the
interest of the originator under the Security Agreement and the Assignment
of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments or amendments of the
security interest referenced in clause (vi) above showing an unbroken
chain of title from the originator to the Trustee, each with evidence of
recording thereof, evidencing the interest of the originator under the
Security Agreement and the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in
the Security Agreement, Assignment of Proprietary Lease and the
recognition agreement referenced in clause (iv) above, showing an unbroken
chain of title from the originator to the Trustee or a copy thereof;
(ix) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Cooperative Loan or a
copy of each such modification, assumption agreement or preferred loan
agreement; and
(x) A duly completed UCC-1 financing statement showing the Master
Servicer as debtor, the Depositor as secured party and the Trustee as
assignee and a duly completed UCC-1 financing statement showing the
Depositor as debtor and the Trustee as secured party, each in a form
sufficient for filing, evidencing the interest of such debtors in the
Cooperative Loans.
The Depositor may, in lieu of delivering the original of the documents set
forth in Sections 2.01(b)(I)(iii), (iv) and (v) or Sections 2.01(b)(II)(ii),
(iv), (vii), (ix) and (x) (or copies thereof) to the Trustee or the Custodian,
deliver such documents to the Master Servicer, and the Master Servicer shall
hold such documents in trust for the use and benefit of all present and future
Certificateholders until such time as is set forth in the next sentence. Within
thirty Business Days following the earlier of (i) the receipt of the original of
all of the documents or instruments set forth in Sections 2.01(b)(I)(iii), (iv)
and (v) or Sections 2.01(b)(II)(ii), (iv), (vii), (ix) (or copies thereof) for
any Mortgage Loan and (ii) a written request by the Trustee to deliver those
documents with respect to any or all of the Mortgage Loans then being held by
the Master Servicer, the Master Servicer shall deliver a complete set of such
documents to the Trustee or the Custodian, as duly appointed agent of the
Trustee.
(c) Notwithstanding the provisions of Section 2.01(b), in the event that
in connection with any Mortgage Loan, if the Depositor cannot deliver the
original of the Mortgage, any assignment, modification, assumption agreement or
preferred loan agreement (or copy thereof as permitted by Section 2.01(b)) with
evidence of recording thereon concurrently with the execution and delivery of
this Agreement because of (i) a delay caused by the public recording office
where such Mortgage, assignment, modification, assumption agreement or preferred
loan
54
agreement as the case may be, has been delivered for recordation, or (ii) a
delay in the receipt of certain information necessary to prepare the related
assignments, the Depositor shall deliver or cause to be delivered to the Trustee
or the respective Custodian a copy of such Mortgage, assignment, modification,
assumption agreement or preferred loan agreement.
The Depositor shall promptly cause to be recorded in the appropriate
public office for real property records the Assignment referred to in clause
(iii) of Section 2.01(b), except (a) in states where, in an Opinion of Counsel
acceptable to the Master Servicer, such recording is not required to protect the
Trustee's interests in the Mortgage Loan or (b) if MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee
of record solely as nominee for Residential Funding and its successors and
assigns, and shall promptly cause to be filed the Form UCC-3 assignment and
UCC-1 financing statement referred to in clause (II)(vii) and (x), respectively,
of Section 2.01(b). If any Assignment, Form UCC-3 or Form UCC-1, as applicable,
is lost or returned unrecorded to the Depositor because of any defect therein,
the Depositor shall prepare a substitute Assignment, Form UCC-3 or Form UCC-1,
as applicable, or cure such defect, as the case may be, and cause such
Assignment to be recorded in accordance with this paragraph. The Depositor shall
promptly deliver or cause to be delivered to the applicable person described in
Section 2.01(b), any Assignment or substitute Assignment (or copy thereof)
recorded in connection with this paragraph, with evidence of recording indicated
thereon at the time specified in Section 2.01(c). In connection with its
servicing of Cooperative Loans, the Master Servicer will use its best efforts to
file timely continuation statements with regard to each financing statement and
assignment relating to Cooperative Loans as to which the related Cooperative
Apartment is located outside of the State of New York.
If the Depositor delivers to the Trustee or Custodian any Mortgage Note or
Assignment of Mortgage in blank, the Depositor shall, or shall cause the
Custodian to, complete the endorsement of the Mortgage Note and the Assignment
of Mortgage in the name of the Trustee in conjunction with the Interim
Certification issued by the Custodian, as contemplated by Section 2.02.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Depositor further agrees that it will cause, at the
Depositor's own expense, within 30 Business Days after the Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
(d) It is intended that the conveyances by the Depositor to the Trustee of
the Mortgage Loans as provided for in this Section 2.01 be construed as a sale
by the Depositor to the Trustee of the Mortgage Loans for the benefit of the
Certificateholders. Further, it is not intended that any such conveyance be
deemed to be a pledge of the Mortgage Loans by the
55
Depositor to the Trustee to secure a debt or other obligation of the Depositor.
However, in the event that the Mortgage Loans are held to be property of the
Depositor or of Residential Funding, or if for any reason this Agreement is held
or deemed to create a security interest in the Mortgage Loans, then it is
intended that (a) this Agreement shall also be deemed to be a security agreement
within the meaning of Articles 8 and 9 of the New York Uniform Commercial Code
and the Uniform Commercial Code of any other applicable jurisdiction; (b) the
conveyances provided for in this Section 2.01 shall be deemed to be (1) a grant
by the Depositor to the Trustee of a security interest in all of the Depositor's
right (including the power to convey title thereto), title and interest, whether
now owned or hereafter acquired, in and to (A) the Mortgage Loans, including (a)
(i) with respect to each Cooperative Loan, the related Mortgage Note, Security
Agreement, Assignment of Proprietary Lease, Cooperative Stock Certificate and
Cooperative Lease, (ii) with respect to each Mortgage Loan other than a
Cooperative Loan, the related Mortgage Note and Mortgage, and (b) any insurance
policies and all other documents in the related Mortgage File, (B) all amounts
payable pursuant to the Mortgage Loans or the Swap Agreement in accordance with
the terms thereof and (C) 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 all proceeds of the conversion, voluntary or involuntary, of
the foregoing into cash, instruments, securities or other property, including
without limitation all amounts from time to time held or invested in the
Certificate Account or the Custodial Account, whether in the form of cash,
instruments, securities or other property and (2) an assignment by the Depositor
to the Trustee of any security interest in any and all of Residential Funding's
right (including the power to convey title thereto), title and interest, whether
now owned or hereafter acquired, in and to the property described in the
foregoing clauses (1)(A), (B) and (C) granted by Residential Funding to the
Depositor pursuant to the Assignment Agreement; (c) the possession by the
Trustee, the Custodian or any other agent of the Trustee of Mortgage Notes or
such other items of property as they 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 Uniform Commercial Code as in
effect in the States of New York and Minnesota and any other applicable
jurisdiction; and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, securities intermediaries, bailees or agents of, or persons holding for,
(as applicable) the Trustee for the purpose of perfecting such security interest
under applicable law.
The Depositor and, at the Depositor's direction, Residential Funding and
the Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans and the other
property described above, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. Without limiting the
generality of the foregoing, the Depositor shall prepare and deliver to the
Trustee not less than 15 days prior to any filing date and, the Trustee shall
forward for filing, or shall cause to be forwarded for filing, at the expense
56
of the Depositor, all filings necessary to maintain the effectiveness of any
original filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest in or lien on the
Mortgage Loans, as evidenced by an Officers' Certificate of the Depositor,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of Residential
Funding, the Depositor or the Trustee (such preparation and filing shall be at
the expense of the Trustee, if occasioned by a change in the Trustee's name),
(2) any change of location of the place of business or the chief executive
office of Residential Funding or the Depositor or (3) any transfer of any
interest of Residential Funding or the Depositor in any Mortgage Loan.
Section 2.02. Acceptance by Trustee
The Trustee acknowledges receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(b)(i) above (except that for purposes of such acknowledgment only, a
Mortgage Note may be endorsed in blank and an Assignment of Mortgage may be in
blank) and declares that it, or the Custodian as its agent, holds and will hold
such documents and the other documents constituting a part of the Custodial
Files delivered to it, or a Custodian as its agent, in trust for the use and
benefit of all present and future Certificateholders. The Trustee or Custodian
(the Custodian being so obligated under a Custodial Agreement) agrees, for the
benefit of Certificateholders, to review each Custodial File delivered to it
pursuant to Section 2.01(b) within 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 Custodial Files by the Depositor or the
Master Servicer, the Trustee shall acknowledge receipt (or, with respect to
Mortgage Loans subject to a Custodial Agreement, and based solely upon a receipt
or certification (the "Final Certification") executed by the Custodian, receipt
by the respective Custodian as the duly appointed agent of the Trustee) of the
documents referred to in Section 2.01(b) above.
If the Custodian, as the Trustee's agent, finds any document or documents
constituting a part of a Custodial File to be missing or defective, upon receipt
of notification from the Custodian as specified in the succeeding sentence, the
Trustee shall promptly so notify or cause the Custodian to notify the Master
Servicer and the Depositor; provided, that if the Mortgage Loan related to such
Custodial File is listed on Schedule A of the Assignment Agreement, no
notification shall be necessary. Pursuant to Section 2.3 of the Custodial
Agreement, the Custodian will notify the Master Servicer, the Depositor and the
Trustee of any such omission or defect found by it in respect of any Custodial
File held by it in respect of the items received by it pursuant to the Custodial
Agreement. If such omission or defect materially and adversely affects the
interests in the related Mortgage Loan of the Certificateholders, the Master
Servicer shall promptly notify Residential Funding of such omission or defect
and request that Residential
57
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,
then Residential Funding shall purchase such Mortgage Loan from the Trust Fund
at its Purchase Price, in either case within 90 days from the date the Master
Servicer was notified of such omission or defect; provided that if the omission
or defect would cause the Mortgage Loan to be other than a "qualified mortgage"
as defined in Section 860G(a)(3) of the Code, any such cure or repurchase must
occur within 90 days from the date such breach was discovered; and provided
further, that no cure, substitution or repurchase shall be required if such
omission or defect is in respect of a Mortgage Loan listed on Schedule A of the
Assignment Agreement. The Purchase Price for any such Mortgage Loan shall be
deposited or caused to be deposited by the Master Servicer in the Custodial
Account maintained by it pursuant to Section 3.07 and, upon receipt by the
Trustee of written notification of such deposit signed by a Servicing Officer,
the Master Servicer, the Trustee or the Custodian, as the case may be, shall
release the contents of any related Mortgage File in its possession to the owner
of such Mortgage Loan (or such owner's designee) and the Trustee shall execute
and deliver such instruments of transfer or assignment prepared by the Master
Servicer, in each case without recourse, as shall be necessary to vest in
Residential Funding or its designee any Mortgage Loan released pursuant hereto
and thereafter such Mortgage Loan shall not be part of the Trust Fund. In
furtherance of the foregoing, if the Subservicer or Residential Funding that
repurchases the Mortgage Loan is not a member of MERS and the Mortgage is
registered on the MERS System, the Master Servicer, at its own expense and
without any right of reimbursement, shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from MERS
to such Subservicer or Residential Funding and shall cause such Mortgage to be
removed from registration on the MERS System in accordance with MERS's 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.
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Depositor
(a) The Master Servicer hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that:
(i) The Master Servicer is a limited liability company duly
organized, validly existing and in good standing under the laws governing
its creation and existence and is or will be in compliance with the laws
of each state in which any Mortgaged Property is located to the extent
necessary to ensure the enforceability of each Mortgage Loan in accordance
with the terms of this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's certificate of formation
or limited liability company agreement or constitute a material default
(or an event which, with notice or lapse of time, or both, would
constitute a material default) under, or result in the material breach of,
any
58
material contract, agreement or other instrument to which the Master
Servicer is a party or which may be applicable to the Master Servicer or
any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Depositor, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its
properties or might have consequences that would materially adversely
affect its performance hereunder;
(v) No litigation is pending or, to the best of the Master
Servicer's knowledge, threatened against the Master Servicer which would
prohibit its entering into this Agreement or performing its obligations
under this Agreement;
(vi) The Master Servicer shall comply in all material respects in
the performance of this Agreement with all reasonable rules and
requirements of each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement furnished
in writing or report delivered to the Depositor, any Affiliate of the
Depositor or the Trustee by the Master Servicer will, to the knowledge of
the Master Servicer, contain any untrue statement of a material fact or
omit a material fact necessary to make the information, certificate,
statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing Agreement and
each designated Subservicer are acceptable to the Master Servicer and any
new Subservicing Agreements will comply with the provisions of Section
3.02; and
(ix) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered
with MERS.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(a) shall survive delivery of the respective Custodial
Files to the Trustee or the Custodian. Upon discovery by either the Depositor,
the Master Servicer, the Trustee or the Custodian of a breach of any
representation or warranty set forth in this Section 2.03(a) which materially
and adversely affects the interests of the Certificateholders in any Mortgage
Loan, the party discovering such breach shall give prompt written notice to the
other parties (the Custodian being so obligated under a Custodial Agreement).
Within 90 days of its discovery or its receipt
59
of notice of such breach, the Master Servicer shall either (i) cure such breach
in all material respects or (ii) to the extent that such breach is with respect
to a Mortgage Loan or a related document, purchase such Mortgage Loan from the
Trust Fund at the Purchase Price and in the manner set forth in Section 2.02;
provided that if the breach would cause the Mortgage Loan to be other than a
"qualified mortgage" as defined in Section 860G(a)(3) of the Code, any such cure
or repurchase must occur within 90 days from the date such breach was
discovered. The obligation of the Master Servicer to cure such breach or to so
purchase such Mortgage Loan shall constitute the sole remedy in respect of a
breach of a representation and warranty set forth in this Section 2.03(a)
available to the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date (or, if otherwise
specified below, as of the date so specified): (i) the information set forth in
Exhibit G hereto with respect to each Mortgage Loan or the Mortgage Loans, as
the case may be, is true and correct in all material respects at the respective
date or dates which such information is furnished; (ii) immediately prior to the
conveyance of the Mortgage Loans to the Trustee, the Depositor had good title
to, and was the sole owner of, each Mortgage Loan free and clear of any pledge,
lien, encumbrance or security interest (other than rights to servicing and
related compensation) and such conveyance validly transfers ownership of the
Mortgage Loans to the Trustee free and clear of any pledge, lien, encumbrance or
security interest; and (iii) each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Custodial
Files to the Trustee or the Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the Trustee
or the Custodian of a breach of any of the representations and warranties set
forth in this Section 2.03(b) which materially and adversely affects the
interests of the Certificateholders in any Mortgage Loan, the party discovering
such breach shall give prompt written notice to the other parties (the Custodian
being so obligated under a Custodial Agreement); provided, however, that in the
event of a breach of the representation and warranty set forth in Section
2.03(b)(iii), the party discovering such breach shall give such notice within
five days of discovery. Within 90 days of its discovery or its receipt of notice
of breach, the Depositor shall either (i) cure such breach in all material
respects or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase
Price and in the manner set forth in Section 2.02; provided that the Depositor
shall have the option to substitute a Qualified Substitute Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the omission or defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as defined in Section
860G(a)(3) of the Code, any such cure, substitution or repurchase must occur
within 90 days from the date such breach was discovered. Any such substitution
shall be effected by the Depositor under the same terms and conditions as
provided in Section 2.04 for substitutions by Residential Funding. It is
understood and agreed that the obligation of the Depositor to cure such breach
or to so purchase or substitute for any Mortgage Loan as to which such a breach
has occurred and is continuing shall constitute the sole remedy
60
respecting such breach available to the Certificateholders or the Trustee on
behalf of the Certificateholders.
Section 2.04. Representations and Warranties of Residential Funding
The Depositor, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect of the
Assignment Agreement applicable to a Mortgage Loan. Insofar as the Assignment
Agreement relates to the representations and warranties made by Residential
Funding in respect of such Mortgage Loan and any remedies provided thereunder
for any breach of such representations and warranties, such right, title and
interest may be enforced by the Master Servicer on behalf of the Trustee and the
Certificateholders.
Upon the discovery by the Depositor, the Master Servicer, the Trustee or
the Custodian of a breach of any of the representations and warranties made in
the Assignment Agreement in respect of any Mortgage Loan or of any Repurchase
Event which materially and adversely affects the interests of the
Certificateholders in such Mortgage Loan, the party discovering such breach
shall give prompt written notice to the other parties (the Custodian being so
obligated under a Custodial Agreement). The Master Servicer shall promptly
notify Residential Funding of such breach or Repurchase Event and request that
Residential Funding either (i) cure such breach or Repurchase Event in all
material respects within 90 days from the date the Master Servicer was notified
of such breach or Repurchase Event or (ii) purchase such Mortgage Loan from the
Trust Fund at the Purchase Price and in the manner set forth in Section 2.02;
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.
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
(bb) 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 or the Custodian
for the benefit of the Certificateholders with respect to such Qualified
Substitute Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an
Assignment of the Mortgage in recordable form, and such other documents and
agreements as are required by Section 2.01, with the Mortgage Note endorsed as
required by Section 2.01. No substitution will be made in any calendar month
after the Determination Date for such month. Monthly Payments due with respect
to Qualified Substitute Mortgage Loans in the month of substitution shall not be
part of the Trust Fund and will be retained by the Master Servicer and remitted
by the Master Servicer
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to Residential Funding on the next succeeding Distribution Date. For the month
of substitution, distributions to the Certificateholders will include the
Monthly Payment due on a Deleted Mortgage Loan for such month and thereafter
Residential Funding shall be entitled to retain all amounts received in respect
of such Deleted Mortgage Loan. The Master Servicer shall amend or cause to be
amended the Mortgage Loan Schedule for the benefit of the Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the substitution of the
Qualified Substitute Mortgage Loan or Loans and the Master Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee and the Custodian.
Upon such substitution, the Qualified Substitute Mortgage Loan or Loans shall be
subject to the terms of this Agreement and the related Subservicing Agreement in
all respects, and Residential Funding shall be deemed to have made the
representations and warranties with respect to the Qualified Substitute Mortgage
Loan contained in Section 4 of the Assignment Agreement, as of the date of
substitution, and the covenants, representations and warranties set forth in
this Section 2.04, and in Section 2.03 hereof and in Section 4 of the Assignment
Agreement, and the Master Servicer shall be obligated to repurchase or
substitute for any Qualified Substitute Mortgage Loan as to which a Repurchase
Event (as defined in the Assignment Agreement) has occurred pursuant to Section
4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer shall
determine the amount (if any) by which the Stated Principal Balance of all such
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (in
each case after application of the principal portion of the Monthly Payments due
in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential Funding shall
deposit the amount of such shortfall into the Custodial Account on the day of
substitution, without any reimbursement therefor. Residential Funding shall give
notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall
and (subject to Section 10.01(f)) by an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code or (b) any portion of any
REMIC created hereunder to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
It is understood and agreed that the obligation of Residential Funding to
cure such breach or purchase (or 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 (bb) of Section 4 thereof shall constitute
the sole remedy respecting such breach available to the Certificateholders or
the Trustee on behalf of the Certificateholders. If the Master Servicer is
Residential Funding, then the Trustee shall also have the right to give the
notification and require the purchase or substitution provided for in the second
preceding paragraph in the event of such a breach of a representation or
warranty made by Residential Funding in the Assignment Agreement. In connection
with the purchase of or substitution for any such Mortgage Loan by Residential
Funding, the Trustee shall assign to Residential Funding all of the right, title
and interest in respect of the Assignment Agreement applicable to such Mortgage
Loan.
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Section 2.05. Execution and Authentication of Certificates; Conveyance of
REMIC Regular Interests
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery of the Custodial Files to it, or the Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the Trustee, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
has executed and caused to be authenticated and delivered to or upon the order
of the Depositor the Certificates in authorized denominations which evidence
ownership of the entire Trust Fund.
(b) The Depositor, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Depositor in and to the Uncertificated REMIC I
Regular Interests to the Trustee for the benefit of the holders of each Class of
Certificates (other than the Class R Certificates). The Trustee acknowledges
receipt of the Uncertificated REMIC I Regular Interests and declares that it
holds and will hold the same in trust for the exclusive use and benefit of all
present and future holders of each Class of Certificates (other than the Class R
Certificates).
(c) The Depositor concurrently with the execution and delivery hereof,
does hereby transfer, assign, set over and otherwise convey in trust to the
Trustee without recourse all the right, title and interest of the Depositor in
and to the REMIC I Regular Interests, and the other assets of REMIC II for the
benefit of the holders of the REMIC II Regular Interests and the Class R-II
Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interests
(which are uncertificated) and the other assets of REMIC II and declares that it
holds and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC II Regular Interests and the Class R-II Certificates.
Section 2.06. Purposes and Powers of the Trust
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(a) To sell the Certificates to the Depositor in exchange for the Mortgage
Loans;
(b) To enter into and perform its obligations under this Agreement;
(c) To engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental hereto 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.
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Section 2.07. Agreement Regarding Ability to Disclose
The Depositor, the Master Servicer and the Trustee hereby agree,
notwithstanding any other express or implied agreement to the contrary, that any
and all Persons, and any of their respective employees, representatives, and
other agents may disclose, immediately upon commencement of discussions, to any
and all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" are defined under Treasury Regulation ss.
1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer
(a) The Master Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement and the respective Mortgage Loans,
following such procedures as it would employ in its good faith business judgment
and which are normal and usual in its general mortgage servicing activities, and
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do any and all things which it may deem necessary
or desirable in connection with such servicing and administration. Without
limiting the generality of the foregoing, the Master Servicer in its own name or
in the name of a Subservicer is hereby authorized and empowered by the Trustee
when the Master Servicer or the Subservicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
consent to assumption or modification in connection with a proposed conveyance,
or of assignment of any Mortgage and Mortgage Note in connection with the
repurchase of a Mortgage Loan and all other comparable instruments, or with
respect to the modification or re-recording of a Mortgage for the purpose of
correcting the Mortgage, the subordination of the lien of the Mortgage in favor
of a public utility company or government agency or unit with powers of eminent
domain, the taking of a deed in lieu of foreclosure, the commencement,
prosecution or completion of judicial or non-judicial foreclosure, the
conveyance of a Mortgaged Property to the related insurer, the acquisition of
any property acquired by foreclosure or deed in lieu of foreclosure, or the
management, marketing and conveyance of any property acquired by foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans and with respect
to the Mortgaged Properties. The Master Servicer further is authorized and
empowered by the Trustee, on behalf of the Certificateholders and the Trustee,
in its own name or in the name of the Subservicer, when the Master Servicer or
the Subservicer, as the case may be, believes it is appropriate in its best
judgment to register any Mortgage Loan on the MERS(R) System, or cause the
removal from the registration of any Mortgage Loan on the MERS(R) System, to
execute and deliver, on behalf of the Trustee and the Certificateholders or any
of them, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee and its successors and assigns. Any
expenses incurred in connection with the actions described in the preceding
sentence shall be borne by the Master Servicer in accordance with Section
3.16(c), with no right of
64
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 3.13(d) hereof) and cause any
REMIC created hereunder to fail to qualify as a REMIC under the Code. The
Trustee shall furnish the Master Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Master Servicer to service and
administer the Mortgage Loans. The Trustee shall not be liable for any action
taken by the Master Servicer or any Subservicer pursuant to such powers of
attorney or other documents. In servicing and administering any Nonsubserviced
Mortgage Loan, the Master Servicer shall, to the extent not inconsistent with
this Agreement, comply with the Program Guide as if it were the originator of
such Mortgage Loan and had retained the servicing rights and obligations in
respect thereof.
(b) The Master Servicer shall, to the extent consistent with the servicing
standards set forth herein, take whatever actions as may be necessary to file a
claim under or enforce or allow the Trustee to file a claim under or enforce any
title insurance policy with respect to any Mortgage Loan including, without
limitation, joining in or causing any Subservicer (or any other party in
possession of any title insurance policy) to join in any claims process,
negotiations, actions or proceedings necessary to make a claim under or enforce
any title insurance policy. Notwithstanding anything in this Agreement to the
contrary, the Master Servicer shall not (unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of the Master
Servicer, reasonably foreseeable) make or permit any modification, waiver, or
amendment of any term of any Mortgage Loan that would both (i) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) (other
than in connection with a proposed conveyance or assumption of such Mortgage
Loan that is treated as a Principal Prepayment in Full pursuant to Section
3.13(d) hereof) and cause any REMIC created hereunder to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions" after the startup date under the REMIC Provisions.
(c) In connection with servicing and administering the Mortgage Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may perform
services such as appraisals and brokerage services that are customarily provided
by Persons other than servicers of mortgage loans, and shall be entitled to
reasonable compensation therefor in accordance with Section 3.10 and (ii) may,
at its own discretion and on behalf of the Trustee, obtain credit information in
the form of a "credit score" from a credit repository.
(d) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to
65
the amount owing under the related Mortgage Loans, notwithstanding that the
terms of such Mortgage Loan so permit, and such costs shall be recoverable to
the extent permitted by Section 3.10(a)(ii).
(e) The Master Servicer may enter into one or more agreements in
connection with the offering of pass-through certificates evidencing interests
in one or more of the Certificates providing for the payment by the Master
Servicer of amounts received by the Master Servicer as servicing compensation
hereunder and required to cover certain Prepayment Interest Shortfalls on the
Mortgage Loans, which payment obligation will thereafter be an obligation of the
Master Servicer hereunder.
(f) The relationship of the Master Servicer (and of any successor to the
Master Servicer) to the Depositor under this Agreement is intended by the
parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.
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
▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or HUD approved mortgage servicer. In addition, any
Subservicer of a Mortgage Loan insured by the FHA must be an FHA-approved
servicer, and any Subservicer of a Mortgage Loan guaranteed by the VA must be a
VA-approved servicer. Each Subservicer of a Mortgage Loan shall be entitled to
receive and retain, as provided in the related Subservicing Agreement and in
Section 3.07, the related Subservicing Fee from payments of interest received on
such Mortgage Loan after payment of all amounts required to be remitted to the
Master Servicer in respect of such Mortgage Loan. For any Mortgage Loan that is
a Nonsubserviced Mortgage Loan, the Master Servicer shall be entitled to receive
and retain an amount equal to the Subservicing Fee from payments of interest.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Each Subservicing Agreement will be upon such terms and conditions as
are generally required by, permitted by or consistent with the Program Guide and
are not inconsistent with this Agreement and as the Master Servicer and the
Subservicer have agreed. With the approval of the Master Servicer, a Subservicer
may delegate its servicing obligations to third-party servicers, but such
Subservicer will remain obligated under the related Subservicing Agreement. The
Master Servicer and a Subservicer may enter into amendments thereto or a
different form of Subservicing Agreement, and the form referred to or included
in the Program Guide is merely provided for information and shall not be deemed
to limit in any respect the discretion of the Master Servicer to modify or enter
into different Subservicing Agreements; provided, however,
66
that any such amendments or different forms shall be consistent with and not
violate the provisions of either this Agreement or the Program Guide in a manner
which would materially and adversely affect the interests of the
Certificateholders. The Program Guide and any other Subservicing Agreement
entered into between the Master Servicer and any Subservicer shall require the
Subservicer to accurately and fully report its borrower credit files to each of
the Credit Repositories in a timely manner.
(b) As part of its servicing activities hereunder, the Master Servicer,
for the benefit of the Trustee and the Certificateholders, shall use its best
reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement, to the extent that the non-performance of any
such obligation would have a material and adverse effect on a Mortgage Loan,
including, without limitation, the obligation to purchase a Mortgage Loan on
account of defective documentation, as described in Section 2.02, or on account
of a breach of a representation or warranty, as described in Section 2.04. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements, as appropriate, and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities. The Master Servicer shall pay the costs of such enforcement at its
own expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loan or (ii) from a
specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed. For purposes of clarification only,
the parties agree that the foregoing is not intended to, and does not, limit the
ability of the Master Servicer to be reimbursed for expenses that are incurred
in connection with the enforcement of a Seller's obligations and are
reimbursable pursuant to Section 3.10(a)(viii).
Section 3.03. Successor Subservicers
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to have the
successor Subservicer assume liability for the representations and warranties
made by the terminated Subservicer in respect of the related Mortgage Loans and,
in the event of any such assumption by the successor Subservicer, the Master
Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
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Section 3.04. Liability of the Master Servicer
Notwithstanding any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a Subservicer or reference to actions taken through a Subservicer or otherwise,
the Master Servicer shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the
Depositor and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
The Master Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Master Servicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Subservicer and Trustee
or Certificateholders
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Master Servicer alone and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer in
its capacity as such except as set forth in Section 3.06. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an
omission or defect or to repurchase a Mortgage Loan as referred to in Section
2.02 hereof.
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.
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Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account
(a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Primary Insurance Policy, follow such
collection procedures as it would employ in its good faith business judgment and
which are normal and usual in its general mortgage servicing activities.
Consistent with the foregoing, the Master Servicer may in its discretion
(subject to the terms and conditions of the Assignment Agreement) (i) waive any
late payment charge or any prepayment charge or penalty interest in connection
with the prepayment of a Mortgage Loan and (ii) extend the Due Date for payments
due on a Mortgage Loan in accordance with the Program Guide, provided, however,
that the Master Servicer shall first determine that any such waiver or extension
will not impair the coverage of any related Primary Insurance Policy or
materially adversely affect the lien of the related Mortgage. Notwithstanding
anything in this Section to the contrary, the Master Servicer or any Subservicer
shall not enforce any prepayment charge to the extent that such enforcement
would violate any applicable law. In the event of any such arrangement, the
Master Servicer shall make timely advances on the related Mortgage Loan during
the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements unless
otherwise agreed to by the Holders of the Classes of Certificates affected
thereby; provided, however, that no such extension shall be made if any advance
would be a Nonrecoverable Advance. Consistent with the terms of this Agreement,
the Master Servicer may also waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if in the Master Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (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. For
purposes of delinquency calculations, any capitalized Mortgage Loan shall be
deemed to be current as of the date of the related Servicing Modification. No
such modification shall reduce the Mortgage Rate (i) with respect to a fixed
rate Mortgage Loan, (A) below one-half of the Mortgage Rate as in effect on the
Cut-off Date or (B) below the sum of the rates at which the Servicing Fee and
the Subservicing Fee with respect to such Mortgage Loan accrue or (ii) with
respect to an adjustable rate Mortgage Loan, (A) below the greater of (1)
one-half of the Mortgage Rate as in effect on the Cut-off Date and (2) one-half
of the Mortgage Rate as in effect on the date of the Servicing Modification or
(B) below the sum of the rates at which the Servicing Fee and the Subservicing
Fee with respect to such Mortgage Loan accrue. The final maturity date for any
Mortgage Loan shall not be extended beyond the Maturity Date. Also, the Stated
Principal Balance of all Reportable Modified Mortgage Loans subject to Servicing
Modifications (measured at the time of the
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Servicing Modification and after giving effect to any Servicing Modification)
can be no more than five percent of the aggregate Cut-off Date Principal Balance
of the Mortgage Loans, unless such limit is increased from time to time with the
consent of the Rating Agencies. In addition, any amounts owing on a Mortgage
Loan added to the outstanding principal balance of such Mortgage Loan must be
fully amortized over the term of such Mortgage Loan, and such amounts may be
added to the outstanding principal balance of a Mortgage Loan only once during
the life of such Mortgage Loan. Also, the addition of such amounts described in
the preceding sentence shall be implemented in accordance with the Program Guide
and may be implemented only by Subservicers that have been approved by the
Master Servicer for such purposes. In connection with any Curtailment of a
Mortgage Loan, the Master Servicer, to the extent not inconsistent with the
terms of the Mortgage Note and local law and practice, may permit the Mortgage
Loan to be re-amortized such that the Monthly Payment is recalculated as an
amount that will fully amortize the remaining Stated Principal Balance thereof
by the original Maturity Date based on the original Mortgage Rate; provided,
that such reamortization shall not be permitted if it would constitute a
reissuance of the Mortgage Loan for federal income tax purposes.
(b) The Master Servicer shall establish and maintain a Custodial Account
in which the Master Servicer shall deposit or cause to be deposited on a daily
basis, except as otherwise specifically provided herein, the following payments
and collections remitted by Subservicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of Monthly
Payments due before or in the month of the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the principal
component of any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage
Rate on the Mortgage Loans, including the interest component of any
Subservicer Advance or of any REO Proceeds received in connection with an
REO Property for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02, 2.03, 2.04, 4.07 or 9.01 (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 (bb) 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.
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The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of Monthly Payments due before or in the month of the Cut-off
Date) and payments or collections consisting of late payment charges or
assumption fees may but need not be deposited by the Master Servicer in the
Custodial Account. In the event any amount not required to be deposited in the
Custodial Account is so deposited, the Master Servicer may at any time withdraw
such amount from the Custodial Account, any provision herein to the contrary
notwithstanding. The Custodial Account may contain funds that belong to one or
more trust funds created for mortgage pass-through certificates of other series
and may contain other funds respecting payments on mortgage loans belonging to
the Master Servicer or serviced or master serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Master Servicer shall keep
records that accurately reflect the funds on deposit in the Custodial Account
that have been identified by it as being attributable to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds,
Subsequent Recoveries and the proceeds of the purchase of any Mortgage Loan
pursuant to Sections 2.02, 2.03, 2.04 and 4.07 received in any calendar month,
the Master Servicer may elect to treat such amounts as included in the Available
Distribution Amount for the Distribution Date in the month of receipt, but is
not obligated to do so. If the Master Servicer so elects, such amounts will be
deemed to have been received (and any related Realized Loss shall be deemed to
have occurred) on the last day of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the
institution maintaining the Custodial Account to invest the funds in the
Custodial Account attributable to the Mortgage Loans in Permitted Investments
which shall mature not later than the Certificate Account Deposit Date next
following the date of such investment (with the exception of the Amount Held for
Future Distribution) and which shall not be sold or disposed of prior to their
maturities. All income and gain realized from any such investment shall be for
the benefit of the Master Servicer as additional servicing compensation and
shall be subject to its withdrawal or order from time to time. The amount of any
losses incurred in respect of any such investments attributable to the
investment of amounts in respect of the Mortgage Loans shall be deposited in the
Custodial Account by the Master Servicer out of its own funds immediately as
realized.
(d) The Master Servicer shall give written notice to the Trustee and the
Depositor of any change in the location of the Custodial Account and the
location of the Certificate Account prior to the use thereof.
Section 3.08. Subservicing Accounts; Servicing Accounts
(a) In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to establish and maintain
one or more Subservicing Accounts which shall be an Eligible Account or, if such
account is not an Eligible Account, shall generally satisfy the requirements of
the Program Guide and be otherwise acceptable to the Master Servicer 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
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Subservicing Agreement. If the Subservicing Account is not an Eligible Account,
the Master Servicer shall be deemed to have received such monies upon receipt
thereof by the Subservicer. The Subservicer shall not be required to deposit in
the Subservicing Account payments or collections in the nature of late charges
or assumption fees, or payments or collections received in the nature of
prepayment charges to the extent that the Subservicer is entitled to retain such
amounts pursuant to the Subservicing Agreement. On or before the date specified
in the Program Guide, but in no event later than the Determination Date, the
Master Servicer shall cause the Subservicer, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the Custodial Account
all funds held in the Subservicing Account with respect to each Mortgage Loan
serviced by such Subservicer that are required to be remitted to the Master
Servicer. The Subservicer will also be required, pursuant to the Subservicing
Agreement, to advance on such scheduled date of remittance amounts equal to any
scheduled monthly installments of principal and interest less its Subservicing
Fees on any Mortgage Loans for which payment was not received by the
Subservicer. This obligation to advance with respect to each Mortgage Loan will
continue up to and including the first of the month following the date on which
the related Mortgaged Property is sold at a foreclosure sale or is acquired by
the Trust Fund by deed in lieu of foreclosure or otherwise. All such advances
received by the Master Servicer shall be deposited promptly by it in the
Custodial Account.
(b) The Subservicer may also be required, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the Custodial Account
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the
rate per annum at which the Servicing Fee accrues in the case of a Modified
Mortgage Loan) on any Curtailment received by such Subservicer in respect of a
Mortgage Loan from the related Mortgagor during any month that is to be applied
by the Subservicer to reduce the unpaid principal balance of the related
Mortgage Loan as of the first day of such month, from the date of application of
such Curtailment to the first day of the following month. Any amounts paid by a
Subservicer pursuant to the preceding sentence shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate Account, the
Master Servicer shall for any Nonsubserviced Mortgage Loan, and shall cause the
Subservicers for Subserviced Mortgage Loans to, establish and maintain one or
more Servicing Accounts and deposit and retain therein all collections from the
Mortgagors (or advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items for the account of the Mortgagors. Each
Servicing Account shall satisfy the requirements for a Subservicing Account and,
to the extent permitted by the Program Guide or as is otherwise acceptable to
the Master Servicer, may also function as a Subservicing Account. Withdrawals of
amounts related to the Mortgage Loans from the Servicing Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, or comparable items, to
reimburse the Master Servicer or Subservicer out of related collections for any
payments made pursuant to Sections 3.11 (with respect to the Primary Insurance
Policy) and 3.12(a) (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required, to Mortgagors on balances in the Servicing Account or to clear and
terminate the Servicing Account at the
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termination of this Agreement in accordance with Section 9.01 or in accordance
with the Program Guide. As part of its servicing duties, the Master Servicer
shall, and the Subservicers will, pursuant to the Subservicing Agreements, be
required to pay to the Mortgagors interest on funds in this account to the
extent required by law.
(d) The Master Servicer shall advance the payments referred to in the
preceding subsection that are not timely paid by the Mortgagors or advanced by
the Subservicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Master Servicer shall be required so to
advance only to the extent that such advances, in the good faith judgment of the
Master Servicer, will be recoverable by the Master Servicer out of Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and Information Regarding
the Mortgage Loans
In the event that compliance with this Section 3.09 shall make any Class
of Certificates legal for investment by federally insured savings and loan
associations, the Master Servicer shall provide, or cause the Subservicers to
provide, to the Trustee, the Office of Thrift Supervision or the FDIC and the
supervisory agents and examiners thereof access to the documentation regarding
the Mortgage Loans required by applicable regulations of the Office of Thrift
Supervision, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices designated by the Master
Servicer. The Master Servicer shall permit such representatives to photocopy any
such documentation and shall provide equipment for that purpose at a charge
reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account
(a) The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.07 that are attributable to the Mortgage Loans for the following
purposes:
(i) to remit to the Trustee for deposit into the Certificate Account
in the amounts and in the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for previously
unreimbursed Advances, Servicing Advances or other expenses made pursuant
to Sections 3.01, 3.07(a) 3.08, 3.11, 3.12(a), 3.14 and 4.04 or otherwise
reimbursable pursuant to the terms of this Agreement, such withdrawal
right being limited to amounts received on the related Mortgage Loans
(including, for this purpose, REO Proceeds, Insurance Proceeds,
Liquidation Proceeds and proceeds from the purchase of a Mortgage Loan
pursuant to Section 2.02, 2.03, 2.04, 4.07, or 9.01) which represent (A)
Late Collections of Monthly Payments for which any such advance was made
in the case of Subservicer Advances or Advances pursuant to Section 4.04
and (B) late recoveries of the payments for which such advances were made
in the case of Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not previously
retained by such Subservicer) out of each payment received by the Master
Servicer on account of
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interest on a Mortgage Loan as contemplated by Sections 3.14 and 3.16, an
amount equal to that remaining portion of any such payment as to interest
(but not in excess of the Servicing Fee and the Subservicing Fee, if not
previously retained) which, when deducted, will result in the remaining
amount of such interest being interest at a rate per annum equal to the
Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) on the amount specified in the amortization schedule of the
related Mortgage Loan as the principal balance thereof at the beginning of
the period respecting which such interest was paid after giving effect to
any previous Curtailments;
(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds deposited in the Custodial
Account that it is entitled to withdraw pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, and any amounts remitted by Subservicers as interest
in respect of Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, Residential Funding, the
Depositor or any other appropriate Person, as the case may be, with
respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased or otherwise transferred pursuant to Section 2.02,
2.03, 2.04, 4.07 or 9.01, all amounts received thereon and not required to
be distributed to Certificateholders as of the date on which the related
Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the extent
provided in subsection (c) below, and any Advance or Servicing Advance
made in connection with a modified Mortgage Loan that is in default or, in
the judgment of the Master Servicer, default is reasonably foreseeable
pursuant to Section 3.07(a), to the extent the amount of the Advance or
Servicing Advance was added to the Stated Principal Balance of the
Mortgage Loan in the preceding calendar month;
(viii) to reimburse itself or the Depositor for expenses incurred by
and reimbursable to it or the Depositor pursuant to Section 3.14(c), 6.03,
10.01 or otherwise;
(ix) to reimburse itself for amounts expended by it (a) pursuant to
Section 3.14 in good faith in connection with the restoration of property
damaged by an Uninsured Cause, and (b), in connection with the liquidation
of a Mortgage Loan or disposition of an REO Property to the extent not
otherwise reimbursed pursuant to clause (ii) or (viii) above; and
(x) to withdraw any amount deposited in the Custodial Account that
was not required to be deposited therein pursuant to Section 3.07,
including any payoff fees or penalties or any other additional amounts
payable to the Master Servicer or Subservicer pursuant to the terms of the
Mortgage Note.
(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii),
(v) and (vi), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the
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related Mortgage Loan, the Master Servicer shall keep and maintain separate
accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of
justifying any withdrawal from the Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or the
related Subservicer for any advance made in respect of a Mortgage Loan that the
Master Servicer determines to be a Nonrecoverable Advance by withdrawal from the
Custodial Account of amounts on deposit therein attributable to the Mortgage
Loans on any Certificate Account Deposit Date succeeding the date of such
determination. Such right of reimbursement in respect of a Nonrecoverable
Advance relating to an Advance made pursuant to Section 4.04 on any such
Certificate Account Deposit Date shall be limited to an amount not exceeding the
portion of such advance previously paid to Certificateholders (and not
theretofore reimbursed to the Master Servicer or the related Subservicer).
Section 3.11. Maintenance of Primary Insurance Coverage
(a) The Master Servicer shall not take, or permit any Subservicer to take,
any action which would result in noncoverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Master Servicer
or Subservicer, would have been covered thereunder. To the extent coverage is
available, the Master Servicer shall keep or cause to be kept in full force and
effect each such Primary Insurance Policy until the principal balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or less
of the Appraised Value at origination in the case of such a Mortgage Loan having
a Loan-to-Value Ratio at origination in excess of 80%, provided that such
Primary Insurance Policy was in place as of the Cut-off Date and the Master
Servicer had knowledge of such Primary Insurance Policy. The Master Servicer
shall not cancel or refuse to renew any such Primary Insurance Policy applicable
to a Nonsubserviced Mortgage Loan, or consent to any Subservicer canceling or
refusing to renew any such Primary Insurance Policy applicable to a Mortgage
Loan subserviced by it, that is in effect at the date of the initial issuance of
the Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for such canceled or non-renewed policy is
maintained with an insurer whose claims-paying ability is acceptable to each
Rating Agency for mortgage pass-through certificates having a rating equal to or
better than the then-current rating assigned to the Certificates by such Rating
Agency.
(b) In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present or to cause the related
Subservicer to present, on behalf of the Master Servicer, the Subservicer, if
any, the Trustee and Certificateholders, claims to the insurer under any Primary
Insurance Policies, in a timely manner in accordance with such policies, and, in
this regard, to take or cause to be taken such reasonable action as shall be
necessary to permit recovery under any Primary Insurance Policies respecting
defaulted Mortgage Loans. Pursuant to Section 3.07, any Insurance Proceeds
collected by or remitted to the Master Servicer under any Primary Insurance
Policies shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.10.
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Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity
Coverage
(a) The Master Servicer shall cause to be maintained for each Mortgage
Loan fire insurance with extended coverage in an amount which is equal to the
lesser of the principal balance owing on such Mortgage Loan (together with the
principal balance of any mortgage loan secured by a lien that is senior to the
Mortgage Loan) or 100 percent of the insurable value of the improvements;
provided, however, that such coverage may not be less than the minimum amount
required to fully compensate for any loss or damage on a replacement cost basis.
To the extent it may do so without breaching the related Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not cause such
insurance, to the extent it is available, to be maintained. The Master Servicer
shall also cause to be maintained on property acquired upon foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan (other than a Cooperative Loan),
fire insurance with extended coverage in an amount which is at least equal to
the amount necessary to avoid the application of any co-insurance clause
contained in the related hazard insurance policy. Pursuant to Section 3.07, any
amounts collected by the Master Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.10. Any cost incurred by the Master Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of related late payments by the
Mortgagor or out of Insurance Proceeds and Liquidation Proceeds to the extent
permitted by Section 3.10. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. Whenever the improvements securing a Mortgage
Loan are located at the time of origination of such Mortgage Loan in a federally
designated special flood hazard area, the Master Servicer shall cause flood
insurance (to the extent available) to be maintained in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the amount
required to compensate for any loss or damage to the Mortgaged Property on a
replacement cost basis and (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).In the event that the Master Servicer shall
obtain and maintain a blanket fire insurance policy with extended coverage
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to have satisfied its obligations as set forth in the
first sentence of this Section 3.12(a), it being understood and agreed that such
policy may contain a deductible clause, in which case the Master Servicer shall,
in the event that there shall not have been maintained on the related Mortgaged
Property a policy complying with the first sentence of this Section 3.12(a) and
there shall have been a loss which would have been covered by such policy,
deposit in the Certificate Account the amount not otherwise payable under the
blanket policy because of such deductible clause. Any such deposit by the Master
Servicer shall be made from its own funds and 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
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of the Mortgage Loans, the Master Servicer agrees to present, on behalf of
itself, the Trustee and Certificateholders, claims under any such blanket
policy.
(b) The Master Servicer shall obtain and maintain at its own expense and
keep in full force and effect throughout the term of this Agreement a blanket
fidelity bond and an errors and omissions insurance policy covering the Master
Servicer's officers and employees and other persons acting on behalf of the
Master Servicer in connection with its activities under this Agreement. The
amount of coverage shall be at least equal to the coverage that would be
required by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the
Mortgage Loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. In the event that any such bond or
policy ceases to be in effect, the Master Servicer shall obtain a comparable
replacement bond or policy from an issuer or insurer, as the case may be,
meeting the requirements, if any, of the Program Guide and acceptable to the
Depositor. Coverage of the Master Servicer under a policy or bond obtained by an
Affiliate of the Master Servicer and providing the coverage required by this
Section 3.12(b) shall satisfy the requirements of this Section 3.12(b).
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master
Servicer or Subservicer, to the extent it has knowledge of such conveyance,
shall enforce any due-on-sale clause contained in any Mortgage Note or Mortgage,
to the extent permitted under applicable law and governmental regulations, but
only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing: (i)
the Master Servicer shall not be deemed to be in default under this Section
3.13(a) by reason of any transfer or assumption which the Master Servicer is
restricted by law from preventing; and (ii) if the Master Servicer determines
that it is reasonably likely that any Mortgagor will bring, or if any Mortgagor
does bring, legal action to declare invalid or otherwise avoid enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage, the Master
Servicer shall not be required to enforce the due-on-sale clause or to contest
such action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale
clause to the extent set forth in Section 3.13(a), in any case in which a
Mortgaged Property is to be conveyed to a Person by a Mortgagor, and such Person
is to enter into an assumption or modification agreement or supplement to the
Mortgage Note or Mortgage which requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor
from liability on the Mortgage Loan, the Master Servicer is authorized, subject
to the requirements of the sentence next following, to execute and deliver, on
behalf of the Trustee, the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person; provided, however, none of
such terms and requirements shall both constitute a "significant modification"
effecting an exchange or reissuance of such Mortgage Loan under the Code (or
final, temporary or proposed Treasury
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regulations promulgated thereunder) and cause any REMIC created hereunder to
fail to qualify as REMICs under the Code or the imposition of any tax on
"prohibited transactions" or "contributions" after the startup date under the
REMIC Provisions. The Master Servicer shall execute and deliver such documents
only if it reasonably determines that (i) its execution and delivery thereof
will not conflict with or violate any terms of this Agreement or cause the
unpaid balance and interest on the Mortgage Loan to be uncollectible in whole or
in part, (ii) any required consents of insurers under any Required Insurance
Policies have been obtained and (iii) subsequent to the closing of the
transaction involving the assumption or transfer (A) the Mortgage Loan will
continue to be secured by a first mortgage lien (or junior lien of the same
priority in relation to any senior mortgage loan, with respect to any Mortgage
Loan secured by a junior Mortgage) pursuant to the terms of the Mortgage, (B)
such transaction will not adversely affect the coverage under any Required
Insurance Policies, (C) the Mortgage Loan will fully amortize over the remaining
term thereof, (D) no material term of the Mortgage Loan (including the interest
rate on the Mortgage Loan) will be altered nor will the term of the Mortgage
Loan be changed and (E) if the seller/transferor of the Mortgaged Property is to
be released from liability on the Mortgage Loan, the buyer/transferee of the
Mortgaged Property would be qualified to assume the Mortgage Loan based on
generally comparable credit quality and such release will not (based on the
Master Servicer's or Subservicer's good faith determination) adversely affect
the collectability of the Mortgage Loan. Upon receipt of appropriate
instructions from the Master Servicer in accordance with the foregoing, the
Trustee shall execute any necessary instruments for such assumption or
substitution of liability as directed by the Master Servicer. Upon the closing
of the transactions contemplated by such documents, the Master Servicer shall
cause the originals or true and correct copies of the assumption agreement, the
release (if any), or the modification or supplement to the Mortgage Note or
Mortgage to be delivered to the Trustee or the Custodian and deposited with the
Mortgage File for such Mortgage Loan. Any fee collected by the Master Servicer
or such related Subservicer for entering into an assumption or substitution of
liability agreement will be retained by the Master Servicer or such Subservicer
as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for a partial release of
the related Mortgaged Property, the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged Property
(or with respect to a Cooperative Loan, the related Cooperative Apartment)
without any right of reimbursement or other similar matters if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for,
and the timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby and that each REMIC created hereunder would continue
to qualify as a REMIC under the Code as a result thereof and that no tax on
"prohibited transactions" or "contributions" after the Startup Date would be
imposed on any REMIC created hereunder as a result thereof. Any fee collected by
the Master Servicer or the related Subservicer for processing such a request
will be retained by the Master Servicer or such Subservicer as additional
servicing compensation.
(d) Subject to any other applicable terms and conditions of this
Agreement, the 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 Master Servicer with a "Lender Certification for Assignment
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of Mortgage Loan" in the form attached hereto as Exhibit N, in form and
substance satisfactory to the Master Servicer, providing the following: (i) that
the Mortgage Loan is secured by Mortgaged Property located in a jurisdiction in
which an assignment in lieu of satisfaction is required to preserve lien
priority, minimize or avoid mortgage recording taxes or otherwise comply with,
or facilitate a refinancing under, the laws of such jurisdiction; (ii) that the
substance of the assignment is, and is intended to be, a refinancing of such
Mortgage Loan and that the form of the transaction is solely to comply with, or
facilitate the transaction under, such local laws; (iii) that the Mortgage Loan
following the proposed assignment will have a rate of interest at least 0.25
percent below or above the rate of interest on such Mortgage Loan prior to such
proposed assignment; and (iv) that such assignment is at the request of the
borrower under the related Mortgage Loan. Upon approval of an assignment in lieu
of satisfaction with respect to any Mortgage Loan, the Master Servicer shall
receive cash in an amount equal to the unpaid principal balance of and accrued
interest on such Mortgage Loan and the Master Servicer shall treat such amount
as a Principal Prepayment in Full with respect to such Mortgage Loan for all
purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans
(a) The Master Servicer shall foreclose upon or otherwise comparably
convert (which may include an REO Acquisition) the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07. Alternatively, the Master Servicer may take
other actions in respect of a defaulted Mortgage Loan, which may include (i)
accepting a short sale (a payoff of the Mortgage Loan for an amount less than
the total amount contractually owed in order to facilitate a sale of the
Mortgaged Property by the Mortgagor) or permitting a short refinancing (a payoff
of the Mortgage Loan for an amount less than the total amount contractually owed
in order to facilitate refinancing transactions by the Mortgagor not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment plan or (iii)
agreeing to a modification in accordance with Section 3.07. In connection with
such foreclosure or other conversion or action, the Master Servicer shall,
consistent with Section 3.11, follow such practices and procedures as it shall
deem necessary or advisable, as shall be normal and usual in its general
mortgage servicing activities and as shall be required or permitted by the
Program Guide; provided that the Master Servicer shall not be liable in any
respect hereunder if the Master Servicer is acting in connection with any such
foreclosure or other conversion or action in a manner that is consistent with
the provisions of this Agreement. The Master Servicer, however, shall not be
required to expend its own funds or incur other reimbursable charges in
connection with any foreclosure, or attempted foreclosure which is not
completed, or towards the correction of any default on a related senior mortgage
loan, or towards the restoration of any property unless it shall determine (i)
that such restoration and/or foreclosure will increase the proceeds of
liquidation of the Mortgage Loan to Holders of Certificates of one or more
Classes after reimbursement to itself for such expenses or charges and (ii) that
such expenses and charges will be recoverable to it through Liquidation
Proceeds, Insurance Proceeds, or REO Proceeds (respecting which it shall have
priority for purposes of withdrawals from the Custodial Account pursuant to
Section 3.10, whether or not such expenses and charges are actually recoverable
from related Liquidation Proceeds, Insurance Proceeds or REO Proceeds). In the
event of such a determination by the Master Servicer pursuant to this Section
3.14(a), the Master Servicer shall be entitled to reimbursement of its funds so
expended pursuant to Section 3.10. In addition, the
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Master Servicer may pursue any remedies that may be available in connection with
a breach of a representation and warranty with respect to any such Mortgage Loan
in accordance with Sections 2.03 and 2.04. However, the Master Servicer is not
required to continue to pursue both foreclosure (or similar remedies) with
respect to the Mortgage Loans and remedies in connection with a breach of a
representation and warranty if the Master Servicer determines in its reasonable
discretion that one such remedy is more likely to result in a greater recovery
as to the Mortgage Loan. Upon the occurrence of a Cash Liquidation or REO
Disposition, following the deposit in the Custodial Account of all Insurance
Proceeds, Liquidation Proceeds and other payments and recoveries referred to in
the definition of "Cash Liquidation" or "REO Disposition," as applicable, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee or the Custodian, as the case may be, shall
release to the Master Servicer the related Custodial File and the Trustee shall
execute and deliver such instruments of transfer or assignment prepared by the
Master Servicer, in each case without recourse, as shall be necessary to vest in
the Master Servicer or its designee, as the case may be, the related Mortgage
Loan, and thereafter such Mortgage Loan shall not be part of the Trust Fund.
Notwithstanding the foregoing or any other provision of this Agreement, in the
Master Servicer's sole discretion with respect to any defaulted Mortgage Loan or
REO Property as to either of the following provisions, (i) a Cash Liquidation or
REO Disposition may be deemed to have occurred if substantially all amounts
expected by the Master Servicer to be received in connection with the related
defaulted Mortgage Loan or REO Property have been received, and (ii) for
purposes of determining the amount of any Liquidation Proceeds, Insurance
Proceeds, REO Proceeds or other unscheduled collections or the amount of any
Realized Loss, the Master Servicer may take into account minimal amounts of
additional receipts expected to be received or any estimated additional
liquidation expenses expected to be incurred in connection with the related
defaulted Mortgage Loan or REO Property.
(b) In the event that title to any Mortgaged Property is acquired by the
Trust Fund as an REO Property by foreclosure or by deed in lieu of foreclosure,
the deed or certificate of sale shall be issued to the Trustee or to its nominee
on behalf of Certificateholders. Notwithstanding any such acquisition of title
and cancellation of the related Mortgage Loan, such REO Property shall (except
as otherwise expressly provided herein) be considered to be an Outstanding
Mortgage Loan held in the Trust Fund until such time as the REO Property shall
be sold. Consistent with the foregoing for purposes of all calculations
hereunder so long as such REO Property shall be considered to be an Outstanding
Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness
evidenced by the related Mortgage Note shall have been discharged, such Mortgage
Note and the related amortization schedule in effect at the time of any such
acquisition of title (after giving effect to any previous Curtailments and
before any adjustment thereto by reason of any bankruptcy or similar proceeding
or any moratorium or similar waiver or grace period) remain in effect.
(c) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Master Servicer on behalf of the Trust Fund shall dispose of
such REO Property within three full years after the taxable year of its
acquisition by the Trust Fund for purposes of Section 860G(a)(8) of the Code (or
such shorter period as may be necessary under applicable state (including any
state in which such property is located) law to maintain the status of each
REMIC created hereunder as a REMIC under applicable state law and avoid taxes
resulting from such property failing to be
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foreclosure property under applicable state law) or, at the expense of the Trust
Fund, request, more than 60 days before the day on which such grace period would
otherwise expire, an extension of such grace period unless the Master Servicer
obtains for the Trustee an Opinion of Counsel, addressed to the Trustee and the
Master Servicer, to the effect that the holding by the Trust Fund of such REO
Property subsequent to such period will not result in the imposition of taxes on
"prohibited transactions" as defined in Section 860F of the Code or cause any
REMIC created hereunder to fail to qualify as a REMIC (for federal (or any
applicable State or local) income tax purposes) at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such REO Property (subject to any conditions contained in such Opinion of
Counsel). The Master Servicer shall be entitled to be reimbursed from the
Custodial Account for any costs incurred in obtaining such Opinion of Counsel,
as provided in Section 3.10. Notwithstanding any other provision of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or (ii) any subject REMIC created hereunder to
the imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Section 860G(c) of the Code,
unless the Master Servicer has agreed to indemnify and hold harmless the Trust
Fund with respect to the imposition of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or
repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as well
as any recovery (other than Subsequent Recoveries) resulting from a collection
of Liquidation Proceeds, Insurance Proceeds or REO Proceeds, will be applied in
the following order of priority: first, to reimburse the Master Servicer or the
related Subservicer in accordance with Section 3.10(a)(ii); second, to the
Certificateholders to the extent of accrued and unpaid interest on the Mortgage
Loan, and any related REO Imputed Interest, at the Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), to the Due
Date in the related Due Period prior to the Distribution Date on which such
amounts are to be distributed; third, to the Certificateholders as a recovery of
principal on the Mortgage Loan (or REO Property) (provided that if any such
Class of Certificates to which such Realized Loss was allocated is no longer
outstanding, such subsequent recovery shall be distributed to the persons who
were the Holders of such Class of Certificates when it was retired); fourth, to
all Servicing Fees and Subservicing Fees payable therefrom (and the Master
Servicer and the Subservicer shall have no claims for any deficiencies with
respect to such fees which result from the foregoing allocation); and fifth, to
Foreclosure Profits.
(e) In the event of a default on a Mortgage Loan one or more of whose
obligors is not a United States Person, in connection with any foreclosure or
acquisition of a deed in lieu of foreclosure (together, "foreclosure") in
respect of such Mortgage Loan, the Master Servicer shall cause compliance with
the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto) necessary to assure that no withholding tax obligation arises with
respect to the proceeds of such foreclosure except to the extent, if any, that
proceeds of such foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
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Section 3.15. Trustee to Cooperate; Release of Custodial Files
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Master Servicer of a notification that payment in full
will be escrowed in a manner customary for such purposes, the Master Servicer
shall immediately notify the Trustee (if it holds the related Custodial File) or
the Custodian by a certification of a Servicing Officer (which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment which are required to be deposited in
the Custodial Account pursuant to Section 3.07 have been or will be so
deposited), substantially in the form attached hereto as Exhibit H, or in the
case of the Custodian, an electronic request in a form acceptable to the
Custodian, requesting delivery to it of the Custodial File. Upon receipt of such
certification and request, the Trustee shall promptly release, or cause the
Custodian to release, the related Custodial File to the Master Servicer. The
Master Servicer is authorized to execute and deliver to the Mortgagor the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage, together with
the Mortgage Note with, as appropriate, written evidence of cancellation thereon
and to cause the removal from the registration on the MERS(R) System of such
Mortgage and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release, including any applicable UCC
termination statements. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure
of any Mortgage Loan, the Master Servicer shall deliver to the Custodian, with a
copy to the Trustee, a certificate of a Servicing Officer substantially in the
form attached as Exhibit H hereto, or in the case of the Custodian, an
electronic request in a form acceptable to the Custodian, requesting that
possession of all, or any document constituting part of, the Custodial File be
released to the Master Servicer and certifying as to the reason for such release
and that such release will not invalidate any insurance coverage provided in
respect of the Mortgage Loan under any Required Insurance Policy. Upon receipt
of the foregoing, the Trustee shall deliver, or cause the Custodian to deliver,
the Custodial File or any document therein to the Master Servicer. The Master
Servicer shall cause each Custodial File or any document therein so released to
be returned to the Trustee, or the Custodian as agent for the Trustee when the
need therefor by the Master Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the Custodial File or
such document has been delivered directly or through a Subservicer to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered directly or through a Subservicer to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Custodial File or such document was
delivered and the purpose or purposes of such delivery. In the event of the
liquidation of a Mortgage Loan, the Trustee shall deliver the Request for
Release with respect thereto to the Master Servicer upon the Trustee's receipt
of notification from the Master Servicer of the deposit of the related
Liquidation Proceeds in the Custodial Account.
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(c) The Trustee or the Master Servicer on the Trustee's behalf shall
execute and deliver to the Master Servicer, if necessary, any court pleadings,
requests for trustee's sale or other documents necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Together with such documents or pleadings (if signed by the Trustee),
the Master Servicer shall deliver to the Trustee a certificate of a Servicing
Officer requesting that such pleadings or documents be executed by the Trustee
and certifying as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee shall not invalidate any
insurance coverage under any Required Insurance Policy or invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
Section 3.16. Servicing and Other Compensation; Eligible Master Servicing
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), subject to clause (e)
below. The amount of servicing compensation provided for in such clauses shall
be accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the event that
Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of amounts
reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect of a Cash
Liquidation or REO Disposition exceed the unpaid principal balance of such
Mortgage Loan plus unpaid interest accrued thereon (including REO Imputed
Interest) at a per annum rate equal to the related Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), the Master
Servicer shall be entitled to retain therefrom and to pay to itself and/or the
related Subservicer, any Foreclosure Profits and any Servicing Fee or
Subservicing Fee considered to be accrued but unpaid.
(b) Additional servicing compensation in the form of assumption fees, late
payment charges, investment income on amounts in the Custodial Account or the
Certificate Account or otherwise shall be retained by the Master Servicer or the
Subservicer to the extent provided herein, subject to clause (e) below.
Prepayment charges shall be deposited into the Certificate Account and shall be
paid on each Distribution Date to the holders of the Class SB Certificates.
(c) The Master Servicer shall be required to pay, or cause to be paid, all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of premiums for the Primary Insurance Policies, if any, to
the extent such premiums are not required to be paid by the related Mortgagors,
and the fees and expenses of the Trustee and the Custodian) and shall not be
entitled to reimbursement therefor except as specifically provided in Sections
3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation may not
be transferred in whole or in part except in connection with the transfer of all
of its responsibilities and obligations of the Master Servicer under this
Agreement.
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(e) Notwithstanding clauses (a) and (b) above, the amount of servicing
compensation that the Master Servicer shall be entitled to receive for its
activities hereunder for the period ending on each Distribution Date shall be
reduced (but not below zero) by an amount equal to Eligible Master Servicing
Compensation (if any) for such Distribution Date. Such reduction shall be
applied during such period as follows: first, to any Servicing Fee or
Subservicing Fee to which the Master Servicer is entitled pursuant to Section
3.10(a)(iii); second, to any income or gain realized from any investment of
funds held in the Custodial Account or the Certificate Account to which the
Master Servicer is entitled pursuant to Sections 3.07(c) or 4.01(b),
respectively; and third, to any amounts of servicing compensation to which the
Master Servicer is entitled pursuant to Section 3.10(a)(v) or (vi). In making
such reduction, the Master Servicer shall not withdraw from the Custodial
Account any such amount representing all or a portion of the Servicing Fee to
which it is entitled pursuant to Section 3.10(a)(iii); (ii) shall not withdraw
from the Custodial Account or Certificate Account any such amount to which it is
entitled pursuant to Section 3.07(c) or 4.01(b) and (iii) shall not withdraw
from the Custodial Account any such amount of servicing compensation to which it
is entitled pursuant to Section 3.10(a)(v) or (vi).
On each Distribution Date, Eligible Master Servicing Compensation shall be
applied to cover Prepayment Interest Shortfalls for such Distribution Date.
Section 3.17. Reports to the Trustee and the Depositor
Not later than fifteen days after it receives a written request from the
Trustee or the Depositor, the Master Servicer shall forward to the Trustee and
the Depositor a statement, certified by a Servicing Officer, setting forth the
status of the Custodial Account as of the close of business on the most recent
prior Distribution Date as it relates to the Mortgage Loans and showing, for the
period covered by such statement, the aggregate of deposits in or withdrawals
from the Custodial Account in respect of the Mortgage Loans for each category of
deposit specified in Section 3.07 and each category of withdrawal specified in
Section 3.10.
Section 3.18. Annual Statement as to Compliance and Servicing Assessment
The Master Servicer shall deliver to the Depositor and the Trustee on or
before the earlier of (a) March 31 of each year or (b) with respect to any
calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, (i) a servicing assessment as described
in Section 4.03(f)(ii) and (ii) a servicer compliance statement, signed by an
authorized officer of the Master Servicer, as described in Items 1122(a),
1122(b) and 1123 of Regulation AB, to the effect that:
(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.
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(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 material respects throughout the reporting period or, if
there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature
and status thereof.
The Master Servicer shall use commercially reasonable efforts to obtain
from all other parties participating in the servicing function any additional
certifications required under Item 1123 of Regulation AB to the extent required
to be included in a Report on Form 10-K; provided, however, that a failure to
obtain such certifications shall not be a breach of the Master Servicer's duties
hereunder if any such party fails to deliver such a certification.
Section 3.19. Annual Independent Public Accountants' Servicing Report
On or before the earlier of (a) March 31 of each year or (b) with respect
to any calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the annual report is required
to be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, the Master Servicer at its expense shall cause a firm of
independent public accountants, which shall be members of the American Institute
of Certified Public Accountants, to furnish to the Depositor and the Trustee the
attestation required under Item 1122(b) of Regulation AB. In rendering such
statement, such firm may rely, as to matters relating to the direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted by independent public accountants substantially in accordance with
standards established by the American Institute of Certified Public Accountants
(rendered within one year of such statement) with respect to such Subservicers.
Section 3.20. Right of the Depositor in Respect of the Master Servicer
The Master Servicer shall afford the Depositor and the Trustee, upon
reasonable notice, during normal business hours access to all records maintained
by the Master Servicer in respect of its rights and obligations hereunder and
access to officers of the Master Servicer responsible for such obligations. Upon
request, the Master Servicer shall furnish the Depositor and the Trustee with
its most recent financial statements and such other information as the Master
Servicer possesses regarding its business, affairs, property and condition,
financial or otherwise. The Master Servicer shall also cooperate with all
reasonable requests for information including, but not limited to, notices,
tapes and copies of files, regarding itself, the Mortgage Loans or the
Certificates from any Person or Persons identified by the Depositor or
Residential Funding. The Depositor may, but is not obligated to perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
hereunder or exercise the rights of the Master Servicer hereunder; provided that
the Master Servicer shall not be relieved of any of its obligations hereunder by
virtue of such performance by the Depositor or its designee. Neither the
Depositor nor the Trustee shall have the responsibility or liability for any
action or failure to act by the Master Servicer and is not obligated to
supervise the performance of the Master Servicer under this Agreement or
otherwise.
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Section 3.21. Advance Facility
(a) The Master Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility") under which (1) the
Master Servicer sells, assigns or pledges to another Person (an "Advancing
Person") the Master Servicer's rights under this Agreement to be reimbursed for
any Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances and/or Servicing Advances required to be made by the Master
Servicer pursuant to this Agreement. No consent of the Depositor, the Trustee,
the Certificateholders or any other party shall be required before the Master
Servicer may enter into an Advance Facility. Notwithstanding the existence of
any Advance Facility under which an Advancing Person agrees to fund Advances
and/or Servicing Advances on the Master Servicer's behalf, the Master Servicer
shall remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement. If the Master Servicer
enters into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances including Nonrecoverable
Advances ("Advance Reimbursement Amounts") and/or Servicing Advances including
Nonrecoverable Advances ("Servicing Advance Reimbursement Amounts" and together
with Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to
the extent such type of Reimbursement Amount is included in the Advance
Facility), as applicable, pursuant to this Agreement, then the Master Servicer
shall identify such Reimbursement Amounts consistent with the reimbursement
rights set forth in Section 3.10(a)(ii) and (vii) and remit such Reimbursement
Amounts in accordance with this Section 3.21 or otherwise in accordance with the
documentation establishing the Advance Facility to such Advancing Person or to a
trustee, agent or custodian (an "Advance Facility Trustee") designated by such
Advancing Person in an Advance Facility Notice described below in Section
3.21(b). Notwithstanding the foregoing, if so required pursuant to the terms of
the Advance Facility, the Master Servicer may direct, and if so directed in
writing the Trustee is hereby authorized to and shall pay to the Advance
Facility Trustee the Reimbursement Amounts identified pursuant to the preceding
sentence. An Advancing Person whose obligations hereunder are limited to the
funding of Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Subservicer pursuant to Section 3.02(a)
or 6.02(c) hereof and shall not be deemed to be a Subservicer under this
Agreement. Notwithstanding anything to the contrary herein, in no event shall
Advance Reimbursement Amounts or Servicing Advance Reimbursement Amounts be
included in the Available Distribution Amount or distributed to
Certificateholders.
(b) If the Master Servicer enters into an Advance Facility and makes the
election set forth in Section 3.21(a), the Master Servicer and the related
Advancing Person shall deliver to the Trustee a written notice and payment
instruction (an "Advance Facility Notice"), providing the Trustee with written
payment instructions as to where to remit Advance Reimbursement Amounts and/or
Servicing Advance Reimbursement Amounts (each to the extent such type of
Reimbursement Amount is included within the Advance Facility) on subsequent
Distribution Dates. The payment instruction shall require the applicable
Reimbursement Amounts to be distributed to the Advancing Person or to an Advance
Facility Trustee designated in the Advance Facility Notice. An Advance Facility
Notice may only be terminated by the joint written direction of the Master
Servicer and the related Advancing Person (and any related Advance Facility
Trustee).
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(c) Reimbursement Amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Master Servicer would be permitted to reimburse itself in accordance
with Section 3.10(a)(ii) and (vii) hereof, assuming the Master Servicer or the
Advancing Person had made the related Advance(s) and/or Servicing Advance(s).
Notwithstanding the foregoing, except with respect to reimbursement of
Nonrecoverable Advances as set forth in Section 3.10(c) of this Agreement, no
Person shall be entitled to reimbursement from funds held in the Collection
Account for future distribution to Certificateholders pursuant to this
Agreement. Neither the Depositor nor the Trustee shall have any duty or
liability with respect to the calculation of any Reimbursement Amount, nor shall
the Depositor or the Trustee have any responsibility to track or monitor the
administration of the Advance Facility and the Depositor shall not have any
responsibility to track, monitor or verify the payment of Reimbursement Amounts
to the related Advancing Person or Advance Facility Trustee. The Master Servicer
shall maintain and provide to any Successor Master Servicer (a "Successor Master
Servicer") a detailed accounting on a loan-by-loan basis as to amounts advanced
by, sold, pledged or assigned to, and reimbursed to any Advancing Person. The
Successor Master Servicer shall be entitled to rely on any such information
provided by the Master Servicer and the Successor Master Servicer shall not be
liable for any errors in such information.
(d) Upon the direction of and at the expense of the Master Servicer, the
Trustee agrees to execute such acknowledgments, certificates, and other
documents provided by the Master Servicer and reasonably satisfactory to the
Trustee recognizing the interests of any Advancing Person or Advance Facility
Trustee in such Reimbursement Amounts as the Master Servicer may cause to be
made subject to Advance Facilities pursuant to this Section 3.21, and such other
documents in connection with such Advance Facility as may be reasonably
requested from time to time by any Advancing Person or Advance Facility Trustee
and reasonably satisfactory to the Trustee.
(e) Reimbursement Amounts collected with respect to each Mortgage Loan
shall be allocated to outstanding unreimbursed Advances or Servicing Advances
(as the case may be) made with respect to that Mortgage Loan on a "first-in,
first out" ("FIFO") basis, subject to the qualifications set forth below:
(i) Any Successor Master Servicer to Residential Funding and the
Advancing Person or Advance Facility Trustee shall be required to apply
all amounts available in accordance with this Section 3.21(e) to the
reimbursement of Advances and Servicing Advances in the manner provided
for herein; provided, however, that after the succession of a Successor
Master Servicer, (A) to the extent that any Advances or Servicing Advances
with respect to any particular Mortgage Loan are reimbursed from payments
or recoveries, if any, from the related Mortgagor, and Liquidation
Proceeds or Insurance Proceeds, if any, with respect to that Mortgage
Loan, reimbursement shall be made, first, to the Advancing Person or
Advance Facility Trustee in respect of Advances and/or Servicing Advances
related to that Mortgage Loan to the extent of the interest of the
Advancing Person or Advance Facility Trustee in such Advances and/or
Servicing Advances, second to the Master Servicer in respect of Advances
and/or Servicing Advances related to that Mortgage Loan in excess of those
in which the Advancing Person or Advance Facility Trustee Person has an
interest, and third, to the Successor
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Master Servicer in respect of any other Advances and/or Servicing Advances
related to that Mortgage Loan, from such sources as and when collected,
and (B) reimbursements of Advances and Servicing Advances that are
Nonrecoverable Advances shall be made pro rata to the Advancing Person or
Advance Facility Trustee, on the one hand, and any such Successor Master
Servicer, on the other hand, on the basis of the respective aggregate
outstanding unreimbursed Advances and Servicing Advances that are
Nonrecoverable Advances owed to the Advancing Person, Advance Facility
Trustee or Master Servicer pursuant to this Agreement, on the one hand,
and any such Successor Master Servicer, on the other hand, and without
regard to the date on which any such Advances or Servicing Advances shall
have been made. In the event that, as a result of the FIFO allocation made
pursuant to this Section 3.21(e), some or all of a Reimbursement Amount
paid to the Advancing Person or Advance Facility Trustee relates to
Advances or Servicing Advances that were made by a Person other than
Residential Funding or the Advancing Person or Advance Facility Trustee,
then the Advancing Person or Advance Facility Trustee shall be required to
remit any portion of such Reimbursement Amount to the Person entitled to
such portion of such Reimbursement Amount. Without limiting the generality
of the foregoing, Residential Funding shall remain entitled to be
reimbursed by the Advancing Person or Advance Facility Trustee for all
Advances and Servicing Advances funded by Residential Funding to the
extent the related Reimbursement Amount(s) have not been assigned or
pledged to an Advancing Person or Advance Facility Trustee. The
documentation establishing any Advance Facility shall require Residential
Funding to provide to the related Advancing Person or Advance Facility
Trustee loan by loan information with respect to each Reimbursement Amount
distributed to such Advancing Person or Advance Facility Trustee on each
date of remittance thereof to such Advancing Person or Advance Facility
Trustee, to enable the Advancing Person or Advance Facility Trustee to
make the FIFO allocation of each Reimbursement Amount with respect to each
Mortgage Loan.
(ii) By way of illustration, and not by way of limiting the
generality of the foregoing, if the Master Servicer resigns or is
terminated at a time when the Master Servicer is a party to an Advance
Facility, and is replaced by a Successor Master Servicer, and the
Successor Master Servicer directly funds Advances or Servicing Advances
with respect to a Mortgage Loan and does not assign or pledge the related
Reimbursement Amounts to the related Advancing Person or Advance Facility
Trustee, then all payments and recoveries received from the related
Mortgagor or received in the form of Liquidation Proceeds with respect to
such Mortgage Loan (including Insurance Proceeds collected in connection
with a liquidation of such Mortgage Loan) will be allocated first to the
Advancing Person or Advance Facility Trustee until the related
Reimbursement Amounts attributable to such Mortgage Loan that are owed to
the Master Servicer and the Advancing Person, which were made prior to any
Advances or Servicing Advances made by the Successor Master Servicer, have
been reimbursed in full, at which point the Successor Master Servicer
shall be entitled to retain all related Reimbursement Amounts subsequently
collected with respect to that Mortgage Loan pursuant to Section 3.10 of
this Agreement. To the extent that the Advances or Servicing Advances are
Nonrecoverable Advances to be reimbursed on an aggregate basis pursuant to
Section 3.10 of this Agreement, the reimbursement paid in this manner will
be made pro
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rata to the Advancing Person or Advance Facility Trustee, on the one hand,
and the Successor Master Servicer, on the other hand, as described in
clause (i)(B) above.
(f) The Master Servicer shall remain entitled to be reimbursed for
all Advances and Servicing Advances funded by the Master Servicer to the
extent the related rights to be reimbursed therefor have not been sold,
assigned or pledged to an Advancing Person.
(g) Any amendment to this Section 3.21 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of
an Advance Facility as described generally in this Section 3.21, including
amendments to add provisions relating to a successor master servicer, may
be entered into by the Trustee, the Depositor and the Master Servicer
without the consent of any Certificateholder, with written confirmation
from each Rating Agency that the amendment will not result in the
reduction of the ratings on any class of the Certificates below the then
current ratings on such Certificates, and delivery of an Opinion of
Counsel as required under Section 11.01(c) notwithstanding anything to the
contrary in Section 11.01 of or elsewhere in this Agreement.
(h) Any rights of set-off that the Trust Fund, the Trustee, the
Depositor, any Successor Master Servicer or any other Person might
otherwise have against the Master Servicer under this Agreement shall not
attach to any rights to be reimbursed for Advances or Servicing Advances
that have been sold, transferred, pledged, conveyed or assigned to any
Advancing Person.
(i) At any time when an Advancing Person shall have ceased funding
Advances and/or Servicing Advances (as the case may be) and the Advancing
Person or related Advance Facility Trustee shall have received
Reimbursement Amounts sufficient in the aggregate to reimburse all
Advances and/or Servicing Advances (as the case may be) the right to
reimbursement for which were assigned to the Advancing Person, then upon
the delivery of a written notice signed by the Advancing Person and the
Master Servicer or its successor or assign) to the Trustee terminating the
Advance Facility Notice (the "Notice of Facility Termination"), the Master
Servicer or its Successor Master Servicer shall again be entitled to
withdraw and retain the related Reimbursement Amounts from the Custodial
Account pursuant to Section 3.10.
(j) After delivery of any Advance Facility Notice, and until any
such Advance Facility Notice has been terminated by a Notice of Facility
Termination, this Section 3.21 may not be amended or otherwise modified
without the prior written consent of the related Advancing Person.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account
(a) The Master Servicer acting as agent of the Trustee shall establish and
maintain a Certificate Account in which the Master Servicer shall deposit or
cause to be deposited on behalf of the Trustee on or before 2:00 P.M. New York
time on each Certificate Account Deposit Date by wire transfer of immediately
available funds an amount equal to the sum of (i) any Advance
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for the immediately succeeding Distribution Date, (ii) any amount required to be
paid pursuant to Section 3.12(a), (iii) any amount required to be deposited in
the Certificate Account pursuant to Section 3.16(e) or Section 4.07, (iv) any
amount required to be paid pursuant to Section 9.01, (v) any prepayment charges
on the Mortgage Loans received during the related Prepayment Period and (vi) all
other amounts constituting the Available Distribution Amount for the immediately
succeeding Distribution Date.
(b) On or prior to the Business Day immediately following each
Determination Date, the Master Servicer shall determine any amounts owed by the
Swap Counterparty under the Swap Agreement and inform the Supplemental Interest
Trust Trustee in writing of the amount so calculated.
(c) The Trustee shall, upon written request from the Master Servicer,
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment (except that (i) if such Permitted
Investment is an obligation of the institution that maintains such account or a
fund for which such institution serves as custodian, then such Permitted
Investment may mature on such Distribution Date and (ii) any other investment
may mature on such Distribution Date if the Trustee shall advance funds on such
Distribution Date to the Certificate Account in the amount payable on such
investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized.
Section 4.02. Distributions
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf
of the Trustee) shall allocate and distribute the Available Distribution Amount,
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 extent of the Available Distribution Amount other than the
portion of the Available Distribution Amount described in
clause(a)(vi) of the definition of Available Distribution Amount),
to the Holders of the REMIC I Regular Interests, pro rata, in an
amount equal to (A) the related Uncertificated Accrued Interest for
such Distribution Date, plus (B) any amounts in respect thereof
remaining unpaid from previous Distribution Dates. Amounts payable
as Uncertificated Accrued Interest in respect of REMIC I Regular
Interest ZZ shall be reduced when the REMIC I Overcollateralization
Amount is less than the REMIC I Required
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Overcollateralization Amount, by the lesser of (x) the amount of
such difference and (y) the REMIC I Regular Interest ZZ Maximum
Interest Deferral Amount, and such amount will be payable to the
Holders of REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-1S, M-2S,
M-3S, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-9 and B in the same proportion as
the Overcollateralization Increase Amount is allocated to the
corresponding Class of Certificates, and the Uncertificated
Principal Balance of the REMIC I Regular Interest ZZ shall be
increased by such amount; 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 (other than the portion of the Available
Distribution Amount described in clause (a)(vi) of the definition of
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 AA,
98.00% of such remainder until the Uncertificated Principal Balance
of such REMIC I Regular Interest is reduced to zero; (B) to the
Holders of REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-1S, M-2S,
M-3S, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-9 and B 1.00% of such remainder in
the same proportion as amounts are distributed in respect of
principal on the corresponding Class of Certificates; (C) to the
Holders of the REMIC I Regular Interest ZZ, 1.00% of such remainder;
and (D) any remaining amounts to the Holders of the Class R
Certificates; provided, however, that 98.00% and 2.00% of any
principal payments that are attributable to an Overcollateralization
Reduction Amount shall be allocated to Holders of the REMIC I
Regular Interest AA and REMIC I Regular Interest ZZ, respectively;
and provided further, that any prepayment charges on deposit in the
Certificate Account attributable to prepayment charges received on
the Mortgage Loans during the related Prepayment Period shall be
deemed distributed to REMIC II as the holder of the REMIC I Regular
Interest AA.
(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 (x) the Master Servicer on behalf of the
Trustee or (y) the Paying Agent appointed by the Trustee, shall distribute to
each Certificateholder of record on the next preceding Record Date (other than
as provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Master Servicer or the
Paying Agent, as the case may be, or, if such Certificateholder has not so
notified the Master Servicer or the Paying Agent by the Record Date, by check
mailed to such Certificateholder at the address of such Holder appearing in the
Certificate Register such Certificateholder's share (which share with respect to
each Class of Certificates, shall be based on the aggregate of the Percentage
Interests represented by
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Certificates of the applicable Class held by such Holder of the following
amounts, in the following order of priority, subject to the provisions of
Section 4.02(d)), to the extent of the Available Distribution Amount on deposit
in the Certificate Account with respect to clauses (i) through (xi), and to the
extent of the sum of the remaining Available Distribution Amount (other than the
portion of the Available Distribution Amount described in clause (a)(vi) of the
definition of Available Distribution Amount)) and to the extent of prepayment
charges on deposit in the Certificate Account):
(i) to the Class A Certificateholders, the Class A Interest
Distribution Amount, with such amount allocated among the Class A
Certificateholders on a pro rata basis based on the Accrued Certificate
Interest on each such Class;
(ii) to the Class M-1S Certificateholders from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions, the Class M-1S Interest Distribution Amount;
(iii) to the Class M-2S Certificateholders from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions, the Class M-2S Interest Distribution Amount;
(iv) to the Class M-3S Certificateholders from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions, the Class M-3S Interest Distribution Amount;
(v) to the Class M-4 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-4 Interest Distribution Amount;
(vi) to the Class M-5 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-5 Interest Distribution Amount;
(vii) to the Class M-6 Certificateholders from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions, the Class M-6 Interest Distribution Amount;
(viii) to the Class M-7 Certificateholders from the amount, if any,
of the Available Distribution Amount remaining after the foregoing
distributions, the Class M-7 Interest Distribution Amount;
(ix) to the Class M-8 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-8 Interest Distribution Amount;
(x) to the Class M-9 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-9 Interest Distribution Amount;
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(xi) to the Class B Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class B Interest Distribution Amount;
(xii) to the Class A, Class M and Class B Certificateholders, from
the amount, if any, of the Available Distribution Amount remaining after
the foregoing distributions, the Principal Distribution Amount (other than
the amounts set forth in clauses (b)(iv), (b)(v), and (b)(vi) of the
definition thereof), in the order of priority described in Section 4.02(d)
hereof, until the Certificate Principal Balances of the Class A, Class M
and Class B Certificates have been reduced to zero;
(xiii) to the Class A, Class M and Class B Certificateholders, from
the amount, if any, of the Excess Cash Flow, an amount equal to the
principal portion of Realized Losses previously allocated to reduce the
Certificate Principal Balance of any Class of the Class A Certificates or
Class M Certificates and remaining unreimbursed, but only to the extent of
Subsequent Recoveries for that Distribution Date, which amount shall be
included in the Principal Distribution Amount and paid in accordance with
Section 4.02(d) hereof, until the Certificate Principal Balances of the
Class A, Class M and Class B Certificates have been reduced to zero;
(xiv) to the Class A, Class M and Class B Certificateholders, from
the amount, if any, of the Excess Cash Flow remaining after the foregoing
distributions, an amount equal to the principal portion of Realized Losses
on the Mortgage Loans during the immediately preceding Prepayment Period,
which amount shall be included in the Principal Distribution Amount and
paid in accordance with Section 4.02(d) hereof, until the Certificate
Principal Balances of the Class A, Class M and Class B Certificates have
been reduced to zero;
(xv) to the Class A, Class M and Class B Certificateholders, from
the amount, if any, of the Excess Cash Flow remaining after the foregoing
distributions, the Overcollateralization Increase Amount for such
Distribution Date, which amount shall be included in the Principal
Distribution Amount and paid in accordance with Section 4.02(d) hereof,
until the Certificate Principal Balances of the Class A, Class M and Class
B Certificates have been reduced to zero;
(xvi) to the Class A, Class M and Class B Certificateholders from
the amount, if any, of the Excess Cash Flow remaining after the foregoing
distributions, the amount of any Prepayment Interest Shortfalls allocated
thereto for such Distribution Date, on a pro rata basis based on Accrued
Certificate Interest otherwise due thereon, to the extent not covered by
Eligible Master Servicing Compensation on such Distribution Date;
(xvii) to the Class A, Class M and Class B Certificateholders from
the amount, if any, of the Excess Cash Flow remaining after the foregoing
distributions, the amount of any Prepayment Interest Shortfalls previously
allocated thereto on any prior Distribution Date that remain unreimbursed,
together with interest thereon at the applicable Pass-Through Rate, on a
pro rata basis based on Prepayment Interest Shortfalls previously
allocated thereto that remain unreimbursed;
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(xviii) from the amount, if any, of the Excess Cash Flow remaining
after the foregoing distributions, to pay the Class A Certificates, on a
pro rata basis, based on the amount of Class A Basis Risk Shortfall
Carry-Forward Amount previously allocated thereto that remain
unreimbursed, the amount of any Class A Basis Risk Shortfall Carry-Forward
Amounts remaining unpaid as of such Distribution Date and then to the
Class M Certificates, in their order of their payment priority, the amount
of any Class M Basis Risk Shortfall Carry-Forward Amounts remaining unpaid
as of such Distribution Date and then to the Class B Certificates the
amount of any Class B Basis Risk Shortfall Carry-Forward Amounts remaining
unpaid as of each Distribution Date;
(xix) to the Class A, Class M and Class B Certificates on a pro rata
basis, based on the amount of Relief Act Shortfalls allocated thereto on
such Distribution Date, from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the amount of any Relief Act
Shortfalls allocated to those Certificates with respect to such
Distribution Date;
(xx) to the Class A, Class M and Class B Certificateholders, from
the amount, if any, of the Excess Cash Flow remaining after the foregoing
distributions, the principal portion of any Realized Losses previously
allocated to those Certificates and remaining unreimbursed, which amount
shall be allocated first, to the Class A Certificateholders on a pro rata
basis, based on their respective principal portion of any Realized Losses
previously allocated thereto that remain unreimbursed, and then to the
Class M Certificates, in their order of payment priority and then to the
Class B Certificates;
(xxi) from the amount, if any, of the Excess Cash Flow remaining
after the foregoing distributions, to the Supplemental Interest Trust
Account for Payment to the Swap Counterparty, any Swap Termination Payment
owed by the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, due to a Swap Counterparty Trigger Event;
(xxii) to the Class SB Certificates, (A) from the amount, if any, of
the Excess Cash Flow remaining after the foregoing distributions, the sum
of (I) Accrued Certificate Interest thereon, (II) the amount of any
Overcollateralization Reduction Amount for such Distribution Date and
(III) for any Distribution Date after the Certificate Principal Balance of
each Class of Class A Certificates and Class M Certificates and the Class
B Certificates has been reduced to zero, the Overcollateralization Amount,
and (B) from prepayment charges on deposit in the Certificate Account, any
prepayment charges received on the Mortgage Loans during the related
Prepayment Period; and
(xxiii) to the Class R Certificateholders, the balance, if any, of
the Excess Cash Flow.
(d) On each Distribution Date, the Principal Distribution Amount will be
paid as follows:
(i) the Class A Principal Distribution Amount shall be distributed,
sequentially, as follows: (w) first, to the Class A-1, Certificates until
the Certificate
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Principal Balance thereof has been reduced to zero, (x) second, to the
Class A-2 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero, and (y) third, to the Class A-3 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero
and (z) fourth, to the Class A-4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(ii) the Class M-1S Principal Distribution Amount shall be
distributed to the Class M-1S Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(iii) the Class M-2S Principal Distribution Amount shall be
distributed to the Class M-2S Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(iv) the Class M-3S Principal Distribution Amount shall be
distributed to the Class M-3S Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
(v) the Class M-4 Principal Distribution Amount shall be distributed
to the Class M-4 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(vi) the Class M-5 Principal Distribution Amount shall be
distributed to the Class M-5 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
(vii) the Class M-6 Principal Distribution Amount shall be
distributed to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
(viii) the Class M-7 Principal Distribution Amount shall be
distributed to the Class M-7 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
(ix) the Class M-8 Principal Distribution Amount shall be
distributed to the Class M-8 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
(x) the Class M-9 Principal Distribution Amount shall be distributed
to the Class M-9 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
(xi) the Class B Principal Distribution Amount shall be distributed
to the Class B Certificates, until the Certificate Principal Balance
thereof has been reduced to zero.
(e) Notwithstanding the foregoing clauses (c) and (d), upon the reduction
of the Certificate Principal Balance of a Class of Class A Certificates and
Class M Certificates or the
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Class B Certificates to zero, such Class of Certificates will not be entitled to
further distributions pursuant to Section 4.02 (other than in respect of
Subsequent Recoveries).
(f) Any Prepayment Interest Shortfalls on the Mortgage Loans which are not
covered by Eligible Master Servicing Compensation as described in Section 3.16
and Relief Act Shortfalls on the Mortgage Loans will be allocated among the
Class A, Class M and Class B Certificates, pro rata in accordance with the
amount of Accrued Certificate Interest payable on such Distribution Date absent
such shortfalls. Any such uncovered Prepayment Interest Shortfalls will be paid
solely pursuant to Section 4.02(c), (xvi) and (xvii) and Section 4.09(c)(iii)
and (iv) to the extent funds are available therefor. Any such Relief Act
Shortfalls will be paid solely pursuant to Section 4.02(c)(xix) and Section
4.09(c)(vi) to the extent funds are available therefor.
(g) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the Master Servicer shall deposit such funds into the
Custodial Account pursuant to Section 3.07(b)(iii).
(h) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(i) 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 held in the Certificate Account for the
benefit of such Certificateholders as provided in Section 9.01(d).
Section 4.03. Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting
(a) Concurrently with each distribution charged to the Certificate Account
and with respect to each Distribution Date the Master Servicer shall forward to
the Trustee and the Trustee shall forward by mail or otherwise make available
electronically on its website (which may be
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obtained by any Certificateholder by telephoning the Trustee at (▇▇▇) ▇▇▇-▇▇▇▇)
to each Holder and the Depositor a statement setting forth the following
information as to each Class of Certificates, in each case to the extent
applicable:
(i) the applicable Record Date, Determination Date, Distribution
Date and the date on which the Interest Accrual Period commenced;
(ii) the aggregate amount of payments received with respect to the
Mortgage Loans in the aggregate, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master
Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the identity
of the party receiving such fees or expenses;
(v) (A) the amount of such distribution to the Certificateholders of
such Class applied to reduce the Certificate Principal Balance thereof,
and (B) the aggregate amount included therein representing Principal
Prepayments;
(vi) the amount of such distribution to Holders of such Class of
Certificates allocable to interest including amounts payable as excess
cash flow and the disposition of the excess cash flow;
(vii) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall;
(viii) the aggregate Certificate Principal Balance of each Class of
Certificates, before and after giving effect to the amounts distributed on
such Distribution Date, separately identifying any reduction thereof due
to Realized Losses other than pursuant to an actual distribution of
principal;
(ix) the Certificate Principal Balance for each Class of
Certificates as of the Closing Date;
(x) the number and Stated Principal Balance of the Mortgage Loans in
the aggregate after giving effect to the distribution of principal on such
Distribution Date and the number of Mortgage Loans in the aggregate at the
beginning and end of the related Due Period;
(xi) on the basis of the most recent reports furnished to it by
Subservicers, (A) the number and Stated Principal Balance of the Mortgage
Loans in the aggregate that are Delinquent (1) 30-59 days, (2) 60-89 days
and (3) 90 or more days and the number and Stated Principal Balance of the
Mortgage Loans in the aggregate that are in foreclosure, (B) the number
and Stated Principal Balances of the Mortgage Loans in the aggregate that
are Reportable Modified Mortgage Loans that are in foreclosure and are REO
Property, indicating in each case capitalized Mortgage Loans, other
Servicing
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Modifications and totals, and (C) for all Reportable Modified Mortgage
Loans, the number and Stated Principal Balances of the Mortgage Loans in
the aggregate that have been liquidated, the subject of pay-offs and that
have been repurchased by the Master Servicer or Seller;
(xii) the amount, terms and general purpose of any Advance by the
Master Servicer pursuant to Section 4.04 and the amount of all Advances
that have been reimbursed during the related Due Period;
(xiii) any material modifications, extensions or waivers to the
terms of the Mortgage Loans in the aggregate during the Due 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 and Stated 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 Realized Losses with respect to the
Mortgage Loans in the aggregate for such Distribution Date and the
aggregate amount of Realized Losses with respect to the Mortgage Loans in
the aggregate incurred since the Cut-off Date;
(xviii) the Pass-Through Rate on each Class of Certificates and the
applicable Net WAC Cap Rate;
(xix) the weighted average of the Maximum Net Mortgage Rates with
respect to the Mortgage Loans in the aggregate;
(xx) the Basis Risk Shortfall, Basis Risk Shortfall Carry Forward
Amount, and Prepayment Interest Shortfalls;
(xxi) the Overcollateralization Amount and the Required
Overcollateralization Amount following such Distribution Date;
(xxii) the number and Stated Principal Balances of the Mortgage
Loans in the aggregate repurchased under Section 4.07;
(xxiii) the aggregate amount of any recoveries on previously
foreclosed loans with respect to the Mortgage Loans in the aggregate from
Residential Funding;
(xxiv) the weighted average remaining term to maturity of the
Mortgage Loans in the aggregate after giving effect to the amounts
distributed on such Distribution Date;
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(xxv) the weighted average Mortgage Rates of the Mortgage Loans in
the aggregate after giving effect to the amounts distributed on such
Distribution Date;
(xxvi) [Reserved];
(xxvii) the amount of any Net Swap Payment payable to the
Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest Trust, any Net Swap Payment payable to the Swap Counterparty, any
Swap Termination Payment payable to the Supplemental Interest Trust
Trustee, on behalf of the Supplemental Interest Trust, and any Swap
Termination Payment payable to the Swap Counterparty; and
(xxviii) the occurrence of the Stepdown Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination. In addition to the statement provided to the Trustee as set
forth in this Section 4.03(a), the Master Servicer shall provide to any manager
of a trust fund consisting of some or all of the Certificates, upon reasonable
request, such additional information as is reasonably obtainable by the Master
Servicer at no additional expense to the Master Servicer. Also, at the request
of a Rating Agency, the Master Servicer shall provide the information relating
to the Reportable Modified Mortgage Loans substantially in the form attached
hereto as Exhibit S to such Rating Agency within a reasonable period of time;
provided, however, that the Master Servicer shall not be required to provide
such information more than four times in a calendar year to any Rating Agency.
(b) Within a reasonable period of time after it receives a written request
from a Holder of a Certificate, other than a Class R Certificate, the Master
Servicer shall prepare, or cause to be prepared, and shall forward, or cause to
be forwarded, to each such requesting Person who at any time during the calendar
year was the Holder of a Certificate, other than a Class R Certificate, a
statement containing the information set forth in clauses (v) and (vi) referred
to in subsection (a) above aggregated for such calendar year or applicable
portion thereof during which such Person was a Certificateholder. Such
obligation of the Master Servicer shall be deemed to have been satisfied to the
extent that substantially comparable information shall be provided by the Master
Servicer and 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 shall forward, or cause to be forwarded, to each such
requesting Person who at any time during the calendar year was the Holder of a
Class R Certificate, a statement containing the applicable distribution
information provided pursuant to this Section 4.03 aggregated for such calendar
year or applicable portion thereof during which such Person was the Holder of a
Class R Certificate. Such obligation of the Master Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Master Servicer pursuant to any requirements of the
Code.
(d) Upon the written request of any Certificateholder, the Master
Servicer, as soon as reasonably practicable, shall provide the requesting
Certificateholder with such information as is
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necessary and appropriate, in the Master Servicer's sole discretion, for
purposes of satisfying applicable reporting requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Depositor and in respect
of the Trust Fund, sign and cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act, and the
rules and regulations of the Commission thereunder including, without
limitation, reports on Form 10-K, Form 10-D and Form 8-K. In connection with the
preparation and filing of such periodic reports, the Trustee shall timely
provide to the Master Servicer (I) a list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Trustee, as trustee hereunder, or the Trust
Fund that are received by a Responsible Officer of the Trustee, (III) notice of
all matters that, to the actual knowledge of a Responsible Officer of the
Trustee, have been submitted to a vote of the Certificateholders, other than
those matters that have been submitted to a vote of the Certificateholders at
the request of the Depositor or the Master Servicer, and (IV) notice of any
failure of the Trustee to make any distribution to the Certificateholders as
required pursuant to this Agreement. Neither the Master Servicer nor the Trustee
shall have any liability with respect to the Master Servicer's failure to
properly prepare or file such periodic reports resulting from or relating to the
Master Servicer's inability or failure to obtain any information not resulting
from the Master Servicer's own negligence or willful misconduct.
(f) Any Form 10-K filed with the Commission in connection with this
Section 4.03 shall include, with respect to the Certificates relating to such
10-K:
(i) A certification, signed by the senior officer in charge of the
servicing functions of the Master Servicer, in the form attached as
Exhibit R-1 hereto or such other form as may be required or permitted by
the Commission (the "Form 10-K Certification"), in compliance with Rules
13a-14 and 15d-14 under the Exchange Act and any additional directives of
the Commission.
(ii) A report regarding its assessment of compliance during the
preceding calendar year with all applicable servicing criteria set forth
in relevant Commission regulations with respect to mortgage-backed
securities transactions taken as a whole involving the Master Servicer
that are backed by the same types of assets as those backing the
certificates, as well as similar reports on assessment of compliance
received from other parties participating in the servicing function as
required by relevant Commission regulations, as described in Item 1122(a)
of Regulation AB. The Master Servicer shall obtain from all other parties
participating in the servicing function any required assessments.
(iii) With respect to each assessment report described immediately
above, a report by a registered public accounting firm that attests to,
and reports on, the assessment made by the asserting party, as set forth
in relevant Commission regulations, as described in Regulation 1122(b) of
Regulation AB and Section 3.19.
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(iv) The servicer compliance certificate required to be delivered
pursuant Section 3.18.
(g) In connection with the Form 10-K Certification, the Trustee shall
provide the Master Servicer with a back-up certification substantially in the
form attached hereto as Exhibit R-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, upon delivery of such report to the Trustee.
Section 4.04. Distribution of Reports to the Trustee and the Depositor;
Advances by the Master Servicer
(a) Prior to the close of business on the Business Day next succeeding
each Determination Date, the Master Servicer shall furnish a written statement
(which may be in a mutually agreeable electronic format) to the Trustee, any
Paying Agent and the Depositor (the information in such statement to be made
available to Certificateholders by the Master Servicer on request) (provided
that the Master Servicer shall use its best efforts to deliver such written
statement not later than 12:00 P.M. New York time on the second Business Day
prior to the Distribution Date) setting forth (i) the Available Distribution
Amounts, (ii) the amounts required to be withdrawn from the Custodial Account
and deposited into the Certificate Account on the immediately succeeding
Certificate Account Deposit Date pursuant to clause (iii) of Section 4.01(a),
(iii) the amount of Prepayment Interest Shortfalls, Class A Basis Risk
Shortfall, Class M Basis Risk Shortfall, Class B Basis Risk Shortfall, Class A
Basis Risk Shortfall Carry-Forward Amounts, Class M Basis Risk Shortfall
Carry-Forward Amounts, and Class B Basis Risk Shortfall Carry-Forward Amounts
and (iv) any Net Swap Payments paid by the Swap Counterparty to the Supplemental
Interest Trust Trustee, on behalf of the Supplemental Interest Trust, if any,
for such Distribution Date. The determination by the Master Servicer of such
amounts shall, in the absence of obvious error, be presumptively deemed to be
correct for all purposes hereunder and the Trustee shall be protected in relying
upon the same without any independent check or verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account
Deposit Date, the Master Servicer shall either (i) remit to the Trustee for
deposit in the Certificate Account from its own funds, or funds received
therefor from the Subservicers, an amount equal to the Advances to be made by
the Master Servicer in respect of the related Distribution Date, which shall be
in an aggregate amount equal to the sum of (A) the aggregate amount of Monthly
Payments other than Balloon Payments (with each interest portion thereof
adjusted to a per annum rate equal to the Net Mortgage Rate), less the amount of
any related Servicing Modifications, Debt Service Reductions or reductions in
the amount of interest collectable from the Mortgagor pursuant to the Relief Act
or similar legislation or regulations then in effect, on the Outstanding
Mortgage Loans as of the related Due Date in the related Due Period, which
Monthly Payments were due during the related Due Period and not received as of
the close of
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business as of the related Determination Date; provided that no Advance shall be
made if it would be a Nonrecoverable Advance and (B) with respect to each
Balloon Loan delinquent in respect of its Balloon Payment as of the close of
business on the related Determination Date, an amount equal to the assumed
Monthly Payment (with each interest portion thereof adjusted to a per annum rate
equal to the Net Mortgage Rate) that would have been due on the related Due Date
based on the original amortization schedule for such Balloon Loan until such
Balloon Loan is finally liquidated, over any payments of interest or principal
(with each interest portion thereof adjusted to per annum rate equal to the Net
Mortgage Rate) received from the related Mortgagor as of the close of business
on the related Determination Date and allocable to the Due Date during the
related Due Period for each month until such Balloon Loan is finally liquidated,
(ii) withdraw from amounts on deposit in the Custodial Account and deposit in
the Certificate Account all or a portion of the Amount Held for Future
Distribution in discharge of any such Advance, or (iii) make advances in the
form of any combination of clauses (i) and (ii) aggregating the amount of such
Advance. Any portion of the Amount Held for Future Distribution so used shall be
replaced by the Master Servicer by deposit in the Certificate Account on or
before 11:00 A.M. New York time on any future Certificate Account Deposit Date
to the extent that funds attributable to the Mortgage Loans that are available
in the Custodial Account for deposit in the Certificate Account on such
Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
Master Servicer shall be entitled to use any Advance made by a Subservicer as
described in Section 3.07(b) that has been deposited in the Custodial Account on
or before such Distribution Date as part of the Advance made by the Master
Servicer pursuant to this Section 4.04. The determination by the Master Servicer
that it has made a Nonrecoverable Advance or that any proposed Advance, if made,
would constitute a Nonrecoverable Advance, shall be evidenced by a certificate
of a Servicing Officer delivered to the Depositor and the Trustee. In the event
that the Master Servicer determines as of the Business Day preceding any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date, it shall give notice to the Trustee of
its inability to advance (such notice may be given by telecopy), not later than
3:00 P.M., New York time, on such Business Day, specifying the portion of such
amount that it will be unable to deposit. Not later than 3:00 P.M., New York
time, on the Certificate Account Deposit Date the Trustee shall, unless by 12:00
Noon, New York time, on such day the Trustee shall have been notified in writing
(by telecopy) that the Master Servicer shall have directly or indirectly
deposited in the Certificate Account such portion of the amount of the Advance
as to which the Master Servicer shall have given notice pursuant to the
preceding sentence, pursuant to Section 7.01, (a) terminate all of the rights
and obligations of the Master Servicer under this Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the Master Servicer as
successor Master Servicer hereunder, including the obligation to deposit in the
Certificate Account an amount equal to the Advance for the immediately
succeeding Distribution Date. In connection with the preceding sentence, the
Trustee shall deposit all funds it receives pursuant to this Section 4.04(b)
into the Certificate Account.
Section 4.05. Allocation of Realized Losses
(a) Prior to each Distribution Date, the Master Servicer shall determine
the total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Servicing
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Modifications, Debt Service Reduction, Deficient Valuation or REO Disposition
that occurred during the related Prepayment Period or, in the case of a
Servicing Modification that constitutes a reduction of the interest rate on a
Mortgage Loan, the amount of the reduction in the interest portion of the
Monthly Payment due in the month in which such Distribution Date occurs. The
amount of each Realized Loss shall be evidenced by an Officers' Certificate.
(b) All Realized Losses on the Mortgage Loans, on any Distribution Date,
shall be allocated or covered as follows:
first, to Excess Cash Flow as provided in clause (b)(v) of the
definition of "Principal Distribution Amount", to the extent of the
Excess Cash Flow for such Distribution Date;
second, by any amounts available from the Swap Agreement for such
Distribution Date pursuant to Section 4.09(c);
third, in reduction of the Overcollateralization Amount, until such
amount has been reduced to zero;
fourth, to the Class B Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
fifth, to the Class M 9 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
sixth, to the Class M 8 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
seventh, to the Class M 7 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
eighth, to the Class M 6 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
ninth, to the Class M 5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
tenth, to the Class M 4 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
eleventh, to the Class M 3 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
twelfth, to the Class M 2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
thirteenth, to the Class M 1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
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fourteenth, to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates on a pro rata basis, until the Certificate Principal
Balances thereof have been reduced to zero.
(c) All allocations of a Realized Loss on a "pro rata basis" among two or
more specified Classes of Certificates means an allocation on a pro rata basis,
among the various Classes so specified, to each such Class of Certificates on
the basis of their then outstanding Certificate Principal Balances prior to
giving effect to distributions to be made on such Distribution Date in the case
of the principal portion of a Realized Loss or based on the Accrued Certificate
Interest thereon payable on such Distribution Date in the case of an interest
portion of a Realized Loss. Any allocation of the principal portion of Realized
Losses (other than Debt Service Reductions) to the Class A, Class M or Class B
Certificates shall be made by reducing the Certificate Principal Balance thereof
by the amount so allocated, which allocation shall be deemed to have occurred on
such Distribution Date; provided that no such reduction shall reduce the
Certificate Principal Balance of the Class A, Class M and the Class B
Certificates below the aggregate Stated Principal Balance of the Mortgage Loans,
as applicable. Allocations of the interest portions of Realized Losses (other
than any interest rate reduction resulting from a Servicing Modification) shall
be made by operation of the definition of "Accrued Certificate Interest" and by
operation of the provisions of Section 4.02(c). Allocations of the interest
portion of a Realized Loss resulting from an interest rate reduction in
connection with a Servicing Modification shall be made by operation of the
provisions of Section 4.02(c). All Realized Losses and all other losses
allocated to a Class of Certificates hereunder will be allocated among the
Certificates of such Class in proportion to the Percentage Interests evidenced
thereby.
(d) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the REMIC I Regular Interests, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC I Regular Interests AA and
ZZ up to an aggregate amount equal to the excess of (a) the REMIC I Interest
Loss Allocation Amount over (b) Prepayment Interest Shortfalls (to the extent
not covered by Eligible Master Servicing Compensation) relating to the Mortgage
Loans for such Distribution Date, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of the REMIC I Regular Interests AA and ZZ up
to an aggregate amount equal to the REMIC I Principal Loss Allocation Amount,
98% and 2%, respectively; third, to the Uncertificated Principal Balances of
REMIC I Regular Interests AA, 98%, B-1, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest B-1 has been reduced to zero;
fourth, to the Uncertificated Principal Balances of REMIC I Regular Interests
AA, 98%, M-9, 1% and ZZ. 1%, until the Uncertificated Principal Balance of REMIC
I Regular Interest M-9 has been reduced to zero; fifth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-8, 1% and ZZ, 1%,
until the Uncertificated Principal Balance of REMIC I Regular Interest M-8 has
been reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC I
Regular Interests AA, 98%, M-7, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-7 has been reduced to zero;
seventh, to the Uncertificated Principal Balances of REMIC I Regular Interests
AA, 98%, M-6, 1% and ZZ, 1%, until the Uncertificated Principal Balance of REMIC
I Regular Interest M-6 has been reduced to zero; eighth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-5, 1% and ZZ, 1%,
until the Uncertificated Principal Balance of REMIC I Regular Interest M-5 has
been reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC I
Regular Interests AA, 98%, M-4, 1% and ZZ, 1%, until the Uncertificated
Principal
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Balance of REMIC I Regular Interest M 4 has been reduced to zero; tenth, to the
Uncertificated Principal Balances of REMIC I Regular Interests AA, 98%, M-3, 1%
and ZZ, 1%, until the Uncertificated Principal Balance of REMIC I Regular
Interest M-3 has been reduced to zero; eleventh, to the Uncertificated Principal
Balances of REMIC I Regular Interests AA, 98%, M-2, 1% and ZZ, 1%, until the
Uncertificated Principal Balance of REMIC I Regular Interest M-2 has been
reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC I
Regular Interests AA, 98%, M-1, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-1 has been reduced to zero; and
thirteenth, to the Uncertificated Principal Balances of REMIC I Regular
Interests AA, 98% and ZZ, 1%, pro rata, based upon the Uncertificated Principal
Balance of the REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇ and A-1 until the
Uncertificated Principal Balances of REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇ and
A-1 have been reduced to zero.
(e) Realized Losses allocated to the Excess Cash Flow or the
Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this
Section, the definition of Accrued Certificate Interest and the operation of
Section 4.02(c) shall be deemed allocated to the Class SB Certificates. Realized
Losses allocated to the Class SB Certificates shall, to the extent such Realized
Losses represent Realized Losses on an interest portion, be allocated to the
REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash
Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued
Certificate Interest on the REMIC I Regular Interest SB-IO. Realized Losses
allocated to the Overcollateralization Amount pursuant to paragraph (b) of this
Section shall be deemed first to reduce the principal balance of the REMIC 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
(a) With respect 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 such
Mortgage Loan that becomes 90 days or more delinquent during any given Calendar
Quarter shall only be eligible for purchase pursuant to this Section during the
period beginning on the first Business Day of the following Calendar Quarter,
and ending at the close of business on the second-to-last Business Day of such
following Calendar Quarter; and provided, further, that such Mortgage Loan is 90
days or more delinquent
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at the time of repurchase. Such option if not exercised shall not thereafter be
reinstated as to any Mortgage Loan, unless the delinquency is cured and the
Mortgage Loan thereafter again becomes delinquent in payment by 90 days or more
in a subsequent Calendar Quarter.
(b) If at any time the Master Servicer makes a payment to the Certificate
Account covering the amount of the Purchase Price for such a Mortgage Loan as
provided in clause (a) above, and the Master Servicer provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Certificate Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of the Master
Servicer without recourse to the Master Servicer which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer will thereupon own such
Mortgage, and all such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto
Section 4.08. [Reserved]
Section 4.09. The Swap Agreement
(a) On the Closing Date, the Supplemental Interest Trust Trustee, on
behalf of the Supplemental Interest Trust, shall (i) establish and maintain in
its name, in trust for the benefit of Class A, Class M, Class B and Class SB
Certificates, the Supplemental Interest Trust Account and (ii) for the benefit
of the Class A, Class M, Class B and Class SB Certificates, enter into the Swap
Agreement.
(b) The Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest Trust, shall deposit in the Supplemental Interest Trust Account all
payments that are payable to the Supplemental Interest Trust Trustee, on behalf
of the Supplemental Interest Trust, under the Swap Agreement. Net Swap Payments
and Swap Termination Payments (other than Swap Termination Payments resulting
from a Swap Counterparty Trigger Event) payable by the Supplemental Interest
Trust Trustee, on behalf of the Supplemental Interest Trust, to the Swap
Counterparty pursuant to the Swap Agreement shall be excluded from the Available
Distribution Amount and payable to the Swap Counterparty prior to any
distributions to the Certificateholders. On each Distribution Date, such amounts
will be remitted by the Supplemental Interest Trust Trustee, on behalf of the
Supplemental Interest Trust, to the Supplemental Interest Trust Account for
payment to the Swap Counterparty, first to make any Net Swap Payment owed to the
Swap Counterparty pursuant to the Swap Agreement for such Distribution Date, and
second to make any Swap Termination Payment (not due to a Swap Counterparty
Trigger Event) owed to the Swap Counterparty pursuant to the Swap Agreement for
such Distribution Date. For federal income tax purposes, such amounts paid to
the Supplemental Interest Trust Account on each Distribution Date shall first be
deemed paid to the Supplemental Interest Trust Account in respect of REMIC II
Regular Interest SB-IO to the extent of the amount distributable on such REMIC
II Regular Interest SB-IO on such Distribution Date, and any remaining amount
shall be deemed paid to the Supplemental Interest Trust Account from the Class
IO Distribution Amount (as defined below). Any Swap Termination Payment
triggered by a Swap Counterparty Trigger Event owed to the Swap Counterparty
pursuant to the
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Swap Agreement will be subordinated to distributions to the Holders of the Class
A, Class M and Class B Certificates and shall be paid as set forth under Section
4.02.
(c) Net Swap Payments payable by the Swap Counterparty to the Supplemental
Interest Trust Trustee, on behalf of the Supplemental Interest Trust, pursuant
to the Swap Agreement will be deposited by the Supplemental Interest Trust
Trustee, on behalf of the Supplemental Interest Trust, into the Supplemental
Interest Trust Account. On each Distribution Date, to the extent required, the
Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, shall withdraw such amounts from the Supplemental Interest Trust Account
to distribute to the Certificates in the following order of priority:
(i) first, as part of the Principal Distribution Amount to pay the
holders of the Class A Certificates, Class M Certificates and then to the
Class B Certificates in reduction of their Certificate Principal Balances,
the principal portion of any Realized Losses incurred on the Mortgage
Loans for the preceding calendar month;
(ii) second, to pay any Overcollateralization Increase Amount, as
part of the Principal Distribution Amount, to the holders of the Class A,
Class M and Class B Certificates;
(iii) third, to pay the holders of Class A, Class M and Class B
Certificates, the amount of any Prepayment Interest Shortfalls allocated
thereto on such Distribution Date, on a pro rata basis, based on the
amount of Prepayment Interest Shortfalls previously allocated thereto
pursuant to Section 4.02(f) that remain unreimbursed, to the extent not
covered by the Eligible Master Servicing Compensation on such Distribution
Date;
(iv) fourth, to pay to the holders of the Class A, Class M and Class
B Certificates, any Prepayment Interest Shortfalls remaining unpaid from
prior Distribution Dates together with interest thereon at the applicable
Pass-Through Rate, on a pro rata basis, based on the amount of Prepayment
Interest Shortfalls previously allocated thereto that remain unreimbursed;
(v) fifth, to pay the holders of the Class A Certificates, on a pro
rata basis, based on the amount of Basis Risk Shortfall Carry
Forward-Amounts previously allocated thereto remaining unpaid as of such
Distribution Date the applicable Basis Risk Shortfall Carry-Forward
Amounts, and then to the Class M Certificates, in order of their payment
priority, and then to the Class B Certificates, the amount of any Basis
Risk Shortfall Carry-Forward Amounts remaining unpaid as of such
Distribution Date;
(vi) sixth, to pay to the holders of the Class A, Class M and Class
B Certificates, the amount of any Relief Act Shortfalls allocated thereto
that remain unreimbursed, on a pro rata basis, based on the amount of
Relief Act Shortfalls previously allocated thereto;
(vii) seventh, to pay to the holders of the Class A Certificates, on
a pro rata basis, based on the amount of Realized Losses previously
allocated thereto that remain unreimbursed, and then to the Class M
Certificates in their order of payment priority, and
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then to the Class B Certificates the principal portion of any Realized
Losses previously allocated thereto that remain unreimbursed; and
(viii) eighth, to the Class SB Certificates.
On any Distribution Date, the amounts described in 4.09(c)(i) through (c)(viii)
above will be paid first from Excess Cash Flow for that Distribution Date and
second from amounts received by the Supplemental Interest Trust Trustee, on
behalf of the Supplemental Interest Trust, under the Swap Agreement.
(d) Subject to Sections 8.01 and 8.02 hereof, the Supplemental Interest
Trust Trustee, on behalf of the Supplemental Interest Trust, agrees to comply
with the terms of the Swap Agreement and to enforce the terms and provisions
thereof against the Swap Counterparty at the written direction of the Holders of
Class A, Class M and Class B Certificates entitled to at least 51% of the Voting
Rights of such Classes of Certificates, or if the Trustee does not receive such
direction from such Certificateholders, then at the written direction of
Residential Funding.
(e) The Supplemental Interest Trust Account shall be an Eligible Account.
Amounts held in the Supplemental Interest Trust Account from time to time shall
continue to constitute assets of the Supplemental Interest Trust, but not of any
REMIC, until released from the Supplemental Interest Trust Account pursuant to
this Section 4.09. The Supplemental Interest Trust Account constitutes an
"outside reserve fund" within the meaning of Treasury Regulation Section
1.860G-2(h) and is not an asset of any REMIC. The Class SB Certificateholders
shall be the owners of the Supplemental Interest Trust Account. The Supplemental
Interest Trust Trustee, on behalf of the Supplemental Interest Trust, shall keep
records that accurately reflect the funds on deposit in the Supplemental
Interest Trust Account. The Supplemental Interest Trust Trustee, on behalf of
the Supplemental Interest Trust, shall, at the direction of the Master Servicer,
invest amounts on deposit in the Supplemental Interest Trust Account in
Permitted Investments. In the absence of written direction to the Supplemental
Interest Trust Trustee, on behalf of the Supplemental Interest Trust from the
Master Servicer, all funds in the Supplemental Interest Trust Account shall
remain uninvested.
(f) The Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest Trust, and the Master Servicer shall treat the holders of each Class of
Certificates (other than the Class SB Certificates and Class R Certificates) as
having entered into a notional principal contract with the holders of the Class
SB Certificates. Pursuant to each such notional principal contract, all holders
of Certificates (other than the Class SB Certificates and Class R Certificates)
shall be treated as having agreed to pay, on each Distribution Date, to the
holder of the Class SB Certificates an aggregate amount equal to the excess, if
any, of (i) the amount payable on such Distribution Date on the REMIC II Regular
Interest corresponding to such Class of Certificates over (ii) the amount
payable on such Class of Certificates on such Distribution Date (such excess, a
"Class IO Distribution Amount"). In addition, pursuant to such notional
principal contract, the holder of the Class SB Certificates shall be treated as
having agreed to pay the related Basis Risk Shortfall Carry-Forward Amounts to
the holders of the Certificates (other than the Class SB Certificates and Class
R Certificates) in accordance with the terms of this Agreement. Any payments to
the Certificates from amounts deemed received in respect of this notional
principal contract shall not be payments with respect to a "regular interest" in
a REMIC
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within the meaning of Code Section 860G(a)(1). However, any payment from the
Certificates (other than the Class SB Certificates and Class R Certificates) of
a Class IO Distribution Amount shall be treated for tax purposes as having been
received by the holders of such Certificates in respect of the REMIC II Regular
Interest corresponding to such Class of Certificates and as having been paid by
such holders to the Supplemental Interest Trust Account pursuant to the notional
principal contract. Thus, each Certificate (other than the Class R Certificates)
shall be treated as representing not only ownership of regular interests in
REMIC II, but also ownership of an interest in, and obligations with respect to,
a notional principal contract.
(g) In the event that the Supplemental Interest Trust Trustee, on behalf
of the Supplemental Interest Trust, receives a Swap Termination Payment, and a
successor swap counterparty cannot be obtained, then such Swap Termination
Payment will be deposited into the Supplemental Interest Trust Account and the
Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, on each subsequent Distribution Date (until the termination date of the
original Swap Agreement), will withdraw the amount of any Net Swap Payment due
to the Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest Trust (calculated in accordance with the terms of the original Swap
Agreement), and administer such Net Swap Payment in accordance with the order of
priority for distribution of Net Swap Payments by the Supplemental Interest
Trust Trustee, on behalf of the Supplemental Interest Trust, as described in
Section 4.09(c) hereof.
(h) The Supplemental Interest Trust Account shall be terminated on the
termination date of the Swap Agreement.
Section 4.10. Posted Collateral Account.
(a) On the Closing Date, the Supplemental Interest Trust Trustee, on
behalf of the Supplemental Interest Trust, shall establish and maintain a Posted
Collateral Account pursuant to the terms of the Swap Agreement.
(b) The Supplemental Interest Trust Trustee, on behalf of the Supplemental
Interest Trust, shall deposit in the Posted Collateral Account all collateral
posted by the Swap Counterparty pursuant to Paragraph 13(g)(i) of the credit
support annex to the Swap Agreement and held by the Supplemental Interest Trust
Trustee, on behalf of the Supplemental Interest Trust, pursuant to the credit
support annex to the Swap Agreement. Assets deposited into the Posted Collateral
Account (i) shall not be commingled or used with any other asset held by the
Supplemental Interest Trust Trustee and (ii) shall not be transferred to any
other person or entity except as may be provided in the Swap Agreement.
(c) The Posted Collateral Account shall be an Eligible Account.
(d) The Posted Collateral Account shall be terminated on the termination
date of the Swap Agreement.
Section 4.11. [Rreserved]
Section 4.12. Tax Treatment of Swap Payments and Swap Termination
Payments.
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(a) For federal income tax purposes, each holder of a Class A, Class M or
Class B Certificate is deemed to own an undivided beneficial ownership interest
in a REMIC regular interest and the right to receive payments from the
Supplemental Interest Trust Account in respect of the related Basis Risk
Shortfall Carry-Forward Amount, and the obligation to make payments to the
Supplemental Interest Trust Account. For federal income tax purposes, the
Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, will account for payments to each Class A, Class M and Class B
Certificates as follows: each Class A, Class M and Class B Certificate will be
treated as receiving their entire payment from REMIC II (regardless of any Swap
Termination Payment or obligation under the Swap Agreement) and subsequently
paying their portion of any Swap Termination Payment in respect of each such
Class' obligation under the Swap Agreement. In the event that any such Class is
resecuritized in a REMIC, the obligation under the Swap Agreement to pay any
such Swap Termination Payment (or any Net Swap Payment), will be made by one or
more of the REMIC Regular Interests issued by the resecuritization REMIC
subsequent to such REMIC Regular Interest receiving its full payment from any
such Class A, Class M or Class B Certificate. Resecuritization of any Class A,
Class M or Class B Certificate in a REMIC will be permissible only if the
Supplemental Interest Trust Trustee, on behalf of the Supplemental Interest
Trust, hereunder is the trustee in such resecuritization.
(b) The REMIC regular interest corresponding to a Class A, Class M or
Class B Certificate will be entitled to receive interest and principal payments
at the times and in the amounts equal to those made on the certificate to which
it corresponds, except that (i) the maximum interest rate of that REMIC regular
interest will equal the applicable Net WAC Cap Rate computed for this purpose by
limiting the base calculation amount of the Swap Agreement to the Stated
Principal Balance of the Mortgage Loans and (ii) any Swap Termination Payment
will be treated as being payable solely from Excess Cash Flow. As a result of
the foregoing, the amount of distributions and taxable income on the REMIC
regular interest corresponding to a Class A, Class M or Class B Certificate may
exceed the actual amount of distributions on the Class A, Class M or Class B
Certificate.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates
(a) The Class A Certificates shall be substantially in the form set forth
in Exhibit A, the Class M Certificates shall be substantially in the form set
forth in Exhibit B, the Class B Certificates shall be substantially in the forms
set forth in Exhibits C-1, C-2 or C-3, as set forth in Section 5.02(e) hereof,
the Class SB Certificates shall be substantially in the forms set forth in
Exhibits ▇-▇, ▇-▇ or D-3, as set forth in Section 5.02(e) hereof and the Class R
Certificates shall be substantially in the forms set forth in Exhibits E. The
Certificates shall, on original issue, be executed and delivered by the Trustee
to the Certificate Registrar for authentication and delivery to or upon the
order of the Depositor upon receipt by the Trustee or one or more Custodians of
the documents specified in Section 2.01. The Class A, Class M-1S, Class M-2S and
Class M-3S Certificates shall be issuable in minimum dollar denominations of
$100,000 and integral multiples of $1 in excess thereof. The Class ▇-▇, ▇▇▇▇▇
▇-▇, Class M-6, Class M-7, Class M-8, Class M-9 and Class B Certificates shall
be issuable in minimum dollar denominations of
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$250,000 and integral multiples of $1 in excess thereof. The Class SB
Certificates shall be issuable in minimum denominations of $100,000,000
representing a portion of the Notional Amount of the Class SB Certificates and
integral multiples of $1 in excess thereof. On the Closing Date, one Class B
Certificate shall be registered as a Temporary Regulation S Global Class B
Certificate with a Certificate Principal Balance of $0.00 and one Class B
Certificate shall be registered as a Rule 144A Global Offered Certificate with a
Certificate Principal Balance of $[___]. On the Closing Date, one Class SB
Certificate shall be registered as a Temporary Regulation S Global Offered
Certificate with a Notional Amount of $0.00 and one Class SB Certificate shall
be registered as a Rule 144A Global Offered Certificate with a Notional Amount
of $[___]. Each Class of Class R Certificates shall be issued in registered,
certificated form in minimum percentage interests of 20.00% and integral
multiples of 0.01% in excess thereof; provided, however, that one Class R
Certificate of each Class will be issuable to the REMIC Administrator as "tax
matters person" pursuant to Section 10.01(c) in a minimum denomination
representing a Percentage Interest of not less than 0.01%. The Certificates
shall be executed by manual or facsimile signature on behalf of an authorized
officer of the Trustee. Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Certificate or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Certificate Registrar by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) The Class A Certificates, Class M and Class B Certificates shall
initially be issued as one or more Certificates registered in the name of the
Depository or its nominee and, except as provided below, registration of such
Certificates may not be transferred by the Trustee except to another Depository
that agrees to hold such Certificates for the respective Certificate Owners with
Ownership Interests therein. The Certificate Owners shall hold their respective
Ownership Interests in and to each such Class A, Class M and Class B Certificate
through the book-entry facilities of the Depository and, except as provided
below, shall not be entitled to Definitive Certificates in respect of such
Ownership Interests. All transfers by Certificate Owners of their respective
Ownership Interests in the Book-Entry Certificates shall be made in accordance
with the procedures established by the Depository Participant or brokerage firm
representing such Certificate Owner. Each Depository Participant shall transfer
the Ownership Interests only in the Book-Entry Certificates of Certificate
Owners it represents or of brokerage firms for which it acts as agent in
accordance with the Depository's normal procedures.
The Trustee, the Master Servicer and the Depositor may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms
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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.
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 Trustee 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 Trustee of
instruction from the Depository directing the Trustee 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 Certificates and any other
information reasonably required by the Trustee), (i) the Trustee shall instruct
the Depository to reduce the related Depository Participant's account by the
aggregate Certificate Principal Balance of the Definitive Certificates, (ii) the
Trustee shall execute, 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 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.
If (i)(A) the Depositor advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Depositor is unable to locate a qualified successor or
(ii) the Depositor notifies the Depository of its intent to terminate the
book-entry system and, upon receipt of notice of such intent from the
Depository, the Depository Participants holding beneficial interest in the
Book-Entry Certificates agree to initiate such termination, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration of transfer, the Trustee shall issue the
Definitive Certificates. Neither the Depositor, the Master Servicer nor the
Trustee shall be liable for any actions taken by the Depository or its nominee,
including, without limitation, any delay in delivery of any instruction required
under this section 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.
No Ownership Interest in a Temporary Regulation S Global Offered
Certificate or Permanent Regulation S Global Offered Certificate may at any time
be transferred to a transferee that takes delivery in the form of a Definitive
Certificate.
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(c) Each of the Certificates is intended to be a "security" governed by
Article 8 of the Uniform Commercial Code as in effect in the State of New York
and any other applicable jurisdiction, to the extent that any of such laws may
be applicable.
Section 5.02. Registration of Transfer and Exchange of Certificates
(a) The Trustee shall cause to be kept at one of the offices or agencies
to be appointed by the Trustee, in accordance with the provisions of Section
8.12, a Certificate Register in which, subject to such reasonable regulations as
it may prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. The Trustee
is initially appointed Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided. The
Certificate Registrar, or the Trustee, shall provide the Master Servicer with a
certified list of Certificateholders as of each Record Date prior to the related
Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at any
office or agency of the Trustee maintained for such purpose pursuant to Section
8.12 and, in the case of any Class B, Class SB 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 B, Class SB
or Class R Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with said Act and laws. Except as otherwise
provided in this Section 5.02(d) or in Section 5.02(e) hereof, in the event that
a transfer of a Class B, Class SB or Class R Certificate is to be made, (i)
unless the Depositor directs the Trustee otherwise, the Trustee shall require a
written Opinion of Counsel addressed to and acceptable to and in form and
substance satisfactory to the Trustee and the Depositor that such transfer may
be made pursuant to an exemption, describing the applicable exemption and the
basis therefor, from said Act and laws or is being made pursuant to said Act and
laws, which Opinion of Counsel shall not be an expense of the Trustee, the Trust
Fund, the Depositor or the Master Servicer, and (ii) the Trustee shall require
the Transferee to execute a representation letter, substantially in the form of
Exhibit J hereto, and the Trustee shall require the transferor to execute a
representation letter, substantially in the form of Exhibit K hereto, each
acceptable to
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and in form and substance satisfactory to the Depositor and the Trustee
certifying to the Depositor and the Trustee the facts surrounding such transfer,
which representation letters shall not be an expense of the Trustee, the Trust
Fund, the Depositor or the Master Servicer. In lieu of the requirements set
forth in the preceding sentence, transfers of a Class B, Class SB or Class R
Certificates may be made in accordance with this Section 5.02(d) if the
prospective Transferee of such a Certificate provides the Trustee and the Master
Servicer with an investment letter substantially in the form of Exhibit O
attached hereto, which investment letter shall not be an expense of the Trustee,
the Depositor, or the Master Servicer, and which investment letter states that,
among other things, such Transferee (i) is a "qualified institutional buyer" as
defined under Rule 144A, acting for its own account or the accounts of other
"qualified institutional buyers" as defined under Rule 144A, and (ii) is aware
that the proposed transferor intends to rely on the exemption from registration
requirements under the Securities Act provided by Rule 144A. If any transfer of
a Class B Certificate that is a Book-Entry Certificate is to be made to a
transferee in book-entry form, the transferor and the transferee will be deemed
to have made each of the respective certifications set forth in Exhibit O as of
the transfer date, in each case as if such Class B, Certificate were in physical
form. The Holder of a Class B, Class SB or Class R Certificate desiring to
effect any transfer, sale, pledge or other disposition shall, and does hereby
agree to, indemnify the Trustee, the Depositor, the Master Servicer and the
Certificate Registrar against any liability that may result if the transfer,
sale, pledge or other disposition is not so exempt or is not made in accordance
with such federal and state laws and this Agreement.
(e) Provisions Regarding Rule 144A and Regulation S Transfers.
(i) Private Offered Certificates sold to "qualified institutional
buyers" as defined in and in reliance on Rule 144A under the 1933 Act
shall be represented by one or more Rule 144A Global Offered Certificates.
Private Offered Certificates sold in offshore transactions in reliance on
Regulation S under the Securities Act shall be represented initially by
Temporary Regulation S Global Offered Certificates.
(ii) The Temporary Regulation S Global Offered Certificates shall be
exchanged on the later of (a) 40 days after the later of the Closing Date
(b) the date on which the requisite certifications are due to and provided
to the Trustee (the later of clauses (a) and (b), the "Exchange Date") for
Permanent Regulation S Global Offered Certificates. Regulation S Global
Offered Certificates shall be issued in registered form, without coupons,
and deposited upon the order of the Transferor with the Trustee as
custodian for and registered in the name of a nominee of the Depository
for credit to the account of the depositaries for Euroclear and
Clearstream.
(iii) A Certificate Owner holding an interest in a Temporary
Regulation S Global Offered Certificate may receive payments in respect of
the Certificates on the Temporary Regulation S Global Offered Certificate
only after the delivery, to Euroclear or Clearstream, as the case may be,
of a written certification substantially in the form set forth in Exhibit
W-1, and upon delivery by Euroclear or Clearstream, as the case may be, to
the Trustee and Certificate Registrar of a certification or certifications
substantially in the form set forth in Exhibit W-2 (the "Clearing System
Certificate"). The delivery by a Certificate Owner of the certification
referred to above shall constitute its irrevocable instruction to
Euroclear or Clearstream, as the case may be, to arrange for the exchange
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of the Certificate Owner's interest in the Temporary Regulation S Global
Offered Certificate for a beneficial interest in the Permanent Regulation
S Global Offered Certificate after the Exchange Date in accordance with
paragraph (iv) below.
(iv) After (i) the Exchange Date and (ii) receipt by the Certificate
Registrar of written instructions from Euroclear or Clearstream, as the
case may be, directing the Certificate Registrar to credit or cause to be
credited to either Euroclear's or Clearstream's, as the case may be,
Depository's account a beneficial interest in the Permanent Regulation S
Global Offered Certificate in a principal amount not greater than that of
the beneficial interest in the Temporary Regulation S Global Offered
Certificate, the Certificate Registrar shall instruct the Depository to
reduce the principal amount of the Temporary Regulation S Global Offered
Certificate and increase the principal amount of the Permanent Regulation
S Global Offered Certificate, by the principal amount of the beneficial
interest in the Temporary Regulation S Global Offered Certificate to be so
transferred, and to credit or cause to be credited to the account of
Euroclear, Clearstream or a Person who has an account with the Depository
as the case may be, a beneficial interest in the Permanent Regulation S
Global Offered Certificate having a Certificate Principal Balance of the
Temporary Regulation S Global Class B that was reduced upon the transfer.
Upon return of the entire principal amount of the Temporary Regulation S
Global Offered Certificate to the Trustee in exchange for beneficial
interests in the Permanent Regulation S Global Offered Certificate,
Trustee shall cancel the Temporary Regulation S Global Offered Certificate
by perforation and shall forthwith destroy it.
(v) For transfer of an interest in a Permanent Regulation S Global
Offered Certificate for an interest in the Rule 144A Global Offered
Certificate, if the Certificateholder of a beneficial interest in a
Permanent Regulation S Global Offered Certificate deposited with the
Depository wishes at any time to exchange its interest in the Permanent
Regulation S Global Offered Certificate, or to transfer its interest in
the Permanent Regulation S Global Offered Certificate to a Person who
wishes to take delivery thereof in the form of an interest in the Rule
144A Global Offered Certificate, the Certificateholder may, subject to the
rules and procedures of Euroclear or Clearstream and the Depository, as
the case may be, give directions for the Certificate Registrar to exchange
or cause the exchange or transfer or cause the transfer of the interest
for an equivalent beneficial interest in the Rule 144A Global Offered
Certificate. Upon receipt by the Certificate Registrar of instructions
from Euroclear or Clearstream, from the Depository or from the
Certificateholder, as the case may be, directing the Certificate Registrar
to credit or cause to be credited a beneficial interest in the Rule 144A
Global Offered Certificate equal to the Percentage Interest in the
Permanent Regulation S Global Offered Certificate to be exchanged or
transferred (such instructions to contain information regarding the
Depository Participant account to be credited with the increase, and, with
respect to an exchange or transfer of an interest in the Permanent
Regulation S Global Offered Certificate, information regarding the
Depository Participant account to be debited with the decrease), the
Certificate Registrar shall instruct the Depository to reduce the
Permanent Regulation S Global Offered Certificate by the aggregate
principal amount of the beneficial interest in the Permanent Regulation S
Global Offered Certificate to be so exchanged or transferred, and the
Certificate Registrar shall instruct the Depository, concurrently with the
reduction, to increase the principal amount of the
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Rule 144A Global Offered Certificate by the aggregate Certificate
Principal Balance of the beneficial interest in the Permanent Regulation S
Global Offered Certificate to be so exchanged or transferred, and to
credit or cause to be credited to the account of the Person specified in
the instructions a beneficial interest in the Rule 144A Global Offered
Certificate equal to the reduction in the Certificate Principal Balance of
the Permanent Regulation S Global Offered Certificate.
(vi) For transfers of an interest in the Rule 144A Global Offered
Certificate for an interest in a Regulation S Global Offered Certificate,
if a Certificate Owner holding a beneficial interest in the Rule 144A
Global Offered Certificate wishes at any time to exchange its interest in
the Rule 144A Global Offered Certificate for an interest in a Regulation S
Global Offered Certificate, or to transfer its interest in the 144A
Book-Entry Certificate to a Person who wishes to take delivery thereof in
the form of an interest in the Regulation S Global Offered Certificate,
the Certificateholder may, subject to the rules and procedures of the
Depository, give directions for the Certificate Registrar to exchange or
cause the exchange or transfer or cause the transfer of the interest for
an equivalent beneficial interest in the Regulation S Global Offered
Certificate. Upon receipt by the Certificate Registrar of (A) instructions
given in accordance with the Depository's procedures from a Depository
Participant or from the Certificateholder, as the case may be, directing
the Certificate Registrar to credit or cause to be credited a beneficial
interest in the Regulation S Global Offered Certificate in an amount equal
to the beneficial interest in the Rule 144A Global Offered Certificate to
be exchanged or transferred, (B) a written order given in accordance with
the Depository's procedures containing information regarding the account
of the depositaries for Euroclear or Clearstream or another Depository
Participant, as the case may be, to be credited with the increase and the
name of the account and (C) certificates in the forms of Exhibits X and Y,
respectively, given by the proposed transferee and the Certificate Owner
of the interest, the Certificate Registrar shall instruct the Depository
to reduce the Rule 144A Global Offered Certificate by the aggregate
principal amount of the beneficial interest in the Rule 144A Global
Offered Certificate to be so exchanged or transferred and the Certificate
Registrar shall instruct the Depository, concurrently with the reduction,
to increase the principal amount of the Regulation S Global Offered
Certificate by the aggregate Certificate Principal Balance of the
beneficial interest in the Rule 144A Global Offered Certificate to be so
exchanged or transferred, and to credit or cause to be credited to the
account of the Person specified in the instructions a beneficial interest
in the Regulation S Global Offered Certificate equal to the reduction in
the Certificate Principal Balance of the Rule 144A Global Offered
Certificate.
(vii) Notwithstanding any other provisions of this Section 5.02(e),
the Initial Purchaser may exchange beneficial interests in the Temporary
Regulation S Global Offered Certificates held by it for interests in the
Rule 144A Global Offered Certificates only after delivery by the Initial
Purchaser of instructions for the exchange substantially in the form of
Exhibit Z. Upon receipt of the instructions provided in the preceding
sentence, the Certificate Registrar shall instruct the Depository to
reduce the principal amount of the Temporary Regulation S Global Offered
Certificate to be so transferred and shall instruct the Depository to
increase the principal amount of the Rule 144A Global Offered Certificate
and credit or cause to be credited to the account of the
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placement agent a beneficial interest in the Rule 144A Global Offered
Certificate having a principal amount equal to the amount by which the
principal amount of the Temporary Regulation S Global Offered Certificate
was reduced upon the transfer pursuant to the instructions provided in the
first sentence of this clause (vii).
(viii) If a transfer of a Class B Certificate or a Class SB
Certificate which is a Definitive Certificate is to be made, the Trustee
shall require a written Opinion of Counsel acceptable to and in form and
substance satisfactory to the Trustee and the Company that such transfer
may be made pursuant to an exemption, describing the applicable exemption
and the basis therefor, from said Act and laws or is being made pursuant
to the 1933 Act, which Opinion of Counsel shall not be an expense of the
Trustee, the Trust Fund, the Company or the Master Servicer.
(ix) The Holder of a Class B Certificate or a Class SB Certificate
desiring to effect any transfer, sale, pledge or other disposition shall,
and does hereby agree to, indemnify the Trustee, the Company, the Master
Servicer and the Certificate Registrar against any liability that may
result if the transfer, sale, pledge or other disposition is not so exempt
or is not made in accordance with the provisions of this Agreement.
(f) (i) In the case of any Class B Certificate, Class SB Certificate
or Class R Certificate presented for registration in the name of any
Person, either (A) the Trustee shall require an Opinion of Counsel
acceptable to and in form and substance satisfactory to the Trustee, the
Depositor and the Master Servicer to the effect that the purchase and
holding of such Class B, Class SB or Class R Certificate is permissible
under applicable law, will not constitute or result in any non-exempt
prohibited transaction under Section 406 of ERISA or Section 4975 of the
Code (or comparable provisions of any subsequent enactments), and will not
subject the Trustee, the Depositor or the Master Servicer to any
obligation or liability (including obligations or liabilities under ERISA
or Section 4975 of the Code) in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the
Trustee, the Depositor or the Master Servicer, or (B) the prospective
Transferee shall be required to provide the Trustee, the Depositor and the
Master Servicer with a certification to the effect set forth in Exhibit
Q-1 (with respect to a Class B Certificate, Exhibit J and Exhibit O (with
respect to a Class SB Certificate) or in paragraph fifteen of Exhibit I-1
(with respect to a Class R Certificate), which the Trustee may rely upon
without further inquiry or investigation, or such other certifications as
the Trustee may deem desirable or necessary in order to establish that
such Transferee or the Person in whose name such registration is requested
either (a) is not an employee benefit plan or other plan subject to the
prohibited transaction provisions of ERISA or Section 4975 of the Code
(each, a "Plan"), or any Person (including, without limitation, an
insurance company investing its general account, an investment manager, a
named fiduciary or a trustee of any Plan) who is using "plan assets,"
within the meaning of the U.S. Department of Labor regulation promulgated
at 29 C.F.R. ss. 2510.3-101, as modified by Section 3(42) of ERISA, of any
Plan (each, a "Plan Investor") to effect such acquisition or (b) in the
case of any Class B Certificate, the following conditions are satisfied:
(i) such Transferee is an insurance company, (ii) the source of funds used
to purchase or hold such Certificate (or any interest therein) is an
"insurance company general account" (as defined in U.S.
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Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60,
and (iii) the conditions set forth in Sections I and III of PTCE 95-60
have been satisfied (each entity that satisfies this clause (b), a
"Complying Insurance Company").
(ii) As of any date prior to the termination of the Swap Agreement,
any Transferee of a Class A Certificate or a Class M Certificate will be
deemed to have represented by virtue of its purchase and holding of such
Certificate (or any interest therein) that either (a) such Transferee is
not a Plan or a Plan Investor or (b) its acquisition of such Certificate
and the right to receive (and its receipt of) payments from the
Supplemental Interest Trust are eligible for exemptive relief available
under at least one of ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ 91-38, PTCE 95-60 or
PTCE 96-23 or other applicable exemption, including Section 408(b)(17) of
ERISA.
(iii) As of any date after the termination of the Swap Agreement,
any Transferee of a Class A Certificate or a Class M Certificate will be
deemed to have represented by virtue of its purchase or holding of such
Certificate (or any interest therein) that either (a) such Transferee is
not a Plan or a Plan Investor, (b) it has acquired and is holding such
Certificate in reliance on U.S. Department of Labor Prohibited Transaction
Exemption ("PTE") 94-29, 59 Fed. Reg. 14674 (March 29, 1994), as most
recently amended by PTE 2002-41, 67 Fed. Reg. 54487 (August 22, 2002) (the
"RFC Exemption"), and that it understands that there are certain
conditions to the availability of the RFC Exemption including that such
Certificate must be rated, at the time of purchase, not lower than "BBB-"
(or its equivalent) by Standard & Poor's or Moody's or (c) such Transferee
is a Complying Insurance Company.
(iv) If any Class A Certificate or Class M Certificate (or any
interest therein) is acquired or held by any Person that does not satisfy
the conditions described in paragraphs (ii) and (iii) above, then the last
preceding Transferee that either (x) is not a Plan or a Plan Investor, (y)
after the termination of the Swap Agreement, acquired such Certificate in
compliance with the RFC Exemption or (z) is a Complying Insurance Company
shall be restored, to the extent permitted by law, to all rights and
obligations as Certificate Owner thereof retroactive to the date of such
Transfer of such Certificate. The Trustee shall be under no liability to
any Person for making any payments due on such Certificate to such
preceding Transferee.
(v) Any purported Certificate Owner whose acquisition or holding of
any Class A Certificate or Class M Certificate (or any interest therein)
was effected in violation of the restrictions in this Section 5.02(f)
shall indemnify and hold harmless the Depositor, the Trustee, the Master
Servicer, any Subservicer, any underwriter and the Trust Fund from and
against any and all liabilities, claims, costs or expenses incurred by
such parties as a result of such acquisition or holding.
(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
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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 I-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 I-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
I-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
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Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Class R Certificate, if it is, or is holding an
Ownership Interest in a Class R Certificate on behalf of, a
"pass-through interest holder."
(ii) The Trustee shall register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the
form attached hereto as Exhibit I-2 and all of such other documents as
shall have been reasonably required by the Trustee as a condition to such
registration. Transfers of the Class R Certificates to Non-United States
Persons and Disqualified Organizations (as defined in Section 860E(e)(5)
of the Code) are prohibited.
(A) If any Disqualified Organization shall become a holder of
a Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. If a
Non-United States Person shall become a holder of a Class R
Certificate, then the last preceding United States Person shall be
restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. If a
transfer of a Class R Certificate is disregarded pursuant to the
provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of
registration of such Transfer of such Class R Certificate. The
Trustee shall be under no liability to any Person for any
registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section 5.02(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 (ii)(A) above shall be invalid, illegal or unenforceable,
then the Master Servicer shall have the right, without notice to the
holder or any prior holder of such Class R Certificate, to sell such
Class R Certificate to a purchaser selected by the Master Servicer
on such terms as the Master Servicer may choose. Such purported
Transferee shall promptly endorse and deliver each Class R
Certificate in accordance with the instructions of the Master
Servicer. Such purchaser may be the Master Servicer itself or any
Affiliate of the Master Servicer. The proceeds of such sale, net of
the commissions (which may include commissions payable to the Master
Servicer or its Affiliates), expenses and taxes due, if any, will be
remitted by the Master Servicer to such purported Transferee. The
terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Master Servicer, and the
Master Servicer shall not be liable to any Person having an
Ownership Interest in a Class R Certificate as a result of its
exercise of such discretion.
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(iii) The Master Servicer, on behalf of the Trustee, shall make
available, upon written request from the Trustee, all information
necessary to compute any tax imposed
(A) as a result of the Transfer of an Ownership Interest in a
Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess
inclusions" of such Class R Certificates required to be provided to
the Internal Revenue Service and certain Persons as described in
Treasury Regulations Sections 1.860D-1(b)(5) and 1.860E-2(a)(5), and
(B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that
holds an Ownership Interest in a Class R Certificate having as among
its record holders at any time any Person who is a Disqualified
Organization. Reasonable compensation for providing such information
may be required by the Master Servicer from such Person.
(iv) The provisions of this Section 5.02(g) set forth prior to this
clause (iv) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee the following:
(A) Written 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 and Class M
Certificates below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date by such
Rating Agency; and
(B) a certificate of the Master Servicer stating that the
Master Servicer has received an Opinion of Counsel, in form and
substance satisfactory to the Master Servicer, to the effect that
such modification, addition to or absence of such provisions will
not cause any REMIC created hereunder to cease to qualify as a REMIC
and will not cause (x) any REMIC created hereunder to be subject to
an entity-level tax caused by the Transfer of any Class R
Certificate to a Person that is a Disqualified Organization or (y) a
Certificateholder or another Person to be subject to a REMIC-related
tax caused by the Transfer of a Class R Certificate to a Person that
is not a Permitted Transferee.
(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.
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Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04. Persons Deemed Owners
Prior to due presentation of a Certificate for registration of transfer,
the Depositor, the Master Servicer, the Trustee, the Certificate Registrar and
any agent of the Depositor, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.02 and for all other purposes whatsoever, except as and to
the extent provided in the definition of "Certificateholder" and neither the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
agent of the Depositor, the Master Servicer, the Trustee or the Certificate
Registrar shall be affected by notice to the contrary except as provided in
Section 5.02(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.
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ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master
Servicer
The Depositor and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Depositor and the Master Servicer herein. By
way of illustration and not limitation, the Depositor is not liable for the
servicing and administration of the Mortgage Loans, nor is it obligated by
Section 7.01 or 10.01 to assume any obligations of the Master Servicer or to
appoint a designee to assume such obligations, nor is it liable for any other
obligation hereunder that it may, but is not obligated to, assume unless it
elects to assume such obligation in accordance herewith.
Section 6.02. Merger or Consolidation of the Depositor or the Master
Servicer; Assignment of Rights and Delegation of Duties by
Master Servicer
(a) The Depositor and the Master Servicer shall each keep in full effect
its existence, rights and franchises as a corporation, in the case of the
Depositor and as a limited liability company, in the case of the Master
Servicer, under the laws of the state of its organization, and will each obtain
and preserve its qualification to do business as a foreign corporation, in the
case of the Depositor, and as a foreign limited liability company, in the case
of the Master Servicer, in each jurisdiction in which such qualification is or
shall be necessary to protect the validity and enforceability of this Agreement,
the Certificates or any of the Mortgage Loans and to perform its respective
duties under this Agreement.
(b) Any Person into which the Depositor or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; and provided further that each Rating Agency's
ratings, if any, of the Class A Certificates and Class M Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to
the contrary, the Master Servicer may assign its rights and delegate its duties
and obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, is reasonably
satisfactory to the Trustee and the Depositor, is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor and
the Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to 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
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immediately prior to such assignment and delegation will not be qualified,
reduced or withdrawn as a result of such assignment and delegation (as evidenced
by a letter to such effect from each Rating Agency). In the case of any such
assignment and delegation, the Master Servicer shall be released from its
obligations under this Agreement, except that the Master Servicer shall remain
liable for all liabilities and obligations incurred by it as Master Servicer
hereunder prior to the satisfaction of the conditions to such assignment and
delegation set forth in the next preceding sentence. This Section 6.02 shall not
apply to any sale, transfer, pledge or assignment by Residential Funding of the
Call Rights.
Section 6.03. Limitation on Liability of the Depositor, the Master
Servicer and Others
None of the Depositor, the Master Servicer or any of the directors,
officers, employees or agents of the Depositor or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Master Servicer or any such
Person against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
by the Trust Fund and held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal or administrative action, proceeding, hearing or examination that is
not incidental to its respective duties under this Agreement and which in its
opinion may involve it in any expense or liability; provided, however, that the
Depositor or the Master Servicer may in its discretion undertake any such
action, proceeding, hearing or examination that it may deem necessary or
desirable in respect to this Agreement and the rights and duties of the parties
hereto and the interests of the Certificateholders hereunder. In such event, the
legal expenses and costs of such action, proceeding, hearing or examination and
any liability resulting therefrom shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor and the Master Servicer shall be entitled to
be reimbursed therefor out of amounts attributable to the Mortgage Loans on
deposit in the Custodial Account as provided by Section 3.10 and, on the
Distribution Date(s) following such reimbursement, the aggregate of such
expenses and costs shall be allocated in reduction of the Accrued Certificate
Interest on each Class entitled thereto in the same manner as if such expenses
and costs constituted a Prepayment Interest Shortfall.
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Section 6.04. Depositor and Master Servicer Not to Resign
Subject to the provisions of Section 6.02, neither the Depositor nor the
Master Servicer shall resign from its respective obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Depositor or the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning party) to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until the Trustee or a successor servicer shall have assumed
the Master Servicer's responsibilities and obligations in accordance with
Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to distribute or cause to be
distributed to Holders of Certificates of any Class any distribution
required to be made under the terms of the Certificates of such Class and
this Agreement and, in either case, such failure shall continue unremedied
for a period of 5 days after the date upon which written notice of such
failure, requiring such failure to be remedied, shall have been given to
the Master Servicer by the Trustee or the Depositor or to the Master
Servicer, the Depositor and the Trustee by the Holders of Certificates of
such Class evidencing Percentage Interests aggregating not less than 25%;
or
(ii) the Master Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in the Certificates of any Class or in this
Agreement and such failure shall continue unremedied for a period of 30
days (except that such number of days shall be 15 in the case of a failure
to pay the premium for any Required Insurance Policy) after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Trustee or the
Depositor, or to the Master Servicer, the Depositor and the Trustee by the
Holders of Certificates of any Class evidencing, as to such Class,
Percentage Interests aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory
authority having jurisdiction in the premises in an involuntary case under
any present or future federal or state bankruptcy, insolvency or similar
law or appointing a conservator or receiver or liquidator in any
insolvency, readjustment of debt, marshalling of assets and liabilities or
similar proceedings, or for the winding-up or liquidation of its affairs,
shall have been entered against the Master Servicer and such decree or
order shall have remained in force undischarged or unstayed for a period
of 60 days; or
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(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of, or
relating to, the Master Servicer or of, or relating to, all or
substantially all of the property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer shall notify the Trustee pursuant to
Section 4.04(b) that it is unable to deposit in the Certificate Account an
amount equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied, either the Depositor or the Trustee shall at the
direction of Holders of Certificates entitled to at least 51% of the Voting
Rights, by notice in writing to the Master Servicer (and to the Depositor if
given by the Trustee or to the Trustee if given by the Depositor), terminate all
of the rights and obligations of the Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that a successor to the Master
Servicer is appointed pursuant to Section 7.02 and such successor Master
Servicer shall have accepted the duties of Master Servicer effective upon the
resignation of the Master Servicer. If an Event of Default described in clause
(vi) hereof shall occur, the Trustee shall, by notice to the Master Servicer and
the Depositor, immediately terminate all of the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder as
provided in Section 4.04(b). On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates (other than as a Holder
thereof) or the Mortgage Loans or otherwise, shall subject to Section 7.02 pass
to and be vested in the Trustee or the Trustee's designee appointed pursuant to
Section 7.02; and, without limitation, the Trustee is hereby authorized and
empowered to execute and deliver, on behalf of the Master Servicer, as
attorney-in-fact or otherwise, any and all documents and other instruments, and
to do or accomplish all other acts or things necessary or appropriate to effect
the purposes of such notice of termination, whether to complete the transfer and
endorsement or assignment of the Mortgage Loans and related documents, or
otherwise. The Master Servicer agrees to cooperate with the Trustee 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
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Servicer hereunder and received after such notice, that portion to which
Residential Funding would have been entitled pursuant to Sections 3.10(a)(ii),
(vi) and (vii) as well as its Servicing Fee in respect thereof, and any other
amounts payable to Residential Funding hereunder the entitlement to which arose
prior to the termination of its activities hereunder. Upon the termination of
Residential Funding as Master Servicer hereunder the Depositor shall deliver to
the Trustee as successor Master Servicer a copy of the Program Guide.
Section 7.02. Trustee or Depositor to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 or resigns in accordance with Section 6.04,
the Trustee or, upon notice to the Depositor and with the Depositor's consent
(which shall not be unreasonably withheld) a designee (which meets the standards
set forth below) of the Trustee, shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer (except for the responsibilities, duties and liabilities contained in
Sections 2.02 and 2.03(a), excluding the duty to notify related Subservicers as
set forth in such Sections, and its obligations to deposit amounts in respect of
losses incurred prior to such notice or termination on the investment of funds
in the Custodial Account or the Certificate Account pursuant to Sections 3.07(c)
and 4.01(c) by the terms and provisions hereof); provided, however, that any
failure to perform such duties or responsibilities caused by the preceding
Master Servicer's failure to provide information required by Section 4.04 shall
not be considered a default by the Trustee hereunder as 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, the Trustee may, if it shall be unwilling to so act, or shall, if it
is unable to so act, appoint, or petition a court of competent jurisdiction to
appoint, any established housing and home finance institution, which is also a
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac-approved mortgage servicing institution, having a net
worth of not less than $10,000,000 as the successor to the Master Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Master Servicer hereunder. Pending appointment of a
successor to the Master Servicer hereunder, the Trustee shall become successor
to the Master Servicer and shall act in such capacity as hereinabove provided.
In connection with such appointment and assumption, the Trustee may make such
arrangements for the compensation of such successor out of payments on Mortgage
Loans as it and such successor shall agree; provided, however, that no such
compensation shall be in excess of that permitted the initial Master Servicer
hereunder. The Depositor, the Trustee, the Custodian and such successor shall
take such action, consistent with this Agreement, as shall be necessary to
effectuate any such succession. The Servicing Fee for any successor Master
Servicer appointed pursuant to this Section 7.02 will be lowered with respect to
those Mortgage Loans, if any, where the Subservicing Fee accrues at a rate of
less than 0.50% per annum in the event that the successor Master Servicer is not
servicing such Mortgage Loans directly and it is necessary to raise the related
Subservicing Fee to a rate of 0.50% per annum in order to hire a Subservicer
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with respect to such Mortgage Loans. The Master Servicer shall pay the
reasonable expenses of the Trustee in connection with any servicing transfer
hereunder.
(b) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS'
rules and regulations, or (ii) the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (b). The
Successor Master Servicer shall cause such assignment to be delivered to the
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03. Notification to Certificateholders
(a) Upon any such termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived as provided in Section 7.04 hereof.
Section 7.04. Waiver of Events of Default
The Holders representing at least 66% of the Voting Rights of Certificates
affected by a default or Event of Default hereunder may waive any default or
Event of Default; provided, however, that (a) a default or Event of Default
under clause (i) of Section 7.01 may be waived only by all of the Holders of
Certificates affected by such default or Event of Default and (b) no waiver
pursuant to this Section 7.04 shall affect the Holders of Certificates in the
manner set forth in Section 11.01(b)(i), (ii) or (iii). Upon any such waiver of
a default or Event of Default by the Holders representing the requisite
percentage of Voting Rights of Certificates affected by such default or Event of
Default, such default or Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose hereunder. No such waiver shall
extend to any
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subsequent or other default or Event of Default or impair any right consequent
thereon except to the extent expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents in a timely
fashion. The Trustee shall forward or cause to be forwarded in a timely fashion
the notices, reports and statements required to be forwarded by the Trustee
pursuant to Sections 4.03, 7.03, and 10.01. The Trustee shall furnish in a
timely fashion to the Master Servicer such information as the Master Servicer
may reasonably request from time to time for the Master Servicer to fulfill its
duties as set forth in this Agreement. The Trustee covenants and agrees that it
shall perform its obligations hereunder in a manner so as to maintain the status
of each REMIC created hereunder as a REMIC under the REMIC Provisions (subject
to Section 10.01(f)) and to prevent the imposition of any federal, state or
local income, prohibited transaction (except as provided in Section 2.04
herein), 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
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to the Trustee by the Depositor or the Master Servicer and which on their
face, do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding
Certificates which evidence, Percentage Interests aggregating not less
than 25% of the affected Classes as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any default
(other than a default in payment to the Trustee) specified in clauses (i)
and (ii) of Section 7.01 or an Event of Default under clauses (iii), (iv)
and (v) of Section 7.01 unless a Responsible Officer of the Trustee
assigned to and working in the Corporate Trust Office obtains actual
knowledge of such failure or event or the Trustee receives written notice
of such failure or event at its Corporate Trust Office from the Master
Servicer, the Depositor or any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision in
this Agreement shall require the Trustee to expend or risk its own funds
(including, without limitation, the making of any Advance) or otherwise
incur any personal financial liability in the performance of any of its
duties as Trustee hereunder, or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds for believing that
repayment of funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) The Trustee shall timely pay, from its own funds, the amount of any
and all federal, state and local taxes imposed on the Trust Fund or its assets
or transactions including, without limitation, (A) "prohibited transaction"
penalty taxes as defined in Section 860F of the Code, if, when and as the same
shall be due and payable, (B) any tax on contributions to a REMIC after the
Closing Date imposed by Section 860G(d) of the Code and (C) any tax on "net
income from foreclosure property" as defined in Section 860G(c) of the Code, but
only if such taxes arise out of a breach by the Trustee of its obligations
hereunder, which breach constitutes negligence or willful misconduct of the
Trustee.
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;
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(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee or Supplemental Interest Trust Trustee, as
applicable, shall be under no obligation to exercise any of the trusts or
powers vested in it by this Agreement or to institute, conduct or defend
any litigation hereunder or in relation hereto at the request, order or
direction of any of the Certificateholders, pursuant to the provisions of
this Agreement or the Swap Agreement, unless such Certificateholders shall
have offered to the Trustee reasonable security or indemnity against the
costs, expenses and liabilities which may be incurred therein or thereby;
nothing contained herein shall, however, relieve the Trustee of the
obligation, upon the occurrence of an Event of Default (which has not been
cured), to exercise such of the rights and powers vested in it by this
Agreement, and to use the same degree of care and skill in their exercise
as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs;
(iv) The Trustee shall not be personally liable for any action
taken, suffered or omitted by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and
after the curing of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, approval, bond or other
paper or document, unless requested in writing to do so by the Holders of
Certificates of any Class evidencing, as to such Class, Percentage
Interests, aggregating not less than 50%; provided, however, that if the
payment within a reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured to
the Trustee by the security afforded to it by the terms of this Agreement,
the Trustee may require reasonable indemnity against such expense or
liability as a condition to so proceeding. The reasonable expense of every
such examination shall be paid by the Master Servicer, if an Event of
Default shall have occurred and is continuing, and otherwise by the
Certificateholder requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers hereunder
or perform any duties hereunder either directly or by or through agents or
attorneys provided that the Trustee shall remain liable for any acts of
such agents or attorneys; and
(vii) To the extent authorized under the Code and the regulations
promulgated thereunder, each Holder of a Class R Certificate hereby
irrevocably appoints and authorizes the Trustee to be its attorney-in-fact
for purposes of signing any Tax Returns required to be filed on behalf of
the Trust Fund. The Trustee shall sign on behalf of the Trust Fund and
deliver to the Master Servicer in a timely manner any Tax Returns prepared
by or on behalf of the Master Servicer that the Trustee is required to
sign as
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determined by the Master Servicer pursuant to applicable federal, state or
local tax laws, provided that the Master Servicer shall indemnify the
Trustee for signing any such Tax Returns that contain errors or omissions.
(b) Following the issuance of the Certificates (and except as provided for
in Section 2.04), the Trustee shall not accept any contribution of assets to the
Trust Fund unless subject to Section 10.01(f)) it shall have obtained or been
furnished with an Opinion of Counsel to the effect that such contribution will
not (i) cause any REMIC created hereunder to fail to qualify as a REMIC at any
time that any Certificates are outstanding or (ii) cause the Trust Fund to be
subject to any federal tax as a result of such contribution (including the
imposition of any federal tax on "prohibited transactions" imposed under Section
860F(a) of the Code).
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Depositor or the Master
Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document, or of MERS
or the MERS(R) System. Except as otherwise provided herein, the Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account or the Certificate Account by the Depositor or the Master
Servicer.
Section 8.04. Trustee May Own Certificates
The Trustee in its individual or any other capacity may become the owner
or pledgee of Certificates with the same rights it would have if it were not
Trustee.
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification
(a) The Master Servicer covenants and agrees to pay to the Trustee and any
co-trustee from time to time, and the Trustee and any co-trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by each of them in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee and any co-trustee, and the Master Servicer shall pay
or reimburse the Trustee and any co-trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or any
co-trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ, and the expenses incurred by the
Trustee or any co-trustee in connection with the appointment of an office or
agency pursuant to Section 8.12) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
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(b) The Master Servicer agrees to indemnify the Trustee for, and to hold
the Trustee harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part, arising out of, or in connection
with, the acceptance and administration of the Trust Fund, including its
obligation to execute the DTC Letter in its individual capacity, the costs and
expenses (including reasonable legal fees and expenses) of defending itself
against any claim in connection with the exercise or performance of any of its
powers or duties under this Agreement and the Master Servicer further agrees to
indemnify the Trustee for, and to hold the Trustee harmless against, any loss,
liability or expense arising out of, or in connection with, the provisions set
forth in the second paragraph of Section 2.01(a) hereof, including, without
limitation, all costs, liabilities and expenses (including reasonable legal fees
and expenses) of investigating and defending itself against any claim, action or
proceeding, pending or threatened, relating to the provisions of such paragraph,
provided that:
(i) with respect to any such claim, the Trustee shall have given the
Master Servicer written notice thereof promptly after the Trustee shall
have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee
shall cooperate and consult fully with the Master Servicer in preparing
such defense; and
(iii) notwithstanding anything in this Agreement to the contrary,
the Master Servicer shall not be liable for settlement of any claim by the
Trustee entered into without the prior consent of the Master Servicer
which consent shall not be unreasonably withheld. No termination of this
Agreement shall affect the obligations created by this Section 8.05(b) of
the Master Servicer to indemnify the Trustee under the conditions and to
the extent set forth herein. Notwithstanding the foregoing, the
indemnification provided by the Master Servicer in this Section 8.05(b)
shall not pertain to any loss, liability or expense of the Trustee,
including the costs and expenses of defending itself against any claim,
incurred in connection with any actions taken by the Trustee at the
direction of Certificateholders pursuant to the terms of this Agreement.
Section 8.06. Eligibility Requirements for Trustee
The Trustee hereunder shall at all times be a national banking association
or a New York banking corporation having its principal office in a state and
city acceptable to the Depositor and organized and doing business under the laws
of such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for 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.
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Section 8.07. Resignation and Removal of the Trustee
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor and the Master
Servicer. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation then the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee. In addition, in the event that
the Depositor determines that the Trustee has failed (i) to distribute or cause
to be distributed to Certificateholders any amount required to be distributed
hereunder, if such amount is held by the Trustee or its Paying Agent (other than
the Master Servicer or the Depositor) for distribution or (ii) to otherwise
observe or perform in any material respect any of its covenants, agreements or
obligations hereunder, and such failure shall continue unremedied for a period
of 5 days (in respect of clause (i) above) or 30 days (in respect of clause (ii)
above, other than any failure to comply with the provisions of Article XII, in
which case no notice or grace period shall be applicable) after the date on
which written notice of such failure, requiring that the same be remedied, shall
have been given to the Trustee by the Depositor, then the Depositor may remove
the Trustee and appoint a successor trustee by written instrument delivered as
provided in the preceding sentence. In connection with the appointment of a
successor trustee pursuant to the preceding sentence, the Depositor shall, on or
before the date on which any such appointment becomes effective, obtain from
each Rating Agency written confirmation that the appointment of any such
successor trustee will not result in the reduction of the ratings on any Class
of the Certificates below the lesser of the then current or original ratings on
such Certificates.
(c) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
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Section 8.08. Successor Trustee
(a) Any successor trustee appointed as provided in this Section 8.08 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held by a Custodian, which shall become the agent of any successor
trustee hereunder), and the Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless (a) at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and (b) such appointment of
such successor trustee will not result in the reduction of the ratings on any
class of the Certificates below the then-current ratings on such Certificates,
as evidenced by a letter from each Rating Agency to such effect.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.
Section 8.09. Merger or Consolidation of Trustee
Any corporation or national banking association into which the Trustee may
be merged or converted or with which it may be consolidated or any corporation
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
national banking association succeeding to the business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation or national
banking association shall be eligible under the provisions of Section 8.06,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall mail notice of any such merger or consolidation to the
Certificateholders at their address as shown in the Certificate Register.
Section 8.10. Appointment of Co-Trustee or Separate Trustee
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee,
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or separate trustee or separate trustees, of all or any part of the Trust Fund,
and to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11. Appointment of the Custodian.
The Trustee may, with the consent of the Master Servicer and the
Depositor, or shall, at the direction of the Master Servicer and the Depositor,
appoint custodians who are not Affiliates of the Depositor or the Master
Servicer to hold all or a portion of the Custodial Files as agent for the
Trustee, by entering into a Custodial Agreement. The Trustee is hereby directed
to enter into a Custodial Agreement with [__________]. Subject to Article VIII,
the Trustee agrees to comply with the terms of each Custodial Agreement with
respect to the Custodial Files and to enforce the terms and provisions thereof
against the related custodian for the benefit of the
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Certificateholders. Each custodian shall be a depository institution subject to
supervision by federal or state authority, shall have a combined capital and
surplus of at least $15,000,000 and shall be qualified to do business in the
jurisdiction in which it holds any Custodial File. Each Custodial Agreement with
respect to the Custodial Files may be amended only as provided in Section 11.01.
The Trustee shall notify the Certificateholders of the appointment of any
custodian (other than the custodian appointed as of the Closing Date) pursuant
to this Section 8.11.
Section 8.12. Appointment of Office or Agency
The Trustee will maintain an office or agency in the City of St. ▇▇▇▇,
Minnesota where Certificates may be surrendered for registration of transfer or
exchange. The Trustee initially designates its offices located at the Corporate
Trust Office for the purpose of keeping the Certificate Register. The Trustee
will maintain an office at the address stated in Section 11.05 hereof where
notices and demands to or upon the Trustee in respect of this Agreement may be
served.
Section 8.13. DTC Letter of Representations.
The Trustee is hereby authorized and directed to, and agrees that it
shall, enter into the DTC Letter on behalf of the Trust Fund and in its
individual capacity as agent thereunder.
Section 8.14. Swap Agreement
The Supplemental Interest Trust Trustee is hereby authorized and directed
to, and agrees that it shall, enter into the Swap Agreement on behalf of the
Supplemental Interest Trust. The Supplemental Interest Trust Trustee shall be
afforded all the rights and protections provided to the Trustee as described in
this Article VIII.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by Residential Funding or
Liquidation of All Mortgage Loans
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee created
hereby in respect of the Certificates (other than the obligation of the Trustee
to make certain payments after the Final Distribution Date to Certificateholders
and the obligation of the Depositor to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Final Distribution Date pursuant to this Article IX following the earlier
of:
(i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, or
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(ii) the purchase by the Master Servicer or its designee of all
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the Trust Fund, at a price equal to 100% of the unpaid
principal balance of each Mortgage Loan (or, if less than such unpaid
principal balance, the fair market value of the related underlying
property of such Mortgage Loan with respect to Mortgage Loans as to which
title has been acquired if such fair market value is less than such unpaid
principal balance) (net of unreimbursed Advances attributable to
principal) on the day of repurchase, plus unpaid accrued interest thereon
at the Mortgage Rate (or Modified Net Mortgage Rate in the case of any
Modified Mortgage Loan) from the Due Date to which interest was last paid
by the Mortgagor to, but not including, the first day of the month in
which such repurchase price is distributed plus any Swap Termination
Payment payable to the Swap Counterparty then remaining unpaid or which is
due to the exercise of such option, plus the amount of any accrued and
unpaid Servicing Fees, unreimbursed advances and Servicing Advances, in
each case through the date of such option; provided, however, that in no
event shall the trust created hereby continue beyond the earlier of (i)
the Maturity Date or (ii) the expiration of 21 years from the death of the
last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador
of the United States to the Court of St. ▇▇▇▇▇, living on the date hereof;
and provided further, that the purchase price set forth above shall be
increased as is necessary, as determined by the Master Servicer, to avoid
disqualification of any REMIC created hereunder as a REMIC. The purchase
price paid by the Master Servicer or its designee shall also include any
amounts owed by the Master Servicer or its designee 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 (bb) of such Section, that
remain unpaid on the date of such purchase.
The right of the Master Servicer or its designee to purchase all the
assets of the Trust Fund relating to the Mortgage Loans, pursuant to clause (ii)
above is conditioned upon the date of such purchase occurring on or after the
Optional Termination Date. If such right is exercised by the Master Servicer or
its designee, the Master Servicer shall be entitled to reimbursement for the
full amount of any unreimbursed Advances theretofore made by it with respect to
the Mortgage Loans being purchased, pursuant to Section 3.10. In addition, the
Master Servicer shall provide to the Trustee the certification required by
Section 3.15 and the Trustee and the Custodian shall, promptly following payment
of the purchase price, release to the Master Servicer or its designee the
Custodial Files pertaining to the Mortgage Loans being purchased.
In addition, on any Distribution Date on or after the Optional Termination
Date, the Master Servicer or its designee shall have the right, at its option or
at the option of its designee, respectively, to purchase all of the Certificates
in whole, but not in part, at a price equal to the aggregate outstanding
Certificate Principal Balance of the Certificates, plus one month's Accrued
Certificate Interest on the Certificates, any previously unpaid Accrued
Certificate Interest, and any unpaid Prepayment Interest Shortfalls previously
allocated thereto.
(b) The Master Servicer shall give the Trustee not less than 60 days'
prior notice of the Distribution Date on which the Master Servicer anticipates
that the final distribution will be made to Certificateholders (whether as a
result of the exercise by the Master Servicer or its designee of its right to
purchase the assets of the Trust Fund or otherwise). Notice of any
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termination, specifying the anticipated Final Distribution Date (which shall be
a date that would otherwise be a Distribution Date) upon which the
Certificateholders may surrender their Certificates to the Trustee for payment
of the final distribution and cancellation, shall be given promptly by the
Master Servicer (if the Master Servicer or its designee is exercising its right
to purchase the assets of the Trust Fund), or by the Trustee (in any other case)
by letter to Certificateholders mailed not earlier than the 15th day and not
later than the 25th day of the month next preceding the month of such final
distribution specifying:
(i) the anticipated Final Distribution Date upon which final payment
of the Certificates is anticipated to be made upon presentation and
surrender of Certificates at the office or agency of the Trustee therein
designated,
(ii) the amount of any such final payment, if known, and
(iii) that the Record Date otherwise applicable to such Distribution
Date is not applicable, and that payment will be made only upon
presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified.
If the Master Servicer 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. In the event
such notice is given by the Master Servicer, the Master Servicer or its designee
shall deposit in the Custodial Account before the Final Distribution Date in
immediately available funds an amount equal to the purchase price for the assets
of the Trust Fund computed as above provided. The Master Servicer shall provide
to the Trustee written notification of any change to the anticipated Final
Distribution Date as soon as practicable. If the Trust Fund is not terminated on
the anticipated Final Distribution Date, for any reason, the Trustee shall
promptly mail notice thereof to each affected Certificateholder.
(c) Upon presentation and surrender of the Class A Certificates, Class M
Certificates, Class B Certificates and Class SB Certificates by the
Certificateholders thereof, the Trustee and the Supplemental Interest Trust
Trustee, as applicable, shall distribute to such Certificateholders (A) the
amount otherwise distributable on such Distribution Date, if not in connection
with the Master Servicer's election to repurchase the Mortgage Loans or the
outstanding Class A Certificates, Class M Certificates, Class B Certificates and
Class SB Certificates, or (B) if the Master Servicer elected to so repurchase
the Mortgage Loans or the outstanding Class A Certificates, Class M
Certificates, Class B Certificates and Class SB Certificates, an amount equal to
the price paid pursuant to Section 9.01(a) as follows:
(i) first, payment of any accrued and unpaid Servicing Fees,
unreimbursed advances and Servicing Advances, in each case through the
date of such option, to the Master Servicer
(ii) second, with respect to the Class A Certificates, pari passu,
the outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
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(iii) third, with respect to the Class M-1S Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(iv) fourth, with respect to the Class M-2S Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(v) fifth, with respect to the Class M-3S Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(vi) sixth, with respect to the Class M-4 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest,
(vii) seventh, with respect to the Class M-5 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(viii) eighth, with respect to the Class M-6 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(ix) ninth, with respect to the Class M-7 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(x) tenth, with respect to the Class M-8 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(xi) eleventh, with respect to the Class M-9 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest,
(xii) twelfth, with respect to the Class B Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued
Certificate Interest thereon for the related Interest Accrual Period and
any previously unpaid Accrued Certificate Interest.
(xiii) thirteenth, to the Class A Certificates and Class M
Certificates, the amount of any Prepayment Interest Shortfalls allocated
thereto for such Distribution Date or remaining unpaid from prior
Distribution Dates and accrued interest thereon at the applicable Pass
Through Rate, on a pro rata basis based on Prepayment Interest Shortfalls
allocated thereto for such Distribution Date or remaining unpaid from
prior Distribution Dates,
(xiv) fourteenth, to the Swap Counterparty (without duplication of
amounts payable to the Swap Counterparty on such date in accordance with
Section 4.02) any
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Swap Termination Payment payable to the Swap Counterparty then remaining
unpaid or which is due to the exercise of any early termination of the
Trust Fund pursuant to this Section 9.01, and
(xv) fifteenth, 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 the Master Servicer or its
designee exercised its right to purchase the Mortgage Loans), or the Trustee (in
any other case) shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within six months after the
second notice any Certificate shall not have been surrendered for cancellation,
the Trustee shall take appropriate steps as directed by the Master Servicer to
contact the remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the 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) All rights of the Master Servicer or its designee to purchase the
assets of the Trust Fund, or to purchase specified classes of Certificates, as
set forth in Section 9.01(a) are referred to in this Agreement as the "Call
Rights". Notwithstanding any other provision of this Agreement, the Master
Servicer or its designee shall have the right to sell, transfer, pledge or
otherwise assign the Call Rights at any time to any Person. Upon written notice
by the Master Servicer or its designee to the Trustee and the Master Servicer of
any such assignment of the Call Rights to any assignee, the Trustee and the
Master Servicer shall be obligated to recognize such assignee as the holder of
the Call Rights. Such entity, if not the Master Servicer or its designee or an
affiliate, shall be deemed to represent, at the time of such sale, transfer,
pledge or other assignment, that one of the following will be, and at the time
the Call Right is exercised is, true and correct: (i) the exercise of such Call
Right shall not result in a non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code (including by reason of U.S. Department of
Labor ("DOL") Prohibited Transaction Class Exemption ("PTCE") 75-1 (Part I),
84-14, 90-1, 91-38, 95-60 or 96-23 or other applicable exemption) or (ii) such
entity is (A) not a party in interest under Section 3(14) of ERISA or a
disqualified person under Section 4975(e)(2) of the Code with respect to any
employee benefit plan subject to Section 3(3) of ERISA or any plan subject to
Section 4975 of the Code (other than an employee benefit plan or plan sponsored
or maintained by the entity, provided that no assets of such employee benefit
plan or plan are invested or deemed to be invested in the Certificates) and (B)
not a "benefit plan investor" as described in DOL regulation Section
2510.3-101(f)(2) and as modified by Section
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3(42) of ERISA. If any such assignee of the Call Right is unable to exercise
such Call Right by reason of the preceding sentence, then the Call Right shall
revert to the immediately preceding assignor of such Call Right subject to the
rights of any secured party therein.
Section 9.02. Additional Termination Requirements
(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 and
the Master Servicer have received an Opinion of Counsel (which Opinion of
Counsel shall not be an expense of the Trustee) to the effect that the failure
of any REMIC created hereunder, as the case may be, to comply with the
requirements of this Section 9.02 will not (i) result in the imposition on the
Trust Fund of taxes on "prohibited transactions," as described in Section 860F
of the Code, or (ii) cause any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation period
for 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 Section 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 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 Certificates shall be designated as the
sole class of "residual interests" in REMIC I. The REMIC II Regular Interests
shall be designated as
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the "regular interests" and the Class R 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 and REMIC II other than the REMIC I Regular
Interests, the REMIC II Regular Interests and the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each of
REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate in each REMIC
representing a 0.01% Percentage Interest of the Class R Certificates in each
REMIC and shall be designated as the "tax matters person" with respect to each
of REMIC I 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, if any, and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of each
REMIC created hereunder.
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(f) The Master Servicer and the REMIC Administrator shall take such
actions and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Master Servicer's or the REMIC Administrator's control and
the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status thereof as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). In performing their duties as more specifically
set forth herein, the Master Servicer and the REMIC Administrator shall not
knowingly or intentionally take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action reasonably
within their respective control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any REMIC created hereunder as a
REMIC or (ii) result in the imposition of a tax upon any REMIC created hereunder
(including but not limited to the tax on prohibited transactions as defined in
Section 860F(a)(2) of the Code (except as provided in Section 2.04) and the tax
on contributions to a REMIC set forth in Section 860G(d) of the Code) (either
such event, in the absence of an Opinion of Counsel or the indemnification
referred to in this sentence, an "Adverse REMIC Event") unless the Master
Servicer or the REMIC Administrator, as applicable, has received an Opinion of
Counsel (at the expense of the party seeking to take such action or, if such
party fails to pay such expense, and the Master Servicer or the REMIC
Administrator, as applicable, determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to the Trust Fund created hereunder, endanger such status or,
unless the Master Servicer or the REMIC Administrator or both, as applicable,
determine in its or their sole discretion to indemnify the Trust Fund against
the imposition of such a tax, result in the imposition of such a tax. Wherever
in this Agreement a contemplated action may not be taken because the timing of
such action might result in the imposition of a tax on the Trust Fund, or may
only be taken pursuant to an Opinion of Counsel that such action would not
impose a tax on the Trust Fund, such action may nonetheless be taken provided
that the indemnity given in the preceding sentence with respect to any taxes
that might be imposed on the Trust Fund has been given and that all other
preconditions to the taking of such action have been satisfied. The Trustee
shall not take or fail to take any action (whether or not authorized hereunder)
as to which the Master Servicer or the REMIC Administrator, as applicable, has
advised it in writing that it has received an Opinion of Counsel to the effect
that an Adverse REMIC Event could occur with respect to such action or inaction,
as the case may be. In addition, prior to taking any action with respect to the
Trust Fund or its assets, or causing the Trust Fund to take any action, which is
not expressly permitted under the terms of this Agreement, the Trustee shall
consult with the Master Servicer or the REMIC Administrator, as applicable, or
its designee, in writing, with respect to whether such action could cause an
Adverse REMIC Event to occur with respect to the Trust Fund and the Trustee
shall not take any such action or cause the Trust Fund to take any such action
as to which the Master Servicer or the REMIC Administrator, as applicable, has
advised it in writing that an Adverse REMIC Event could occur. The Master
Servicer or the REMIC Administrator, as applicable, may consult with counsel to
make such written advice, and the cost of same shall be borne by the party
seeking to take the action not expressly permitted by this Agreement, but in no
event at the expense of the Master Servicer or the REMIC Administrator. At all
times as may be required by the Code, the
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Master Servicer or the REMIC Administrator, as applicable, will to the extent
within its control and the scope of its duties more specifically set forth
herein, maintain substantially all of the assets of the REMIC as "qualified
mortgages" as defined in Section 860G(a)(3) of the Code and "permitted
investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of any REMIC as defined in Section
860G(c) of the Code, on any contributions to any REMIC after the Startup Date
therefor pursuant to Section 860G(d) of the Code, or any other tax imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Master Servicer, if such tax arises out of or results from
a breach by the Master Servicer in its role as Master Servicer or REMIC
Administrator of any of its obligations under this Agreement or the Master
Servicer has in its sole discretion determined to indemnify the Trust Fund
against such tax, (ii) to the Trustee, if such tax arises out of or results from
a breach by the Trustee of any of its obligations under this Article X, or (iii)
otherwise against amounts on deposit in the Custodial Account as provided by
Section 3.10 and on the Distribution Date(s) following such reimbursement the
aggregate of such taxes shall be allocated in reduction of the Accrued
Certificate Interest on each Class entitled thereto in the same manner as if
such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC
Provisions.
(i) Following the Startup Date, neither the Master Servicer nor the
Trustee shall accept any contributions of assets to any REMIC unless (subject to
Section 10.01(f)) the Master Servicer and the Trustee shall have received an
Opinion of Counsel (at the expense of the party seeking to make such
contribution) to the effect that the inclusion of such assets in any REMIC will
not cause any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificates are outstanding or subject any such REMIC to any tax under
the REMIC Provisions or other applicable provisions of federal, state and local
law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to Section
10.01(f)) enter into any arrangement by which any REMIC created hereunder will
receive a fee or other compensation for services nor permit any REMIC created
hereunder to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code.
(k) Solely for 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 the
Distribution Date in[____] 20[__], which is the Distribution Date in the month
following the last scheduled payment on any Mortgage Loan.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate
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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 any
REMIC pursuant to Article IX of this Agreement or (ii) a purchase of Mortgage
Loans pursuant to Article II or III of this Agreement) or acquire any assets for
any REMIC or sell or dispose of any investments in the Custodial Account or the
Certificate Account for gain, or accept any contributions to any REMIC after the
Closing Date unless it has received an Opinion of Counsel that such sale,
disposition, substitution or acquisition will not (a) affect adversely the
status of any REMIC created hereunder as a REMIC or (b) unless the Master
Servicer has determined in its sole discretion to indemnify the Trust Fund
against such tax, cause any REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.02. Master Servicer, REMIC Administrator and Trustee
Indemnification
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor, the
REMIC Administrator and the Master Servicer for any taxes and costs including,
without limitation, any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in Article VIII or this Article X. In the event
that Residential Funding is no longer the Master Servicer, the Trustee shall
indemnify Residential Funding for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by Residential
Funding as a result of a breach of the Trustee's covenants set forth in Article
VIII or this Article X.
(b) The REMIC Administrator agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer or the Trustee,
as a result of a breach of the REMIC Administrator's covenants set forth in this
Article X with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the REMIC Administrator that contain errors or omissions;
provided, however, that such liability will not be imposed to the extent such
breach is a result of an error or omission in information provided to the REMIC
Administrator by the Master Servicer in which case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the Depositor,
the REMIC Administrator and the Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by
the Trust Fund, the Depositor, the REMIC Administrator or the Trustee, as a
result of a breach of the Master Servicer's covenants set forth in this Article
X or in Article III with respect to compliance with the REMIC Provisions,
including without limitation, any penalties arising from the Trustee's execution
of Tax Returns prepared by the Master Servicer that contain errors or omissions.
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ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment
(a) This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the Master Servicer and the Trustee, without the consent
of any of the Certificateholders (but with the consent of the Swap Counterparty
if such amendment is with respect to Section 4.09, Section 4.02(c)(xxi) or
Section 11.10):
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein,
which may be inconsistent with any other provisions herein or therein or
to correct any error,
(iii) to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or desirable to maintain the qualification of
any REMIC created hereunder as a REMIC at all times that any Certificate
is outstanding or to avoid or minimize the risk of the imposition of any
tax on the Trust Fund pursuant to the Code that would be a claim against
the Trust Fund, provided that the Trustee has received an Opinion of
Counsel to the effect that (A) such action is necessary or desirable to
maintain such qualification or to avoid or minimize the risk of the
imposition of any such tax and (B) such action will not adversely affect
in any material respect the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the
Custodial Account or the Certificate Account or to change the name in
which the Custodial Account is maintained, provided that (A) the
Certificate Account Deposit Date shall in no event be later than the
related Distribution Date, (B) such change shall not, as evidenced by an
Opinion of Counsel, adversely affect in any material respect the interests
of any Certificateholder and (C) such change shall not result in a
reduction of the rating assigned to any Class of Certificates below the
then-current rating assigned to such Certificates, as evidenced by a
letter from each Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(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, 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
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evidenced by an Opinion of Counsel, adversely affect in any material
respect the interests of any Certificateholder.
(b) This Agreement or any Custodial Agreement may also be amended from
time to time by the Depositor, the Master Servicer, the Trustee and the Holders
of Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates with a Certificate Principal Balance
greater than zero affected thereby and, if such amendment is with respect to
Section 4.09, Section 4.02(c)(xxi) or Section 11.10, with the consent of the
Swap Counterparty, for the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Agreement or such
Custodial Agreement or of modifying in any manner the rights of the Holders of
Certificates of such Class; provided, however, that no such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate,
(ii) adversely affect in any material respect the interest of the
Holders of Certificates of any Class in a manner other than as described
in clause (i) hereof without the consent of Holders of Certificates of
such Class evidencing, as to such Class, Percentage Interests aggregating
not less than 66%, or
(iii) reduce the aforesaid percentage of Certificates of any Class
the Holders of which are required to consent to any such amendment, in any
such case without the consent of the Holders of all Certificates of such
Class then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (at the expense of the party seeking such
amendment) to the effect that such amendment is permitted under this Agreement
and that such amendment or the exercise of any power granted to the Master
Servicer, the Depositor or the Trustee in accordance with such amendment will
not result in the imposition of a federal tax on the Trust Fund or cause any
REMIC created hereunder to fail to qualify as a REMIC at any time that any
Certificate is outstanding. The Trustee may but shall not be obligated to enter
into any amendment pursuant to this Section that affects its rights, duties and
immunities and this Agreement or otherwise; provided however, such consent shall
not be unreasonably withheld.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(e) The Depositor shall have the option, in its sole discretion, to obtain
and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond,
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insurance policy or similar instrument or a reserve fund, or any combination of
the foregoing, for the purpose of protecting the Holders of the Class R
Certificates against any or all Realized Losses or other shortfalls. Any such
instrument or fund shall be held by the Trustee for the benefit of the Class R
Certificateholders, but shall not be and shall not be deemed to be under any
circumstances included in any REMIC. To the extent that any such instrument or
fund constitutes a reserve fund for federal income tax purposes, (i) any reserve
fund so established shall be an outside reserve fund and not an asset of such
REMIC, (ii) any such reserve fund shall be owned by the Depositor, and (iii)
amounts transferred by such REMIC to any such reserve fund shall be treated as
amounts distributed by such REMIC to the Depositor or any successor, all within
the meaning of Treasury regulations Section 1.860G-2(h). In connection with the
provision of any such instrument or fund, this Agreement and any provision
hereof may be modified, added to, deleted or otherwise amended in any manner
that is related or incidental to such instrument or fund or the establishment or
administration thereof, such amendment to be made by written instrument executed
or consented to by the Depositor and such related insurer but without the
consent of any Certificateholder and without the consent of the Master Servicer
or the Trustee being required unless any such amendment would impose any
additional obligation on, or otherwise adversely affect the interests of the
Certificateholders, the Master Servicer or the Trustee, as applicable; provided
that the Depositor obtains an Opinion of Counsel (which need not be an opinion
of Independent counsel) to the effect that any such amendment will not cause (a)
any federal tax to be imposed on the Trust Fund, including without limitation,
any federal tax imposed on "prohibited transactions" under Section 860F(a)(1) of
the Code or on "contributions after the startup date" under Section 860G(d)(1)
of the Code and (b) any REMIC created hereunder to fail to qualify as a REMIC at
any time that any Certificate is outstanding. In the event that the Depositor
elects to provide such coverage in the form of a limited guaranty provided by
GMAC LLC, the Depositor may elect that the text of such amendment to this
Agreement shall be substantially in the form attached hereto as Exhibit L (in
which case Residential Funding's Subordinate Certificate Loss Obligation as
described in such exhibit shall be established by Residential Funding's consent
to such amendment) and that the limited guaranty shall be executed in the form
attached hereto as Exhibit M, with such changes as the Depositor shall deem to
be appropriate; it being understood that the Trustee has reviewed and approved
the content of such forms and that the Trustee's consent or approval to the use
thereof is not required.
Section 11.02. Recordation of Agreement; Counterparts
(a) To the extent permitted by applicable law, this Agreement is subject
to recordation in all appropriate public offices for real property records in
all the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer and at its expense on direction by the Trustee (pursuant to the
request of the Holders of Certificates entitled to at least 25% of the Voting
Rights), but only upon direction accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
(b) For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number
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of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same instrument.
Section 11.03. Limitation on Rights of Certificateholders
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of any of the parties
hereto.
(b) No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision
of this Agreement to institute any suit, action or proceeding in equity or at
law upon or under or with respect to this Agreement, unless such Holder
previously shall have given to the Trustee a written notice of default and of
the continuance thereof, as hereinbefore provided, and unless also the Holders
of Certificates of any Class evidencing in the aggregate not less than 25% of
the related Percentage Interests of such Class, shall have made written request
upon the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such action, suit or proceeding it being understood and intended,
and being expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
of any Class shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates of such Class or any other Class, or
to obtain or seek to obtain priority over or preference to any other such
Holder, or to enforce any right under this Agreement, except in the manner
herein provided and for the common benefit of Certificateholders of such Class
or all Classes, as the case may be. For the protection and enforcement of the
provisions of this Section 11.03, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04. Governing Law
This agreement and the Certificates shall be governed by and construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws, without regard to the conflict of laws principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
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Section 11.05. Notices
All demands and notices hereunder shall be in writing and shall be deemed
to have been duly given if personally delivered at or mailed by registered mail,
postage prepaid (except for notices to the Trustee which shall be deemed to have
been duly given only when received), to (a) in the case of the Depositor, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President (RFMSII), or such other address as may hereafter be furnished to the
Master Servicer and the Trustee in writing by the Depositor; (b) in the case of
the Master Servicer, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Bond Administration or such other address as may be hereafter
furnished to the Depositor and the Trustee by the Master Servicer in writing;
(c) in the case of the Trustee, [_______],[_______], Attention: Structured
Finance/RFMSII Series 20[__]-[___] or such other address as may hereafter be
furnished to the Depositor and the Master Servicer in writing by the Trustee;
(d) in the case of Moody's, ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: ABS Monitoring Department or such other address as may be hereafter
furnished to the Depositor, the Trustee and the Master Servicer by Moody's and
(e) in the case of Standard & Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention; Mortgage Surveillance. Any notice required or permitted to be mailed
to a Certificateholder shall be given by first class mail, postage prepaid, at
the address of such holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 11.06. Notices to Rating Agencies
The Depositor, the Master Servicer or the Trustee, as applicable, (a)
shall notify each Rating Agency at such time as it is otherwise required
pursuant to this Agreement to give notice of the occurrence of, any of the
events described in clause (a), (b), (c), (d), (g), (h), (i) or (j) below, (b)
shall notify the Subservicer at such time as it is otherwise required pursuant
to this Agreement to give notice of the occurrence of any of the events
described in clause (a), (b), (c)(1), (g)(1) or (i) below, or (c) provide a copy
to each Rating Agency at such time as otherwise required to be delivered
pursuant to this Agreement of any of the statements described in clauses (e) and
(f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) (1) the termination or appointment of a successor Master Servicer or
(2) the termination or appointment of a successor Trustee or a change in the
majority ownership of the Trustee,
(d) the filing of any claim under the Master Servicer's blanket fidelity
bond and the errors and omissions insurance policy required by Section 3.12 or
the cancellation or modification of coverage under 152 any such instrument,
(e) the statement required to be delivered to the Holders of each Class of
Certificates pursuant to Section 4.03,
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(f) the statements required to be delivered pursuant to Sections 3.18 and
3.19,
(g) (1) a change in the location of the Custodial Account or (2) a change
in the location of the Certificate Account,
(h) the occurrence of any monthly cash flow shortfall to the Holders of
any Class of Certificates resulting from the failure by the Master Servicer to
make an Advance pursuant to Section 4.04,
(i) the occurrence of the Final Distribution Date and
(j) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the
events described in clauses (d), (g) or (h) above, the Master Servicer shall
provide prompt written notice to each Rating Agency and the Subservicer of any
such event known to the Master Servicer.
Section 11.07. Severability of Provisions
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.08. Supplemental Provisions for Resecuritization
(a) This Agreement may be supplemented by means of the addition of a
separate Article hereto (a "Supplemental Article") for the purpose of
resecuritizing any of the Certificates issued hereunder, under the following
circumstances. With respect to any Class or Classes of Certificates issued
hereunder, or any portion of any such Class, as to which the Depositor or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Depositor may deposit such Resecuritized
Certificates into a new REMIC, grantor trust or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Depositor, the Master Servicer and the Trustee; provided, that neither the
Master Servicer nor the Trustee shall withhold their consent thereto if their
respective interests would not be materially adversely affected thereby. To the
extent that the terms of the Supplemental Article do not in any way affect any
provisions of this Agreement as to any of the Certificates initially issued
hereunder, the adoption of the Supplemental Article shall not constitute an
"amendment" of this Agreement. Each Supplemental Article shall set forth all
necessary provisions relating to the holding of the Resecuritized Certificates
by the Trustee, the establishment of the Restructuring Vehicle, the issuing of
various classes of new certificates by the Restructuring Vehicle and the
distributions to be made thereon, and any other provisions necessary to the
purposes thereof. In connection with each Supplemental Article, the Depositor
shall deliver to the Trustee an Opinion of Counsel to the effect that (i) the
Restructuring Vehicle will qualify as a REMIC, grantor trust or other entity not
subject to taxation for federal income tax purposes and (ii) the adoption of the
Supplemental Article will not endanger the status of any
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REMIC created hereunder as a REMIC or result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transaction as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC as set forth in Section 860G(d) of the Code.
Section 11.09. [Reserved]
Section 11.10. Third Party Beneficiaries
The Swap Counterparty is an express third-party beneficiary of the
Agreement, and shall have the right to enforce the related provisions of the
Agreement as if it were a party hereto.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of Parties; Reasonableness
The Depositor, the Trustee and the Master Servicer acknowledge and agree
that the purpose of this Article XII is to facilitate compliance by the
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. The Depositor shall not exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission under the
Securities Act and the Exchange Act. Each of the Master Servicer and the Trustee
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Depositor in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. Each
of the Master Servicer and the Trustee shall cooperate reasonably with the
Depositor to deliver to the Depositor (including any of its assignees or
designees), any and all disclosure, statements, reports, certifications, records
and any other information necessary in the reasonable, good faith determination
of the Depositor to permit the Depositor to comply with the provisions of
Regulation AB.
Section 12.02. Additional Representations and Warranties of the Trustee
(a) The Trustee shall be deemed to represent to the Depositor as of the
Closing Date and on each date on which information is provided to the Depositor
under Sections 12.01, 12.02(b) or 12.03 that, except as disclosed in writing to
the Depositor prior to such date: (i) it is not aware and has not received
notice that any default, early amortization or other performance triggering
event has occurred as to any other Securitization Transaction due to any default
of the Trustee; (ii) there are no aspects of its financial condition that could
have a material adverse effect on the performance by it of its trustee
obligations under this Agreement or any other Securitization Transaction as to
which it is the trustee; (iii) there are no material legal or governmental
proceedings pending (or known to be contemplated) against it that would be
material to Certificateholders; (iv) there are no relationships or transactions
relating to the Trustee with respect to the Depositor or any sponsor, issuing
entity, servicer, trustee, originator, significant obligor, enhancement or
support provider or other material transaction party (as such terms are used in
Regulation AB) relating to the Securitization Transaction contemplated by the
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Agreement, as identified by the Depositor to the Trustee in writing as of the
Closing Date (each, a "Transaction Party") that are outside the ordinary course
of business or on terms other than would be obtained in an arm's length
transaction with an unrelated third party, apart from the Securitization
Transaction, and that are material to the investors' understanding of the
Certificates; and (v) the Trustee is not an affiliate of any Transaction Party.
The Depositor shall notify the Trustee of any change in the identity of a
Transaction Party after the Closing Date.
(b) If so requested by the Depositor on any date following the Closing
Date, the Trustee shall, within five Business Days following such request,
confirm in writing the accuracy of the representations and warranties set forth
in paragraph (a) of this Section or, if any such representation and warranty is
not accurate as of the date of such confirmation, provide the pertinent facts,
in writing, to the Depositor. Any such request from the Depositor shall not be
given more than once each calendar quarter, unless the Depositor shall have a
reasonable basis for a determination that any of the representations and
warranties may not be accurate.
Section 12.03. Information to be Provided by the Trustee
For so long as the Certificates are outstanding, for the purpose of
satisfying the Depositor's reporting obligation under the Exchange Act with
respect to any Class of Certificates, the Trustee shall provide to the Depositor
a written description of (a) any litigation or governmental proceedings pending
against the Trustee as of the last day of each calendar month that would be
material to Certificateholders, and (b) any affiliations or relationships (as
described in Item 1119 of Regulation AB) that develop following the Closing Date
between the Trustee and any Transaction Party of the type described in Section
12.02(a)(iv) or 12.02(a)(v) as of the last day of each calendar year. Any
descriptions required with respect to legal proceedings, as well as updates to
previously provided descriptions, under this Section 12.03 shall be given no
later than five Business Days prior to the Determination Date following the
month in which the relevant event occurs, and any notices and descriptions
required with respect to affiliations, as well as updates to previously provided
descriptions, under this Section 12.03 shall be given no later than January 31
of the calendar year following the year in which the relevant event occurs. As
of the date the Depositor or Master Servicer files each Report on Form 10-D and
Report on Form 10-K with respect to the Certificates, the Trustee will be deemed
to represent that any information previously provided under this Article XII is
materially correct and does not have any material omissions unless the Trustee
has provided an update to such information. The Depositor will allow the Trustee
to review any disclosure relating to material litigation against the Trustee
prior to filing such disclosure with the Commission to the extent the Depositor
changes the information provided by the Trustee.
Section 12.04. Report on Assessment of Compliance and Attestation
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Depositor a report (in form and substance reasonably
satisfactory to the Depositor) regarding the Trustee's assessment of compliance
with the applicable Servicing Criteria during the immediately preceding calendar
year, as required under Rules 13a-18 and 15d-18 of the Exchange Act and Item
1122 of Regulation AB. Such report shall be addressed to
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the Depositor and signed by an authorized officer of the Trustee, and shall
address each of the Servicing Criteria specified on Exhibit V hereto; and
(b) deliver to the Depositor a report of a registered public accounting
firm reasonably acceptable to the Depositor that attests to, and reports on, the
assessment of compliance made by the Trustee and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act.
Section 12.05. Indemnification; Remedies
(a) The Trustee shall indemnify the Depositor, each affiliate of the
Depositor, the Master Servicer and each broker dealer acting as underwriter,
placement agent or Initial Purchaser of the Certificates or each Person who
controls any of such parties (within the meaning of 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 any information, report, certification, accountants'
attestation or other material provided under this Article XII by or on
behalf of the Trustee (collectively, the "Trustee Information"), or (B)
the omission or alleged omission to state in the Trustee Information a
material fact required to be stated in the Trustee Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided, by way
of clarification, that clause (B) of this paragraph shall be construed
solely by reference to the Trustee Information and not to any other
information communicated in connection with a sale or purchase of
securities, without regard to whether the Trustee Information or any
portion thereof is presented together with or separately from such other
information; or
(ii) any failure by the Trustee to deliver any information, report,
certification or other material when and as required under this Article
XII, other than a failure by the Trustee to deliver the accountants'
attestation.
(b) In the case of any failure of performance described in clause (ii) of
Section 12.05(a), the Trustee shall (i) promptly reimburse the Depositor for all
costs reasonably incurred by the Depositor in order to obtain the information,
report, certification, accountants' attestation or other material not delivered
as required by the Trustee and (ii) cooperate with the Depositor to mitigate any
damages that may result from such failure.
155
(c) The Depositor and the Master Servicer shall indemnify the Trustee,
each affiliate of the Trustee or each Person who controls the Trustee (within
the meaning of 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 Depositor or Master Servicer for
inclusion in any report filed with Commission under the Exchange Act
(collectively, the "RFC Information"), or (ii) the omission or alleged omission
to state in the RFC Information a material fact required to be stated in the RFC
Information or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided, by
way of clarification, that clause (ii) of this paragraph shall be construed
solely by reference to the RFC Information and not to any other information
communicated in connection with a sale or purchase of securities, without regard
to whether the RFC Information or any portion thereof is presented together with
or separately from such other information.
[SIGNATURE PAGES FOLLOW]
156
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee
have caused their names to be signed hereto by their respective officers
thereunto duly authorized and their respective seals, duly attested, to be
hereunto affixed, all as of the day and year first above written.
[Seal] RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
Attest: By:
Name: Name:
Title: Title:
[Seal] RESIDENTIAL FUNDING COMPANY, LLC
Attest: By:
Name: Name:
Title: Title:
[Seal] [______]
as Trustee and Supplemental Interest
Trust Trustee
Attest: _____________________________ By:
Name: Name:
Title: Title:
Pooling and Servicing Agreement
Series 20[__]-[___]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the [__] day of [______], 20[__] before me, a notary public in and for
said State, personally appeared [_________], known to me to be a [_________] 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]
Pooling and Servicing Agreement
Series 20[__]-[___]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the [__] day of [______], 20[__] before me, a notary public in and for
said State, personally appeared [______], known to me to be an [_________] of
Residential Funding Company, LLC, one of the companies that executed the within
instrument, and also known to me to be the person who executed it on behalf of
said company, and acknowledged to me that such company executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
Notary Public
_____________
[Notarial Seal]
Pooling and Servicing Agreement
Series 20[__]-[___]
STATE OF MINNESOTA )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the [__] day of [______], 20[__] before me, a notary public in and for
said State, personally appeared [______], known to me to be a [_________] of
[______], a 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]
Pooling and Servicing Agreement
Series 20[__]-[___]
EXHIBIT 4.1 FORM OF EXHIBITS TO PSA
EXHIBIT A
FORM OF CLASS [A-__] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
AS OF ANY DATE PRIOR TO THE TERMINATION OF THE SWAP AGREEMENT, ANY TRANSFEREE OF
A CLASS A CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS
PURCHASE OR HOLDING OF SUCH CERTIFICATE (OR ANY INTEREST HEREIN) THAT EITHER (A)
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974 AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (EACH, A "PLAN"), OR
ANY PERSON (INCLUDING, WITHOUT LIMITATION, AN INVESTMENT MANAGER, A NAMED
FIDUCIARY OR A TRUSTEE OF ANY PLAN) WHO IS USING PLAN ASSETS, WITHIN THE MEANING
OF THE U.S. DEPARTMENT OF LABOR REGULATION PROMULGATED AT 29 C.F.R. ss.
2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA, OF ANY PLAN (EACH, A "PLAN
INVESTOR") TO EFFECT SUCH ACQUISITION OR (B) ITS ACQUISITION OF SUCH CERTIFICATE
AND THE RIGHT TO RECEIVE (AND ITS RECEIPT OF) PAYMENTS FROM THE SUPPLEMENTAL
INTEREST TRUST ARE ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇,
▇▇▇▇ ▇▇-▇▇ ▇▇ ▇▇▇▇ 96-23 OR OTHER APPLICABLE EXEMPTION, INCLUDING SECTION
408(b)(17) OF ERISA.
AS OF ANY DATE AFTER THE TERMINATION OF THE SWAP AGREEMENT, ANY TRANSFEREE OF A
CLASS A CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE
OR HOLDING OF SUCH CERTIFICATE (OR ANY INTEREST HEREIN) THAT EITHER (A) SUCH
TRANSFEREE IS NOT A PLAN OR A PLAN INVESTOR, (B) IT HAS ACQUIRED AND IS HOLDING
SUCH CERTIFICATE IN RELIANCE ON U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION
EXEMPTION ("PTE") 94-29, 59 FED. REG. 14674 (MARCH 29, 1994), AS MOST RECENTLY
AMENDED BY PTE 2002-41, 67 FED. REG. 54487 (AUGUST 22, 2002)
A-1
(THE "RFC EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS
TO THE AVAILABILITY OF THE RFC EXEMPTION INCLUDING THAT SUCH CERTIFICATE MUST BE
RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY
STANDARD & POOR'S OR MOODY'S OR (C) (I) THE TRANSFEREE IS AN INSURANCE COMPANY,
(II) THE SOURCE OF FUNDS USED TO PURCHASE OR HOLD SUCH CERTIFICATE (OR ANY
INTEREST HEREIN) IS AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS DEFINED IN U.S.
DEPARTMENT OF LABOR PTCE 95-60), AND (III) THE CONDITIONS SET FORTH IN SECTIONS
I AND III OF PTCE 95-60 HAVE BEEN SATISFIED (EACH ENTITY THAT SATISFIES THIS
CLAUSE (C), A "COMPLYING INSURANCE COMPANY").
IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD IN VIOLATION OF
THE PROVISIONS OF THE PRECEDING TWO PARAGRAPHS, THEN THE LAST PRECEDING
TRANSFEREE THAT EITHER (A) IS NOT A PLAN OR A PLAN INVESTOR, (B) AFTER THE
TERMINATION OF THE SWAP AGREEMENT, ACQUIRED THIS CERTIFICATE IN COMPLIANCE WITH
THE RFC EXEMPTION OR (C) IS A COMPLYING INSURANCE COMPANY SHALL BE RESTORED, TO
THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER
THEREOF RETROACTIVE TO THE DATE OF SUCH TRANSFER OF THIS CERTIFICATE. THE
TRUSTEE SHALL BE UNDER NO LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON
THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR ANY INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN
SECTION 5.02(e) OF THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD
HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER, ANY
UNDERWRITER AND THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS,
COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR
HOLDING.
Class [A-__] Senior Certificate No. __
Date of Pooling and Servicing [Adjustable] [Variable] Pass-Through Rate
Agreement and Cut-off Date: Percentage Interest: ___%
[_____] 1, 20[__] Aggregate Initial Certificate Principal
Balance of the Class [A-__]
First Distribution Date: Certificates: $___________
[_____ __], 20[__]
Initial Certificate Principal
Master Servicer: Balance of this Class [A-__] Certificate:
Residential Funding Company, LLC $___________
Final Scheduled Distribution Date:
_________ __, 20__ CUSIP ________
A-2
Maturity Date:
_________ __, 20__
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the
distributions allocable to the Class
[A-__] Certificates with respect to a
Trust Fund consisting primarily of a
pool of conventional one- to four-family
fixed and adjustable interest rate first
lien 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, LLC or any of their affiliates. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental agency
or instrumentality or by Residential Funding Mortgage Securities II, Inc., the
Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that ____________ 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 conventional
one- to four-family fixed and adjustable interest rate, first and junior lien
mortgage loans (the "Mortgage Loans"), sold by Residential Funding Mortgage
Securities II, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Depositor, the Master Servicer and [_____], as
trustee and supplemental interest trust trustee (the "Trustee" and "Supplemental
Interest Trust Trustee," respectively), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an
A-3
amount equal to the product of the Percentage Interest evidenced by this
Certificate and the amount of interest and principal, if any, required to be
distributed to Holders of Class [A-__] Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of, this Certificate at the office or agency
appointed by the Trustee for that purpose in the City and State of St. ▇▇▇▇,
Minnesota. The Initial Certificate Principal Balance of this Certificate is set
forth above. The Certificate Principal Balance hereof will be reduced to the
extent of distributions allocable to principal and any Realized Losses allocable
hereto.
As described above, as of any date prior to the termination of the Swap
Agreement, any transferee of a Class A Certificate will be deemed to have
represented by virtue of its purchase and holding of such Certificate (or any
interest therein) that either (a) such transferee is not a Plan or a Plan
Investor or (b) its acquisition of such Certificate and the right to receive
(and its receipt of) payments from the Supplemental Interest Trust are eligible
for exemptive relief available under at least one of ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇
91-38, PTCE 95-60 or PTCE 96-23 or other applicable exemption, including Section
408(b)(17) of ERISA.
As described above, as of any date after the termination of the Swap
Agreement, any transferee of a Class A Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or any
interest herein) that either (a) such transferee is not a Plan or a Plan
Investor, (b) it has acquired and is holding such Certificate in reliance on the
RFC Exemption, and that it understands that there are certain conditions to the
availability of the RFC Exemption including that such Certificate must be rated,
at the time of purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's or Moody's or (c) the transferee is a Complying Insurance Company. In
addition, any purported Certificate Owner whose acquisition or holding of this
Certificate (or any interest herein) was effected in violation of the
restrictions in Section 5.02(e) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Master Servicer, any Subservicer, any
Underwriter and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related
A-4
recoveries on such Mortgage Loan or from other cash that would have been
distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
A-5
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
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 Residential Funding
Company, LLC or its designee 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 related Certificates. The Agreement permits, but does
not require, Residential Funding Company, LLC or its designee (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) subject to the
terms of the Agreement, to purchase in whole, but not in part, all of the Class
A and Class M Certificates from the Holders thereof, provided, that any such
option may only be exercised if the aggregate Stated Principal Balance of the
Mortgage Loans, as of the Distribution Date upon which the proceeds of any such
purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By: _____________________________________
Authorized Signatory
Dated:___________________
Certificate of Authentication
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: _____________________________________
Authorized Signatory
A-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:_____________________ _________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
A-8
EXHIBIT B
FORM OF CLASS [M-_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [A-__][M-_]
CERTIFICATES, AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
AS OF ANY DATE PRIOR TO THE TERMINATION OF THE SWAP AGREEMENT, ANY TRANSFEREE OF
A CLASS M CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS
PURCHASE OR HOLDING OF SUCH CERTIFICATE (OR ANY INTEREST HEREIN) THAT EITHER (A)
SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN SUBJECT TO THE
PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT
OF 1974 AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE (EACH, A "PLAN"), OR
ANY PERSON (INCLUDING, WITHOUT LIMITATION, AN INVESTMENT MANAGER, A NAMED
FIDUCIARY OR A TRUSTEE OF ANY PLAN) WHO IS USING PLAN ASSETS, WITHIN THE MEANING
OF THE U.S. DEPARTMENT OF LABOR REGULATION PROMULGATED AT 29 C.F.R. ss.
2510.3-101, AS MODIFIED BY SECTION 3(42) OF ERISA, OF ANY PLAN (EACH, A "PLAN
INVESTOR") TO EFFECT SUCH ACQUISITION OR (B) ITS ACQUISITION OF SUCH CERTIFICATE
AND THE RIGHT TO RECEIVE (AND ITS RECEIPT OF) PAYMENTS FROM THE SUPPLEMENTAL
INTEREST TRUST ARE ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇ ▇▇-▇▇,
▇▇▇▇ ▇▇-▇▇ ▇▇ ▇▇▇▇ 96-23 OR OTHER APPLICABLE EXEMPTION, INCLUDING SECTION
408(b)(17) OF ERISA.
AS OF ANY DATE AFTER THE TERMINATION OF THE SWAP AGREEMENT, ANY TRANSFEREE OF A
CLASS M CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE OF ITS PURCHASE
OR HOLDING OF SUCH CERTIFICATE (OR ANY INTEREST HEREIN) THAT EITHER (A) SUCH
TRANSFEREE IS NOT A PLAN
B-1
OR A PLAN INVESTOR, (B) IT HAS ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN
RELIANCE ON U.S. DEPARTMENT OF LABOR PROHIBITED TRANSACTION EXEMPTION ("PTE")
94-29, 59 FED. REG. 14674 (MARCH 29, 1994), AS MOST RECENTLY AMENDED BY PTE
2002-41, 67 FED. REG. 54487 (AUGUST 22, 2002) (THE "RFC EXEMPTION"), AND THAT IT
UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS TO THE AVAILABILITY OF THE RFC
EXEMPTION INCLUDING THAT SUCH CERTIFICATE MUST BE RATED, AT THE TIME OF
PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY STANDARD & POOR'S OR
MOODY'S OR (C) (I) THE TRANSFEREE IS AN INSURANCE COMPANY, (II) THE SOURCE OF
FUNDS USED TO PURCHASE OR HOLD SUCH CERTIFICATE (OR ANY INTEREST HEREIN) IS AN
"INSURANCE COMPANY GENERAL ACCOUNT" (AS DEFINED IN U.S. DEPARTMENT OF LABOR PTCE
95-60), AND (III) THE CONDITIONS SET FORTH IN SECTIONS I AND III OF PTCE 95-60
HAVE BEEN SATISFIED (EACH ENTITY THAT SATISFIES THIS CLAUSE (C), A "COMPLYING
INSURANCE COMPANY").
IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD IN VIOLATION OF
THE PROVISIONS OF THE PRECEDING TWO PARAGRAPHS, THEN THE LAST PRECEDING
TRANSFEREE THAT EITHER (A) IS NOT A PLAN OR A PLAN INVESTOR, (B) AFTER THE
TERMINATION OF THE SWAP AGREEMENT, ACQUIRED THIS CERTIFICATE IN COMPLIANCE WITH
THE RFC EXEMPTION OR (C) IS A COMPLYING INSURANCE COMPANY SHALL BE RESTORED, TO
THE EXTENT PERMITTED BY LAW, TO ALL RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER
THEREOF RETROACTIVE TO THE DATE OF SUCH TRANSFER OF THIS CERTIFICATE. THE
TRUSTEE SHALL BE UNDER NO LIABILITY TO ANY PERSON FOR MAKING ANY PAYMENTS DUE ON
THIS CERTIFICATE TO SUCH PRECEDING TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR ANY INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN
SECTION 5.02(e) OF THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD
HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER, ANY
UNDERWRITER AND THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS,
COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR
HOLDING.
Class M-__Mezzanine Certificate No. 1
Date of Pooling and Servicing Adjustable Pass-Through Rate
Agreement and Cut-off Date: Percentage Interest: ___%
[_____] 1, 20[__] Aggregate Initial Certificate Principal
Balance of the Class M-__
First Distribution Date: Certificates: $___________
[_____ __], 20[__]
Master Servicer:
Residential Funding Company, LLC
B-2
Final Scheduled Distribution Date: Initial Certificate Principal
Balance of this Class M-__ Certificate:
_________ __, 20__
$___________
Maturity Date:
CUSIP ________
_________ __, 20__
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the
distributions allocable to the Class M-_
Certificates with respect to a Trust Fund
consisting primarily of a pool of
conventional one- to four-family fixed and
adjustable interest rate, first and junior
lien 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, LLC or any of their affiliates. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental agency
or instrumentality or by Residential Funding Mortgage Securities II, Inc., the
Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that _________ 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 conventional
one- to four-family fixed and adjustable interest rate, first and junior lien
mortgage loans (the "Mortgage Loans"), sold by Residential Funding Mortgage
Securities II, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Depositor, the Master Servicer and [_____], as
trustee and supplemental interest trust trustee (the "Trustee" and "Supplemental
Interest Trust Trustee," respectively), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the
B-3
amount of interest and principal, if any, required to be distributed to Holders
of Class M-__ Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of St. ▇▇▇▇, Minnesota.
The Initial Certificate Principal Balance of this Certificate is set forth
above. The Certificate Principal Balance hereof will be reduced to the extent of
the distributions allocable to principal and any Realized Losses allocable
hereto.
As described above, as of any date prior to the termination of the Swap
Agreement, any transferee of a Class M Certificate will be deemed to have
represented by virtue of its purchase and holding of such Certificate (or any
interest therein) that either (a) such transferee is not a Plan or a Plan
Investor or (b) its acquisition of such Certificate and the right to receive
(and its receipt of) payments from the Supplemental Interest Trust are eligible
for exemptive relief available under at least one of ▇▇▇▇ ▇▇-▇▇, ▇▇▇▇ ▇▇-▇, ▇▇▇▇
91-38, PTCE 95-60 or PTCE 96-23 or other applicable exemption, including Section
408(b)(17) of ERISA.
As described above, as of any date after the termination of the Swap
Agreement, any transferee of a Class M Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or any
interest herein) that either (a) such transferee is not a Plan or a Plan
Investor, (b) it has acquired and is holding such Certificate in reliance on the
RFC Exemption, and that it understands that there are certain conditions to the
availability of the RFC Exemption including that such Certificate must be rated,
at the time of purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's or Moody's or (c) the transferee is a Complying Insurance Company. In
addition, any purported Certificate Owner whose acquisition or holding of this
Certificate (or any interest herein) was effected in violation of the
restrictions in Section 5.02(e) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Master Servicer, any Subservicer, any
underwriter and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related
B-4
recoveries on such Mortgage Loan or from other cash that would have been
distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
B-5
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
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 Residential Funding
Company, LLC or its designee 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 related Certificates. The Agreement permits, but does
not require, Residential Funding Company, LLC or its designee (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) subject to the
terms of the Agreement, to purchase in whole, but not in part, all of the Class
A and Class M Certificates from the Holders thereof, provided, that any such
option may only be exercised if the aggregate Stated Principal Balance of the
Mortgage Loans, as of the Distribution Date upon which the proceeds of any such
purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By: _____________________________________
Authorized Signatory
Dated: _________________________
Certificate of Authentication
This is one of the Class M Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: _____________________________________
Authorized Signatory
B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
________________________________________________________________________________
Dated:_____________________ _________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available 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.
B-8
EXHIBIT C-1
FORM OF RULE 144A GLOBAL CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE
MASTER SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF
THE AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, 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 (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT THE MASTER
SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER
OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE
C-1-1
SECURITIES LAWS, OR IS MADE IN A TRANSACTION THAT DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION. FURTHERMORE, THE AGREEMENT PROVIDES THAT NO
TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS
CERTIFICATE EXCEPT (I) OUTSIDE THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S.
PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT OR (II) IN
RELIANCE ON RULE 144A UNDER THE 1933 ACT ("RULE 144A") TO A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT IS ACQUIRING THIS CERTIFICATE
OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT
UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT, AND THAT,
IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
(OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER) AND TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE, THE DEPOSITOR, THE MASTER
SERVICER AND THE CERTIFICATE REGISTRAR AGAINST ANY LIABILITY THAT MAY RESULT IF
THE TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION IS NOT SO EXEMPT OR IS NOT MADE
IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS AND THE AGREEMENT.
CUSIP: _____________________ Certificate No. B-__
Date of Pooling and Servicing Agreement [Adjustable Pass-Through Rate]
and Cut-off Date: [_____] 1, 20[__] [Fixed Pass-Through Rate]
First Distribution Date: Aggregate Initial Certificate Principal
[_____ __], 20[__] Balance of the Class B Certificates:
C-1-2
$___________________________
Master Servicer: Initial Certificate Principal Balance
of this Class B Certificate:
Residential Funding Company LLC
$___________________________
Final Scheduled Distribution Date:
__________ __, 20__
CUSIP: Certificate No. B
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the
distributions allocable to the Class B
Certificates with respect to a Trust Fund
consisting primarily of a pool of
conventional one to four family fixed and
adjustable interest rate, first and junior
lien 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, LLC or any of their affiliates. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental agency
or instrumentality or by Residential Funding Mortgage Securities II, Inc., the
Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional one
to four family fixed and adjustable interest rate, first and junior lien
mortgage loans (the "Mortgage Loans") sold by Residential Funding Mortgage
Securities II, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Depositor, the Master Servicer and [_____], as
trustee and supplemental interest trust trustee (the "Trustee" and "Supplemental
Interest Trust Trustee," respectively), 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.
C-1-3
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount of interest and principal, if any, required to be distributed to
Holders of Class B Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of, this Certificate at the office or agency
appointed by the Trustee for that purpose in St. ▇▇▇▇, Minnesota. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of the Agreement stating that either (i) the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person (including,
without limitation, an investment manager, a named fiduciary or a trustee of any
Plan) who is using plan assets, within the meaning of the U.S. Department of
Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, as modified by Section
3(42) of ERISA, of any Plan (each, a "Plan Investor") to effect such acquisition
or (ii) such transferee is an insurance company, the source of funds used to
purchase or hold this Certificate (or any interest herein) is an "insurance
company general account" (as defined in U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60) and the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied or (b) an opinion of
counsel acceptable to and in form and substance satisfactory to the Trustee, the
Depositor and the Master Servicer to the effect that the purchase and holding of
this Certificate is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Depositor or the Master
Servicer to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in the
Agreement, which opinion of counsel shall not be an expense of the Trustee, the
Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Home Equity Loan Pass-Through Certificates of
the Series specified hereon (herein collectively called the "Certificates").
C-1-4
The Certificates are limited in right of payment to certain collections
and recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
C-1-5
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee 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, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or its designee from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans or the Certificates, in
either case thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer or its designee (i)
to purchase, at a price determined as provided in the Agreement, all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
to purchase in whole, but not in part, all of the Certificates from the Holders
thereof, provided, that any such option may only be exercised if the Stated
Principal Balance before giving effect to the distributions to be made on such
Distribution Date of the Mortgage Loans, as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-1-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By: _____________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: _____________________________________
Authorized Signatory
C-1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
_______________________________________________________________________________.
_______________________________________________________________________________.
_______________________________________________________________________________.
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated: _________________________ _________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available fund to ______________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to ____________________________________________________.
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
C-1-8
EXHIBIT C-2
FORM OF TEMPORARY REGULATION S GLOBAL CLASS B CERTIFICATE
THIS CERTIFICATE IS A TEMPORARY REGULATION S GLOBAL CERTIFICATE FOR
PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY REGULATION S GLOBAL CLASS B
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS
PERMITTED UNDER THE AGREEMENT (AS DEFINED BELOW).
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M CERTIFICATES AS DESCRIBED IN THE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
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 AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE
MASTER SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF
THE AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, 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 (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT THE MASTER
SERVICER, THE DEPOSITOR OR THE TRUSTEE 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
C-2-1
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE
MASTER SERVICER.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER
OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A
TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION.
FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS CERTIFICATE OR
INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE
THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF
REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE ON RULE 144A UNDER THE 1933
ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A)
THAT IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT
UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT, AND THAT,
IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
(OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER) AND TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S; AND (III) IF THE HOLDER IS A REGULATION S PURCHASER, IT
UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED
STATES OR TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING
DATE MAY CONSTITUTE A VIOLATION OF UNITED STATES LAW, AND THAT DISTRIBUTIONS OF
PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL
OWNERSHIP OR THE EXCHANGE OF BENEFICIAL INTEREST IN TEMPORARY REGULATION S
GLOBAL OFFERED CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED PERMANENT
REGULATION S GLOBAL OFFERED
C-2-2
CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE A CERTIFICATION OF NON-U.S.
BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE MANNER SET FORTH IN THE
AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE, THE DEPOSITOR, THE MASTER
SERVICER AND THE CERTIFICATE REGISTRAR AGAINST ANY LIABILITY THAT MAY RESULT IF
THE TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION IS NOT SO EXEMPT OR IS NOT MADE
IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS AND THE AGREEMENT.
CUSIP: _____________________ Certificate No. B-__
Date of Pooling and Servicing Agreement [Adjustable Pass-Through Rate]
and Cut-off Date: [_____] 1, 20[__] [Fixed Pass-Through Rate]
First Distribution Date:
Aggregate Initial Certificate Principal
[_____ __], 20[__] Balance of the Class B Certificates:
$___________________________
Master Servicer:
Initial Certificate Principal Balance
Residential Funding Company, LLC of this Class B Certificate:
Final Scheduled Distribution Date: $___________________________
__________ __, 20__
CUSIP: Certificate No. B
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the
distributions allocable to the Class B
Certificates with respect to a Trust Fund
consisting primarily of a pool of
Conventional one-to-four family fixed and
adjustable interest rate, first and junior
lien 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, LLC or any of their affiliates. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental agency
or instrumentality or by Residential Funding Mortgage Securities II, Inc., the
Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of
C-2-3
their affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage
Group, LLC or any of their affiliates will have any obligation with respect to
any certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional one
to four family fixed and adjustable interest rate, first and junior lien
mortgage loans (the "Mortgage Loans") sold by Residential Funding Mortgage
Securities II, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Depositor, the Master Servicer and [_____], as
trustee and supplemental interest trust trustee (the "Trustee" and "Supplemental
Interest Trust Trustee," respectively), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount of interest and principal, if any, required to be distributed to
Holders of Class B Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of, this Certificate at the office or agency
appointed by the Trustee for that purpose in St. ▇▇▇▇, Minnesota. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of the Agreement stating that either (i) the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person (including,
without limitation, an investment manager, a named fiduciary or a trustee of any
Plan) who is using plan assets, within
C-2-4
the meaning of the U.S. Department of Labor regulation promulgated at 29 C.F.R.
ss. 2510.3-101, as modified by Section 3(42) of ERISA, of any Plan (each, a
"Plan Investor") to effect such acquisition or (ii) such transferee is an
insurance company, the source of funds used to purchase or hold this Certificate
(or any interest herein) is an "insurance company general account" (as defined
in U.S. Department of Labor Prohibited Transaction Class Exemption ("PTCE")
95-60) and the conditions set forth in Sections I and III of PTCE 95-60 have
been satisfied or (b) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Depositor and the Master Servicer to
the effect that the purchase and holding of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which opinion of counsel shall
not be an expense of the Trustee, the Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Home Equity 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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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
▇-▇-▇
▇▇▇▇ ▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇. ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, duly endorsed by, or accompanied by an
assignment in the form below or other written instrument of transfer in form
satisfactory to the Trustee and the Certificate Registrar duly executed by the
Holder hereof or such Holder's attorney duly authorized in writing, and
thereupon one or more new Certificates of authorized denominations evidencing
the same Class and aggregate Percentage Interest will be issued to the
designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or its designee from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans or the Certificates, in
either case thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer or its designee (i)
to purchase, at a price determined as provided in the Agreement, all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
to purchase in whole, but not in part, all of the Certificates from the Holders
thereof, provided, that any such option may only be exercised if the Stated
Principal Balance before giving effect to the distributions to be made on such
Distribution Date of the Mortgage Loans, as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
C-2-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By: _____________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: _____________________________________
Authorized Signatory
C-2-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
_______________________________________________________________________________.
_______________________________________________________________________________.
_______________________________________________________________________________.
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated: _________________________ _________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available 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.
C-2-8
EXHIBIT C-3
FORM OF PERMANENT REGULATION S GLOBAL CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A AND
CLASS M CERTIFICATES [AND CLASS B CERTIFICATE] AS DESCRIBED IN THE AGREEMENT (AS
DEFINED BELOW).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE
MASTER SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF
THE AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, 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 (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT THE MASTER
SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER
OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE
C-3-1
SECURITIES LAWS, OR IS MADE IN A TRANSACTION THAT DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION. FURTHERMORE, THE AGREEMENT PROVIDES THAT NO
TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS
CERTIFICATE EXCEPT (I) OUTSIDE THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S.
PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT OR (II) IN
RELIANCE ON RULE 144A UNDER THE 1933 ACT ("RULE 144A") TO A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT IS ACQUIRING THIS CERTIFICATE
OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT
UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT, AND THAT,
IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
(OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER) AND TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S; AND (III) IF THE HOLDER IS A REGULATION S PURCHASER, IT
UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED
STATES OR TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING
DATE MAY CONSTITUTE A VIOLATION OF UNITED STATES LAW, AND THAT DISTRIBUTIONS OF
PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL
OWNERSHIP OR THE EXCHANGE OF BENEFICIAL INTEREST IN TEMPORARY REGULATION S
GLOBAL OFFERED CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED PERMANENT
REGULATION S GLOBAL OFFERED CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE
A CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE
MANNER SET FORTH IN THE AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE,
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THE DEPOSITOR, THE MASTER SERVICER AND THE CERTIFICATE REGISTRAR AGAINST ANY
LIABILITY THAT MAY RESULT IF THE TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION IS
NOT SO EXEMPT OR IS NOT MADE IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS AND
THE AGREEMENT.
CUSIP: _____________________ Certificate No. B-__
Date of Pooling and Servicing Agreement [Adjustable Pass-Through Rate]
and Cut-off Date: [_____] 1, 20[__] [Fixed Pass-Through Rate]
First Distribution Date: Aggregate Initial Certificate Principal
Balance of the Class B Certificates:
[_____ __], 20[__] $___________________________
Master Servicer: Initial Certificate Principal Balance
of this Class B Certificate:
Residential Funding Company, LLC
$___________________________
Final Scheduled Distribution Date:
__________ __, 20__
CUSIP: Certificate No. B
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the
distributions allocable to the Class B
Certificates with respect to a Trust Fund
consisting primarily of a pool of
one-to-four family fixed and adjustable
interest rate, first and junior lien
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, LLC or any of their affiliates. Neither this Certificate nor the
underlying Mortgage Loans are guaranteed or insured by any governmental agency
or instrumentality or by Residential Funding Mortgage Securities II, Inc., the
Master Servicer, the Trustee or GMAC Mortgage Group, LLC or any of their
affiliates. None of the Depositor, the Master Servicer, GMAC Mortgage Group, LLC
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional one
to four family fixed and adjustable interest
C-3-3
rate, first and junior lien mortgage loans (the "Mortgage Loans") sold by
Residential Funding Mortgage Securities II, Inc. (hereinafter called the
"Depositor," which term includes any successor entity under the Agreement
referred to below). The Trust Fund was created pursuant to a Pooling and
Servicing Agreement dated as specified above (the "Agreement") among the
Depositor, the Master Servicer and [_____], as trustee and supplemental interest
trust trustee (the "Trustee" and "Supplemental Interest Trust Trustee,"
respectively), a summary of certain of the pertinent provisions of which is set
forth hereafter. To the extent not defined herein, the capitalized terms used
herein have the meanings assigned in the Agreement. This Certificate is issued
under and is subject to the terms, provisions and conditions of the Agreement,
to which Agreement the Holder of this Certificate by virtue of the acceptance
hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount of interest and principal, if any, required to be distributed to
Holders of Class B Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
***Notwithstanding the above, the final distribution on this Certificate
will be made after due notice of the pendency of such distribution and only upon
presentation and surrender of, this Certificate at the office or agency
appointed by the Trustee for that purpose in St. ▇▇▇▇, Minnesota. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of the Agreement stating that either (i) the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (each, a "Plan"), or any Person (including,
without limitation, an investment manager, a named fiduciary or a trustee of any
Plan) who is using plan assets, within the meaning of the U.S. Department of
Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, as modified by Section
3(42) of ERISA, of any Plan (each, a "Plan Investor") to effect such acquisition
or (ii) such transferee is an insurance company, the source of funds used to
purchase or hold this Certificate (or any interest herein) is an "insurance
company general account" (as defined in U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60) and the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied or (b) an
C-3-4
opinion of counsel acceptable to and in form and substance satisfactory to the
Trustee, the Depositor and the Master Servicer to the effect that the purchase
and holding of this Certificate is permissible under applicable law, will not
constitute or result in a non-exempt prohibited transaction under Section 406 of
ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Depositor or the Master
Servicer to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in the
Agreement, which opinion of counsel shall not be an expense of the Trustee, the
Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Home Equity 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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations
C-3-5
evidencing the same Class and aggregate Percentage Interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee 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, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or its designee from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans or the Certificates, in
either case thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer or its designee (i)
to purchase, at a price determined as provided in the Agreement, all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
to purchase in whole, but not in part, all of the Certificates from the Holders
thereof, provided, that any such option may only be exercised if the Stated
Principal Balance before giving effect to the distributions to be made on such
Distribution Date of the Mortgage Loans, as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By: _____________________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class B Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: _____________________________________
Authorized Signatory
C-3-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto ___________________________________________________________________________
_______________________________________________________________________________.
_______________________________________________________________________________.
_______________________________________________________________________________.
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
_______________________________________________________________________________.
Dated:_____________________ _________________________________________
Signature by or on behalf of assignor
_________________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available 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.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF RULE 144A GLOBAL CLASS SB CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M AND CLASS B CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
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 BELOW.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE
MASTER SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF
THE AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, 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 (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT THE MASTER
SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER
OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE
D-1-1
SECURITIES LAWS, OR IS MADE IN A TRANSACTION THAT DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION. FURTHERMORE, THE AGREEMENT PROVIDES THAT NO
TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS
CERTIFICATE EXCEPT (I) OUTSIDE THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S.
PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT OR (II) IN
RELIANCE ON RULE 144A UNDER THE 1933 ACT ("RULE 144A") TO A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT IS ACQUIRING THIS CERTIFICATE
OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); AND
(II) IT UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A
TRANSACTION NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933
ACT, AND THAT, IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE
TRANSFER THIS CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR
TRANSFERRED ONLY IN ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN
A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS
OWN ACCOUNT (OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER)
AND TO WHOM NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN
RELIANCE ON RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE
903 OR RULE 904 OF REGULATION S.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE, THE DEPOSITOR, THE MASTER
SERVICER AND THE CERTIFICATE REGISTRAR AGAINST ANY LIABILITY THAT MAY RESULT IF
THE TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION IS NOT SO EXEMPT OR IS NOT MADE
IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS AND THE AGREEMENT.
CUSIP: _____________________ Certificate No. SB
Date of Pooling and Servicing Agreement Percentage Interest: 100.00%
and Cut-off Date: [_____] 1, 20[__]
First Distribution Date: [_____ __], 20[__] Notional Amount
of the Class SB Certificates:
$___________________________
D-1-2
Master Servicer: Notional Amount
Residential Funding Company LLC of this Class SB Certificate:
$___________________________
Maturity Date:
__________ __, 20__
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the distributions
allocable to the Class SB Certificates with respect to a
Trust Fund consisting primarily of a pool of
conventional one-to-four family fixed and adjustable
interest rate, first and junior lien 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 the Depositor, the Master Servicer
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional one
to four family fixed and adjustable interest rate, first and junior lien
mortgage loans (the "Mortgage Loans") sold by Residential Funding Mortgage
Securities II, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Depositor, the Master Servicer and [_____], as
trustee and supplemental interest trust trustee (the "Trustee" and "Supplemental
Interest Trust Trustee," respectively), a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such
D-1-3
Distribution Date (the "Record Date"), from the related Available Distribution
Amount in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount of interest and principal, if any, required to
be distributed to Holders of Class SB Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in St. ▇▇▇▇, Minnesota. The Notional Amount of
this Class SB Certificate as of any date of determination will be calculated as
described in the Agreement. This Class SB Certificate as of any date of
determination will be calculated as described in the Agreement. This Class SB
Certificate will accrue interest at the Pass-Through Rate on the Notional Amount
as indicated in the definition of Accrued Certificate Interest in the Agreement.
This Class SB Certificate will not accrue interest on its Certificate Principal
Balance.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of 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 (each, a "Plan"), or any Person (including, without
limitation, an insurance company investing its general account, an investment
manager, a named fiduciary or a trustee of any Plan) who is using plan assets,
within the meaning of the U.S. Department of Labor regulation promulgated at 29
C.F.R. ss. 2510.3-101, as modified by Section 3(42) of ERISA, of any Plan (each,
a "Plan Investor") to effect such acquisition, or (b) an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee, the
Depositor and the Master Servicer to the effect that the purchase and holding of
this Certificate is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Depositor or the Master
Servicer to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in the
Agreement, which opinion of counsel shall not be an expense of the Trustee, the
Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Home Equity 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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance
D-1-4
is reimbursable to the Master Servicer, to the extent provided in the Agreement,
from related recoveries on such Mortgage Loan or from other cash that would have
been distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none
D-1-5
of the Depositor, the Master Servicer, the Trustee nor any such agent shall be
affected by notice to the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or its designee from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans or the Certificates, in
either case thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer or its designee (i)
to purchase, at a price determined as provided in the Agreement, all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
to purchase in whole, but not in part, all of the Certificates from the Holders
thereof, provided, that any such option may only be exercised if the Stated
Principal Balance before giving effect to the distributions to be made on such
Distribution Date of the Mortgage Loans, as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-1-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By:
------------------------
Authorized Signatory
Dated:
----------------
Certificate of Authentication
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By:
------------------------
Authorized Signatory
D-1-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available fund to ______________________________________________________________
for the account of ____________________________________________________________
account number ________________________________________________________________
or, if mailed by check, to ____________________________________________________
Applicable statements should be mailed to:_______________________________
_______________________________________________________________________________
_______________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF TEMPORARY REGULATION S GLOBAL CLASS SB CERTIFICATE
THIS CERTIFICATE IS A TEMPORARY REGULATION S GLOBAL CERTIFICATE FOR
PURPOSES OF REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS
AMENDED (THE "1933 ACT"). NEITHER THIS TEMPORARY REGULATION S GLOBAL CLASS B
CERTIFICATE NOR ANY INTEREST HEREIN MAY BE OFFERED, SOLD OR DELIVERED, EXCEPT AS
PERMITTED UNDER THE POOLING AND SERVICING AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST BELOW.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M AND CLASS B 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, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE
MASTER SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF
THE AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, 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 (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT THE MASTER
SERVICER, THE DEPOSITOR OR THE TRUSTEE 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
D-1-9
OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE
MASTER SERVICER.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER
OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE SECURITIES LAWS, OR IS MADE IN A
TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR QUALIFICATION.
FURTHERMORE, THE AGREEMENT PROVIDES THAT NO TRANSFER OF THIS CERTIFICATE OR
INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS CERTIFICATE EXCEPT (I) OUTSIDE
THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S. PERSONS WITHIN THE MEANING OF
REGULATION S UNDER THE 1933 ACT OR (II) IN RELIANCE ON RULE 144A UNDER THE 1933
ACT ("RULE 144A") TO A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A)
THAT IS ACQUIRING THIS CERTIFICATE OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR
THE ACCOUNT OF ANOTHER QUALIFIED INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT
UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT, AND THAT,
IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
(OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER) AND TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S; AND (III) IF THE HOLDER IS A REGULATION S PURCHASER, IT
UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED
STATES OR TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING
DATE MAY CONSTITUTE A VIOLATION OF UNITED STATES LAW, AND THAT DISTRIBUTIONS OF
PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL
OWNERSHIP OR THE EXCHANGE OF BENEFICIAL INTEREST IN TEMPORARY REGULATION S
GLOBAL OFFERED
D-1-10
CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED PERMANENT REGULATION S
GLOBAL OFFERED CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE A
CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE MANNER
SET FORTH IN THE AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE, THE DEPOSITOR, THE MASTER
SERVICER AND THE CERTIFICATE REGISTRAR AGAINST ANY LIABILITY THAT MAY RESULT IF
THE TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION IS NOT SO EXEMPT OR IS NOT MADE
IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS AND THE AGREEMENT.
CUSIP: _____________________ Certificate No. SB
Date of Pooling and Servicing Agreement Percentage Interest: 100.00%
and Cut-off Date: [_____] 1, 20[__]
First Distribution Date: [_____ __], 20[__] Notional Amount
of the Class SB Certificates:
$___________________________
Master Servicer: Notional Amount
Residential Funding Company, LLC of this Class SB Certificate:
$___________________________
Maturity Date:
__________ __, 20__
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the
distributions allocable to the Class SB
Certificates with respect to a Trust Fund
consisting primarily of a pool of
one-to-four family fixed and adjustable
interest rate, first and junior lien
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 the Depositor, the Master Servicer
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
D-1-11
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional one
to four family fixed and adjustable interest rate, first and junior lien
mortgage loans (the "Mortgage Loans") sold by Residential Funding Mortgage
Securities II, Inc. (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement referred to below). The Trust Fund was
created pursuant to a Pooling and Servicing Agreement dated as specified above
(the "Agreement") among the Depositor, the Master Servicer and [_____], as
trustee and supplemental interest trust trustee (the "Trustee" and "Supplemental
Interest Trust Trustee," respectively), 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 prior to such immediately following (the "Distribution Date"), commencing as
described in the Agreement, to the Person in whose name this Certificate is
registered at the close of business on the Business Day prior to such
Distribution Date (the "Record Date"), from the related Available Distribution
Amount in an amount equal to the product of the Percentage Interest evidenced by
this Certificate and the amount of interest and principal, if any, required to
be distributed to Holders of Class SB Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in St. ▇▇▇▇, Minnesota. The Notional Amount of
this Class SB Certificate as of any date of determination will be calculated as
described in the Agreement. This Class SB Certificate will accrue interest at
the Pass-Through Rate on the Notional Amount as indicated in the definition of
Accrued Certificate Interest in the Agreement. This Class SB Certificate will
not accrue interest on its Certificate Principal Balance.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of 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 (each, a "Plan"), or any Person (including, without
limitation, an insurance company investing its general account, an investment
manager, a named fiduciary or a trustee of any Plan) who is using plan assets,
within the meaning of the U.S. Department of
D-1-12
Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, as modified by Section
3(42) of ERISA, of any Plan (each, a "Plan Investor") to effect such
acquisition, or (b) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Depositor and the Master Servicer to
the effect that the purchase and holding of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which opinion of counsel shall
not be an expense of the Trustee, the Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Home Equity 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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly
D-1-13
authorized in writing, and thereupon one or more new Certificates of authorized
denominations evidencing the same Class and aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or its designee from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans or the Certificates, in
either case thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer or its designee (i)
to purchase, at a price determined as provided in the Agreement, all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
to purchase in whole, but not in part, all of the Certificates from the Holders
thereof, provided, that any such option may only be exercised if the Stated
Principal Balance before giving effect to the distributions to be made on such
Distribution Date of the Mortgage Loans, as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-1-14
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By: _______________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: ______________________________
Authorized Signatory
D-1-15
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available fund to
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
▇-▇-▇▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF PERMANENT REGULATION S GLOBAL CLASS SB CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS A, CLASS
M AND CLASS B CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE
ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO
CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR
OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER
HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO
ANY PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE
MASTER SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF
THE AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND
SUBSTANCE SATISFACTORY TO THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE TO
THE EFFECT THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE
UNDER APPLICABLE LAW, 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 (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT THE MASTER
SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER.
NO TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER
OF THIS CERTIFICATE UNLESS THAT TRANSFER IS MADE PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE 1933 ACT, AND EFFECTIVE REGISTRATION OR
QUALIFICATION UNDER APPLICABLE STATE
D-3-1
SECURITIES LAWS, OR IS MADE IN A TRANSACTION THAT DOES NOT REQUIRE SUCH
REGISTRATION OR QUALIFICATION. FURTHERMORE, THE AGREEMENT PROVIDES THAT NO
TRANSFER OF THIS CERTIFICATE OR INTEREST HEREIN MAY BE MADE BY A HOLDER OF THIS
CERTIFICATE EXCEPT (I) OUTSIDE THE UNITED STATES TO ENTITIES WHICH ARE NOT U.S.
PERSONS WITHIN THE MEANING OF REGULATION S UNDER THE 1933 ACT OR (II) IN
RELIANCE ON RULE 144A UNDER THE 1933 ACT ("RULE 144A") TO A QUALIFIED
INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A) THAT IS ACQUIRING THIS CERTIFICATE
OR INTEREST HEREIN FOR ITS OWN ACCOUNT OR FOR THE ACCOUNT OF ANOTHER QUALIFIED
INSTITUTIONAL BUYER.
EACH HOLDER OF THIS CERTIFICATE WILL BE DEEMED TO HAVE ACKNOWLEDGED AND
AGREED THAT (I) IT IS (A) A QUALIFIED INSTITUTIONAL BUYER AND IS ACQUIRING THIS
CERTIFICATE FOR ITS OWN INSTITUTIONAL ACCOUNT OR FOR THE ACCOUNT OR ACCOUNTS OF
A QUALIFIED INSTITUTIONAL BUYER, OR (B) IT IS NOT A U.S. PERSON AND IS ACQUIRING
THIS CERTIFICATE OUTSIDE THE UNITED STATES (A "REGULATION S PURCHASER"); (II) IT
UNDERSTANDS THAT THIS CERTIFICATE IS BEING TRANSFERRED TO IT IN A TRANSACTION
NOT INVOLVING ANY PUBLIC OFFERING WITHIN THE MEANING OF THE 1933 ACT, AND THAT,
IF IN THE FUTURE IT DECIDES TO RESELL, PLEDGE OR OTHERWISE TRANSFER THIS
CERTIFICATE, THIS CERTIFICATE MAY BE RESOLD, PLEDGED OR TRANSFERRED ONLY IN
ACCORDANCE WITH APPLICABLE STATE SECURITIES LAWS AND (A) IN A TRANSACTION
MEETING THE REQUIREMENTS OF RULE 144A, TO A PERSON THAT THE SELLER REASONABLY
BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER THAT PURCHASES FOR ITS OWN ACCOUNT
(OR FOR THE ACCOUNT OR ACCOUNTS OF A QUALIFIED INSTITUTIONAL BUYER) AND TO WHOM
NOTICE IS GIVEN THAT THE RESALE, PLEDGE OR TRANSFER IS BEING MADE IN RELIANCE ON
RULE 144A, OR (B) IN AN OFFSHORE TRANSACTION IN ACCORDANCE WITH RULE 903 OR RULE
904 OF REGULATION S; AND (III) IF THE HOLDER IS A REGULATION S PURCHASER, IT
UNDERSTANDS THAT THIS CERTIFICATE HAS NOT AND WILL NOT BE REGISTERED UNDER THE
1933 ACT, THAT ANY OFFERS, SALES OR DELIVERIES OF THIS CERTIFICATE IN THE UNITED
STATES OR TO U.S. PERSONS PRIOR TO THE DATE THAT IS 40 DAYS AFTER THE CLOSING
DATE MAY CONSTITUTE A VIOLATION OF UNITED STATES LAW, AND THAT DISTRIBUTIONS OF
PRINCIPAL AND INTEREST WILL BE MADE IN RESPECT OF SUCH CERTIFICATES ONLY
FOLLOWING THE DELIVERY BY THE HOLDER OF A CERTIFICATION OF NON-U.S. BENEFICIAL
OWNERSHIP OR THE EXCHANGE OF BENEFICIAL INTEREST IN TEMPORARY REGULATION S
GLOBAL OFFERED CERTIFICATES FOR BENEFICIAL INTERESTS IN THE RELATED PERMANENT
REGULATION S GLOBAL OFFERED CERTIFICATES (WHICH IN EACH CASE WILL ITSELF REQUIRE
A CERTIFICATION OF NON-U.S. BENEFICIAL OWNERSHIP), AT THE TIMES AND IN THE
MANNER SET FORTH IN THE AGREEMENT.
THE HOLDER OF THIS CERTIFICATE DESIRING TO EFFECT ANY TRANSFER, SALE,
PLEDGE OR OTHER DISPOSITION SHALL, AND BY ACCEPTANCE OF THIS CERTIFICATE WILL BE
DEEMED TO HAVE AGREED TO, INDEMNIFY THE TRUSTEE,
D-3-2
THE DEPOSITOR, THE MASTER SERVICER AND THE CERTIFICATE REGISTRAR AGAINST ANY
LIABILITY THAT MAY RESULT IF THE TRANSFER, SALE, PLEDGE OR OTHER DISPOSITION IS
NOT SO EXEMPT OR IS NOT MADE IN ACCORDANCE WITH SUCH FEDERAL AND STATE LAWS AND
THE AGREEMENT.
CUSIP: _____________________ Certificate No. SB
Date of Pooling and Servicing Agreement Percentage Interest: [__]%
and Cut-off Date: [_____] 1, 20[__]
First Distribution Date: [_____ __], 20[__] Notional Amount
of the Class SB Certificates:
$___________________________
Master Servicer: Notional Amount
Residential Funding Company, LLC of this Class SB Certificate:
$___________________________
Maturity Date:
__________ __, 20__
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in the
distributions allocable to the Class SB
Certificates with respect to a Trust Fund
consisting primarily of a pool of
one-to-four family fixed and adjustable
interest rate, first and junior lien
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 the Depositor, the Master Servicer
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that Cede & Co. is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional one
to four family fixed and adjustable interest rate, first and junior lien
mortgage loans (the "Mortgage Loans") sold by Residential Funding
D-3-3
Mortgage Securities II, Inc. (hereinafter called the "Depositor," which term
includes any successor entity under the Agreement referred to below). The Trust
Fund was created pursuant to a Pooling and Servicing Agreement dated as
specified above (the "Agreement") among the Depositor, the Master Servicer and
[_____], as trustee and supplemental interest trust trustee (the "Trustee" and
"Supplemental Interest Trust Trustee," respectively), a summary of certain of
the pertinent provisions of which is set forth hereafter. To the extent not
defined herein, the capitalized terms used herein have the meanings assigned in
the Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount of interest and principal, if any, required to be distributed to
Holders of Class SB Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in St. ▇▇▇▇, Minnesota. The Notional Amount of
this Class SB Certificate as of any date of determination will be calculated as
described in the Agreement. This Class SB Certificate will accrue interest at
the Pass-Through Rate on the Notional Amount as indicated in the definition of
Accrued Certificate Interest in the Agreement. This Class SB Certificate will
not accrue interest on its Certificate Principal Balance.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of 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 (each, a "Plan"), or any Person (including, without
limitation, an insurance company investing its general account, an investment
manager, a named fiduciary or a trustee of any Plan) who is using plan assets,
within the meaning of the U.S. Department of Labor regulation promulgated at 29
C.F.R. ss. 2510.3-101, as modified by Section 3(42) of ERISA, of any Plan (each,
a "Plan Investor") to effect such acquisition, or (b) an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee, the
Depositor and the Master Servicer to the effect that the purchase and holding of
this Certificate is permissible under
D-3-4
applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which opinion of counsel shall
not be an expense of the Trustee, the Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Home Equity 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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
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The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and none of the Depositor, the
Master Servicer, the Trustee 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, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by the Master Servicer
or its designee from the Trust Fund of all remaining Mortgage Loans and all
property acquired in respect of such Mortgage Loans or the Certificates, in
either case thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer or its designee (i)
to purchase, at a price determined as provided in the Agreement, all remaining
Mortgage Loans and all property acquired in respect of any Mortgage Loan or (ii)
to purchase in whole, but not in part, all of the Certificates from the Holders
thereof, provided, that any such option may only be exercised if the Stated
Principal Balance before giving effect to the distributions to be made on such
Distribution Date of the Mortgage Loans, as of the Distribution Date upon which
the proceeds of any such purchase are distributed is less than ten percent of
the Cut-off Date Balance.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By: _______________________________
Authorized Signatory
Dated:_____________________
Certificate of Authentication
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: ______________________________
Authorized Signatory
D-3-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
Dated:_____________________ ____________________________________
Signature by or on behalf of assignor
____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available fund to
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to: _______________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
▇-▇-▇
▇-▇
EXHIBIT E
FORM OF CLASS R-__ CERTIFICATE
THE CLASS R-__ CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS CONSTITUTING THE
AVAILABLE DISTRIBUTION AMOUNT UNTIL SUCH TIME AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN (THE "AGREEMENT").
THIS 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, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT (THE
"AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER
SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE
AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE MASTER SERVICER, THE DEPOSITOR AND THE TRUSTEE TO THE EFFECT
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, 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 (OR COMPARABLE
PROVISIONS OF ANY SUBSEQUENT ENACTMENTS) AND WILL NOT SUBJECT THE MASTER
SERVICER, THE DEPOSITOR OR THE TRUSTEE TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS OR LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER.
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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 FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE 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, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (D) 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-__ Certificate No. __
Date of Pooling and Servicing Percentage Interest: __%
Agreement and Cut-off Date:
[_____] 1, 20[__]
First Distribution Date: Initial Certificate Principal
[_____ __], 20[__] Balance of this Certificate: $_____
Master Servicer:
Residential Funding Company, LLC
HOME EQUITY LOAN PASS-THROUGH CERTIFICATES
SERIES 20[__]-[___]
evidencing a percentage interest in any
distributions allocable to the Class R-__
Certificates with respect to the Trust
Fund consisting primarily of a pool of
conventional one- to four-family
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fixed and adjustable interest rate first
and junior lien 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 the Depositor, the Master Servicer
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that ___________ is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of a pool of conventional one- to
four-family fixed and adjustable interest rate first and junior lien mortgage
loans (the "Mortgage Loans"), sold by Residential Funding Mortgage Securities
II, Inc. (hereinafter called the "Depositor," which term includes any successor
entity under the Agreement referred to below). The Trust Fund was created
pursuant to a Pooling and Servicing Agreement dated as specified above (the
"Agreement) among the Depositor, the Master Servicer and [_____], as trustee and
supplemental interest trust trustee (the "Trustee" and "Supplemental Interest
Trust Trustee," respectively), a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month next preceding the month
in which the related Distribution Date occurs (the "Record Date"), from the
related Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class R-__
Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States Person and Permitted Transferee, (iii) any attempted or purported
transfer of any Ownership Interest in this Certificate in violation of such
restrictions will be absolutely null and void and will vest no rights in the
purported transferee, and (iv) if any person other than a United States Person
and a Permitted Transferee acquires any Ownership Interest in this Certificate
in violation of such restrictions, then the Master Servicer will have the right,
in its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the
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Master Servicer, which purchaser may be the Master Servicer, or any affiliate of
the Master Servicer, on such terms and conditions as the Master Servicer may
choose.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of St. ▇▇▇▇, Minnesota.
The Holder of this Certificate may have additional obligations with respect to
this Certificate, including tax liabilities.
No transfer of this Class R-__ Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee or the Depositor may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Depositor that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of 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 (each, a "Plan"), or any Person (including, without
limitation, an insurance company investing its general account, an investment
manager, a named fiduciary or a trustee of any Plan) who is using plan assets,
within the meaning of the U.S. Department of Labor regulation promulgated at 29
C.F.R. ss. 2510.3-101, as modified by Section 3(42) of ERISA, of any Plan (each,
a "Plan Investor") to effect such acquisition, or (b) an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee, the
Depositor and the Master Servicer to the effect that the purchase and holding of
this Certificate is permissible under applicable law, will not constitute or
result in a non-exempt prohibited transaction under Section 406 of ERISA or
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Depositor or the Master
Servicer to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in the
Agreement, which opinion of counsel shall not be an expense of the Trustee, the
Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Home Equity 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. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related
E-4
recoveries on such Mortgage Loan or from other cash that would have been
distributable to Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account
and/or the Certificate Account created for the benefit of Certificateholders may
be made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein
set forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of St. ▇▇▇▇,
Minnesota, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Trustee and
the Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, the Certificate Registrar
and any agent of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
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This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of these 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 Residential Funding
Company, LLC or its designee 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 related Certificates. The Agreement permits, but does
not require, Residential Funding Company, LLC or its designee (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) subject to the
terms of the Agreement, to purchase in whole, but not in part, all of the
related Certificates from the Holders thereof; provided, that any such option
may only be exercised if the aggregate Stated Principal Balance of the related
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 related 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.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
[_____],
as Trustee
By:________________________________
Authorized Signatory
Dated:_______________________
Certificate of Authentication
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
[_____],
as Certificate Registrar
By: _______________________________
Authorized Signatory
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated:_____________________ _____________________________________
Signature by or on behalf of assignor
_____________________________________
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available 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.
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EXHIBIT F
FORM OF CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time,
the "Agreement"), dated as of [_____ __], 20[__], by and among [_____], as
trustee and supplemental interest trust trustee (including its successors under
the Pooling Agreement defined below, the "Trustee" and "Supplemental Interest
Trust Trustee," respectively), RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.,
as company (together with any successor in interest, the "Company"), RESIDENTIAL
FUNDING COMPANY, LLC, as master servicer (together with any successor in
interest or successor under the Pooling Agreement referred to below, the "Master
Servicer") and [_______], as custodian (together with any successor in interest
or any successor appointed hereunder, the "Custodian").
W I T N E S S E T H T H A T:
WHEREAS, the Company, the Master Servicer and the Trustee have entered
into a Pooling and Servicing Agreement, dated as of [_____] 1, 20[__], relating
to the issuance of Residential Funding Mortgage Securities II, Inc., Home Equity
Loan Pass-Through Certificates, Series 20[__]-[___] (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");
WHEREAS, the Company and the Master Servicer, hereby direct the Trustee to
appoint ▇▇▇▇▇ Fargo Bank,, N.A. as Custodian, and
WHEREAS, the Custodian has agreed to act as agent for the Trustee for the
purposes of receiving and holding certain documents and other instruments
delivered by the Company and the Master Servicer under the Pooling Agreement,
all upon the terms and conditions and subject to the limitations hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Trustee, the Company, the Master
Servicer and the Custodian hereby agree as follows:
ARTICLE I
Definitions
Capitalized terms used in this Agreement and not defined herein shall have
the meanings assigned in the Original Pooling Agreement, unless otherwise
required by the context herein.
ARTICLE II
Custody of Mortgage Documents
Section 2.1 Custodian to Act as Agent: Acceptance of Custodial Files. The
Company and the Master Servicer, hereby direct the Trustee to appoint [_______]
as Custodian. The Custodian, as the duly appointed agent of the Trustee for
these purposes, acknowledges receipt
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of the Custodial Files relating to the Mortgage Loans identified on the schedule
attached hereto (the "Custodial Files") and declares that it holds and will hold
the Custodial Files as agent for the Trustee, in trust, for the use and benefit
of all present and future Certificateholders.
Section 2.2 Recordation of Assignments. If any Custodial File includes one
or more assignments of the related Mortgage Loans to the Trustee that have not
been recorded, each such assignment shall be delivered by the Custodian to the
Company for the purpose of recording it in the appropriate public office for
real property records, and the Company, at no expense to the Custodian, shall
promptly cause to be recorded in the appropriate public office for real property
records each such assignment and, upon receipt thereof from such public office,
shall return each such assignment to the Custodian.
Section 2.3 Review of Custodial Files.
(a) On or prior to the Closing Date, the Custodian shall
deliver to the Trustee an Initial Certification in the form annexed hereto as
Exhibit One evidencing receipt of a Custodial File for each Mortgage Loan listed
on the Schedule attached hereto (the "Mortgage Loan Schedule"). The parties
hereto acknowledge that certain documents referred to in Subsection 2.01(b)(i)
of the Pooling Agreement may be missing on or prior to the Closing Date and such
missing documents shall be listed as a Schedule to Exhibit One.
(b) Within 45 days after the Closing Date, the Custodian
agrees, for the benefit of Certificateholders, to review each Custodial File and
to deliver to the Trustee an Interim Certification in the form annexed hereto as
Exhibit Two to the effect that all documents required to be delivered pursuant
to Section 2.01(b) of the Pooling Agreement have been executed and received and
that such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule, except for any exceptions listed on Schedule A attached to such
Interim Certification. For purposes of such review, the Custodian shall compare
the following information in each Custodial File to the corresponding
information in the Mortgage Loan Schedule: (i) the loan number, (ii) the
borrower name and (iii) the original principal balance. In the event that any
Mortgage Note or Assignment of Mortgage has been delivered to the Custodian by
the Company in blank, the Custodian, upon the direction of the Company, shall
cause each such Mortgage Note to be endorsed to the Trustee and each such
Assignment of Mortgage to be completed in the name of the Trustee prior to the
date on which such Interim Certification is delivered to the Trustee. Within 45
days of receipt of the documents required to be delivered pursuant to Section
2.01(b) of the Pooling Agreement, the Custodian agrees, for the benefit of the
Certificateholders, to review each such document, and upon the written request
of the Trustee to deliver to the Trustee an updated Schedule A to the Interim
Certification. The Custodian shall be under no duty or obligation to inspect,
review or examine said documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable, or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face, or that the MIN is accurate.
If in performing the review required by this Section 2.3 the Custodian finds any
document or documents constituting a part of a Custodial File to be missing or
defective in respect of the items reviewed as described in this Section 2.3(b),
the Custodian shall promptly so notify the Company, the Master Servicer, and the
Trustee.
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(c) Upon receipt of all documents required to be in the
Custodial Files the Custodian shall deliver to the Trustee a Final Certification
in the form annexed hereto as Exhibit Three evidencing the completeness of the
Custodial Files.
Upon receipt of written request from the Trustee, the Company or the
Master Servicer, the Custodian shall as soon as practicable supply the Trustee
with a list of all of the documents relating to the Mortgage Loans required to
be delivered pursuant to Section 2.01(b) of the Pooling Agreement not then
contained in the Custodial Files.
Section 2.4 Notification of Breaches of Representations and Warranties. If
the Custodian discovers, in the course of performing its custodial functions, a
breach of a representation or warranty made by the Master Servicer or the
Company as set forth in the Pooling Agreement with respect to a Mortgage Loan
relating to a Custodial File, the Custodian shall give prompt written notice to
the Company, the Master Servicer, and the Trustee.
Section 2.5 Custodian to Cooperate: Release of Custodial Files. Upon the
repurchase or substitution of any Mortgage Loan pursuant to Article II of the
Pooling Agreement or payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer shall immediately notify
the Custodian by delivering to the Custodian a Request for Release (in the form
of Exhibit Four attached hereto or a mutually acceptable electronic form) and
shall request delivery to it of the Custodial File. The Custodian agrees, upon
receipt of such Request for Release, promptly to release to the Master Servicer
the related Custodial File. Upon written notification of a substitution, the
Master Servicer shall deliver to the Custodian and the Custodian agrees to
accept the Mortgage Note and other documents constituting the Custodial File
with respect to any Qualified Substitute Mortgage Loan, upon receiving written
notification from the Master Servicer of such substitution.
Upon receipt of a Request for Release from the Master Servicer, signed by
a Servicing Officer, stating that (i) the Master Servicer or a Subservicer, as
the case may be, has made a deposit into the Certificate Account in payment for
the purchase of the related Mortgage Loan in an amount equal to the Purchase
Price for such Mortgage Loan or (ii) the Company has chosen to substitute a
Qualified Substitute Mortgage Loan for such Mortgage Loan, the Custodian shall
release to the Master Servicer the related Custodial File.
From time to time as is appropriate for the servicing or foreclosures of
any Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy or any Mortgage Pool Insurance Policy, the Master Servicer
shall deliver to the Custodian a Request for Release certifying as to the reason
for such release. Upon receipt of the foregoing, the Custodian shall deliver the
Custodial File or such document to the Master Servicer. All Custodial Files so
released to the Master Servicer shall be held by it in trust for the Trustee for
the use and benefit of all present and future Certificateholders. The Master
Servicer shall cause each Custodial File or any document therein so released to
be returned to the Custodian when the need therefor by the Master Servicer no
longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Custodial Account or (ii) the Custodial File or such document has been delivered
to an attorney, or to a public trustee or other public official as required by
law, for purposes of initiating or pursuing legal action or other proceedings
for the foreclosure of the Mortgaged Property either judicially
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or non-judicially, and the Master Servicer has delivered to the Custodian an
updated Request for Release signed by a Servicing Officer certifying as to the
name and address of the Person to which such Custodial File or such document was
delivered and the purpose or purposes of such delivery. Immediately upon receipt
of any Custodial File returned to the Custodian by the Master Servicer, the
Custodian shall deliver a signed acknowledgment to the Master Servicer,
confirming receipt of such Custodial File.
Upon the written request of the Master Servicer, the Custodian will send
to the Master Servicer copies of any documents contained in the Custodial File.
Section 2.6 Assumption Agreements. In the event that any assumption
agreement or substitution of liability agreement is entered into with respect to
any Mortgage Loan subject to this Agreement in accordance with the terms and
provisions of the Pooling Agreement, the Master Servicer shall notify the
Custodian that such assumption or substitution agreement has been completed by
forwarding to the Custodian the original of such assumption or substitution
agreement, which shall be added to the related Custodial File and, for all
purposes, shall be considered a part of such Custodial File to the same extent
as all other documents and instruments constituting parts thereof.
ARTICLE III
Concerning the Custodian
Section 3.1 Custodian a Bailee and Agent of the Trustee. With respect to
each Mortgage Note, Mortgage and other documents constituting each Custodial
File which are delivered to the Custodian, the Custodian is exclusively the
bailee and agent of the Trustee and has no instructions to hold any Mortgage
Note or Mortgage for the benefit of any person other than the Trustee, holds
such documents for the benefit of the Certificateholders and undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. Except upon compliance with the provisions of Section 2.5 of this
Agreement, no Mortgage Note, Mortgage or other document constituting a part of a
Custodial File shall be delivered by the Custodian to the Company or the Master
Servicer or otherwise released from the possession of the Custodian.
The Master Servicer shall promptly notify the Custodian in writing if it
shall no longer be a member of MERS, or if it otherwise shall no longer be
capable of registering and recording Mortgage Loans using MERS. In addition, the
Master Servicer shall (i) promptly notify the Custodian in writing when a MERS
Mortgage Loan is no longer registered with and recorded under MERS and (ii)
concurrently with any such deregistration of a MERS Mortgage Loan, prepare,
execute and record an original assignment from MERS to the Trustee and deliver
such assignment to the Custodian.
Section 3.2 Indemnification. The Company hereby agrees to indemnify and
hold the Custodian harmless from and against all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or any other expenses, fees
or charges of any character or nature, which the Custodian may incur or with
which the Custodian may be threatened by reason of its acting as custodian under
this Agreement, including indemnification of the Custodian against any and all
expenses, including attorney's fees if counsel for the Custodian has been
approved by the Company, and the cost of defending any action, suit or
proceedings or resisting any claim.
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Notwithstanding the foregoing, it is specifically understood and agreed that in
the event any such claim, liability, loss, action, suit or proceeding or other
expense, fee or charge shall have been caused by reason of any negligent act,
negligent failure to act or willful misconduct on the part of the Custodian, or
which shall constitute a willful breach of its duties hereunder, the
indemnification provisions of this Agreement shall not apply.
Section 3.3 Custodian May Own Certificates. The Custodian in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights it would have if it were not Custodian.
Section 3.4 Master Servicer to Pay Custodian's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith.
Section 3.5 Custodian May Resign: Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Custodial Files itself and give prompt notice thereof to the
Company, the Master Servicer and the Custodian, or promptly appoint a successor
Custodian by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Custodian and one copy to the successor
Custodian. If the Trustee shall not have taken custody of the Custodial Files
and no successor Custodian shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Custodian may petition any court of competent jurisdiction for the
appointment of a successor Custodian.
The Trustee, at the direction of the Master Servicer and the Company, may
remove the Custodian at any time, with or without cause. 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.
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Section 3.6 Merger or Consolidation of Custodian. Any Person into which
the Custodian may be merged or converted or with which it may be consolidated,
or any Person resulting from any merger, conversion or consolidation to which
the Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
such successor is a depository institution subject to supervision or examination
by federal or state authority and is able to satisfy the other requirements
contained in Section 3.7 and is unaffiliated with the Master Servicer or the
Company.
Section 3.7 Representations of the Custodian. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Custodial File.
ARTICLE IV
COMPLIANCE with Regulation AB
Section 4.1 Intent of the Parties; Reasonableness. The parties hereto
acknowledge and agree that the purpose of this Article IV is to facilitate
compliance by the Company with the provisions of Regulation AB and related rules
and regulations of the Commission. The Company shall not exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
under the Securities Act and the Exchange Act. Each of the parties hereto
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Company in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. The
Custodian shall cooperate reasonably with the Company to deliver to the Company
(including any of its assignees or designees), any and all disclosure,
statements, reports, certifications, records and any other information necessary
in the reasonable, good faith determination of the Company to permit the Company
to comply with the provisions of Regulation AB.
Section 4.2 Additional Representations and Warranties of the Custodian.
(a) The Custodian hereby represents and warrants that the
information set forth under the caption "Pooling and Servicing
Agreement--General--Custodial Arrangements" (the "Custodian Disclosure") in the
Preliminary Prospectus Supplement dated [_______ __], 20[__], as supplemented by
the Preliminary Supplement to Preliminary Prospectus Supplement, dated [_______
__], 20[__], and the Final Prospectus Supplement dated, [_______ __], 20[__],
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.
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(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 commencing in 20[__], 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
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(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.
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Section 5.2 Amendments. No modification or amendment of or supplement to
this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and none of the Company, the Master Servicer or
the Trustee shall enter into any amendment hereof except as permitted by the
Pooling Agreement. The Trustee shall give prompt notice to the Custodian of any
amendment or supplement to the Pooling Agreement and furnish the Custodian with
written copies thereof.
Section 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 (WITHOUT
REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 5.4 Recordation of Agreement. To the extent permitted by
applicable law, this Agreement is subject to recordation in all appropriate
public offices for real property records in all the counties or other comparable
jurisdictions in which any or all of the properties subject to the Mortgages are
situated, and in any other appropriate public recording office or elsewhere,
such recordation to be effected by the Master Servicer and at its expense on
direction by the Trustee (pursuant to the request of holders of Certificates
evidencing undivided interests in the aggregate of not less than 25% of the
Trust Fund), but only upon direction accompanied by an Opinion of Counsel
reasonably satisfactory to the Master Servicer to the effect that the failure to
effect such recordation is likely to materially and adversely affect the
interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 5.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
[SIGNATURE PAGES FOLLOW]
F-9
IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
Address: [_____],
as Trustee
[_____]
EP-MN-WS3D
▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇ By: _______________________________
Name:
Attn: Structured Finance/RFMSII Series 20[__]- Title:
Address: RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: _______________________________
Name:
Title:
Address: RESIDENTIAL FUNDING COMPANY,
LLC, a Master Servicer
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By: _______________________________
Name:
Title:
Address: [_______]
Mortgage Document Custody
[_________]
[_________]
By: _______________________________
Name:
Title:
F-10
)
)ss.:
)
On the _____ day of ___________________, 20[__], before me, a notary
public in and for said State, personally appeared ____________________________,
known to me to be a _____________________________ of [_____], 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]
▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF HENNEPIN )
On the _____ day of ________________, 20[__], before me, a notary
public in and for said State, personally appeared _____________________________,
known to me to be a ____________ of Residential Funding 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]
▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF HENNEPIN )
On the _____ day of _______________, 20[__], before me, a notary
public in and for said State, personally appeared,
_____________________________, known to me to be a ______________ of Residential
Funding Company, LLC, one of the companies that executed the within instrument,
and also known to me to be the person who executed it on behalf of said company,
and acknowledged to me that such company executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
________________________
Notary Public
[Notarial Seal]
F-13
STATE OF _____________ )
) ss.:
COUNTY OF ____________ )
On the _____ day of __________________, 20[__], before me, a notary
public in and for said State, personally appeared
______________________________, known to me to be a __________________ of
[__________], one of the corporations that executed the within instrument, and
also known to me to be the person who executed it on behalf of said 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 _____________ )
) ss.:
COUNTY OF ___________ )
On the _____ day of __________________, 20[__], before me, a notary
public in and for said State, personally appeared
______________________________, known to me to be a __________________ of
[__________], a 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
F-14
EXHIBIT ONE
FORM OF CUSTODIAN
INITIAL CERTIFICATION
_______________________, 20__
[____________]
[____________]
[____________]
Attention: Structured Finance/RFMSII Series 20[__]-[___]
Re: Custodial Agreement, dated as of [_____ __],
20[__], by and among [_____], Residential Funding
Mortgage Securities II, Inc., Residential Funding
Company, LLC and [_______], relating to Home
Equity Loan Pass-Through Certificates, Series
20[__]-[___]
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, and subject to Section 2.02 of the Pooling Agreement, the
undersigned, as Custodian, hereby certifies that it has received a Custodial
File (which contains an original Mortgage Note or an original Lost Note
Affidavit with a copy of the related Mortgage Note) to the extent required in
Section 2.01(b) of the Pooling Agreement with respect to each Mortgage Loan
listed in the Mortgage Loan Schedule, with any exceptions listed on Schedule A
attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
[_______]
By: ____________________________
Name: ____________________________
Title: ____________________________
F-15
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
_______________________, 20__
[____________]
[____________]
[____________]
Attention: Structured Finance/RFMSII Series 20[__]-[___]
Re: Custodial Agreement, dated as of [_____ __],
20[__], by and among [_____], Residential Funding
Mortgage Securities II, Inc., Residential Funding
Company, LLC and [_______], relating to Home
Equity Loan Pass-Through Certificates, Series
20[__]-[___]
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Custodial File to the extent required pursuant to Section 2.01(b) of the
Pooling Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, and it has reviewed the Custodial File and the Mortgage Loan Schedule
and has determined that: all required documents have been executed and received
and that such documents relate to the Mortgage Loans identified on the Mortgage
Loan Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
[___________________________]
By: ____________________________
Name: ____________________________
Title: ____________________________
F-16
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______________________, 20__
[_____________]
[_____________]
[_____________]
Attention: Structured Finance/RFMSII Series 20[__]-[___]
Re: Custodial Agreement, dated as of [_____ __],
20[__], by and among [_____], Residential Funding
Mortgage Securities II, Inc., Residential Funding
Company, LLC and [_______], relating to Home
Equity Loan Pass-Through Certificates, Series
20[__]-[___]
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial
Agreement, the undersigned, as Custodian, hereby certifies that it has received
a Custodial File with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule and it has reviewed the Custodial File and the Mortgage Loan Schedule
and has determined that: all required documents referred to in Section 2.01(b)
of the Pooling Agreement have been executed and received and that such documents
relate to the Mortgage Loans identified on the Mortgage Loan Schedule.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
[_______]
By: ____________________________
Name: ____________________________
Title: ____________________________
F-17
EXHIBIT FOUR
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement, Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
______________________________
Residential Funding Company, LLC
Authorized Signature
****************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents
being enclosed with a copy of this form. You should retain this form for your
files in accordance with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other: ________________________
___________________________
Name
___________________________
Title
___________________________
Date
F-18
EXHIBIT FIVE
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Custodian shall
address, at a minimum, the criteria identified below as "Applicable Servicing
Criteria":
--------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
General Servicing Considerations
--------------------------------------------------------------------------------
Policies and procedures are instituted
to monitor any performance or other
triggers and events of default in
accordance with the transaction
1122(d)(1)(i) agreements.
--------------------------------------------------------------------------------
If any material servicing activities
are outsourced to third parties,
policies and procedures are instituted
to monitor the third party's
performance and compliance with such
1122(d)(1)(ii) servicing activities.
--------------------------------------------------------------------------------
Any requirements in the transaction
agreements to maintain a back-up
servicer for the pool assets are
1122(d)(1)(iii) maintained.
--------------------------------------------------------------------------------
A fidelity bond and errors and
omissions policy is in effect on the
party participating in the servicing
function throughout the reporting
period in the amount of coverage
required by and otherwise in
accordance with the terms of the
1122(d)(1)(iv) transaction agreements.
--------------------------------------------------------------------------------
Cash Collection and Administration
--------------------------------------------------------------------------------
Payments on pool assets are deposited
into the appropriate custodial bank
accounts and related bank clearing
accounts no more than two business
days following receipt, or such other
number of days specified in the
1122(d)(2)(i) transaction agreements.
--------------------------------------------------------------------------------
Disbursements made via wire transfer
on behalf of an obligor or to an
investor are made only by authorized
1122(d)(2)(ii) personnel.
--------------------------------------------------------------------------------
Advances of funds or guarantees
regarding collections, cash flows or
distributions, and any interest or
other fees charged for such advances,
are made, reviewed and approved as
specified in the transaction
1122(d)(2)(iii) agreements.
--------------------------------------------------------------------------------
The related accounts for the
transaction, such as cash reserve
accounts or accounts established as a
form of overcollateralization, are
separately maintained (e.g., with
respect to commingling of cash) as set
1122(d)(2)(iv) forth in the transaction agreements.
--------------------------------------------------------------------------------
Each custodial account is maintained
at a federally insured depository
institution as set forth in the
transaction agreements. For purposes
of this criterion, "federally insured
depository institution" with respect
to a foreign financial institution
means a foreign financial institution
that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange
1122(d)(2)(v) Act.
--------------------------------------------------------------------------------
Unissued checks are safeguarded so as
1122(d)(2)(vi) to prevent unauthorized access.
--------------------------------------------------------------------------------
Reconciliations are prepared on a
monthly basis for all asset-backed
securities related bank accounts,
including custodial accounts and
related bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30
calendar days after the bank statement
cutoff date, or such other number of
days specified in the transaction
agreements; (C) reviewed and approved
by someone other than the person who
prepared the reconciliation; and (D)
contain explanations for reconciling
items. These reconciling items are
resolved within 90 calendar days of
their original identification, or such
other number of days specified in the
1122(d)(2)(vii) transaction agreements.
--------------------------------------------------------------------------------
F-19
--------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
Investor Remittances and Reporting
--------------------------------------------------------------------------------
Reports to investors, including those
to be filed with the Commission, are
maintained in accordance with the
transaction agreements and applicable
Commission requirements. Specifically,
such reports (A) are prepared in
accordance with timeframes and other
terms set forth in the transaction
agreements; (B) provide information
calculated in accordance with the
terms specified in the transaction
agreements; (C) are filed with the
Commission as required by its rules
and regulations; and (D) agree with
investors' or the trustee's records as
to the total unpaid principal balance
and number of pool assets serviced by
1122(d)(3)(i) the servicer.
--------------------------------------------------------------------------------
Amounts due to investors are allocated
and remitted in accordance with
timeframes, distribution priority and
other terms set forth in the
1122(d)(3)(ii) transaction agreements.
--------------------------------------------------------------------------------
Disbursements made to an investor are
posted within two business days to the
servicer's investor records, or such
other number of days specified in the
1122(d)(3)(iii) transaction agreements.
--------------------------------------------------------------------------------
Amounts remitted to investors per the
investor reports agree with cancelled
checks, or other form of payment, or
1122(d)(3)(iv) custodial bank statements.
--------------------------------------------------------------------------------
Pool Asset Administration
--------------------------------------------------------------------------------
Collateral or security on pool assets
is maintained as required by the |X|
transaction agreements or related
1122(d)(4)(i) asset pool documents.
--------------------------------------------------------------------------------
Pool assets and related documents are
safeguarded as required by the |X|
1122(d)(4)(ii) transaction agreements
--------------------------------------------------------------------------------
Any additions, removals or
substitutions to the asset pool are
made, reviewed and approved in
accordance with any conditions or
requirements in the transaction
1122(d)(4)(iii) agreements.
--------------------------------------------------------------------------------
Payments on pool assets, including any
payoffs, made in accordance with the
related pool asset documents are
posted to the servicer's obligor
records maintained no more than two
business days after receipt, or such
other number of days specified in the
transaction agreements, and allocated
to principal, interest or other items
(e.g., escrow) in accordance with the
1122(d)(4)(iv) related pool asset documents.
--------------------------------------------------------------------------------
The servicer's records regarding the
pool assets agree with the servicer's
records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance.
--------------------------------------------------------------------------------
Changes with respect to the terms or
status of an obligor's pool asset
(e.g., loan modifications or
re-agings) are made, reviewed and
approved by authorized personnel in
accordance with the transaction
agreements and related pool asset
1122(d)(4)(vi) documents.
--------------------------------------------------------------------------------
Loss mitigation or recovery actions
(e.g., forbearance plans,
modifications and deeds in lieu of
foreclosure, foreclosures and
repossessions, as applicable) are
initiated, conducted and concluded in
accordance with the timeframes or
other requirements established by the
1122(d)(4)(vii) transaction agreements.
--------------------------------------------------------------------------------
Records documenting collection efforts
are maintained during the period a
pool asset is delinquent in accordance
with the transaction agreements. Such
records are maintained on at least a
monthly basis, or such other period
specified in the transaction
agreements, and describe the entity's
activities in monitoring delinquent
pool assets including, for example,
phone calls, letters and payment
rescheduling plans in cases where
delinquency is deemed temporary (e.g.,
1122(d)(4)(viii) illness or unemployment).
--------------------------------------------------------------------------------
Adjustments to interest rates or rates
of return for pool assets with
variable rates are computed based on
1122(d)(4)(ix) the related pool asset documents.
--------------------------------------------------------------------------------
F-20
--------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
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
1122(d)(4)(x) transaction agreements.
--------------------------------------------------------------------------------
Payments made on behalf of an obligor
(such as tax or insurance payments)
are made on or before the related
penalty or expiration dates, as
indicated on the appropriate bills or
notices for such payments, provided
that such support has been received by
the servicer at least 30 calendar days
prior to these dates, or such other
number of days specified in the
1122(d)(4)(xi) transaction agreements.
--------------------------------------------------------------------------------
Any late payment penalties in
connection with any payment to be made
on behalf of an obligor are paid from
the servicer's funds and not charged
to the obligor, unless the late
payment was due to the obligor's error
1122(d)(4)(xii) or omission.
--------------------------------------------------------------------------------
Disbursements made on behalf of an
obligor are posted within two business
days to the obligor's records
maintained by the servicer, or such
other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
--------------------------------------------------------------------------------
Delinquencies, charge-offs and
uncollectible accounts are recognized
and recorded in accordance with the
1122(d)(4)(xiv) transaction agreements.
--------------------------------------------------------------------------------
Any external enhancement or other
support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation
AB, is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
--------------------------------------------------------------------------------
F-21
EXHIBIT G
MORTGAGE LOAN SCHEDULE
[On file with RFC]
G-1
EXHIBIT H
FORMS OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
________________________________
Residential Funding Company, LLC
Authorized Signature
****************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents
being enclosed with a copy of this form. You should retain this form for your
files in accordance with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other: ___________________________________
______________________________
Name
______________________________
Title
______________________________
Date
H-1
EXHIBIT I-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes, represents and
warrants as follows:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial
owner of the Home Equity Loan Pass-Through Certificates, Series _______, Class
R[-__] (the "Owner")), a [savings institution] [corporation] duly organized and
existing under the laws of [the State of ] [the United States], on behalf of
which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified organization"
or an electing large partnership as of [date of transfer] within the meaning of
Sections 860E(e)(5) and 775, respectively, of the Internal Revenue Code of 1986,
as amended (the "Code") or an electing large partnership under Section 775(a) of
the Code, (ii) will endeavor to remain other than a disqualified organization
for so long as it retains its ownership interest in the Class R[-__]
Certificates, and (iii) is acquiring the Class R[-__] Certificates for its own
account or for the account of another Owner from which it has received an
affidavit and agreement in substantially the same form as this affidavit and
agreement. (For this purpose, a "disqualified organization" means an electing
large partnership under Section 775 of the Code, the United States, any state or
political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental
entity) or any foreign government, international organization or any agency or
instrumentality of such foreign government or organization, any rural electric
or telephone cooperative, or any organization (other than certain farmers'
cooperatives) that is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R[-__] Certificates to disqualified organizations or electing
large partnerships, under the Code, that applies to all transfers of Class
R[-__] Certificates after March 31, 1988; (ii) that such tax would be on the
transferor (or, with respect to transfers to electing large partnerships, on
each such partnership), or, if such transfer is through an agent (which person
includes a broker, nominee or middleman) for a disqualified organization, on the
agent; (iii) that the person (other than with respect to transfers to electing
large partnerships) otherwise liable for the tax shall be relieved of liability
for the tax if the transferee furnishes to such person an affidavit that the
transferee is not a disqualified organization and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
the Class R[-__] Certificates may be "noneconomic residual interests" within the
meaning of Treasury regulations promulgated pursuant to the Code and that the
transferor of a noneconomic residual interest will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer was to impede the assessment or collection of tax.
I-1-1
4. That the Owner is aware of the tax imposed on a "pass-through entity"
holding Class R[-__] Certificates if either the pass-through entity is an
electing large partnership under Section 775 of the Code or if at any time
during the taxable year of the pass-through entity a disqualified organization
is the record holder of an interest in such entity. (For this purpose, a "pass
through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives.)
5. The Owner is either (i) a citizen or resident of the United States,
(ii) a corporation, partnership or other entity treated as a corporation or a
partnership for U.S. federal income tax purposes and created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia (other than a partnership that is not treated as a United States person
under any applicable Treasury regulations), (iii) an estate that is described in
Section 7701(a)(30)(D) of the Code, or (iv) a trust that is described in Section
7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the Class
R[-__] Certificates to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the Owner
of another United States taxpayer.
7. That the Owner is aware that the Trustee will not register the transfer
of any Class R[- __] Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.
8. That the Owner has reviewed the restrictions set forth on the face of
the Class R[-__] Certificates and the provisions of Section 5.02(f) of the
Pooling and Servicing Agreement under which the Class R[-__] Certificates were
issued (in particular, clauses (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(e)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R[-__] Certificates will only be owned,
directly or indirectly, by an Owner that is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is ________________.
11. This affidavit and agreement relates only to the Class R[-__]
Certificates held by the Owner and not to any other holder of the Class R[-__]
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R[-__] Certificates.
I-1-2
12. That no purpose of the Owner relating to the transfer of any of the
Class R[-__] Certificates by the Owner is or will be to impede the assessment or
collection of any tax; in making this representation, the Owner warrants that
the Owner is familiar with (i) Treasury Regulation Section 1.860E-1(c) and
recent amendments thereto, effective as of July 19, 2002, and (ii) the preamble
describing the adoption of the amendments to such regulation, which is attached
hereto as Exhibit 1.
13. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R[-__]
Certificate that the Owner intends to pay taxes associated with holding such
Class R[- __] Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Class R[-__]
Certificate.
14. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R[-__] Certificates remain outstanding.
15. (a) The Owner is not an employee benefit plan or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Code (each, a "Plan"),
or any Person (including, without limitation, an insurance company investing its
general account, an investment manager, a named fiduciary or a trustee of any
Plan) who is using "plan assets," within the meaning of the U.S. Department of
Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, as modified by Section
3(42) of ERISA, of any Plan (each, a "Plan Investor") to effect such
acquisition; or
(b) The Owner has provided the Trustee, the Depositor and the Master
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor, the Master Servicer to the effect
that the purchase and holding of Class R[-__] Certificates is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments) and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Pooling and Servicing Agreement, which
opinion of counsel shall not be an expense of the Trustee, the Depositor or the
Master Servicer.
In addition, the Owner hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any transferee unless either
such transferee meets the requirements set forth in either (a) or (b) above.
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
I-1-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, pursuant to the authority of its Board of Directors, by its [Title
of Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this ________day of _______________________, 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___.
I-1-4
EXHIBIT 1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
-----------------------------------------------------------------------
SUMMARY: This document contains final regulations relating to safe harbor
transfers of noneconomic residual interests in real estate mortgage investment
conduits (REMICs). The final regulations provide additional limitations on the
circumstances under which transferors may claim safe harbor treatment.
DATES: Effective Date: These regulations are effective July 19, 2002.
Applicability Date: For dates of applicability, see Sec. 1.860E-(1)(c)(10).
FOR FURTHER INFORMATION CONTACT: ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ (not a
toll-free number).
SUPPLEMENTARY INFORMATION:
Paperwork Reduction Act
The collection of information in this final rule has been reviewed and,
pending receipt and evaluation of public comments, approved by the Office of
Management and Budget (OMB) under 44 U.S.C. 3507 and assigned control number
1545-1675.
The collection of information in this regulation is in Sec. 1.860E -
1(c)(5)(ii). This information is required to enable the IRS to verify that a
taxpayer is complying with the conditions of this regulation.
The collection of information is mandatory and is required. Otherwise, the
taxpayer will not receive the benefit of safe harbor treatment as provided in
the regulation. The likely respondents are businesses and other for-profit
institutions.
I-1-5
Comments on the collection of information should be sent to the Office of
Management and Budget, Attn: Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, ▇▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, with copies
to the Internal Revenue Service, Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Comments on the collection of information
should be received by September 17, 2002. Comments are specifically requested
concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including whether
the information will have practical utility;
The accuracy of the estimated burden associated with the collection of
information (see below);
How the quality, utility, and clarity of the information to be collected
may be enhanced;
How the burden of complying with the collection of information may be
minimized, including through the application of automated collection techniques
or other forms of information technology; and Estimates of capital or start-up
costs and costs of operation, maintenance, and purchase of service to provide
information.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an
estimated number of respondents of 470 and an estimated average annual burden
hours per respondent of one hour.
Books or records relating to a collection of information must be retained
as long as their contents may become material in the administration of any
internal revenue law. Generally, tax returns and tax return information are
confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed amendments
to 26 CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules
governing the transfer of noneconomic REMIC residual interests. In general, a
transfer of a noneconomic residual interest is disregarded for all tax purposes
if a significant purpose of the transfer is to enable the transferor to impede
the assessment or collection of tax. A purpose to impede the assessment or
collection of tax (a wrongful purpose) exists if the transferor, at the time of
the transfer, either knew or should have known that the transferee would be
unwilling or unable to pay taxes due on its share of the REMIC's taxable income.
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Under a safe harbor, the transferor of a REMIC noneconomic residual
interest is presumed not to have a wrongful purpose if two requirements are
satisfied: (1) the transferor conducts a reasonable investigation of the
transferee's financial condition (the investigation requirement); and (2) the
transferor secures a representation from the transferee to the effect that the
transferee understands the tax obligations associated with holding a residual
interest and intends to pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even in
situations where the economics of the transfer clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest. For
this reason, on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula test," an economic test. The
proposed regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any
consideration given to the transferee to acquire the interest; (2) the present
value of the expected future distributions on the interest; and (3) the present
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335)
to set forth an alternative safe harbor that taxpayers could use while the IRS
and the Treasury considered comments on the proposed regulations. Under the
alternative safe harbor, if a transferor meets the investigation requirement and
the representation requirement but the transfer fails to meet the formula test,
the transferor may invoke the safe harbor if the transferee meets a two- prong
test (the asset test). A transferee generally meets the first prong of this test
if, at the time of the transfer, and in each of the two years preceding the year
of transfer, the transferee's gross assets exceed $100 million and its net
assets exceed $10 million. A transferee generally meets the second prong of this
test if it is a domestic, taxable corporation and agrees in writing not to
transfer the interest to any person other than another domestic, taxable
corporation that also satisfies the requirements of the asset test. A transferor
cannot rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit the
restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in
the case of a transfer or assignment of a noneconomic residual interest to a
foreign branch of an otherwise eligible transferee. If such a transfer or
assignment were permitted, a corporate taxpayer might seek to claim that the
provisions of an applicable income tax treaty would resource excess inclusion
income as foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset by foreign
tax credits. Such a claim would impede the assessment or collection of U.S. tax
on excess inclusion income, contrary to the congressional purpose of assuring
that such income will be taxable in all events. See, e.g., sections 860E(a)(1),
(b), (e) and 860G(b) of the Code.
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The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E -1(c)(8) provides computational rules that a taxpayer may
use to qualify for safe harbor status under the formula test. Section
1.860E-1(c)(8)(1) provides that the transferee is presumed to pay tax at a rate
equal to the highest rate of tax specified in section 11(b). Some commentators
were concerned that this presumed rate of taxation was too high because it does
not take into consideration taxpayers subject to the alternative minimum tax
rate. In light of the comments received, this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative minimum tax rate to use the alternative minimum tax rate
applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in
the formula test are to be computed using a discount rate equal to the
applicable Federal short-term rate prescribed by section 1274(d). This is a
change from the proposed regulation and Rev. Proc. 2001-12. In those
publications the provision stated that "present values are computed using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded semiannually" and that "[a] lower discount rate may be used if the
transferee can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based on this
provision, certain taxpayers have been attempting to use unrealistically low or
zero interest rates to satisfy the formula test, frustrating the intent of the
test. Furthermore, the Treasury Department and the IRS believe that a rule
allowing for a rate other than a rate based on an objective index would add
unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if the
transferee can demonstrate that it regularly borrows substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate has been substituted for the applicable Federal rate. To simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term rates, provided that the present values are computed with a
corresponding period of compounding. With the exception of the provisions
relating to transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may choose to
apply the interest rate formula set forth in the proposed regulation and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
Effect on Other Documents. Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is
obsolete for transfers of noneconomic residual interests in REMICs occurring on
or after August 19, 2002.
I-1-8
Special Analyses
It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do
not apply to these regulations.
Drafting Information
The principal author of these regulations is ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. However,
other personnel from the IRS and Treasury Department participated in their
development.
List of Subjects
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations.
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in part
as follows:
Authority: 26 U.S.C. 7805
* * *
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EXHIBIT I-2
FORM OF TRANSFEROR CERTIFICATE
__________________, 200__
Residential Funding Mortgage Securities II, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[_____]
[_____]
[_____]
[_____]
Attn: Structured Finance/RFMSII Series 20[__]-[___]
Re: Home Equity Loan Pass-Through Certificates, Series
20[__]-[___], Class R-[ ]
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_______________________________ (the "Seller") to
_______________________________ (the "Purchaser") of $_____________ Initial
Certificate Principal Balance of Home Equity Loan Pass-Through Certificates,
Series 20[__]-[___], Class R-[__] (the "Certificates"), pursuant to Section 5.02
of the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of [_____] 1, 20[__] among Residential Funding Mortgage Securities II,
Inc., as seller (the "Company"), Residential Funding Company, LLC, as master
servicer, and [_____], as trustee and supplemental interest trust trustee (the
"Trustee" and "Supplemental Interest Trust Trustee," respectively). 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 I-1. The Seller does
not know or believe that any representation contained therein is false.
I-2-1
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R
Certificate may not be respected for United States income tax purposes (and the
Seller may continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed Purchaser is
not both a United States Person and a Permitted Transferee.
Very truly yours,
___________________________________
(Seller)
By: _______________________________
Name: _____________________________
Title: ____________________________
I-2-2
EXHIBIT J
FORM OF INVESTOR REPRESENTATION LETTER
______________, 20__
Residential Funding Mortgage Securities II, Inc.
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[_____]
[_____]
[_____]
[_____]
Attn: Structured Finance/RFMSII Series 20[__]-[___]
Residential Funding Company, LLC
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Home Equity Loan Pass-Through Certificates, Series
20[__]-[___], [Class SB]
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate
Principal Balance of Home Equity Loan Pass-Through Certificates, Series
20[__]-[___], Class SB (the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of [_____]
1, 20[__] among Residential Funding Mortgage Securities II, Inc., as seller (the
"Company"), Residential Funding Company, LLC, as master servicer (the "Master
Servicer"), and [_____], as trustee and supplemental interest trust trustee (the
"Trustee" and "Supplemental Interest Trust Trustee," respectively). 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.
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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
J-2
that would require registration or qualification pursuant thereto.
The Purchaser will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the
Pooling and Servicing Agreement.
6. The Purchaser hereby certifies, represents and warrants to,
and covenants with the Trustee, the Company and the Master Servicer
that the following statements in (a) or (b) are correct:
(a) The Purchaser is not an employee benefit plan or
other plan 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") (each, a "Plan"), or any
Person (including, without limitation, an insurance company
investing its general account, an investment manager, a named
fiduciary or a trustee of any Plan) who is using "plan
assets," within the meaning of the U.S. Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101, as
modified by Section 3(42) of ERISA, of any Plan (each, a "Plan
Investor"), to effect such acquisition; or
(b) The Purchaser 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 and holding of the Certificates is permissible under
applicable law, will not constitute or result in any
non-exempt prohibited transaction under Section 406 of ERISA
or Section 4975 of the Code (or comparable provisions of any
subsequent enactments) and will not subject the Trustee, the
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, which opinion of counsel
shall not be an expense of the Trustee, the Company or the
Master Servicer.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Trustee, the Company and the Master Servicer that the
Purchaser will not transfer the Certificates to any transferee unless such
transferee meets the requirements set forth in either (a) or (b) above.
Very truly yours,
(Purchaser)
By: _______________________________
Name: _____________________________
Title: ____________________________
J-3
EXHIBIT K
FORM OF TRANSFEROR REPRESENTATION LETTER
_____________________________, 20____
Residential Funding Mortgage Securities II, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[_____]
[_____]
Attn: Structured Finance/RFMSII Series 20[__]-[___]
Re: Home Equity Loan Pass-Through Certificates, Series
20[__]-[___], [Class SB]
Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the "Purchaser")
of $ Initial Certificate Principal Balance of Home Equity Loan Pass-Through
Certificates, Series 20[__]-[___], Class SB (the "Certificates"), issued
pursuant to the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of [_____] 1, 20[__] among Residential Funding Mortgage
Securities II, Inc., as seller (the "Company"), Residential Funding Company,
LLC, as master servicer, and [_____], as trustee and supplemental interest trust
trustee (the "Trustee" and "Supplemental Interest Trust Trustee," respectively).
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.
K-1
Very truly yours,
___________________________________
(Seller)
By: _______________________________
Name: _____________________________
Title: ____________________________
K-2
EXHIBIT L
TEXT OF AMENDMENT TO POOLING AND SERVICING
AGREEMENT PURSUANT TO SECTION 11.01(E) FOR A
LIMITED GUARANTY
ARTICLE XIII
Subordinate Certificate Loss Coverage; Limited Guaranty
Section 13.01. Subordinate Certificate Loss Coverage; Limited
Guaranty. (a) Subject to subsection (c) below, prior to the later of the third
Business Day prior to each Distribution Date or the related Determination Date,
the Master Servicer shall determine whether it or any Subservicer will be
entitled to any reimbursement pursuant to Section 4.02(a) on such Distribution
Date for Advances or Subservicer Advances previously made, (which will not be
Advances or Subservicer Advances that were made with respect to delinquencies
which were subsequently determined to be Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses) and, if so, the
Master Servicer shall demand payment from Residential Funding of an amount equal
to the amount of any Advances or Subservicer Advances reimbursed pursuant to
Section 4.02(a), to the extent such Advances or Subservicer Advances have not
been included in the amount of the Realized Loss in the related Mortgage Loan,
and shall distribute the same to the Class SB Certificateholders in the same
manner as if such amount were to be distributed pursuant to Section 4.02(a).
(b) Subject to subsection (c) below, prior to the later of the third
Business Day prior to each Distribution Date or the related Determination Date,
the Master Servicer shall determine whether any Realized Losses (other than
Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses and
Extraordinary Losses) will be allocated to the Class SB Certificates on such
Distribution Date pursuant to Section 4.05, and, if so, the Master Servicer
shall demand payment from Residential Funding of the amount of such Realized
Loss and shall distribute the same to the Class SB Certificateholders in the
same manner as if such amount were to be distributed pursuant to Section
4.02(a); provided, however, that the amount of such demand in respect of any
Distribution Date shall in no event be greater than the sum of (i) the
additional amount of Accrued Certificate Interest that would have been paid for
the Class SB Certificateholders on such Distribution Date had such Realized Loss
or Losses not occurred plus (ii) the amount of the reduction in the Certificate
Principal Balances of the Class SB Certificates on such Distribution Date due to
such Realized Loss or Losses. Notwithstanding such payment, such Realized Losses
shall be deemed to have been borne by the Certificateholders for purposes of
Section 4.05. Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses and Extraordinary Losses allocated to the Class SB
Certificates will not be covered by the Subordinate Certificate Loss Obligation.
L-1
(c) Demands for payments pursuant to this Section shall be made
prior to the later of the third Business Day prior to each Distribution Date or
the related Determination Date by the Master Servicer with written notice
thereof to the Trustee. The maximum amount that Residential Funding shall be
required to pay pursuant to this Section on any Distribution Date (the "Amount
Available") shall be equal to the lesser of (X) minus the sum of (i) all
previous payments made under subsections (a) and (b) hereof and (ii) all draws
under the Limited Guaranty made in lieu of such payments as described below in
subsection (d) and (Y) the then outstanding Certificate Principal Balances of
the Class SB Certificates, or such lower amount as may be established pursuant
to Section 13.02. Residential Funding's obligations as described in this Section
are referred to herein as the "Subordinate Certificate Loss Obligation."
(d) The Trustee will promptly notify GMAC LLC of any failure of
Residential Funding to make any payments hereunder and shall demand payment
pursuant to the limited guaranty (the "Limited Guaranty"), executed by GMAC LLC,
of Residential Funding's obligation to make payments pursuant to this Section,
in an amount equal to the lesser of (i) the Amount Available and (ii) such
required payments, by delivering to GMAC LLC a written demand for payment by
wire transfer, not later than the second Business Day prior to the Distribution
Date for such month, with a copy to the Master Servicer.
(e) All payments made by Residential Funding pursuant to this
Section or amounts paid under the Limited Guaranty shall be deposited directly
in the Certificate Account, for distribution on the Distribution Date for such
month to the Class SB Certificateholders.
(f) The Company shall have the option, in its sole discretion, to
substitute for either or both of the Limited Guaranty or the Subordinate
Certificate Loss Obligation another instrument in the form of a corporate
guaranty, an irrevocable letter of credit, a surety bond, insurance policy or
similar instrument or a reserve fund; provided that (i) the Company obtains
(subject to the provisions of Section 10.01(f) as if the Company was substituted
for the Master Servicer solely for the purposes of such provision) an Opinion of
Counsel (which need not be an opinion of Independent counsel) to the effect that
obtaining such substitute corporate guaranty, irrevocable letter of credit,
surety bond, insurance policy or similar instrument or reserve fund will not
cause either (a) any federal tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860(F)(a)(1) of the Code or on "contributions after the startup date"
under Section 860(G)(d)(1) of the Code or (b) the Trust Fund to fail to qualify
as a REMIC at any time that any Certificate is outstanding, and (ii) no such
substitution shall be made unless (A) the substitute Limited Guaranty or
Subordinate Certificate Loss Obligation is for an initial amount not less than
the then current Amount Available and contains provisions that are in all
material respects equivalent to the original Limited Guaranty or Subordinate
Certificate Loss Obligation (including that no portion of the fees,
reimbursements or other obligations under any such instrument will be borne by
the Trust Fund), (B) the long term debt obligations of any obligor of any
substitute Limited Guaranty or Subordinate Certificate Loss Obligation (if not
supported by the Limited Guaranty) shall be rated at least the lesser of (a) the
rating of the long term debt obligations of GMAC LLC as of the date of issuance
of the Limited Guaranty and (b) the rating of the long term debt obligations of
GMAC LLC at the date of such substitution and (C) the Company obtains written
confirmation from each nationally recognized credit rating agency that
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rated the Class SB Certificates at the request of the Company that such
substitution shall not lower the rating on the Class SB Certificates below the
lesser of (a) the then-current rating assigned to the Class SB Certificates by
such rating agency and (b) the original rating assigned to the Class SB
Certificates by such rating agency. Any replacement of the Limited Guaranty or
Subordinate Certificate Loss Obligation pursuant to this Section shall be
accompanied by a written Opinion of Counsel to the substitute guarantor or
obligor, addressed to the Master Servicer and the Trustee, that such substitute
instrument constitutes a legal, valid and binding obligation of the substitute
guarantor or obligor, enforceable in accordance with its terms, and concerning
such other matters as the Master Servicer and the Trustee shall reasonably
request. Neither the Company, the Master Servicer nor the Trustee shall be
obligated to substitute for or replace the Limited Guaranty or Subordinate
Certificate Loss Obligation under any circumstance.
Section 13.02. Amendments Relating to the Limited Guaranty.
Notwithstanding Sections 11.01 or 13.01: (i) the provisions of this Article XIII
may be amended, superseded or deleted, (ii) the Limited Guaranty or Subordinate
Certificate Loss Obligation may be amended, reduced or canceled, and (iii) any
other provision of this Agreement which is related or incidental to the matters
described in this Article XIII may be amended in any manner; in each case by
written instrument executed or consented to by the Company and Residential
Funding but without the consent of any Certificateholder and without the consent
of the Master Servicer or the Trustee being required unless any such amendment
would impose any additional obligation on, or otherwise adversely affect the
interests of, the Master Servicer or the Trustee, as applicable; provided that
the Company shall also obtain a letter from each nationally recognized credit
rating agency that rated the Class SB Certificates at the request of the Company
to the effect that such amendment, reduction, deletion or cancellation will not
lower the rating on the Class SB Certificates below the lesser of (a) the
then-current rating assigned to the Class SB Certificates by such rating agency
and (b) the original rating assigned to the Class SB Certificates by such rating
agency, unless (A) the Holder of 100% of the Class SB Certificates is
Residential Funding or an Affiliate of Residential Funding, or (B) such
amendment, reduction, deletion or cancellation is made in accordance with
Section 11.01(e) and, provided further that the Company obtains (subject to the
provisions of Section 10.01(f) as if the Company was substituted for the Master
Servicer solely for the purposes of such provision), in the case of a material
amendment or supersession (but not a reduction, cancellation or deletion of the
Limited Guaranty or the Subordinate Certificate Loss Obligation), an Opinion of
Counsel (which need not be an opinion of Independent counsel) to the effect that
any such amendment or supersession will not cause either (a) any federal tax to
be imposed on the Trust Fund, including without limitation, any federal tax
imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or on
"contributions after the startup date" under Section 860G(d)(1) of the Code or
(b) the Trust Fund to fail to qualify as a REMIC at any time that any
Certificate is outstanding. A copy of any such instrument shall be provided to
the Trustee and the Master Servicer together with an Opinion of Counsel that
such amendment complies with this Section 13.02.
L-3
EXHIBIT M
FORM OF LIMITED GUARANTY
RESIDENTIAL FUNDING MORTGAGE SECURITIES II, INC.
Home Equity Loan Pass-Through Certificates
Series 20[__]-[___]
____________, 200__
[____________]
[____________]
[____________]
Attn: Structured Finance/RFMSII Series 20[__]-[___]
Ladies and Gentlemen:
WHEREAS, Residential Funding Company, LLC, a Delaware limited
liability company ("Residential Funding"), an indirect wholly-owned subsidiary
of GMAC LLC, a Delaware limited liability company ("GMAC"), plans to incur
certain obligations as described under Section 13.01 of the Pooling and
Servicing Agreement dated as of [_____] 1, 20[__] (the "Servicing Agreement"),
among Residential Funding Mortgage Securities II, Inc. (the "Company"),
Residential Funding and [_____] (the "Trustee" and "Supplemental Interest Trust
Trustee," respectively) as amended by Amendment No. ___ thereto, dated as of
________, with respect to the Home Equity Loan Pass-Through Certificates, Series
20[__]-[___] (the "Certificates"); and
WHEREAS, pursuant to Section 13.01 of the Servicing Agreement,
Residential Funding agrees to make payments to the Holders of the Class SB
Certificates with respect to certain losses on the Mortgage Loans as described
in the Servicing Agreement; and
WHEREAS, GMAC desires to provide certain assurances with respect to
the ability of Residential Funding to secure sufficient funds and faithfully to
perform its Subordinate Certificate Loss Obligation;
NOW THEREFORE, in consideration of the premises herein contained and
certain other good and valuable consideration, the receipt of which is hereby
acknowledged, GMAC agrees as follows:
1. Provision of Funds. (a) GMAC agrees to contribute and deposit in
the Certificate Account on behalf of Residential Funding (or otherwise provide
to Residential Funding, or to cause to be made available to Residential
Funding), either directly or through a subsidiary, in any case prior to the
related Distribution Date, such moneys as may be required by Residential Funding
to perform its Subordinate Certificate Loss Obligation when and
M-1
as the same arises from time to time upon the demand of the Trustee in
accordance with Section 13.01 of the Servicing Agreement.
(b) The agreement set forth in the preceding clause (a) shall be
absolute, irrevocable and unconditional and shall not be affected by the
transfer by GMAC or any other person of all or any part of its or their interest
in Residential Funding, by any insolvency, bankruptcy, dissolution or other
proceeding affecting Residential Funding or any other person, by any defense or
right of counterclaim, set-off or recoupment that GMAC may have against
Residential Funding or any other person or by any other fact or circumstance.
Notwithstanding the foregoing, GMAC's obligations under clause (a) shall
terminate upon the earlier of (x) substitution for this Limited Guaranty
pursuant to Section 13.01(f) of the Servicing Agreement, or (y) the termination
of the Trust Fund pursuant to the Servicing Agreement.
2. Waiver. GMAC hereby waives any failure or delay on the part of
Residential Funding, the Trustee or any other person in asserting or enforcing
any rights or in making any claims or demands hereunder. Any defective or
partial exercise of any such rights shall not preclude any other or further
exercise of that or any other such right. GMAC further waives demand,
presentment, notice of default, protest, notice of acceptance and any other
notices with respect to this Limited Guaranty, including, without limitation,
those of action or nonaction on the part of Residential Funding or the Trustee.
3. Modification, Amendment and Termination. This Limited Guaranty
may be modified, amended or terminated only by the written agreement of GMAC and
the Trustee and only if such modification, amendment or termination is permitted
under Section 13.02 of the Servicing Agreement. The obligations of GMAC under
this Limited Guaranty shall continue and remain in effect so long as the
Servicing Agreement is not modified or amended in any way that might affect the
obligations of GMAC under this Limited Guaranty without the prior written
consent of GMAC.
4. Successor. Except as otherwise expressly provided herein, the
guarantee herein set forth shall be binding upon GMAC and its respective
successors.
5. Governing Law. This Limited Guaranty shall be governed by the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
6. Authorization and Reliance. GMAC understands that a copy of this
Limited Guaranty shall be delivered to the Trustee in connection with the
execution of Amendment No. 1 to the Servicing Agreement and GMAC hereby
authorizes the Company and the Trustee to rely on the covenants and agreements
set forth herein.
7. Definitions. Capitalized terms used but not otherwise defined
herein shall have the meaning given them in the Servicing Agreement.
8. Counterparts. This Limited Guaranty may be executed in any number
of counterparts, each of which shall be deemed to be an original and such
counterparts shall constitute but one and the same instrument.
M-2
IN WITNESS WHEREOF, GMAC has caused this Limited Guaranty to be
executed and delivered by its respective officers thereunto duly authorized as
of the day and year first above written.
GMAC LLC
By: _______________________________
Name: _____________________________
Title: ____________________________
Acknowledged by:
[_____],
as Trustee
By: ______________________
Name: ____________________
Title: ___________________
RESIDENTIAL FUNDING MORTGAGE
SECURITIES II, INC.
By: ______________________
Name: ____________________
Title: ___________________
M-3
EXHIBIT N
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
__________________, 20____
Residential Funding Mortgage
Securities II, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[_____]
[_____]
Attn: Structured Finance/RFMSII Series 20[__]-[___]
Re: Home Equity Loan Pass-Through Certificates, Series
20[__]-[___] Assignment of Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
_________________ (the "Trustee") to _______________________ (the "Lender") of
_______________ (the "Mortgage Loan") pursuant to Section 3.13(d) of the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
[_____] 1, 20[__] among Residential Funding Mortgage Securities II, Inc., as
seller (the "Company"), Residential Funding Company, LLC, as master servicer,
and the Trustee. All terms used herein and not otherwise defined shall have the
meanings set forth in the Pooling and Servicing Agreement. The Lender hereby
certifies, represents and warrants to, and covenants with, the Master Servicer
and the Trustee that:
(i) the Mortgage Loan is secured by Mortgaged Property located in a
jurisdiction in which an assignment in lieu of satisfaction is required to
preserve lien priority, minimize or avoid mortgage recording taxes or otherwise
comply with, or facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a
refinancing of such Mortgage Loan and the form of the transaction is solely to
comply with, or facilitate the transaction under, such local laws;
(iii) the Mortgage Loan following the proposed assignment will be modified
to have a rate of interest at least 0.25 percent below or above the rate of
interest on such Mortgage Loan prior to such proposed assignment; and
(iv) such assignment is at the request of the borrower under the related
Mortgage Loan.
N-1
Very truly yours,
___________________________________
(Lender)
By: _______________________________
Name: _____________________________
Title: ____________________________
N-2
EXHIBIT O
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
_______________________________________________
_______________________________________________
_______________________________________________
_______________________________________________
The undersigned seller, as registered holder (the "Seller"), intends
to transfer the Rule 144A Securities described above to the undersigned buyer
(the "Buyer").
1. In connection with such transfer and in accordance with the
agreements pursuant to which the Rule 144A Securities were issued, the Seller
hereby certifies the following facts: Neither the Seller nor anyone acting on
its behalf has offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or any other
similar security to, or solicited any offer to buy or accept a transfer, pledge
or other disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the
Seller, the Trustee and the Master Servicer (as defined in the Pooling and
Servicing Agreement (the "Agreement"), dated as of [_____] 1, 20[__] among
Residential Funding Company, LLC as Master Servicer (the "Master Servicer"),
Residential Funding Mortgage Securities II, Inc. as depositor pursuant to
Section 5.02 of the Agreement and [_____], as trustee and supplemental interest
trust trustee (the "Trustee" and "Supplemental Interest Trust Trustee,"
respectively), 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.
O-1
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 Master Servicer.
d. Neither the Buyer nor anyone acting on its behalf has
offered, transferred, pledged, sold or otherwise disposed of the
Rule 144A Securities, any interest in the Rule 144A Securities or
any other similar security to, or solicited any offer to buy or
accept a transfer, pledge or other disposition of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other
similar security from, or otherwise approached or negotiated with
respect to the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general
advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Rule 144A Securities under
the 1933 Act or that would render the disposition of the Rule 144A
Securities a violation of Section 5 of the 1933 Act or require
registration pursuant thereto, nor will it act, nor has it
authorized or will it authorize any person to act, in such manner
with respect to the Rule 144A Securities.
e. The Buyer is a "qualified institutional buyer" as that term
is defined in Rule 144A under the 1933 Act and has completed either
of the forms of certification to that effect attached hereto as
Annex 1 or Annex 2. The Buyer is aware that the sale to it is being
made in reliance on Rule 144A. The Buyer is acquiring the Rule 144A
Securities for its own account or the accounts of other qualified
institutional buyers, understands that such Rule 144A Securities may
be resold, pledged or transferred only (i) to a person reasonably
believed to be a qualified institutional buyer that purchases for
its own account or for the account of a qualified institutional
buyer to whom notice is given that the resale, pledge or transfer is
being made in reliance on Rule 144A, or (ii) pursuant to another
exemption from registration under the 1933 Act.
3. The Buyer
(a) is not an employee benefit 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") (each,
a "Plan"), or any Person (including, without limitation, an
insurance company investing its general account, an investment
manager, a named fiduciary or a trustee of any Plan) who is using
"plan assets," within the meaning of the U.S. Department of Labor
regulation promulgated at 29 C.F.R. ss. 2510.3-101, as modified by
Section 3(42) of ERISA, of any Plan (each, a "Plan Investor"), to
effect such acquisition; or
(b.) has provided the Trustee, the Depositor and the Master
Servicer with an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Depositor and the Master
Servicer to the effect that the purchase and holding of Class SB
Certificates is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under
Section 406 of ERISA or Section 4975 of the Code (or comparable
provisions of any subsequent enactments) and will not subject
O-2
the Trustee, the Depositor or the Master Servicer to any obligation
or liability (including obligations or liabilities under ERISA or
Section 4975 of the Code) in addition to those undertaken in the
Pooling and Servicing Agreement, which opinion of counsel shall not
be an expense of the Trustee, the Depositor or the Master Servicer.
4. This document may be executed in one or more counterparts
and by the different parties hereto on separate counterparts, each
of which, when so executed, shall be deemed to be an original; such
counterparts, together, shall constitute one and the same document.
[SIGNATURE PAGE FOLLOWS]
O-3
IN WITNESS WHEREOF, each of the parties has executed this document
as of the date set forth below.
___________________________________ ___________________________________
Print Name of Seller Print Name of Buyer
By: ______________________________ By: ______________________________
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. _______________________________ No. _______________________________
Date: _____________________________ Date: _____________________________
O-4
ANNEX 1 TO EXHIBIT O
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $_____________________ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to banking
and is supervised by the State or territorial banking commission or
similar official or is a foreign bank or equivalent institution, and
(b) has an audited net worth of at least $25,000,000 as demonstrated
in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and examined
by a State or Federal authority having supervision over any such
institutions or is a foreign savings and loan association or
equivalent institution and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or the
reinsuring of risks underwritten by insurance companies and which is
subject to supervision by the insurance commissioner or a similar
official or agency of a State or territory or the District of
Columbia.
O-5
___ 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 1are 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.
O-6
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that,
in connection with any purchase of securities sold to the Buyer for the account
of a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification
is made of any changes in the information and conclusions herein. Until such
notice is given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.
___________________________________
Print Name of Buyer
By: _______________________________
Name:
Title:
Date: _____________________________
O-7
ANNEX 2 TO EXHIBIT O
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.
O-8
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: _____________________________
O-9
EXHIBIT P
[RESERVED]
P-1
EXHIBIT Q-1
FORM OF ERISA REPRESENTATION LETTER
[For Class B Certificates]
______________, 20__
Residential Funding Mortgage Securities II, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[_____]
[_____]
Attn: Structured Finance/RFMSII Series 20[__]-[___]
Residential Funding Company, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Re: Home Equity Loan Pass-Through Certificates, Series 20[__]-[___],
Class [A-__], Class M-[_]
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate
Principal Balance of Home Equity Loan Pass-Through Certificates, Series
20[__]-[___], Class __ (the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of [_____]
1, 20[__] among Residential Funding Mortgage Securities II, Inc., as seller (the
"Depositor"), Residential Funding Company, LLC, as master servicer (the "Master
Servicer"), and [_____], as trustee and supplemental interest trust trustee (the
"Trustee" and "Supplemental Interest Trust Trustee," respectively). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee and the Master
Servicer that:
(a) The Purchaser is not an employee benefit plan or other plan
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") (each, a "Plan"), or any
Person (including, an investment manager, a named fiduciary or a trustee of any
Plan) who is using "plan assets," within the meaning of the U.S. Department of
Q-1-1
Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, as modified by Section
3(42) of ERISA, of any Plan (each, a "Plan Investor"), to effect such
acquisition; or
(b) The Purchaser is an insurance company, the source of funds used
to purchase or hold the Certificates (or any interest therein) is an "insurance
company general account" (as defined in U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the conditions set forth in
Sections I and III of PTCE 95-60 have been satisfied.
In addition, the Purchaser hereby certifies, represents and warrants
to, and covenants with, the Trustee, the Depositor and the Master Servicer that
the Purchaser will not transfer the Certificates to any transferee unless such
transferee meets the requirements set forth in either (a) or (b) above.
Very truly yours,
___________________________________
(Purchaser)
By: _______________________________
Name: _____________________________
Title: ____________________________
Q-1-2
EXHIBIT Q-2
FORM OF ERISA REPRESENTATION LETTER
[for Class A Certificates and Class M Certificates]
[date]
Residential Funding Company, LLC
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Residential Funding Mortgage Securities II, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[_____]
[_____]
Attention: Structured Finance/RFMSII Series 20[__]-[___]
Re: Residential Funding Mortgage Securities II, Inc. Home Equity Loan
Pass-Through Certificates, Series 20[__]-[___] Class __
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate
Principal Balance of Home Equity Loan Pass-Through Certificates, Series
20[__]-[___], Class __ (the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of [_____]
1, 20[__] among Residential Funding Mortgage Securities II, Inc., as seller (the
"Depositor"), Residential Funding Company, LLC, as master servicer (the "Master
Servicer"), and [_____], as trustee and supplemental interest trust trustee (the
"Trustee" and "Supplemental Interest Trust Trustee," respectively). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement.
(1) As of any date prior to the termination of the Swap Agreement, the
Purchaser hereby certifies, represents and warrants to, and covenants with the
Depositor, the Trustee and the Master Servicer that:
(a) The Purchaser is not an employee benefit or other plan subject to
the prohibited transaction provisions of ERISA or Section 4975 of
the Code (each, a "Plan"), or any Person (including, without
limitation, an investment manager, a named fiduciary or a trustee of
any Plan) who is using plan assets, within the meaning of the U.S.
Department of Labor regulation promulgated at 29 C.F.R. ss.
2510.3-101, as modified by Section 3(42) of ERISA, of any Plan
(each, a "Plan Investor") to effect such acquisition; or
Q-2-1
(b) The Purchaser's acquisition of the above referenced certificates and
the right to receive (and its receipt of) payments from the
supplemental interest trust are eligible for exemptive relief
available under at least one of the following exemptions:
(i) Prohibited Transaction Class Exemption ("PTCE") 84-14,
regarding transactions negotiated by independent "qualified
professional asset managers";
(ii) PTCE 90-1, regarding investments by insurance company pooled
separate accounts;
(iii) PTCE 91-38, regarding investments by bank collective
investment funds;
(iv) PTCE 95-60, regarding investments by insurance company general
accounts;
(v) PTCE 96-23, regarding transactions negotiated by certain
in-house asset managers; or
(vi) Section 408(b)(17) of ERISA, regarding transactions between a
Plan and a person or an entity that is a party in interest to
such Plan (other than a party in interest that is a fiduciary,
or its affiliate, that has or exercises discretionary
authority or control or renders investment advice with respect
to the assets of the Plan involved in the transaction) solely
by reason of providing services to the Plan, but only if the
Plan pays no more, or receives no less, than adequate
consideration.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Depositor, the Trustee and the Master Servicer that
prior to the termination of the Swap Agreement, the Purchaser will not transfer
the Certificates to any transferee unless that transferee meets the requirements
in either (a) or (b) above.
(2) As of any date after the termination of the Swap Agreement, the
Purchaser hereby certifies, represents and warrants to, and covenants with the
Depositor, the Trustee and the Master Servicer that:
(a) The Purchaser is not a Plan or a Plan Investor;
(b) The Purchaser has acquired and is holding the Certificates in
reliance on U.S. Department of Labor Prohibited Transaction
Exemption ("PTE") 94-29, 59 Fed. Reg. 14674 (March 29, 1994), as
most recently amended by PTE 2002-41, 67 Fed. Reg. 54487 (August 22,
2002) (the "RFC Exemption"), and that it understands that there are
certain conditions to the availability of the RFC Exemption
including that such Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by Standard &
Poor's or Moody's; or
Q-2-2
(c) The Purchaser is an insurance company, the source of funds used to
purchase or hold the Certificates (or any interest therein) is an
"insurance company general account" (as defined in U.S. Department
of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60), and
the conditions set forth in Sections I and III of PTCE 95-60 have
been satisfied.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Depositor, the Trustee and the Master Servicer that
after the termination of the Swap Agreement, the Purchaser will not transfer the
Certificates to any transferee unless that transferee meets the requirements in
either (a), (b) or (c) above.
Very truly yours,
By: _______________________________
Name: _____________________________
Title: ____________________________
Q-2-3
EXHIBIT R-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of the trust (the Exchange Act periodic reports) created pursuant to the
Pooling and Servicing Agreement dated ____________ (the "Agreement") among
Residential Funding Mortgage Securities II, Inc., Residential Funding Company,
LLC (the "Master Servicer") and [Name of Trustee] (the "Trustee");
(1) Based on my knowledge, Exchange Act periodic reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
(2) Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
(3) I am responsible for reviewing the activities performed by the Master
Servicer and based on my knowledge and the compliance review conducted in
preparing the servicer compliance statement required in this report under Item
1123 of Regulation AB and except as disclosed in the Exchange Act periodic
reports, the Master Servicer has fulfilled its obligations under the Agreement;
and
(4) All of the reports on assessment of compliance with servicing criteria
for asset-backed securities and their related attestation reports on assessment
of compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
Date: ____________
_________________________________*
[Signature]
Name:
Title:
* - to be signed by the senior officer in charge of the servicing functions of
the Master Servicer
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of [_____] (the "Trustee" and
"Supplemental Interest Trust Trustee," respectively) certifies that:
1. The Trustee has performed all of the duties specifically required to be
performed by it pursuant to the provisions of the Pooling and Servicing
Agreement dated as of [_____] 1, 20[__] (the "Agreement") by and among
Residential Funding Mortgage Securities II, Inc. (the "Depositor"), Residential
Funding Company, LLC (the "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(f)(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 THEREOF, I have duly executed this certificate as of
____________, 20___.
_________________________________
[Signature]
Name:
Title:
R-2-1
EXHIBIT S
INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING
AGENCIES RELATING TO REPORTABLE MODIFIED MORTGAGE LOANS
Account number
Transaction Identifier
Unpaid Principal Balance prior to Modification
Next Due Date
Monthly Principal and Interest Payment
Total Servicing Advances
Current Interest Rate
Original Maturity Date
Original Term to Maturity (Months)
Remaining Term to Maturity (Months)
Trial Modification Indicator
Mortgagor Equity Contribution
Total Servicer Advances
Trial Modification Terms (Months)
Trial Modification Start Date
Trial Modification End Date
Trial Modification Period Principal and Interest Payment
Trial Modification Interest Rate
Trial Modification Term
Rate Reduction Indicator
Interest Rate Post Modification
Rate Reduction Start Date
Rate Reduction End Date
Rate Reduction Term
Term Modified Indicator
Modified Amortization Period
Modified Final Maturity Date
Total Advances Written Off
Unpaid Principal Balance Written Off
Other Past Due Amounts Written Off
Write Off Date
Unpaid Principal Balance Post Write Off
Capitalization Indicator
Mortgagor Contribution
Total Capitalized Amount
Modification Close Date
Unpaid Principal Balance Post Capitalization Modification
Next Payment Due Date per Modification Plan
Principal and Interest Payment Post Modification
Interest Rate Post Modification
Payment Made Post Capitalization
Delinquency Status to Modification Plan
S-1
EXHIBIT T
SCHEDULE OF SWAP AGREEMENT NOTIONAL BALANCES
T-1
EXHIBIT U
SWAP AGREEMENT
U-1
EXHIBIT V
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 below as "Applicable Servicing
Criteria":
--------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
General Servicing Considerations
--------------------------------------------------------------------------------
Policies and procedures are instituted
to monitor any performance or other
triggers and events of default in
accordance with the transaction
1122(d)(1)(i) agreements.
--------------------------------------------------------------------------------
If any material servicing activities
are outsourced to third parties,
policies and procedures are instituted
to monitor the third party's
performance and compliance with such
1122(d)(1)(ii) servicing activities.
--------------------------------------------------------------------------------
Any requirements in the transaction
agreements to maintain a back-up
servicer for the pool assets are
1122(d)(1)(iii) maintained.
--------------------------------------------------------------------------------
A fidelity bond and errors and
omissions policy is in effect on the
party participating in the servicing
function throughout the reporting
period in the amount of coverage
required by and otherwise in
accordance with the terms of the
1122(d)(1)(iv) transaction agreements.
--------------------------------------------------------------------------------
Cash Collection and Administration
--------------------------------------------------------------------------------
Payments on pool assets are deposited
into the appropriate custodial bank
accounts and related bank clearing |X| (as to accounts
accounts no more than two business held by Trustee)
days following receipt, or such other
number of days specified in the
1122(d)(2)(i) transaction agreements.
--------------------------------------------------------------------------------
Disbursements made via wire transfer
on behalf of an obligor or to an |X| (as to investors
investor are made only by authorized only)
1122(d)(2)(ii) personnel.
--------------------------------------------------------------------------------
Advances of funds or guarantees
regarding collections, cash flows or
distributions, and any interest or
other fees charged for such advances,
are made, reviewed and approved as
specified in the transaction
1122(d)(2)(iii) agreements.
--------------------------------------------------------------------------------
The related accounts for the
transaction, such as cash reserve
accounts or accounts established as a |X| (as to accounts
form of overcollateralization, are held by Trustee)
separately maintained (e.g., with
respect to commingling of cash) as set
1122(d)(2)(iv) forth in the transaction agreements.
--------------------------------------------------------------------------------
Each custodial account is maintained
at a federally insured depository
institution as set forth in the
transaction agreements. For purposes
of this criterion, "federally insured
depository institution" with respect
to a foreign financial institution
means a foreign financial institution
that meets the requirements of Rule
13k-1(b)(1) of the Securities Exchange
1122(d)(2)(v) Act.
--------------------------------------------------------------------------------
Unissued checks are safeguarded so as
1122(d)(2)(vi) to prevent unauthorized access.
--------------------------------------------------------------------------------
Reconciliations are prepared on a
monthly basis for all asset-backed
securities related bank accounts,
including custodial accounts and
related bank clearing accounts. These
reconciliations are (A) mathematically
accurate; (B) prepared within 30
calendar days after the bank statement
cutoff date, or such other number of
days specified in the transaction
agreements; (C) reviewed and approved
by someone other than the person who
prepared the reconciliation; and (D)
contain explanations for reconciling
items. These reconciling items are
resolved within 90 calendar days of
their original identification, or such
other number of days specified in the
1122(d)(2)(vii) transaction agreements.
--------------------------------------------------------------------------------
V-1
--------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
Investor Remittances and Reporting
--------------------------------------------------------------------------------
Reports to investors, including those
to be filed with the Commission, are
maintained in accordance with the
transaction agreements and applicable
Commission requirements. Specifically,
such reports (A) are prepared in
accordance with timeframes and other
terms set forth in the transaction
agreements; (B) provide information
calculated in accordance with the
terms specified in the transaction
agreements; (C) are filed with the
Commission as required by its rules
and regulations; and (D) agree with
investors' or the trustee's records as
to the total unpaid principal balance
and number of pool assets serviced by
1122(d)(3)(i) the servicer.
--------------------------------------------------------------------------------
Amounts due to investors are allocated
and remitted in accordance with
timeframes, distribution priority and |X|
other terms set forth in the
1122(d)(3)(ii) transaction agreements.
--------------------------------------------------------------------------------
Disbursements made to an investor are
posted within two business days to the
servicer's investor records, or such |X|
other number of days specified in the
1122(d)(3)(iii) transaction agreements.
--------------------------------------------------------------------------------
Amounts remitted to investors per the
investor reports agree with cancelled
checks, or other form of payment, or |X|
1122(d)(3)(iv) custodial bank statements.
--------------------------------------------------------------------------------
Pool Asset Administration
--------------------------------------------------------------------------------
Collateral or security on pool assets
is maintained as required by the
transaction agreements or related
1122(d)(4)(i) asset pool documents.
--------------------------------------------------------------------------------
Pool assets and related documents are
safeguarded as required by the
1122(d)(4)(ii) transaction agreements
--------------------------------------------------------------------------------
Any additions, removals or
substitutions to the asset pool are
made, reviewed and approved in
accordance with any conditions or
requirements in the transaction
1122(d)(4)(iii) agreements.
--------------------------------------------------------------------------------
Payments on pool assets, including any
payoffs, made in accordance with the
related pool asset documents are
posted to the servicer's obligor
records maintained no more than two
business days after receipt, or such
other number of days specified in the
transaction agreements, and allocated
to principal, interest or other items
(e.g., escrow) in accordance with the
1122(d)(4)(iv) related pool asset documents.
--------------------------------------------------------------------------------
The servicer's records regarding the
pool assets agree with the servicer's
records with respect to an obligor's
1122(d)(4)(v) unpaid principal balance.
--------------------------------------------------------------------------------
Changes with respect to the terms or
status of an obligor's pool asset
(e.g., loan modifications or
re-agings) are made, reviewed and
approved by authorized personnel in
accordance with the transaction
agreements and related pool asset
1122(d)(4)(vi) documents.
--------------------------------------------------------------------------------
Loss mitigation or recovery actions
(e.g., forbearance plans,
modifications and deeds in lieu of
foreclosure, foreclosures and
repossessions, as applicable) are
initiated, conducted and concluded in
accordance with the timeframes or
other requirements established by the
1122(d)(4)(vii) transaction agreements.
--------------------------------------------------------------------------------
Records documenting collection efforts
are maintained during the period a
pool asset is delinquent in accordance
with the transaction agreements. Such
records are maintained on at least a
monthly basis, or such other period
specified in the transaction
agreements, and describe the entity's
activities in monitoring delinquent
pool assets including, for example,
phone calls, letters and payment
rescheduling plans in cases where
delinquency is deemed temporary (e.g.,
1122(d)(4)(viii) illness or unemployment).
--------------------------------------------------------------------------------
Adjustments to interest rates or rates
of return for pool assets with
variable rates are computed based on
1122(d)(4)(ix) the related pool asset documents.
--------------------------------------------------------------------------------
V-2
--------------------------------------------------------------------------------
Servicing Criteria Applicable
Servicing Criteria
--------------------------------------------------------------------------------
Reference Criteria
--------------------------------------------------------------------------------
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
1122(d)(4)(x) transaction agreements.
--------------------------------------------------------------------------------
Payments made on behalf of an obligor
(such as tax or insurance payments)
are made on or before the related
penalty or expiration dates, as
indicated on the appropriate bills or
notices for such payments, provided
that such support has been received by
the servicer at least 30 calendar days
prior to these dates, or such other
number of days specified in the
1122(d)(4)(xi) transaction agreements.
--------------------------------------------------------------------------------
Any late payment penalties in
connection with any payment to be made
on behalf of an obligor are paid from
the servicer's funds and not charged
to the obligor, unless the late
payment was due to the obligor's error
1122(d)(4)(xii) or omission.
--------------------------------------------------------------------------------
Disbursements made on behalf of an
obligor are posted within two business
days to the obligor's records
maintained by the servicer, or such
other number of days specified in the
1122(d)(4)(xiii) transaction agreements.
--------------------------------------------------------------------------------
Delinquencies, charge-offs and
uncollectible accounts are recognized
and recorded in accordance with the
1122(d)(4)(xiv) transaction agreements.
--------------------------------------------------------------------------------
Any external enhancement or other
support, identified in Item 1114(a)(1)
through (3) or Item 1115 of Regulation |X|
AB, is maintained as set forth in the
1122(d)(4)(xv) transaction agreements.
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
V-3
EXHIBIT W-1
FORM OF CERTIFICATE TO BE GIVEN BY CERTIFICATE OWNER
[Euroclear Cedel, societe anonyme
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇-▇▇▇▇ Brussels, Belgium ▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇]
Re: Residential Funding Mortgage Securities II, Inc., Home Equity
Loan Pass-Through Certificates, Series 20[__]-[___], Class [B][SB],
issued pursuant to the Pooling and Servicing Agreement dated as of
[_____] 1, 20[__] among Residential Funding Mortgage Securities II,
Inc., Residential Funding Company, LLC, and [_____], as Trustee and
Supplemental Interest Trust Trustee (the "Certificates").
This is to certify that as of the date hereof and except as set forth
below, the beneficial interest in the Certificates held by you for our account
is owned by persons that are not U.S. persons (as defined in Rule 901 under the
Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned has acquired, or intends
to acquire, a beneficial interest in accordance with your operating procedures
if any applicable statement herein is not correct on such date. In the absence
of any such notification, it may be assumed that this certification applies as
of such date.
[This certification excepts beneficial interests in and does not relate to
U.S. $_________ principal amount of the Certificates appearing in your books as
being held for our account but that we have sold or as to which we are not yet
able to certify.]
We understand that this certification is required in connection with
certain securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated:_________________________,*/ By:________________________,
Account Holder
----------
* Certification must be dated on or after the 15th day before the date of
the Euroclear or Cedel certificate to which this certification releases.
W-1-1
EXHIBIT W-2
FORM OF CERTIFICATE TO BE GIVEN BY EUROCLEAR OR CEDEL
[_____]
Re: Residential Funding Mortgage Securities II, Inc., Home Equity Loan
Pass-Through Certificates, Series 20[__]-[___], Class [B][SB],
issued pursuant to the Pooling and Servicing Agreement dated as of
[_____] 1, 20[__] among Residential Funding Mortgage Securities II,
Inc., Residential Funding Company, LLC, and [_____], as Trustee and
Supplemental Interest Trust Trustee (the "Certificates").
This is to certify that, based solely on certifications we have received
in writing, by tested telex or by electronic transmission from member
organizations appearing in our records as persons being entitled to a portion of
the principal amount set forth below (our "Member Organizations") as of the date
hereof, $____________ principal amount of the Certificates is owned by persons
(a) that are not U.S. persons (as defined in Rule 901 under the Securities Act
of 1933. as amended (the "Securities Act")) or (b) who purchased their
Certificates (or interests therein) in a transaction or transactions that did
not require registration under the Securities Act.
We further certify (a) that we are not making available herewith for
exchange any portion of the related Temporary Regulation S Global Class [B][SB]
Certificate excepted in such certifications and (b) that as of the date hereof
we have not received any notification from any of our Member Organizations to
the effect that the statements made by them with respect to any portion of the
part submitted herewith for exchange are no longer true and cannot be relied
upon as of the date hereof
We understand that this certification is required in connection with
certain securities laws of the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy hereof to any interested party in such proceedings.
Date:___________________* Yours faithfully,
* To be dated no earlier By: _______________________________
than the Effective Date. [▇▇▇▇▇▇ Guaranty Trust Company of New
York, Brussels Office, as Operator of
the Euroclear Clearance System Cedel,
Societe anonyme]
W-2-1
EXHIBIT X
FORM OF
CERTIFICATE TO BE GIVEN BY TRANSFEREE
OF BENEFICIAL INTEREST IN A REGULATION S
BOOK-ENTRY CERTIFICATE
Euroclear Cedel, societe anonyme
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇- ▇▇▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇- ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Re: Residential Funding Mortgage Securities II, Inc., Home Equity
Loan Pass-Through Certificates, Series 20[__]-[___], Class
[B][SB], issued pursuant to the Pooling and Servicing
Agreement dated as of [_____] 1, 20[__] among Residential
Funding Mortgage Securities II, Inc., Residential Funding
Company, LLC, and [_____], as Trustee and Supplemental
Interest Trust Trustee (the "Certificates").
This is to certify that as of the date hereof, and except as set forth
below, for purposes of acquiring a beneficial interest in the Certificates, the
undersigned certifies that it is not a U.S. person (as defined in Rule 901 under
the Securities Act of 1933, as amended).
The undersigned undertakes to advise you promptly by tested telex on or
prior to the date on which you intend to submit your certification relating to
the Certificates held by you in which the undersigned intends to acquire a
beneficial interest in accordance with your operating procedures if any
applicable statement herein is not correct on such date. In the absence of any
such notification, it may be assumed that this certification applies as of such
date.
We understand that this certification is required in connection with
certain securities laws in the United States of America. If administrative or
legal proceedings are commenced or threatened in connection with which this
certification is or would be relevant, we irrevocably authorize you to produce
this certification or a copy thereof to any interested party in such
proceedings.
Dated: ________________________ By:____________________________
X-1
EXHIBIT Y
FORM OF
TRANSFER CERTIFICATE FOR EXCHANGE OR
TRANSFER FROM 144A BOOK-ENTRY CERTIFICATE
TO REGULATION S BOOK-ENTRY CERTIFICATE
[_____]
Re: Residential Funding Mortgage Securities II, Inc., Home Equity
Loan Pass-Through Certificates, Series 20[__]-[___], Class
[B][SB], issued pursuant to the Pooling and Servicing
Agreement dated as of [_____] 1, 20[__] (the "Agreement"),
among Residential Funding Mortgage Securities II, Inc.,
Residential Funding Company, LLC and [_____], as Trustee and
Supplemental Interest Trust Trustee (the "Certificates").
Capitalized terms used but not defined herein shall have the meanings
given to them in the Agreement.
This letter relates to U.S. $____________ principal amount of Certificates
that are held as a beneficial interest in the 144A Book-Entry Certificate (CUSIP
No. ________) with DTC in the name of [insert name of transferor] (the
"Transferor"). The Transferor has requested an exchange or transfer of the
beneficial interest for an interest in the Permanent Regulation S Global Class
[B][SB] Certificate (CUSIP No. ________) to be held with [Euroclear] [Cedel]
through DTC.
In connection with the request and in receipt of the Certificates, the
Transferor does hereby certify that the exchange or transfer has been effected
in accordance with the transfer restrictions set forth in the Agreement and the
Certificates and:
(a) pursuant to and in accordance with Regulation S under the
Securities Act of 1933, as amended (the "Securities Act"), and accordingly
the Transferor does hereby certify that:
(i) the offer of the Certificates was not made to a person in
the United States of America,
(ii) at the time the buy order was originated, the transferee
was outside the United States of America or the Transferor and any
person acting on its behalf reasonably believed that the transferee
was outside the United States of America,
(ii) the transaction was executed in, on or through the
facilities of a designated offshore securities market and neither
the Transferor nor any person
Y-1
acting on its behalf knows that the transaction was pre-arranged
with a buyer in the United States of America,**
(iii) no directed selling efforts have been made in
contravention of the requirements of Rule 903(b) or 904(b) of
Regulation 5, as applicable,
(iv) the transaction is not part of a plan or scheme to evade
the registration requirements of the Securities Act, and
(b) with respect to transfers made in reliance on Rule 144 under the
Securities Act, the Transferor does hereby certify that the Certificates
are being transferred in a transaction permitted by Rule 144 under the
Securities Act.
This certification and the statements contained herein are made for your
benefit and the benefit of the issuer and the [placement agent].
[Insert name of Transferor]
Date: ________________ By: _______________________________
Title: ____________________________
----------
** Insert one of these two provisions, which come from the definition of
"offshore transactions" in Regulation S.
Y-2
EXHIBIT Z
FORM OF
INITIAL PURCHASER EXCHANGE INSTRUCTIONS
Depository Trust Company
▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: Residential Funding Mortgage Securities II, Inc., Home Equity
Loan Pass-Through Certificates, Series 20[__]-[___], Class
[B][SB], issued pursuant to the Pooling and Servicing
Agreement dated as of [_____] 1, 20[__] (the "Agreement")
among Residential Funding Mortgage Securities II, Inc.,
Residential Funding Company, LLC, and [_____], as Trustee and
Supplemental Interest Trust Trustee (the "Certificates").
Pursuant to Section 5.02(e) of the Agreement, ________________________
(the "Initial Purchaser") hereby requests that $______________ aggregate
principal amount of the Certificates held by you for our account and represented
by the Temporary Regulation S Global Class [B][SB] Certificate (CUSIP No.
________) (as defined in the Agreement) be exchanged for an equal principal
amount represented by the Rule 144A Global Class [B][SB] Certificate (CUSIP No.
_______) to be held by you for our account.
Date: _____________________________ [Initial Purchaser]
By: _____________________
Title: __________________
AA-1