EXHIBIT 4.1
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STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
Dated as of January 1, 2006
Residential Funding Mortgage Securities I, Inc.
Mortgage Pass-Through Certificates
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS........................................................................................1
Section 1.01 Definitions..................................................................................1
Section 1.02 Use of Words and Phrases....................................................................31
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES..................................32
Section 2.01 Conveyance of Mortgage Loans................................................................32
Section 2.02 Acceptance by Trustee.......................................................................38
Section 2.03 Representations, Warranties and Covenants of the Master Servicer and the Company............39
Section 2.04 Representations and Warranties of Residential Funding.......................................41
Section 2.05 Execution and Authentication of Certificates/Issuance of Certificates Evidencing
Interests in REMIC I........................................................................43
Section 2.06 Conveyance of Uncertificated REMIC I and REMIC II Regular Interests; Acceptance by the
Trustee.....................................................................................43
Section 2.07 Issuance of Certificates Evidencing Interests in REMIC II...................................43
Section 2.08 Purposes and Powers of the Trust............................................................43
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE LOANS..................................................43
Section 3.01 Master Servicer to Act as Servicer..........................................................43
Section 3.02 Subservicing Agreements Between Master Servicer and Subservicers; Enforcement of
Subservicers' and Sellers' Obligations......................................................45
Section 3.03 Successor Subservicers......................................................................46
Section 3.04 Liability of the Master Servicer............................................................46
Section 3.05 No Contractual Relationship Between Subservicer and Trustee or Certificateholders...........47
Section 3.06 Assumption or Termination of Subservicing Agreements by Trustee.............................47
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits to Custodial Account.................47
Section 3.08 Subservicing Accounts; Servicing Accounts...................................................50
Section 3.09 Access to Certain Documentation and Information Regarding the Mortgage Loans................52
Section 3.10 Permitted Withdrawals from the Custodial Account............................................52
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TABLE OF CONTENTS
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Section 3.11 Maintenance of the Primary Insurance Policies; Collections Thereunder.......................54
Section 3.12 Maintenance of Fire Insurance and Omissions and Fidelity Coverage...........................55
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements; Certain
Assignments.................................................................................56
Section 3.14 Realization Upon Defaulted Mortgage Loans...................................................58
Section 3.15 Trustee to Cooperate; Release of Mortgage Files.............................................61
Section 3.16 Servicing and Other Compensation; Compensating Interest.....................................63
Section 3.17 Reports to the Trustee and the Company......................................................64
Section 3.18 Annual Statement as to Compliance...........................................................64
Section 3.19 Annual Independent Public Accountants' Servicing Report.....................................64
Section 3.20 Rights of the Company in Respect of the Master Servicer.....................................65
Section 3.21 Administration of Buydown Funds.............................................................65
Section 3.22 Advance Facility............................................................................66
ARTICLE IV PAYMENTS TO CERTIFICATEHOLDERS...................................................................70
Section 4.01 Certificate Account.........................................................................70
Section 4.02 Distributions...............................................................................70
Section 4.03 Statements to Certificateholders; Statements to Rating Agencies; Exchange Act Reporting.....70
Section 4.04 Distribution of Reports to the Trustee and the Company; Advances by the Master Servicer.....73
Section 4.05 Allocation of Realized Losses...............................................................74
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged Property...............................74
Section 4.07 Optional Purchase of Defaulted Mortgage Loans...............................................74
Section 4.08 Surety Bond.................................................................................75
ARTICLE V THE CERTIFICATES..................................................................................75
Section 5.01 The Certificates............................................................................75
Section 5.02 Registration of Transfer and Exchange of Certificates.......................................78
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates...........................................83
Section 5.04 Persons Deemed Owners.......................................................................83
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TABLE OF CONTENTS
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Section 5.05 Appointment of Paying Agent.................................................................84
ARTICLE VI THE COMPANY AND THE MASTER SERVICER..............................................................84
Section 6.01 Respective Liabilities of the Company and the Master Servicer...............................84
Section 6.02 Merger or Consolidation of the Company or the Master Servicer; Assignment of Rights
and Delegation of Duties by Master Servicer.................................................84
Section 6.03 Limitation on Liability of the Company, the Master Servicer and Others......................85
Section 6.04 Company and Master Servicer Not to Resign...................................................86
ARTICLE VII DEFAULT.........................................................................................86
Section 7.01 Events of Default...........................................................................86
Section 7.02 Trustee or Company to Act; Appointment of Successor.........................................88
Section 7.03 Notification to Certificateholders..........................................................90
Section 7.04 Waiver of Events of Default.................................................................90
ARTICLE VIII CONCERNING THE TRUSTEE.........................................................................90
Section 8.01 Duties of Trustee...........................................................................90
Section 8.02 Certain Matters Affecting the Trustee.......................................................92
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.......................................93
Section 8.04 Trustee May Own Certificates................................................................94
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses; Indemnification.........................94
Section 8.06 Eligibility Requirements for Trustee........................................................95
Section 8.07 Resignation and Removal of the Trustee......................................................95
Section 8.08 Successor Trustee...........................................................................96
Section 8.09 Merger or Consolidation of Trustee..........................................................97
Section 8.10 Appointment of Co-Trustee or Separate Trustee...............................................97
Section 8.11 Appointment of Custodians...................................................................98
Section 8.12 Appointment of Office or Agency.............................................................98
ARTICLE IX TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES.............................................98
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TABLE OF CONTENTS
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Section 9.01 Optional Purchase by the Master Servicer of All Certificates; Termination Upon
Purchase by the Master Servicer or Liquidation of All Mortgage Loans........................98
Section 9.02 Additional Termination Requirements........................................................102
Section 9.03 Termination of Multiple REMICs.............................................................103
ARTICLE X REMIC PROVISIONS.................................................................................103
Section 10.01 REMIC Administration......................................................................103
Section 10.02 Master Servicer, REMIC Administrator and Trustee Indemnification..........................106
Section 10.03 Designation of REMIC(s)...................................................................107
ARTICLE XI MISCELLANEOUS PROVISIONS........................................................................107
Section 11.01 Amendment.................................................................................107
Section 11.02 Recordation of Agreement; Counterparts....................................................110
Section 11.03 Limitation on Rights of Certificateholders................................................110
Section 11.04 Governing Law.............................................................................111
Section 11.05 Notices...................................................................................111
Section 11.06 Required Notices to Rating Agency and Subservicer.........................................111
Section 11.07 Severability of Provisions................................................................112
Section 11.08 Supplemental Provisions for Resecuritization..............................................112
Section 11.09 Allocation of Voting Rights...............................................................113
ARTICLE XII COMPLIANCE WITH REGULATION AB..................................................................113
Section 12.01 Intent of the Parties; Reasonableness.....................................................113
Section 12.02 Additional Representations and Warranties of the Trustee..................................113
Section 12.03 Information to be Provided by the Trustee.................................................114
Section 12.04 Report on Assessment of Compliance and Attestation........................................114
Section 12.05 Indemnification; Remedies.................................................................114
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EXHIBITS
Exhibit A: Form of Class A Certificate
Exhibit B: Form of Class M Certificate
Exhibit C: Form of Class B Certificate
Exhibit D: Form of Class R Certificate
Exhibit E: Form of Seller/Servicer Contract
Exhibit F: Forms of Request for Release
Exhibit G-1: Form of Transfer Affidavit and Agreement
Exhibit G-2: Form of Transferor Certificate
Exhibit H: Form of Investor Representation Letter
Exhibit I: Form of Transferor Representation Letter
Exhibit J: Form of Rule 144A Investment Representation Letter
Exhibit K: Text of Amendment to Pooling and Servicing Agreement Pursuant to
Section 11.01(e) for a Limited Guaranty
Exhibit L: Form of Limited Guaranty
Exhibit M: Form of Lender Certification for Assignment of Mortgage Loan
Exhibit N: Request for Exchange Form
Exhibit O: Form of Form 10-K Certification
Exhibit P: Form of Back-Up Certification to Form 10-K Certificate
Exhibit Q: Information to be Provided by the Master Servicer to the Rating
Agencies Relating to Reportable Modified Mortgage Loans
Exhibit R: Servicing Criteria
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This is the Standard Terms of Pooling and Servicing Agreement, dated as of
January 1, 2006 (the "Standard Terms", and as incorporated by reference into a
Series Supplement dated as of the Cut-off Date, the "Pooling and Servicing
Agreement" or "Agreement"), among RESIDENTIAL FUNDING MORTGAGE SECURITIES I,
INC., as the company (together with its permitted successors and assigns, the
"Company"), RESIDENTIAL FUNDING CORPORATION, as master servicer (together with
its permitted successors and assigns, the "Master Servicer"), and the trustee
named in the applicable Series Supplement (together with its permitted
successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company intends to sell certain mortgage pass-through certificates
(collectively, the "Certificates"), to be issued under each Agreement in
multiple classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans.
In consideration of the mutual agreements herein contained, the Company,
the Master Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accretion Termination Date: As defined in the Series Supplement.
Accrual Certificates: As defined in the Series Supplement.
Accrued Certificate Interest: With respect to each Distribution Date, as to
any Class or Subclass of Certificates (other than any Principal Only
Certificates), interest accrued during the related Interest Accrual Period at
the related Pass-Through Rate on the Certificate Principal Balance or Notional
Amount thereof immediately prior to such Distribution Date. Accrued Certificate
Interest will be calculated on the basis of a 360-day year, consisting of twelve
30-day months. In each case Accrued Certificate Interest on any Class or
Subclass of Certificates will be reduced by the amount of:
(i) Prepayment Interest Shortfalls on all Mortgage Loans or, if the
Mortgage Pool is comprised of two or more Loan Groups, on the Mortgage
Loans in the related Loan Group (to the extent not offset by the
Master Servicer with a payment of Compensating Interest as provided in
Section 4.01),
(ii) the interest portion (adjusted to the Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan))
of Realized Losses on all Mortgage Loans or, if the Mortgage Pool is
comprised of two or more Loan Groups, on the Mortgage Loans in the
related Loan Group (including Excess
Special Hazard Losses, Excess Fraud Losses, Excess Bankruptcy Losses
and Extraordinary Losses) not allocated solely to one or more specific
Classes of Certificates pursuant to Section 4.05,
(iii) the interest portion of Advances that were (A) previously made with
respect to a Mortgage Loan or REO Property on all Mortgage Loans or,
if the Mortgage Pool is comprised of two or more Loan Groups, on the
Mortgage Loans in the related Loan Group, which remained unreimbursed
following the Cash Liquidation or REO Disposition of such Mortgage
Loan or REO Property or (B) made with respect to delinquencies that
were ultimately determined to be Excess Special Hazard Losses, Excess
Fraud Losses, Excess Bankruptcy Losses or Extraordinary Losses, and
(iv) any other interest shortfalls not covered by the subordination
provided by the Class M Certificates and Class B Certificates,
including interest that is not collectible from the Mortgagor pursuant
to the Relief Act,
with all such reductions allocated (A) among all of the Certificates in
proportion to their respective amounts of Accrued Certificate Interest payable
on such Distribution Date absent such reductions or (B) if the Mortgage Pool is
comprised of two or more Loan Groups, the related Senior Percentage of such
reductions among the related Senior Certificates in proportion to the amounts of
Accrued Certificate Interest payable from the related Loan Group on such
Distribution Date absent such reductions, with the remainder of such reductions
allocated among the holders of the Class M Certificates and Class B Certificates
in proportion to their respective amounts of Accrued Certificate Interest
payable on such Distribution Date absent such reductions. In addition to that
portion of the reductions described in the preceding sentence that are allocated
to any Class of Class B Certificates or any Class of Class M Certificates,
Accrued Certificate Interest on such Class of Class B Certificates or such Class
of Class M Certificates will be reduced by the interest portion (adjusted to the
Net Mortgage Rate) of Realized Losses that are allocated solely to such Class of
Class B Certificates or such Class of Class M Certificates pursuant to Section
4.05.
Addendum and Assignment Agreement: The Addendum and Assignment Agreement,
dated as of January 31, 1995, between MLCC and the Master Servicer.
Additional Collateral: Any of the following held, in addition to the
related Mortgaged Property, as security for a Mortgage Loan: (i) all money,
securities, security entitlements, accounts, general intangibles, payment
rights, instruments, documents, deposit accounts, certificates of deposit,
commodities contracts and other investment property and other property of
whatever kind or description now existing or hereafter acquired which is pledged
as security for the repayment of such Mortgage Loan, (ii) third-party
guarantees, and (A) all money, securities, security entitlements, accounts,
general intangibles, payment rights, instruments, documents, deposit accounts,
certificates of deposit, commodities contracts and other investment property and
other property of whatever kind or description now existing or hereafter
acquired which is pledged as collateral for such guarantee or (B) any mortgaged
property securing the performance of such guarantee, or (iii) such other
collateral as may be set forth in the Series Supplement.
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Additional Collateral Loan: Each Mortgage Loan that is supported by
Additional Collateral.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any date of
determination, the Mortgage Rate borne by the related Mortgage Note, less the
rate at which the related Subservicing Fee accrues.
Advance: As to any Mortgage Loan, any advance made by the Master Servicer,
pursuant to Section 4.04.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Ambac: Ambac Assurance Corporation (formerly known as AMBAC Indemnity
Corporation).
Amount Held for Future Distribution: As to any Distribution Date and, with
respect to any Mortgage Pool that is comprised of two or more Loan Groups, each
Loan Group, the total of the amounts held in the Custodial Account at the close
of business on the preceding Determination Date on account of (i) Liquidation
Proceeds, Subsequent Recoveries, Insurance Proceeds, Curtailments, Mortgage Loan
purchases made pursuant to Section 2.02, 2.03, 2.04 or 4.07 and Mortgage Loan
substitutions made pursuant to Section 2.03 or 2.04 received or made in the
month of such Distribution Date (other than such Liquidation Proceeds, Insurance
Proceeds and purchases of Mortgage Loans that the Master Servicer has deemed to
have been received in the preceding month in accordance with Section 3.07(b)),
and Principal Prepayments in Full made after the related Prepayment Period, and
(ii) payments which represent early receipt of scheduled payments of principal
and interest due on a date or dates subsequent to the related Due Date.
Appraised Value: As to any Mortgaged Property, the lesser of (i) the
appraised value of such Mortgaged Property based upon the appraisal made at the
time of the origination of the related Mortgage Loan, and (ii) the sales price
of the Mortgaged Property at such time of origination, except in the case of a
Mortgaged Property securing a refinanced or modified Mortgage Loan as to which
it is either the appraised value determined above or the appraised value
determined in an appraisal at the time of refinancing or modification, as the
case may be.
Assigned Contracts: With respect to any Pledged Asset Loan: the Credit
Support Pledge Agreement; the Funding and Pledge Agreement, among GMAC Mortgage
Corporation, National Financial Services Corporation and the Mortgagor or other
person pledging the related Pledged Assets; the Additional Collateral Agreement,
between GMAC Mortgage Corporation and the Mortgagor or other person pledging the
related Pledged Assets; or such other contracts as may be set forth in the
Series Supplement.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged
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Property is located to reflect of record the sale of the Mortgage Loan to the
Trustee for the benefit of Certificateholders, which assignment, notice of
transfer or equivalent instrument may be in the form of one or more blanket
assignments covering Mortgages secured by Mortgaged Properties located in the
same county, if permitted by law and accompanied by an Opinion of Counsel to
that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the
Closing Date, between Residential Funding and the Company relating to the
transfer and assignment of the Mortgage Loans.
Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment of the related Cooperative Lease from the Mortgagor to the originator
of the Cooperative Loan.
Available Distribution Amount: As to any Distribution Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups, each Loan
Group, an amount equal to (a) the sum of (i) the amount relating to the Mortgage
Loans on deposit in the Custodial Account as of the close of business on the
immediately preceding Determination Date, including any Subsequent Recoveries,
and amounts deposited in the Custodial Account in connection with the
substitution of Qualified Substitute Mortgage Loans, (ii) the amount of any
Advance made on the immediately preceding Certificate Account Deposit Date,
(iii) any amount deposited in the Certificate Account on the related Certificate
Account Deposit Date pursuant to the second paragraph of Section 3.12(a), (iv)
any amount deposited in the Certificate Account pursuant to Section 4.07 and any
amounts deposited in the Custodial Account pursuant to Section 9.01, (v) any
amount that the Master Servicer is not permitted to withdraw from the Custodial
Account or the Certificate Account pursuant to Section 3.16(e), (vi) any amount
received by the Trustee pursuant to the Surety Bond in respect of such
Distribution Date and (vii) the proceeds of any Pledged Assets received by the
Master Servicer, reduced by (b) the sum as of the close of business on the
immediately preceding Determination Date of (x) the Amount Held for Future
Distribution, and (y) amounts permitted to be withdrawn by the Master Servicer
from the Custodial Account in respect of the Mortgage Loans pursuant to clauses
(ii)-(x), inclusive, of Section 3.10(a). Such amount shall be determined
separately for each Loan Group. Additionally, with respect to any Mortgage Pool
that is comprised of two or more Loan Groups, if on any Distribution Date
Compensating Interest provided pursuant to Section 3.16(e) is less than
Prepayment Interest Shortfalls incurred on the Mortgage Loans in connection with
Principal Prepayments in Full received during the related Prepayment Period and
Curtailments made in the prior calendar month, such Compensating Interest shall
be allocated on such Distribution Date to the Available Distribution Amount for
each Loan Group on a pro rata basis in accordance with the respective amounts of
such Prepayment Interest Shortfalls incurred on the Mortgage Loans in such Loan
Group in respect of such Distribution Date.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Bankruptcy Loss: With respect to any Mortgage Loan, a Deficient Valuation
or Debt Service Reduction; provided, however, that neither a Deficient Valuation
nor a Debt Service Reduction shall be deemed a Bankruptcy Loss hereunder so long
as the Master Servicer has notified the Trustee in writing that the Master
Servicer is diligently pursuing any remedies that may exist in connection with
the representations and warranties made regarding the related
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Mortgage Loan and either (A) the related Mortgage Loan is not in default with
regard to payments due thereunder or (B) delinquent payments of principal and
interest under the related Mortgage Loan and any premiums on any applicable
primary hazard insurance policy and any related escrow payments in respect of
such Mortgage Loan are being advanced on a current basis by the Master Servicer
or a Subservicer, in either case without giving effect to any Debt Service
Reduction.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee, and designated as such in the Preliminary Statement
to the Series Supplement.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the State of New York, the State of Michigan,
the State of California, the State of Illinois or the City of St. ▇▇▇▇,
Minnesota (and such other state or states in which the Custodial Account or the
Certificate Account are at the time located) are required or authorized by law
or executive order to be closed.
Buydown Funds: Any amount contributed by the seller of a Mortgaged
Property, the Company or other source in order to enable the Mortgagor to reduce
the payments required to be made from the Mortgagor's funds in the early years
of a Mortgage Loan. Buydown Funds are not part of the Trust Fund prior to
deposit into the Custodial or Certificate Account.
Buydown Mortgage Loan: Any Mortgage Loan as to which a specified amount of
interest is paid out of related Buydown Funds in accordance with a related
buydown agreement.
Capitalization Reimbursement Amount: As to any Distribution Date, the
amount of Advances or Servicing Advances that were added to the Stated Principal
Balance of the related Mortgage Loans during the prior calendar month and
reimbursed to the Master Servicer or Subservicer on or prior to such
Distribution Date pursuant to Section 3.10(a)(vii), plus the Capitalization
Reimbursement Shortfall Amount remaining unreimbursed from any prior
Distribution Date and reimbursed to the Master Servicer or Subservicer on or
prior to such Distribution Date.
Capitalization Reimbursement Shortfall Amount: As to any Distribution Date,
the amount, if any, by which the amount of Advances or Servicing Advances that
were added to the Stated Principal Balance of the Mortgage Loans during the
preceding calendar month exceeds the amount of principal payments on the
Mortgage Loans included in the Available Distribution Amount for that
Distribution Date.
Call Rights: As defined in Section 9.01(f).
Cash Liquidation: As to any defaulted Mortgage Loan other than a Mortgage
Loan as to which an REO Acquisition occurred, a determination by the Master
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds and
other payments or cash recoveries which the Master Servicer reasonably and in
good faith expects to be finally recoverable with respect to such Mortgage Loan.
Certificate Account Deposit Date: As to any Distribution Date, the Business
Day prior thereto.
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Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, and, in respect of any Insured
Certificates, the Certificate Insurer to the extent of Cumulative Insurance
Payments, except that neither a Disqualified Organization nor a Non-United
States Person shall be a holder of a Class R Certificate for purposes hereof
and, solely for the purpose of giving any consent or direction pursuant to this
Agreement, any Certificate, other than a Class R Certificate, registered in the
name of the Company, the Master Servicer or any Subservicer or any Affiliate
thereof shall be deemed not to be outstanding and the Percentage Interest or
Voting Rights evidenced thereby shall not be taken into account in determining
whether the requisite amount of Percentage Interests or Voting Rights necessary
to effect any such consent or direction has been obtained. All references herein
to "Holders" or "Certificateholders" shall reflect the rights of Certificate
Owners as they may indirectly exercise such rights through the Depository and
participating members thereof, except as otherwise specified herein; provided,
however, that the Trustee shall be required to recognize as a "Holder" or
"Certificateholder" only the Person in whose name a Certificate is registered in
the Certificate Register.
Certificate Insurer: As defined in the Series Supplement.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to each Certificate (other than
any Interest Only Certificate), on any date of determination, an amount equal
to:
(i) the Initial Certificate Principal Balance of such Certificate as
specified on the face thereof, plus
(ii) any Subsequent Recoveries added to the Certificate Principal Balance
of such Certificate pursuant to Section 4.02, plus
(iii) in the case of each Accrual Certificate, an amount equal to the
aggregate Accrued Certificate Interest added to the Certificate
Principal Balance thereof prior to such date of determination, minus
(iv) the sum of (x) the aggregate of all amounts previously distributed
with respect to such Certificate (or any predecessor Certificate) and
applied to reduce the Certificate Principal Balance thereof pursuant
to Section 4.02(a) and (y) the aggregate of all reductions in
Certificate Principal Balance deemed to have occurred in connection
with Realized Losses which were previously allocated to such
Certificate (or any predecessor Certificate) pursuant to Section 4.05;
provided, that the Certificate Principal Balance of the Class of Subordinate
Certificates with the Lowest Priority at any given time shall be further reduced
by an amount equal to the Percentage Interest evidenced by such Certificate
multiplied by the excess, if any, of (A) the then aggregate Certificate
Principal Balance of all Classes of Certificates then outstanding over (B) the
then aggregate Stated Principal Balance of the Mortgage Loans.
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Certificate Register and Certificate Registrar: The register maintained and
the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates bearing the same designation.
The initial Class A-V Certificates and any Subclass thereof issued pursuant to
Section 5.01(c) shall be a single Class for purposes of this Agreement.
Class A-P Certificate: Any one of the Certificates designated as a Class
A-P Certificate.
Class A-P Collection Shortfall: With respect to the Cash Liquidation or REO
Disposition of a Discount Mortgage Loan and any Distribution Date, the excess of
the amount described in Section 4.02(b)(i)(C)(1) over the amount described in
Section 4.02(b)(i)(C)(2).
Class A-P Principal Distribution Amount: As defined in Section 4.02.
Class A-V Certificate: Any one of the Certificates designated as a Class
A-V Certificate, including any Subclass thereof.
Class B Certificate: Any one of the Certificates designated as a Class B-1
Certificate, Class B-2 Certificate or Class B-3 Certificate.
Class M Certificate: Any one of the Certificates designated as a Class M-1
Certificate, Class M-2 Certificate or Class M-3 Certificate.
Closing Date: As defined in the Series Supplement.
Code: The Internal Revenue Code of 1986.
Combined Collateral LLC: Combined Collateral LLC, a Delaware limited
liability company.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date, an amount
equal to Prepayment Interest Shortfalls resulting from Principal Prepayments in
Full during the related Prepayment Period and Curtailments during the prior
calendar month and included in the Available Distribution Amount for such
Distribution Date, but not more than the lesser of (a) one-twelfth of 0.125% of
the Stated Principal Balance of the Mortgage Loans immediately preceding such
Distribution Date and (b) the sum of the Servicing Fee and all income and gain
on amounts held in the Custodial Account and the Certificate Account and payable
to the Certificateholders with respect to such Distribution Date; provided that
for purposes of this definition the amount of the Servicing Fee will not be
reduced pursuant to Section 7.02(a) except as may be required pursuant to the
last sentence of such paragraph.
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.
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Cooperative Apartment: A dwelling unit in a multi-dwelling building owned
or leased by a Cooperative, which unit the Mortgagor has an exclusive right to
occupy pursuant to the terms of a proprietary lease or occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
Credit Repository: Equifax, Transunion and Experian, or their successors in
interest.
Credit Support Depletion Date: The first Distribution Date on which the
Certificate Principal Balances of the Subordinate Certificates have been reduced
to zero.
Credit Support Pledge Agreement: The Credit Support Pledge Agreement, dated
as of November 24, 1998, among the Master Servicer, GMAC Mortgage Corporation,
Combined Collateral LLC and The First National Bank of Chicago (now known as
Bank One, National Association), as custodian.
Cumulative Insurance Payments: As defined in the Series Supplement.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and maintained
pursuant to Section 3.07 in the name of a depository institution, as custodian
for the holders of the Certificates, for the holders of certain other interests
in mortgage loans serviced or sold by the Master Servicer and for the Master
Servicer, into which the amounts set forth in Section 3.07 shall be deposited
directly. Any such account or accounts shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the
Company, the Master Servicer, the Trustee and a Custodian pursuant to which the
Custodian will hold certain documents relating to the Mortgage Loans on behalf
of the Trustee.
8
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date Principal Balance: As to any Mortgage Loan, the unpaid
principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due on or prior thereto (or due during the month of
the Cut-Off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any Certificate other than a Book-Entry
Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to 59
days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the last business day
immediately prior to the next following monthly scheduled due date; "60 to 89
days" or "60 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the last business day
immediately prior to the second following monthly scheduled due date; and so on.
The determination as to whether a Mortgage Loan falls into these categories is
made as of the close of business on the last business day of each month. For
example, a Mortgage Loan with a payment due on July 1 that remained unpaid as of
the close of business on July 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and
prepared as of the close of business on the last business day immediately prior
to the Cut-off Date.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York and
a "clearing agency" registered pursuant to the provisions of Section 17A of the
Securities Exchange Act of 1934, as amended.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
9
Determination Date: As defined in the Series Supplement.
Discount Fraction: With respect to each Discount Mortgage Loan, the
fraction expressed as a percentage, the numerator of which is the Discount Net
Mortgage Rate minus the Net Mortgage Rate (or the initial Net Mortgage Rate with
respect to any Discount Mortgage Loans as to which the Mortgage Rate is modified
pursuant to 3.07(a)) for such Mortgage Loan and the denominator of which is the
Discount Net Mortgage Rate. The Discount Fraction with respect to each Discount
Mortgage Loan is set forth as an exhibit attached to the Series Supplement.
Discount Mortgage Loan: Any Mortgage Loan having a Net Mortgage Rate (or
the initial Net Mortgage Rate) of less than the Discount Net Mortgage Rate per
annum and any Mortgage Loan deemed to be a Discount Mortgage Loan pursuant to
the definition of Qualified Substitute Mortgage Loan.
Discount Net Mortgage Rate: As defined in the Series Supplement.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, and if not otherwise
included, any of the following: (i) the United States, any State or political
subdivision thereof, any possession of the United States, or any agency or
instrumentality of any of the foregoing (other than an instrumentality which is
a corporation if all of its activities are subject to tax and, except for
▇▇▇▇▇▇▇ Mac, a majority of its board of directors is not selected by such
governmental unit), (ii) a foreign government, any international organization,
or any agency or instrumentality of any of the foregoing, (iii) any organization
(other than certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from the tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income), (iv)
rural electric and telephone cooperatives described in Section 1381(a)(2)(C) of
the Code, (v) any "electing large partnership," as defined in Section 775(a) of
the Code and (vi) any other Person so designated by the Trustee based upon an
Opinion of Counsel that the holding of an Ownership Interest in a Class R
Certificate by such Person may cause the Trust Fund or any Person having an
Ownership Interest in any Class of Certificates (other than such Person) to
incur a liability for any federal tax imposed under the Code that would not
otherwise be imposed but for the Transfer of an Ownership Interest in a Class R
Certificate to such Person. The terms "United States", "State" and
"international organization" shall have the meanings set forth in Section 7701
of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month
immediately following the month of the initial issuance of the Certificates or,
if such 25th day is not a Business Day, the Business Day immediately following
such 25th day.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which the Monthly Payment is due.
Due Period: With respect to any Distribution Date, the one-month period set
forth in the Series Supplement.
Eligible Account: An account that is any of the following: (i) maintained
with a depository institution the debt obligations of which have been rated by
each Rating Agency in its
10
highest rating available, or (ii) an account or accounts in a depository
institution in which such accounts are fully insured to the limits established
by the FDIC, provided that any deposits not so insured shall, to the extent
acceptable to each Rating Agency, as evidenced in writing, be maintained such
that (as evidenced by an Opinion of Counsel delivered to the Trustee and each
Rating Agency) the registered Holders of Certificates have a claim with respect
to the funds in such account or a perfected first security interest against any
collateral (which shall be limited to Permitted Investments) securing such funds
that is superior to claims of any other depositors or creditors of the
depository institution with which such account is maintained, or (iii) in the
case of the Custodial Account, a trust account or accounts maintained in the
corporate trust department of [ ], or (iv) in the case of the
Certificate Account, a trust account or accounts maintained in the corporate
trust division of the Trustee, or (v) an account or accounts of a depository
institution acceptable to each Rating Agency (as evidenced in writing by each
Rating Agency that use of any such account as the Custodial Account or the
Certificate Account will not reduce the rating assigned to any Class of
Certificates by such Rating Agency below the lower of the then-current rating or
the rating assigned to such Certificates as of the Closing Date by such Rating
Agency).
Event of Default: As defined in Section 7.01.
Excess Bankruptcy Loss: Any Bankruptcy Loss, or portion thereof, which
exceeds the then applicable Bankruptcy Amount.
Excess Fraud Loss: Any Fraud Loss, or portion thereof, which exceeds the
then applicable Fraud Loss Amount.
Excess Special Hazard Loss: Any Special Hazard Loss, or portion thereof,
that exceeds the then applicable Special Hazard Amount.
Excess Subordinate Principal Amount: With respect to any Distribution Date
on which the aggregate Certificate Principal Balance of the Class of Subordinate
Certificates then outstanding with the Lowest Priority is to be reduced to zero
and on which Realized Losses are to be allocated to such class or classes, the
excess, if any, of (i) the amount that would otherwise be distributable in
respect of principal on such class or classes of Certificates on such
Distribution Date over (ii) the excess, if any, of the aggregate Certificate
Principal Balance of such class or classes of Certificates immediately prior to
such Distribution Date over the aggregate amount of Realized Losses to be
allocated to such classes of Certificates on such Distribution Date as reduced
by any amount calculated pursuant to Section 4.02(b)(i)(E). With respect to any
Mortgage Pool that is comprised of two or more Loan Groups, the Excess
Subordinate Principal Amount will be allocated between each Loan Group on a pro
rata basis in accordance with the amount of Realized Losses attributable to each
Loan Group and allocated to the Certificates on such Distribution Date.
Exchange Act: The Securities and Exchange Act of 1934, as amended.
Extraordinary Events: Any of the following conditions with respect to a
Mortgaged Property (or, with respect to a Cooperative Loan, the Cooperative
Apartment) or Mortgage Loan causing or resulting in a loss which causes the
liquidation of such Mortgage Loan:
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(a) losses that are of the type that would be covered by the fidelity bond
and the errors and omissions insurance policy required to be maintained pursuant
to Section 3.12(b) but are in excess of the coverage maintained thereunder;
(b) nuclear reaction or nuclear radiation or radioactive contamination, all
whether controlled or uncontrolled, and whether such loss be direct or indirect,
proximate or remote or be in whole or in part caused by, contributed to or
aggravated by a peril covered by the definition of the term "Special Hazard
Loss";
(c) hostile or warlike action in time of peace or war, including action in
hindering, combating or defending against an actual, impending or expected
attack:
1. by any government or sovereign power, de jure or de facto, or by
any authority maintaining or using military, naval or air forces;
or
2. by military, naval or air forces; or
3. by an agent of any such government, power, authority or forces;
(d) any weapon of war employing atomic fission or radioactive force whether
in time of peace or war; or
(e) insurrection, rebellion, revolution, civil war, usurped power or action
taken by governmental authority in hindering, combating or defending against
such an occurrence, seizure or destruction under quarantine or customs
regulations, confiscation by order of any government or public authority; or
risks of contraband or illegal transportation or trade.
Extraordinary Losses: Any loss incurred on a Mortgage Loan caused by or
resulting from an Extraordinary Event.
▇▇▇▇▇▇ Mae: Federal National Mortgage Association, a federally chartered
and privately owned corporation organized and existing under the Federal
National Mortgage Association Charter Act, or any successor thereto.
FDIC: Federal Deposit Insurance Corporation or any successor thereto.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
9.01, which Final Distribution Date shall in no event be later than the end of
the 90-day liquidation period described in Section 9.02.
Fitch: Fitch, Inc. or its successor in interest.
Form 10-K Certification: As defined in Section 4.03(e).
Foreclosure Profits: As to any Distribution Date or related Determination
Date and any Mortgage Loan, the excess, if any, of Liquidation Proceeds,
Insurance Proceeds and REO Proceeds (net of all amounts reimbursable therefrom
pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or REO
Property for which a Cash Liquidation or REO Disposition
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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.
Fraud Losses: Losses on Mortgage Loans as to which there was fraud in the
origination of such Mortgage Loan.
▇▇▇▇▇▇▇ Mac: Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Highest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with a Certificate Principal Balance greater than
zero, with the earliest priority for payments pursuant to Section 4.02(a), in
the following order: Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and
Class B-3 Certificates.
Independent: When used with respect to any specified Person, means such a
Person who (i) is in fact independent of the Company, the Master Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any direct financial
interest or any material indirect financial interest in the Company, the Master
Servicer or the Trustee or in an Affiliate thereof, and (iii) is not connected
with the Company, the Master Servicer or the Trustee as an officer, employee,
promoter, underwriter, trustee, partner, director or person performing similar
functions.
Initial Certificate Principal Balance: With respect to each Class of
Certificates, the Certificate Principal Balance of such Class of Certificates as
of the Cut-off Date, as set forth in the Series Supplement.
Initial Monthly Payment Fund: An amount representing scheduled principal
amortization and interest at the Net Mortgage Rate for the Due Date in the first
Due Period commencing subsequent to the Cut-off Date for those Mortgage Loans
for which the Trustee will not be entitled to receive such payment, and as more
specifically defined in the Series Supplement.
Initial Notional Amount: With respect to any Class or Subclass of Interest
Only Certificates, the amount initially used as the principal basis for the
calculation of any interest payment amount, as more specifically defined in the
Series Supplement.
Initial Subordinate Class Percentage: As defined in the Series Supplement.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans pursuant
to any Primary Insurance Policy or any other related insurance policy covering a
Mortgage Loan (excluding any Certificate Policy (as defined in the Series
Supplement)), to the extent such proceeds are payable to the mortgagee under the
Mortgage, any Subservicer, the Master Servicer or the Trustee and are not
applied to the restoration of the related Mortgaged Property (or, with respect
to a Cooperative Loan, the related Cooperative Apartment) or released to the
Mortgagor
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in accordance with the procedures that the Master Servicer would follow in
servicing mortgage loans held for its own account.
Insurer: Any named insurer under any Primary Insurance Policy or any
successor thereto or the named insurer in any replacement policy.
Interest Accrual Period: As defined in the Series Supplement.
Interest Only Certificates: A Class or Subclass of Certificates not
entitled to payments of principal, and designated as such in the Series
Supplement. The Interest Only Certificates will have no Certificate Principal
Balance.
Interim Certification: As defined in Section 2.02.
Junior Certificateholder: The Holder of not less than 95% of the Percentage
Interests of the Junior Class of Certificates.
Junior Class of Certificates: The Class of Subordinate Certificates
outstanding as of the date of the repurchase of a Mortgage Loan pursuant to
Section 4.07 herein that has the Lowest Priority.
Late Collections: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received by
the Master Servicer in connection with the taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or in
connection with the liquidation of a defaulted Mortgage Loan through trustee's
sale, foreclosure sale or otherwise, other than REO Proceeds.
Loan Group: Any group of Mortgage Loans designated as a separate loan group
in the Series Supplement. The Certificates relating to each Loan Group will be
designated in the Series Supplement.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.
Lower Priority: As of any date of determination and any Class of
Subordinate Certificates, any other Class of Subordinate Certificates then
outstanding with a Certificate Principal Balance greater than zero, with later
priority for payments pursuant to Section 4.02(a).
Lowest Priority: As of any date of determination, the Class of Subordinate
Certificates then outstanding with the latest priority for payments pursuant to
Section 4.02(a), in the following order: Class B-3, Class B-2, Class B-1, Class
M-3, Class M-2 and Class M-1 Certificates.
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Maturity Date: The latest possible maturity date, solely for purposes of
Section 1.860G-1(a)(4)(iii) of the Treasury regulations, by which the
Certificate Principal Balance of each Class of Certificates (other than the
Interest Only Certificates which have no Certificate Principal Balance) and each
Uncertificated REMIC Regular Interest would be reduced to zero, as designated in
the Series Supplement.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R) System.
MLCC: ▇▇▇▇▇▇▇ ▇▇▇▇▇ Credit Corporation, or its successor in interest.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a
Servicing Modification.
Modified Mortgage Rate: As 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: As to any Mortgage Loan that is the subject of
a Servicing Modification, the Net Mortgage Rate minus the rate per annum by
which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and any Due Date, the payment of principal and interest due thereon in
accordance with the amortization schedule at the time applicable thereto (after
adjustment, if any, for Curtailments and for Deficient Valuations occurring
prior to such Due Date but before any adjustment to such amortization schedule
by reason of any bankruptcy, other than a Deficient Valuation, or similar
proceeding or any moratorium or similar waiver or grace period and before any
Servicing Modification that constitutes a reduction of the interest rate on such
Mortgage Loan).
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or its successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan
which is not a Cooperative Loan, the mortgage, deed of trust or other comparable
instrument creating a first lien on an estate in fee simple or leasehold
interest in real property securing a Mortgage Note.
15
Mortgage File: The mortgage documents listed in Section 2.01 pertaining to
a particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and assigned to the
Trustee pursuant to Section 2.01 as from time to time are held or deemed to be
held as a part of the Trust Fund, the Mortgage Loans originally so held being
identified in the initial Mortgage Loan Schedule, and Qualified Substitute
Mortgage Loans held or deemed held as part of the Trust Fund including, without
limitation, (i) with respect to each Cooperative Loan, the related Mortgage
Note, Security Agreement, Assignment of Proprietary Lease, Cooperative Stock
Certificate, Cooperative Lease and Mortgage File and all rights appertaining
thereto, and (ii) with respect to each Mortgage Loan other than a Cooperative
Loan, each related Mortgage Note, Mortgage and Mortgage File and all rights
appertaining thereto.
Mortgage Loan Schedule: As defined in the Series Supplement.
Mortgage Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with any modification thereto.
Mortgage Pool: The pool of mortgage loans, including all Loan Groups, if
any, consisting of the Mortgage Loans.
Mortgage Rate: As to any Mortgage Loan, the interest rate borne by the
related Mortgage Note, or any modification thereto other than a Servicing
Modification.
Mortgaged Property: The underlying real property securing a Mortgage Loan
or, with respect to a Cooperative Loan, the related Cooperative Lease and
Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: As to each Mortgage Loan, a per annum rate of interest
equal to the Adjusted Mortgage Rate less the per annum rate at which the
Servicing Fee is calculated.
Non-Discount Mortgage Loan: A Mortgage Loan that is not a Discount Mortgage
Loan.
Non-Primary Residence Loans: The Mortgage Loans designated as secured by
second or vacation residences, or by non-owner occupied residences, on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be made
by the Master Servicer or Subservicer in respect of a Mortgage Loan (other than
a Deleted Mortgage Loan) which, in the good faith judgment of the Master
Servicer, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds, REO Proceeds or amounts reimbursable
to the Master Servicer pursuant to Section 4.02(a) hereof. To the extent that
any Mortgagor is not obligated under the related Mortgage documents to pay or
reimburse any
16
portion of any Servicing Advances that are outstanding with respect to the
related Mortgage Loan as a result of a modification of such Mortgage Loan by the
Master Servicer, which forgives amounts which the Master Servicer or Subservicer
had previously advanced, and the Master Servicer determines that no other source
of payment or reimbursement for such advances is available to it, such Servicing
Advances shall be deemed to be Nonrecoverable Advances. The determination by the
Master Servicer that it has made a Nonrecoverable Advance or that any proposed
Advance would constitute a Nonrecoverable Advance, shall be evidenced by an
Officers' Certificate delivered to the Company, the Trustee and any Certificate
Insurer.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Notional Amount: With respect to any Class or Subclass of Interest Only
Certificates, an amount used as the principal basis for the calculation of any
interest payment amount, as more specifically defined in the Series Supplement.
Officers' Certificate: A certificate signed by the Chairman of the Board,
the President or a Vice President or Assistant Vice President, or a Director or
Managing Director, and by the Treasurer, the Secretary, or one of the Assistant
Treasurers or Assistant Secretaries of the Company or the Master Servicer, as
the case may be, and delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the Trustee
and the Master Servicer, who may be counsel for the Company or the Master
Servicer, provided that any opinion of counsel (i) referred to in the definition
of "Disqualified Organization" or (ii) relating to the qualification of any
REMIC formed under the Series Supplement or compliance with the REMIC Provisions
must, unless otherwise specified, be an opinion of Independent counsel.
Outstanding Mortgage Loan: As to any Due Date, a Mortgage Loan (including
an REO Property) which was not the subject of a Principal Prepayment in Full,
Cash Liquidation or REO Disposition and which was not purchased, deleted or
substituted for prior to such Due Date pursuant to Section 2.02, 2.03, 2.04 or
4.07.
Ownership Interest: As to any Certificate, any ownership or security
interest in such Certificate, including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial, as owner or as pledgee.
Pass-Through Rate: As defined in the Series Supplement.
Paying Agent: The Trustee or any successor Paying Agent appointed by the
Trustee.
Percentage Interest: With respect to any Certificate (other than a Class R
Certificate), the undivided percentage ownership interest in the related Class
evidenced by such Certificate, which percentage ownership interest shall be
equal to the Initial Certificate Principal Balance thereof or Initial Notional
Amount (in the case of any Interest Only Certificate) thereof divided by the
aggregate Initial Certificate Principal Balance or the aggregate of the Initial
Notional Amounts, as applicable, of all the Certificates of the same Class. With
respect to a Class R
17
Certificate, the interest in distributions to be made with respect to such Class
evidenced thereby, expressed as a percentage, as stated on the face of each such
Certificate.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to 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 (or, if the only Rating Agency
is Standard & Poor's, in the case of the principal depository
institution in a depository institution holding company, debt
obligations of the depository institution holding 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
only Rating Agency is Standard & Poor's and if the depository or trust
company is a principal subsidiary of a bank holding company and the
debt obligations of such subsidiary are not separately rated, the
applicable rating shall be that of the bank holding company; and,
provided further that, if the original maturity of such short-term
obligations of a domestic branch of a foreign depository institution
or trust company shall exceed 30 days, the short-term rating of such
institution shall be A-1+ in the case of Standard & Poor's if Standard
& Poor's is the Rating Agency;
(iv) commercial paper and demand notes (having original maturities of not
more than 365 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of
acquisition has been rated by each Rating Agency in its highest
short-term rating available; provided that such commercial paper shall
have a remaining maturity of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each
Rating Agency in its highest long-term rating available; 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 lower of the then-current
18
rating or the rating assigned to such Certificates as of the Closing
Date by such Rating Agency, as evidenced in writing;
provided, however, no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations. References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Fitch and Aaa
in the case of Moody's, and references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean A-1 in the
case of Standard & Poor's, P-1 in the case of Moody's and either A-1 by Standard
& Poor's, P-1 by Moody's or F-1 by Fitch in the case of Fitch; provided,
however, that any Permitted Investment that is a short-term debt obligation
rated A-1 by Standard & Poor's must satisfy the following additional conditions:
(i) the total amount of debt from A-1 issuers must be limited to the investment
of monthly principal and interest payments (assuming fully amortizing
collateral); (ii) the total amount of A-1 investments must not represent more
than 20% of the aggregate outstanding Certificate Principal Balance of the
Certificates and each investment must not mature beyond 30 days; (iii)
investments in A-1 rated securities are not eligible for the Reserve Fund; (iv)
the terms of the debt must have a predetermined fixed dollar amount of principal
due at maturity that cannot vary; and (v) 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.
Permitted Transferee: Any Transferee of a Class R Certificate, other than a
Disqualified Organization or Non-United States Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pledged Amount: With respect to any Pledged Asset Loan, the amount of money
remitted to Combined Collateral LLC, at the direction of or for the benefit of
the related Mortgagor.
Pledged Asset Loan: Any Mortgage Loan supported by Pledged Assets or such
other collateral, other than the related Mortgaged Property, set forth in the
Series Supplement.
Pledged Assets: With respect to any Mortgage Loan, all money, securities,
security entitlements, accounts, general intangibles, instruments, documents,
certificates of deposit, commodities contracts and other investment property and
other property of whatever kind or description pledged by Combined Collateral
LLC as security in respect of any Realized Losses in connection with such
Mortgage Loan up to the Pledged Amount for such Mortgage Loan, and any related
collateral, or such other collateral as may be set forth in the Series
Supplement.
19
Pledged Asset Mortgage Servicing Agreement: The Pledged Asset Mortgage
Servicing Agreement, dated as of February 28, 1996 between MLCC and the Master
Servicer.
Pooling and Servicing Agreement or Agreement: With respect to any Series,
this Standard Terms together with the related Series Supplement.
Pool Stated Principal Balance: As to any Distribution Date, the aggregate
of the Stated Principal Balances of each Mortgage Loan.
Pool Strip Rate: With respect to each Mortgage Loan, a per annum rate equal
to the excess of (a) the Net Mortgage Rate of such Mortgage Loan over (b) the
Discount Net Mortgage Rate (but not less than 0.00%) per annum.
Prepayment Distribution Trigger: With respect to any Distribution Date and
any Class of Subordinate Certificates (other than the Class M-1 Certificates), a
test that shall be satisfied if the fraction (expressed as a percentage) equal
to the sum of the Certificate Principal Balances of such Class and each Class of
Subordinate Certificates with a Lower Priority than such Class immediately prior
to such Distribution Date divided by the aggregate Stated Principal Balance of
all of the Mortgage Loans (or related REO Properties) immediately prior to such
Distribution Date is greater than or equal to the sum of the related Initial
Subordinate Class Percentages of such Classes of Subordinate Certificates.
Prepayment Interest Shortfall: As to any Distribution Date and any Mortgage
Loan (other than a Mortgage Loan relating to an REO Property) that was the
subject of (a) a Principal Prepayment in Full during the portion of the related
Prepayment Period that falls during the prior calendar month, an amount equal to
the excess of one month's interest at the Net Mortgage Rate (or Modified Net
Mortgage Rate in the case of a Modified Mortgage Loan) on the Stated Principal
Balance of such Mortgage Loan over the amount of interest (adjusted to the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified Mortgage
Loan)) paid by the Mortgagor for such month to the date of such Principal
Prepayment in Full or (b) a Curtailment during the prior calendar month, an
amount equal to one month's interest at the Net Mortgage Rate (or Modified Net
Mortgage Rate in the case of a Modified Mortgage Loan) on the amount of such
Curtailment.
Prepayment Period: As to any Distribution Date and Principal Prepayment in
Full, the period commencing on the 16th day of the month prior to the month
prior to the month in which that Distribution Date occurs and ending on the 15th
day of the month in which such Distribution Date occurs.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance or any replacement policy therefor referred to in Section 2.03(b)(iv)
and (v).
Principal Only Certificates: A Class of Certificates not entitled to
payments of interest, and more specifically designated as such in the Series
Supplement.
Principal Prepayment: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is
20
received in advance of its scheduled Due Date and is not accompanied by an
amount as to interest representing scheduled interest on such payment due on any
date or dates in any month or months subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment of the entire
principal balance of a Mortgage Loan that is made by the Mortgagor.
Program Guide: Collectively, the Client Guide and the Servicer Guide for
Residential Funding's mortgage loan purchase and conduit servicing program and
all supplements and amendments thereto published by Residential Funding from
time to time.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to Section 2.02,
2.03, 2.04 or 4.07, an amount equal to the sum of (i) 100% of the Stated
Principal Balance thereof plus the principal portion of any related unreimbursed
Advances and (ii) unpaid accrued interest at the Adjusted Mortgage Rate (or
Modified Net Mortgage Rate plus the rate per annum at which the Servicing Fee is
calculated in the case of a Modified Mortgage Loan) (or at the Net Mortgage Rate
(or Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) in the
case of a purchase made by the Master Servicer) on the Stated Principal Balance
thereof to the Due Date in the Due Period related to the Distribution Date
occurring in the month following the month of purchase from the Due Date to
which interest was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Company for a Deleted Mortgage Loan which must, on
the date of such substitution, as confirmed in an Officers' Certificate
delivered to the Trustee, with a copy to the Custodian,
(i) have an outstanding principal balance, after deduction of the
principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding
principal balance, after such deduction), not in excess of the Stated
Principal Balance of the Deleted Mortgage Loan (the amount of any
shortfall to be deposited by Residential Funding in the Custodial
Account in the month of substitution);
(ii) have a Mortgage Rate and a Net Mortgage Rate no lower than and not
more than 1% per annum higher than the Mortgage Rate and Net Mortgage
Rate, respectively, of the Deleted Mortgage Loan as of the date of
substitution;
(iii) have a Loan-to-Value Ratio at the time of substitution no higher than
that of the Deleted Mortgage Loan at the time of substitution;
(iv) have a remaining term to stated maturity not greater than (and not
more than one year less than) that of the Deleted Mortgage Loan;
(v) comply with each representation and warranty set forth in Sections
2.03 and 2.04 hereof and Section 4 of the Assignment Agreement; and
21
(vi) have a Pool Strip Rate equal to or greater than that of the Deleted
Mortgage Loan.
Notwithstanding any other provisions herein, (x) with respect to any Qualified
Substitute Mortgage Loan substituted for a Deleted Mortgage Loan which was a
Discount Mortgage Loan, such Qualified Substitute Mortgage Loan shall be deemed
to be a Discount Mortgage Loan and to have a Discount Fraction equal to the
Discount Fraction of the Deleted Mortgage Loan and (y) in the event that the
"Pool Strip Rate" of any Qualified Substitute Mortgage Loan as calculated
pursuant to the definition of "Pool Strip Rate" is greater than the Pool Strip
Rate of the related Deleted Mortgage Loan
(i) the Pool Strip Rate of such Qualified Substitute Mortgage Loan shall
be equal to the Pool Strip Rate of the related Deleted Mortgage Loan
for purposes of calculating the Pass-Through Rate on the Class A-V
Certificates and
(ii) the excess of the Pool Strip Rate on such Qualified Substitute
Mortgage Loan as calculated pursuant to the definition of "Pool Strip
Rate" over the Pool Strip Rate on the related Deleted Mortgage Loan
shall be payable to the Class R Certificates pursuant to Section 4.02
hereof.
Rating Agency: Each of the statistical credit rating agencies specified in
the Preliminary Statement of the Series Supplement. If any agency or a successor
is no longer in existence, "Rating Agency" shall be such statistical credit
rating agency, or other comparable Person, designated by the Company, notice of
which designation shall be given to the Trustee and the Master Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO Property):
(a) as to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii) interest (and REO Imputed Interest, if any) at the Net
Mortgage Rate from the Due Date as to which interest was last paid or advanced
to Certificateholders up to the Due Date in the Due Period related to the
Distribution Date on which such Realized Loss will be allocated pursuant to
Section 4.05 on the Stated Principal Balance of such Mortgage Loan (or REO
Property) outstanding during each Due Period that such interest was not paid or
advanced, minus (iii) the proceeds, if any, received during the month in which
such Cash Liquidation (or REO Disposition) occurred, to the extent applied as
recoveries of interest at the Net Mortgage Rate and to principal of the Mortgage
Loan, net of the portion thereof reimbursable to the Master Servicer or any
Subservicer with respect to related Advances, Servicing Advances or other
expenses as to which the Master Servicer or Subservicer is entitled to
reimbursement thereunder but which have not been previously reimbursed,
(b) which is the subject of a Servicing Modification, (i) (1) the amount by
which the interest portion of a Monthly Payment or the principal balance of such
Mortgage Loan was reduced or (2) the sum of any other amounts owing under the
Mortgage Loan that were forgiven and that constitute Servicing Advances that are
reimbursable to the Master Servicer or a Subservicer, and (ii) any such amount
with respect to a Monthly Payment that was or would have
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been due in the month immediately following the month in which a Principal
Prepayment or the Purchase Price of such Mortgage Loan is received or is deemed
to have been received,
(c) which has become the subject of a Deficient Valuation, the difference
between the principal balance of the Mortgage Loan outstanding immediately prior
to such Deficient Valuation and the principal balance of the Mortgage Loan as
reduced by the Deficient Valuation, or
(d) which has become the object of a Debt Service Reduction, the amount of
such Debt Service Reduction.
Notwithstanding the above, neither a Deficient Valuation nor a Debt Service
Reduction shall be deemed a Realized Loss hereunder so long as the Master
Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the
representations and warranties made regarding the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard
insurance policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by the Master Servicer or a
Subservicer, in either case without giving effect to any Debt Service Reduction.
To the extent the Master Servicer receives Subsequent Recoveries with respect to
any Mortgage Loan, the amount of the Realized Loss with respect to that Mortgage
Loan will be reduced to the extent such recoveries are applied to reduce the
Certificate Principal Balance of any Class of Certificates on any Distribution
Date.
Record Date: With respect to each Distribution Date, the close of business
on the last Business Day of the month next preceding the month in which the
related Distribution Date occurs.
Regular Certificate: Any of the Certificates other than a Class R
Certificate.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. Sections 229.1100-229.1123, as such may be amended from time to time,
and subject to such clarification and interpretation as have been provided by
the Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Relief Act: The Servicemembers Civil Relief Act or similar legislation or
regulations as in effect from time to time.
Relief Act Shortfalls: Shortfalls in interest payable by a Mortgagor that
are not collectible from the Mortgagor pursuant to the Relief Act.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code.
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REMIC Administrator: Residential Funding Corporation. If Residential
Funding Corporation is found by a court of competent jurisdiction to no longer
be able to fulfill its obligations as REMIC Administrator under this Agreement
the Master Servicer or Trustee acting as Master Servicer shall appoint a
successor REMIC Administrator, subject to assumption of the REMIC Administrator
obligations under this Agreement.
REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at Sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and temporary
and final regulations (or, to the extent not inconsistent with such temporary or
final regulations, proposed regulations) and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
REO Acquisition: The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
REO Disposition: As to any REO Property, a determination by the Master
Servicer that it has received all Insurance Proceeds, Liquidation Proceeds, REO
Proceeds and other payments and recoveries (including proceeds of a final sale)
which the Master Servicer expects to be finally recoverable from the sale or
other disposition of the REO Property.
REO Imputed Interest: As to any REO Property, for any period, an amount
equivalent to interest (at the Net Mortgage Rate that would have been applicable
to the related Mortgage Loan had it been outstanding) on the unpaid principal
balance of the Mortgage Loan as of the date of acquisition thereof for such
period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property or, with respect to a Cooperative Loan, the related
Cooperative Apartment) which proceeds are required to be deposited into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer through
foreclosure or deed in lieu of foreclosure in connection with a defaulted
Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been
subject to an interest rate reduction, (ii) has been subject to a term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized by adding such
amount to the Stated Principal Balance of such Mortgage Loan; provided, however,
that a Mortgage Loan modified in accordance with clause (i) above for a
temporary period shall not be a Reportable Modified Mortgage Loan if such
Mortgage Loan has not been delinquent in payments of principal and interest for
six months since the date of such modification if that interest rate reduction
is not made permanent thereafter.
Request for Release: A request for release, the forms of which are attached
as Exhibit F hereto, or an electronic request in a form acceptable to the
Custodian.
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Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this
Agreement, the Program Guide or the related Subservicing Agreement in respect of
such Mortgage Loan.
Required Surety Payment: With respect to any Additional Collateral Loan
that becomes a Liquidated Mortgage Loan, the lesser of (i) the principal portion
of the Realized Loss with respect to such Mortgage Loan and (ii) the excess, if
any, of (a) the amount of Additional Collateral required at origination with
respect to such Mortgage Loan over (b) the net proceeds realized by the
Subservicer from the related Additional Collateral.
Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the Company and
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 with particular
responsibility for this transaction, or any other officer of the Trustee
customarily performing functions similar to those performed by any of the above
designated officers to whom, with respect to a particular matter, such matter is
referred.
Retail Certificates: A Senior Certificate, if any, offered in smaller
minimum denominations than other Senior Certificates, and designated as such in
the Series Supplement.
Schedule of Discount Fractions: The schedule setting forth the Discount
Fractions with respect to the Discount Mortgage Loans, attached as an exhibit to
the Series Supplement.
Securitization Transaction: Any transaction involving a sale or other
transfer of mortgage loans directly or indirectly to an issuing in connection
with an issuance of publicly offered or privately placed, rated or unrated
mortgage-backed securities.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Seller: As to any Mortgage Loan, a Person, including any Subservicer, that
executed a Seller's Agreement applicable to such Mortgage Loan.
Seller's Agreement: An agreement for the origination and sale of Mortgage
Loans generally in the form of the Seller Contract referred to or contained in
the Program Guide, or in such other form as has been approved by the Master
Servicer and the Company, each containing representations and warranties in
respect of one or more Mortgage Loans consistent in all material respects with
those set forth in the Program Guide.
Senior Accelerated Distribution Percentage: With respect to any
Distribution Date occurring on or prior to the 60th Distribution Date and, with
respect to any Mortgage Pool comprised of two or more Loan Groups, any Loan
Group, 100%. With respect to any Distribution Date thereafter and any such Loan
Group, if applicable, as follows:
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(i) for any Distribution Date after the 60th Distribution Date but on or
prior to the 72nd Distribution Date, the related Senior Percentage for
such Distribution Date plus 70% of the related Subordinate Percentage
for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date but on or
prior to the 84th Distribution Date, the related Senior Percentage for
such Distribution Date plus 60% of the related Subordinate Percentage
for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date but on or
prior to the 96th Distribution Date, the related Senior Percentage for
such Distribution Date plus 40% of the related Subordinate Percentage
for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date but on or
prior to the 108th Distribution Date, the related Senior Percentage
for such Distribution Date plus 20% of the related Subordinate
Percentage for such Distribution Date; and
(v) for any Distribution Date thereafter, the Senior Percentage for such
Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated Distribution
Percentage described above shall not occur as of any Distribution Date
unless either
(a)(1)(X) the outstanding principal balance of the Mortgage Loans
delinquent 60 days or more averaged over the last six months, as a
percentage of the aggregate outstanding Certificate Principal Balance of
the Subordinate Certificates, is less than 50% or (Y) the outstanding
principal balance of Mortgage Loans delinquent 60 days or more averaged
over the last six months, as a percentage of the aggregate outstanding
principal balance of all Mortgage Loans averaged over the last six months,
does not exceed 2% and (2) Realized Losses on the Mortgage Loans to date
for such Distribution Date if occurring during the sixth, seventh, eighth,
ninth or tenth year (or any year thereafter) after the Closing Date are
less than 30%, 35%, 40%, 45% or 50%, respectively, of the sum of the
Initial Certificate Principal Balances of the Subordinate Certificates or
(b)(1) the outstanding principal balance of Mortgage Loans delinquent
60 days or more averaged over the last six months, as a percentage of the
aggregate outstanding principal balance of all Mortgage Loans averaged over
the last six months, does not exceed 4% and (2) Realized Losses on the
Mortgage Loans to date for such Distribution Date, if occurring during the
sixth, seventh, eighth, ninth or tenth year (or any year thereafter) after
the Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of
the sum of the Initial Certificate Principal Balances of the Subordinate
Certificates, and
(ii) that for any Distribution Date on which the Senior Percentage is
greater than the Percentage as of the Closing Date, the Senior
Accelerated Distribution Percentage for such Distribution Date shall
be 100%, or, if the Mortgage Pool is comprised of
26
two or more Loan Groups, for any Distribution Date on which the
weighted average of the Senior Percentages for each Loan Group,
weighted on the basis of the Stated Principal Balances of the Mortgage
Loans in the related Loan Group, exceeds the weighted average of the
initial Senior Percentages (calculated on such basis) for each Loan
Group, each of the Senior Accelerated Distribution Percentages for
such Distribution Date will equal 100%.
Notwithstanding the foregoing, upon the reduction of the Certificate Principal
Balances of the related Senior Certificates (other than the Class A-P
Certificates, if any) to zero, the related Senior Accelerated Distribution
Percentage shall thereafter be 0%.
Senior Certificate: As defined in the Series Supplement.
Senior Percentage: As defined in the Series Supplement.
Senior Support Certificate: A Senior Certificate that provides additional
credit enhancement to certain other classes of Senior Certificates and
designated as such in the Preliminary Statement of the Series Supplement.
Series: All of the Certificates issued pursuant to a Pooling and Servicing
Agreement and bearing the same series designation.
Series Supplement: The agreement into which this Standard Terms is
incorporated and pursuant to which, together with this Standard Terms, a Series
of Certificates is issued.
Servicing Accounts: The account or accounts created and maintained pursuant
to Section 3.08.
Servicing 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, 3.12(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 designated on the Mortgage Loan
Schedule as the "MSTR SERV FEE" for such
27
Mortgage Loan, as may be adjusted with respect to successor Master Servicers as
provided in Section 7.02.
Servicing Modification: Any reduction of the interest rate on or the
outstanding principal balance of a Mortgage Loan, any extension of the final
maturity date of a Mortgage Loan, and any increase to the outstanding principal
balance of a Mortgage Loan by adding to the Stated Principal Balance unpaid
principal and interest and other amounts owing under the Mortgage Loan, in each
case pursuant to a modification of a Mortgage Loan that is in default, or for
which, in the judgment of the Master Servicer, default is reasonably
foreseeable, in accordance with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee by the Master Servicer, as such list may from time to time be
amended.
Special Hazard Loss: Any Realized Loss not in excess of the cost of the
lesser of repair or replacement of a Mortgaged Property (or, with respect to a
Cooperative Loan, the related Cooperative Apartment) suffered by such Mortgaged
Property (or Cooperative Apartment) on account of direct physical loss,
exclusive of (i) any loss of a type covered by a hazard policy or a flood
insurance policy required to be maintained in respect of such Mortgaged Property
pursuant to Section 3.12(a), except to the extent of the portion of such loss
not covered as a result of any coinsurance provision and (ii) any Extraordinary
Loss.
Standard & Poor's: Standard & Poor's, a division of The ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc., or its successor in interest.
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 plus (b) any amount by which the Stated Principal
Balance of the Mortgage Loan is increased pursuant to a Servicing Modification,
minus (ii) the sum of (a) the principal portion of the Monthly Payments due with
respect to such Mortgage Loan or REO Property during each Due Period ending
prior to the most recent Distribution Date which were received or with respect
to which an Advance was made, and (b) all Principal Prepayments with respect to
such Mortgage Loan or REO Property, and all Insurance Proceeds, Liquidation
Proceeds and REO Proceeds, to the extent applied by the Master Servicer as
recoveries of principal in accordance with Section 3.14 with respect to such
Mortgage Loan or REO Property, in each case which were distributed pursuant to
Section 4.02 on any previous Distribution Date, and (c) any Realized Loss
allocated to Certificateholders with respect thereto for any previous
Distribution Date.
Subclass: With respect to the Class A-V Certificates, any Subclass thereof
issued pursuant to Section 5.01(c). Any such Subclass will represent the
Uncertificated Class A-V REMIC Regular Interest or Interests specified by the
initial Holder of the Class A-V Certificates pursuant to Section 5.01(c).
28
Subordinate Certificate: Any one of the Class M Certificates or Class B
Certificates, executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed hereto as Exhibit B and Exhibit C,
respectively.
Subordinate Class Percentage: With respect to any Distribution Date and any
Class of Subordinate Certificates, a fraction, expressed as a percentage, the
numerator of which is the aggregate Certificate Principal Balance of such Class
of Subordinate Certificates immediately prior to such date and the denominator
of which is the aggregate Stated Principal Balance of all of the Mortgage Loans
(or related REO Properties) (other than the related Discount Fraction of each
Discount Mortgage Loan) immediately prior to such Distribution Date.
Subordinate Percentage: As of any Distribution Date and, with respect to
any Mortgage Pool comprised of two or more Loan Groups, any Loan Group, 100%
minus the related Senior Percentage as of such Distribution Date.
Subsequent Recoveries: As of any Distribution Date, amounts received by the
Master Servicer (net of any related expenses permitted to be reimbursed pursuant
to Section 3.10) or surplus amounts held by the Master Servicer to cover
estimated expenses (including, but not limited to, recoveries in respect of the
representations and warranties made by the related Seller pursuant to the
applicable Seller's Agreement and assigned to the Trustee pursuant to Section
2.04) specifically related to a Mortgage Loan that was the subject of a Cash
Liquidation or an REO Disposition prior to the related Prepayment Period that
resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference
thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in
the Program Guide in respect of the qualification of a Subservicer as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and interest
on a Mortgage Loan which is advanced by the related Subservicer (net of its
Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in accordance
with Section 3.08.
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Company. With respect to
Additional Collateral Loans subserviced by MLCC, the Subservicing Agreement
shall also include the Addendum and Assignment Agreement and the Pledged Asset
Mortgage Servicing Agreement. With respect to any Pledged Asset Loan subserviced
by GMAC Mortgage Corporation, the Addendum and Assignment Agreement, dated as of
November 24, 1998, between the Master Servicer and GMAC Mortgage Corporation, as
such agreement may be amended from time to time.
29
Subservicing Fee: As to any Mortgage Loan, the fee payable monthly to the
related Subservicer (or, in the case of a Nonsubserviced Mortgage Loan, to the
Master Servicer) in respect of subservicing and other compensation that accrues
at an annual rate equal to the excess of the Mortgage Rate borne by the related
Mortgage Note over the rate per annum designated on the Mortgage Loan Schedule
as the "CURR NET" for such Mortgage Loan.
Surety: Ambac, or its successors in interest, or such other surety as may
be identified in the Series Supplement.
Surety Bond: The Limited Purpose Surety Bond (Policy No. AB0039BE), dated
February 28, 1996 in respect to Mortgage Loans originated by MLCC, or the Surety
Bond (Policy No. AB0240BE), dated March 17, 1999 in respect to Mortgage Loans
originated by Novus Financial Corporation, in each case issued by Ambac for the
benefit of certain beneficiaries, including the Trustee for the benefit of the
Holders of the Certificates, but only to the extent that such Surety Bond covers
any Additional Collateral Loans, or such other Surety Bond as may be identified
in the Series Supplement.
Tax Returns: The federal income tax return on Internal Revenue Service Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed on
behalf of any REMIC formed under the Series Supplement and under the REMIC
Provisions, together with any and all other information, reports or returns that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
Transaction Party: As defined in Section 12.02(a).
Transfer: Any direct or indirect transfer, sale, pledge, hypothecation or
other form of assignment of any Ownership Interest in a Certificate.
Transferee: Any Person who is acquiring by Transfer any Ownership Interest
in a Certificate.
Transferor: Any Person who is disposing by Transfer of any Ownership
Interest in a Certificate.
Trust Fund: The segregated pool of assets consisting of:
(i) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all payments on and collections in respect of the Mortgage Loans due
after the Cut-off Date (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, including the proceeds from the liquidation of Additional
Collateral for any Additional Collateral Loan or Pledged Assets for
any Pledged Asset Loan, but not including amounts on deposit in the
Initial Monthly Payment Fund,
30
(iii) property that secured a Mortgage Loan and that has been acquired for
the benefit of the Certificateholders by foreclosure or deed in lieu
of foreclosure,
(iv) the hazard insurance policies and Primary Insurance Policies, if any,
the Pledged Assets with respect to each Pledged Asset Loan, and the
interest in the Surety Bond transferred to the Trustee pursuant to
Section 2.01,
(v) the Initial Monthly Payment Fund, and
(vi) all proceeds of clauses (i) through (v) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Underwriter: As defined in the Series Supplement.
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 created or organized in, or under the
laws of, the United States, provided that, for purposes solely of the
restrictions on the transfer of residual interests, no partnership or other
entity treated as a partnership for United States federal income tax purposes
shall be treated as a United States Person 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 operating agreement to be United States Persons, any state thereof,
or the District of Columbia (except in the case of a partnership, to the extent
provided in Treasury regulations) or any political subdivision thereof, or an
estate that is described in Section 7701(a)(30)(D) of the Code, or a trust that
is described in Section 7701(a)(30)(E) of the Code.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate, and more specifically designated in
Article XI of the Series Supplement.
Section 1.02 Use of Words and Phrases.
"Herein," "hereby," "hereunder," 'hereof," "hereinbefore," "hereinafter"
and other equivalent words refer to the Pooling and Servicing Agreement as a
whole. All references herein to Articles, Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and Servicing
Agreement. The definition set forth herein include both the singular and the
plural.
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ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
(a) The Company, concurrently with the execution and delivery hereof, does
hereby assign to the Trustee without recourse all the right, title and interest
of the Company in and to the Mortgage Loans, including all interest and
principal received on or with respect to the Mortgage Loans after the Cut-off
Date (other than payments of principal and interest due on the Mortgage Loans in
the month of the Cut-off Date). In connection with such transfer and assignment,
the Company does hereby deliver to the Trustee the Certificate Policy (as
defined in the Series Supplement), if any. The Company, the Master Servicer and
the Trustee agree that it is not intended that any mortgage loan be included in
the Trust that is (i) a "High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective November 27, 2003, (ii) a "High-Cost Home Loan" as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004 or
(iii) a "High Cost Home Mortgage Loan" as defined in the Massachusetts Predatory
Home Practices Act effective November 7, 2004.
(b) In connection with such assignment, except as set forth in Section
2.01(c) and subject to Section 2.01(d) below, the Company does hereby deliver
to, and deposit with, the Trustee, or to and with one or more Custodians, as the
duly appointed agent or agents of the Trustee for such purpose, the following
documents or instruments (or copies thereof as permitted by this Section) (I)
with respect to each Mortgage Loan so assigned (other than a Cooperative Loan):
(i) The original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or with
respect to any Destroyed Mortgage Note, an original lost note affidavit
from the related Seller or Residential Funding stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy of the
related Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of the
Mortgage Loan and language indicating that the Mortgage Loan is a MOM Loan
if the Mortgage Loan is a MOM Loan, with evidence of recording indicated
thereon or a copy of the Mortgage with evidence of recording indicated
thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R) System, an
original Assignment of the Mortgage to the Trustee with evidence of
recording indicated thereon or a copy of such assignment with evidence of
recording indicated thereon;
(iv) The original recorded assignment or assignments of the Mortgage
showing an unbroken chain of title from the originator thereof to the
Person assigning it to the Trustee (or to MERS, if the Mortgage Loan is
registered on the MERS(R) System and noting the presence of a MIN) with
evidence of recordation noted thereon or attached
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thereto, or a copy of such assignment or assignments of the Mortgage with
evidence of recording indicated thereon; and
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan or a copy
of each modification, assumption agreement or preferred loan agreement.
and (II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from the
originator thereof to the Person endorsing it to the Trustee, or with
respect to any Destroyed Mortgage Note, an original lost note affidavit
from the related Seller or Residential Funding stating that the original
Mortgage Note was lost, misplaced or destroyed, together with a copy of the
related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(iii) The related Cooperative Stock Certificate, representing the
related Cooperative Stock pledged with respect to such Cooperative Loan,
together with an undated stock power (or other similar instrument) executed
in blank;
(iv) The original recognition agreement by the Cooperative of the
interests of the mortgagee with respect to the related Cooperative Loan;
(v) The Security Agreement;
(vi) Copies of the original UCC-1 financing statement, and any
continuation statements, filed by the originator of such Cooperative Loan
as secured party, each with evidence of recording thereof, evidencing the
interest of the originator under the Security Agreement and the Assignment
of Proprietary Lease;
(vii) Copies of the filed UCC-3 assignments of the security interest
referenced in clause (vi) above showing an unbroken chain of title from the
originator to the Trustee, each with evidence of recording thereof,
evidencing the interest of the originator under the Security Agreement and
the Assignment of Proprietary Lease;
(viii) An executed assignment of the interest of the originator in the
Security Agreement, Assignment of Proprietary Lease and the recognition
agreement referenced in clause (iv) above, showing an unbroken chain of
title from the originator to the Trustee;
(ix) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Cooperative Loan; and
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(x) A duly completed UCC-1 financing statement showing the Master
Servicer as debtor, the Company as secured party and the Trustee as
assignee and a duly completed UCC-1 financing statement showing the Company
as debtor and the Trustee as secured party, each in a form sufficient for
filing, evidencing the interest of such debtors in the Cooperative Loans.
(c) The Company may, in lieu of delivering the original of the documents
set forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as permitted by
Section 2.01(b)) to the Trustee or the Custodian or Custodians, deliver such
documents to the Master Servicer, and the Master Servicer shall hold such
documents in trust for the use and benefit of all present and future
Certificateholders until such time as is set forth in the next sentence. Within
thirty Business Days following the earlier of (i) the receipt of the original of
all of the documents or instruments set forth in Section 2.01(b)(I)(ii), (iii),
(iv) and (v) and Section (b)(II)(ii), (iv), (vii), (ix) and (x) (or copies
thereof as permitted by such Section) for any Mortgage Loan and (ii) a written
request by the Trustee to deliver those documents with respect to any or all of
the Mortgage Loans then being held by the Master Servicer, the Master Servicer
shall deliver a complete set of such documents to the Trustee or the Custodian
or Custodians that are the duly appointed agent or agents of the Trustee.
(d) Notwithstanding the provisions of Section 2.01(c), in connection with
any Mortgage Loan, if the Company cannot deliver the original of the Mortgage,
any assignment, modification, assumption agreement or preferred loan agreement
(or copy thereof as permitted by Section 2.01(b)) with evidence of recording
thereon concurrently with the execution and delivery of this Agreement because
of (i) a delay caused by the public recording office where such Mortgage,
assignment, modification, assumption agreement or preferred loan agreement as
the case may be, has been delivered for recordation, or (ii) a delay in the
receipt of certain information necessary to prepare the related assignments, the
Company shall deliver or cause to be delivered to the Trustee or the respective
Custodian a copy of such Mortgage, assignment, modification, assumption
agreement or preferred loan agreement.
The Company shall promptly cause to be recorded in the appropriate public
office for real property records the Assignment referred to in clause (I)(iii)
of Section 2.01(b), except (a) in states where, in the opinion of counsel
acceptable to the Master Servicer, such recording is not required to protect the
Trustee's interests in the Mortgage Loan against the claim of any subsequent
transferee or any successor to or creditor of the Company or the originator of
such Mortgage Loan or (b) if MERS is identified on the Mortgage or on a properly
recorded assignment of the Mortgage as the mortgagee of record solely as nominee
for the Seller and its successors and assigns, and shall promptly cause to be
filed the Form UCC-3 assignment and UCC-1 financing statement referred to in
clause (II)(vii) and (x), respectively, of Section 2.01(b). If any Assignment,
Form UCC-3 or Form UCC-1, as applicable, is lost or returned unrecorded to the
Company because of any defect therein, the Company shall prepare a substitute
Assignment, Form UCC-3 or Form UCC-1, as applicable, or cure such defect, as the
case may be, and cause such Assignment to be recorded in accordance with this
paragraph. The Company shall promptly deliver or cause to be delivered to the
Trustee or the respective Custodian such Mortgage or Assignment or Form UCC-3 or
Form UCC-1, as applicable, (or copy thereof as permitted by Section 2.01(b))
with evidence of recording indicated thereon at the time specified in Section
2.01(c). In connection with its servicing of Cooperative Loans, the Master
Servicer will use its
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best efforts to file timely continuation statements with regard to each
financing statement and assignment relating to Cooperative Loans as to which the
related Cooperative Apartment is located outside of the State of New York.
If the Company delivers to the Trustee or Custodian any Mortgage Note or
Assignment of Mortgage in blank, the Company shall, or shall cause the Custodian
to, complete the endorsement of the Mortgage Note and the Assignment of Mortgage
in the name of the Trustee in conjunction with the Interim Certification issued
by the Custodian, as contemplated by Section 2.02.
Any of the items set forth in Sections 2.01(b)(I)(ii), (iii), (iv) and (v)
and (II)(vi) and (vii) and that may be delivered as a copy rather than the
original may be delivered to the Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan registered on the
MERS(R) System, the Company further agrees that it will cause, at the Company's
own expense, within 30 Business Days after the Closing Date, the MERS(R) System
to indicate that such Mortgage Loans have been assigned by the Company to the
Trustee in accordance with this Agreement for the benefit of the
Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Company further agrees that it will
not, and will not permit the Master Servicer to, and the Master Servicer agrees
that it will not, alter the codes referenced in this paragraph with respect to
any Mortgage Loan during the term of this Agreement unless and until such
Mortgage Loan is repurchased in accordance with the terms of this Agreement.
(e) Residential Funding hereby assigns to the Trustee its security interest
in and to any Additional Collateral or Pledged Assets, its right to receive
amounts due or to become due in respect of any Additional Collateral or Pledged
Assets pursuant to the related Subservicing Agreement and its rights as
beneficiary under the Surety Bond in respect of any Additional Collateral Loans.
With respect to any Additional Collateral Loan or Pledged Asset Loan,
Residential Funding shall cause to be filed in the appropriate recording office
a UCC-3 statement giving notice of the assignment of the related security
interest to the Trust Fund and shall thereafter cause the timely filing of all
necessary continuation statements with regard to such financing statements.
(f) It is intended that the conveyance by the Company to the Trustee of the
Mortgage Loans as provided for in this Section 2.01 be and the Uncertificated
REMIC Regular Interests, if any (as provided for in Section 2.06), be construed
as a sale by the Company to the Trustee of the Mortgage Loans and any
Uncertificated REMIC Regular Interests for the benefit of the
Certificateholders. Further, it is not intended that such conveyance be deemed
to be a pledge of the Mortgage Loans and any Uncertificated REMIC Regular
Interests by the Company to the Trustee to secure a debt or other obligation of
the Company. However, if the Mortgage Loans and any Uncertificated REMIC Regular
Interests are held to be property of the Company or of Residential Funding, or
if for any reason this Agreement is held or deemed to create a security interest
in the Mortgage Loans and any Uncertificated REMIC Regular Interests, then it is
35
intended that (a) this Agreement shall 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 conveyance
provided for in Section 2.01 shall be deemed to be, and hereby is, (1) a grant
by the Company to the Trustee of a security interest in all of the Company's
right (including the power to convey title thereto), title and interest, whether
now owned or hereafter acquired, in and to any and all general intangibles,
payment intangibles, accounts, chattel paper, instruments, documents, money,
deposit accounts, certificates of deposit, goods, letters of credit, advices of
credit and investment property and other property of whatever kind or
description now existing or hereafter acquired consisting of, arising from or
relating to any of the following: (A) the Mortgage Loans, including (i) with
respect to each Cooperative Loan, the related Mortgage Note, Security Agreement,
Assignment of Proprietary Lease, Cooperative Stock Certificate and Cooperative
Lease, (ii) with respect to each Mortgage Loan other than a Cooperative Loan,
the related Mortgage Note and Mortgage, and (iii) any insurance policies and all
other documents in the related Mortgage File, (B) all amounts payable pursuant
to the Mortgage Loans in accordance with the terms thereof, (C) any
Uncertificated REMIC Regular Interests and (D) all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including without limitation all amounts from time to time held
or invested in the Certificate Account or the Custodial Account, whether in the
form of cash, instruments, securities or other property and (2) an assignment by
the Company to the Trustee of any security interest in any and all of
Residential Funding's right (including the power to convey title thereto), title
and interest, whether now owned or hereafter acquired, in and to the property
described in the foregoing clauses (1)(A), (B), (C) and (D) granted by
Residential Funding to the Company pursuant to the Assignment Agreement; (c) the
possession by the Trustee, the Custodian or any other agent of the Trustee of
Mortgage Notes or such other items of property as constitute instruments, money,
payment intangibles, negotiable documents, goods, deposit accounts, letters of
credit, advices of credit, investment property, certificated securities or
chattel paper shall be deemed to be "possession by the secured party," or
possession by a purchaser or a person designated by such secured party, for
purposes of perfecting the security interest pursuant to the Minnesota Uniform
Commercial Code and the Uniform Commercial Code of any other applicable
jurisdiction as in effect (including, without limitation, Sections 8-106, 9-313
and 9-106 thereof); and (d) notifications to persons holding such property, and
acknowledgments, receipts or confirmations from persons holding such property,
shall be deemed notifications to, or acknowledgments, receipts or confirmations
from, securities intermediaries, bailees or agents of, or persons holding for
(as applicable) the Trustee for the purpose of perfecting such security interest
under applicable law.
The Company and, at the Company's direction, Residential Funding and the
Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
determined to create a security interest in the Mortgage Loans, any
Uncertificated REMIC Regular Interests and the other property described above,
such security interest would be determined to be a perfected security interest
of first priority under applicable law and will be maintained as such throughout
the term of this Agreement. Without limiting the generality of the foregoing,
the Company shall prepare and deliver to the Trustee not less than 15 days prior
to any filing date and, the Trustee shall forward for filing, or shall cause to
be forwarded for filing, at the expense of the Company, all filings necessary to
maintain the effectiveness of any original filings necessary under the Uniform
Commercial Code as in effect in any jurisdiction to perfect the Trustee's
security interest in or lien on the Mortgage Loans and
36
any Uncertificated REMIC Regular Interests, as evidenced by an Officers'
Certificate of the Company, including without limitation (x) continuation
statements, and (y) such other statements as may be occasioned by (1) any change
of name of Residential Funding, the Company or the Trustee (such preparation and
filing shall be at the expense of the Trustee, if occasioned by a change in the
Trustee's name), (2) any change of location of the place of business or the
chief executive office of Residential Funding or the Company, (3) any transfer
of any interest of Residential Funding or the Company in any Mortgage Loan or
(4) any transfer of any interest of Residential Funding or the Company in any
Uncertificated REMIC Regular Interest.
(g) The Master Servicer hereby acknowledges the receipt by it of the
Initial Monthly Payment Fund. The Master Servicer shall hold such Initial
Monthly Payment Fund in the Custodial Account and shall include such Initial
Monthly Payment Fund in the Available Distribution Amount for the initial
Distribution Date. Notwithstanding anything herein to the contrary, the Initial
Monthly Payment Fund shall not be an asset of any REMIC. To the extent that the
Initial Monthly Payment Fund constitutes a reserve fund for federal income tax
purposes, (1) it shall be an outside reserve fund and not an asset of any REMIC,
(2) it shall be owned by the Seller and (3) amounts transferred by any REMIC to
the Initial Monthly Payment Fund shall be treated as transferred to the Seller
or any successor, all within the meaning of Section 1.860G-2(h) of the Treasury
Regulations.
(h) The Company agrees that the sale of each Pledged Asset Loan pursuant to
this Agreement will also constitute the assignment, sale, setting-over, transfer
and conveyance to the Trustee, without recourse (but subject to the Company's
covenants, representations and warranties specifically provided herein), of all
of the Company's obligations and all of the Company's right, title and interest
in, to and under, whether now existing or hereafter acquired as owner of the
Mortgage Loan with respect to all money, securities, security entitlements,
accounts, general intangibles, instruments, documents, certificates of deposit,
commodities contracts, and other investment property and other property of
whatever kind or description consisting of, arising from or related to (i) the
Assigned Contracts, (ii) all rights, powers and remedies of the Company as owner
of such Mortgage Loan under or in connection with the Assigned Contracts,
whether arising under the terms of such Assigned Contracts, by statute, at law
or in equity, or otherwise arising out of any default by the Mortgagor under or
in connection with the Assigned Contracts, including all rights to exercise any
election or option or to make any decision or determination or to give or
receive any notice, consent, approval or waiver thereunder, (iii) all security
interests in and lien of the Company as owner of such Mortgage Loan in the
Pledged Amounts and all money, securities, security entitlements, accounts,
general intangibles, instruments, documents, certificates of deposit,
commodities contracts, and other investment property and other property of
whatever kind or description and all cash and non-cash proceeds of the sale,
exchange, or redemption of, and all stock or conversion rights, rights to
subscribe, liquidation dividends or preferences, stock dividends, rights to
interest, dividends, earnings, income, rents, issues, profits, interest payments
or other distributions of cash or other property that is credited to the
Custodial Account, (iv) all documents, books and records concerning the
foregoing (including all computer programs, tapes, disks and related items
containing any such information) and (v) all insurance proceeds (including
proceeds from the Federal Deposit Insurance Corporation or the Securities
Investor Protection Corporation or any other insurance company) of any of the
foregoing or replacements thereof or substitutions therefor, proceeds of
proceeds and the conversion, voluntary or involuntary, of any thereof. The
37
foregoing transfer, sale, assignment and conveyance does not constitute and is
not intended to result in the creation, or an assumption by the Trustee, of any
obligation of the Company, or any other person in connection with the Pledged
Assets or under any agreement or instrument relating thereto, including any
obligation to the Mortgagor, other than as owner of the Mortgage Loan.
Section 2.02 Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(b)(I)(i) and Section 2.01(b)(II)(i), (iii), (v), (vi) and (viii) above
(except that for purposes of such acknowledgment only, a Mortgage Note may be
endorsed in blank) and declares that it, or a Custodian as its agent, holds and
will hold such documents and the other documents constituting a part of the
Mortgage Files delivered to it, or a Custodian as its agent, and the rights of
Residential Funding with respect to any Pledged Assets, Additional Collateral
and the Surety Bond assigned to the Trustee pursuant to Section 2.01, in trust
for the use and benefit of all present and future Certificateholders. The
Trustee or Custodian (such Custodian being so obligated under a Custodial
Agreement) agrees, for the benefit of Certificateholders, to review each
Mortgage File delivered to it pursuant to Section 2.01(b) within 45 days after
the Closing Date to ascertain that all required documents (specifically as set
forth in Section 2.01(b)), have been executed and received, and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule,
as supplemented, that have been conveyed to it, and to deliver to the Trustee a
certificate (the "Interim Certification") to the effect that all documents
required to be delivered pursuant to Section 2.01(b) above have been executed
and received and that such documents relate to the Mortgage Loans identified on
the Mortgage Loan Schedule, except for any exceptions listed on Schedule A
attached to such Interim Certification. Upon delivery of the Mortgage Files by
the Company or the Master Servicer, the Trustee shall acknowledge receipt (or,
with respect to Mortgage Loans subject to a Custodial Agreement, and based
solely upon a receipt or certification executed by the Custodian, receipt by the
respective Custodian as the duly appointed agent of the Trustee) of the
documents referred to in Section 2.01(c) above.
If the Custodian, as the Trustee's agent, finds any document or documents
constituting a part of a Mortgage File to be missing or defective, the Trustee
shall promptly so notify the Master Servicer and the Company. Pursuant to
Section 2.3 of the Custodial Agreement, the Custodian will notify the Master
Servicer, the Company and the Trustee of any such omission or defect found by it
in respect of any Mortgage File held by it in respect of the items reviewed by
it pursuant to the Custodial Agreement. If such omission or defect materially
and adversely affects the interests of the Certificateholders, the Master
Servicer shall promptly notify Residential Funding of such omission or defect
and request that Residential Funding correct or cure such omission or defect
within 60 days from the date the Master Servicer was notified of such omission
or defect and, if Residential Funding does not correct or cure such omission or
defect within such period, the Master Servicer shall require Residential Funding
to purchase such Mortgage Loan from the Trust Fund at its Purchase Price within
90 days from the date the Master Servicer was notified of such omission or
defect; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section
38
860G(a)(3) of the Code, any such cure or repurchase must occur within 90 days
from the date such breach was discovered. The Purchase Price for any such
Mortgage Loan shall be deposited by the Master Servicer in the Custodial Account
maintained by it pursuant to Section 3.07 and, upon receipt by the Trustee of
written notification of such deposit signed by a Servicing Officer, the Trustee
or any Custodian, as the case may be, shall release to Residential Funding the
related Mortgage File and the Trustee shall execute and deliver such instruments
of transfer or assignment prepared by the Master Servicer, in each case without
recourse, as shall be necessary to vest in Residential Funding or its designee
any Mortgage Loan released pursuant hereto and thereafter such Mortgage Loan
shall not be part of the Trust Fund. It is understood and agreed that the
obligation of Residential Funding to so cure or purchase any Mortgage Loan as to
which a material and adverse defect in or omission of a constituent document
exists shall constitute the sole remedy respecting such defect or omission
available to Certificateholders or the Trustee on behalf of the
Certificateholders.
Section 2.03 Representations, Warranties and Covenants of the Master
Servicer and the Company.
(a) The Master Servicer hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that:
(i) The Master Servicer is a corporation duly organized, validly
existing and in good standing under the laws governing its creation and
existence and is or will be in compliance with the laws of each state in
which any Mortgaged Property is located to the extent necessary to ensure
the enforceability of each Mortgage Loan in accordance with the terms of
this Agreement;
(ii) The execution and delivery of this Agreement by the Master
Servicer and its performance and compliance with the terms of this
Agreement will not violate the Master Servicer's Certificate of
Incorporation or Bylaws or constitute a material default (or an event
which, with notice or lapse of time, or both, would constitute a material
default) under, or result in the material breach of, any material contract,
agreement or other instrument to which the Master Servicer is a party or
which may be applicable to the Master Servicer or any of its assets;
(iii) This Agreement, assuming due authorization, execution and
delivery by the Trustee and the Company, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
(iv) The Master Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its properties
or might have consequences that would materially adversely affect its
performance hereunder;
39
(v) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this
Agreement;
(vi) The Master Servicer will comply in all material respects in the
performance of this Agreement with all reasonable rules and requirements of
each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement furnished
in writing or report delivered to the Company, any Affiliate of the Company
or the Trustee by the Master Servicer will, to the knowledge of the Master
Servicer, contain any untrue statement of a material fact or omit a
material fact necessary to make the information, certificate, statement or
report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing Agreement and
each designated Subservicer are acceptable to the Master Servicer and any
new Subservicing Agreements will comply with the provisions of Section
3.02; and
(ix) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered
with MERS.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(a) shall survive delivery of the respective
Mortgage Files to the Trustee or any Custodian.
Upon discovery by either the Company, the Master Servicer, the Trustee or
any Custodian of a breach of any representation or warranty set forth in this
Section 2.03(a) which materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, the party discovering such breach shall
give prompt written notice to the other parties (any Custodian being so
obligated under a Custodial Agreement). Within 90 days of its discovery or its
receipt of notice of such breach, the Master Servicer shall either (i) cure such
breach in all material respects or (ii) to the extent that such breach is with
respect to a Mortgage Loan or a related document, purchase such Mortgage Loan
from the Trust Fund at the Purchase Price and in the manner set forth in Section
2.02; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure or repurchase must occur within 90 days from the date such
breach was discovered. The obligation of the Master Servicer to cure such breach
or to so purchase such Mortgage Loan shall constitute the sole remedy in respect
of a breach of a representation and warranty set forth in this Section 2.03(a)
available to the Certificateholders or the Trustee on behalf of the
Certificateholders.
(b) Representations and warranties relating to the Mortgage Loans are set
forth in Section 2.03(b) of the Series Supplement.
40
Section 2.04 Representations and Warranties of Residential Funding.
The Company, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of Certificateholders
all of its right, title and interest in respect of the Assignment Agreement (to
the extent assigned to the Company pursuant to the Assignment Agreement)
applicable to a Mortgage Loan. Insofar as the Assignment Agreement relates to
the representations and warranties made by Residential Funding or the related
Seller in respect of such Mortgage Loan and any remedies provided thereunder for
any breach of such representations and warranties, such right, title and
interest may be enforced by the Master Servicer on behalf of the Trustee and the
Certificateholders. Upon the discovery by the Company, the Master Servicer, the
Trustee or any Custodian of a breach of any of the representations and
warranties made in the Assignment Agreement (which, for purposes hereof, will be
deemed to include any other cause giving rise to a repurchase obligation under
the Assignment Agreement) in respect of any Mortgage Loan which materially and
adversely affects the interests of the Certificateholders in such Mortgage Loan,
the party discovering such breach shall give prompt written notice to the other
parties (any Custodian being so obligated under a Custodial Agreement). The
Master Servicer shall promptly notify Residential Funding of such breach and
request that Residential Funding either (i) cure such breach in all material
respects within 90 days from the date the Master Servicer was notified of such
breach or (ii) purchase such Mortgage Loan from the Trust Fund at the Purchase
Price and in the manner set forth in Section 2.02; provided that Residential
Funding shall have the option to substitute a Qualified Substitute Mortgage Loan
or Loans for such Mortgage Loan if such substitution occurs within two years
following the Closing Date; provided that if the breach would cause the Mortgage
Loan to be other than a "qualified mortgage" as defined in Section 860G(a)(3) of
the Code, any such cure, repurchase or substitution must occur within 90 days
from the date the breach was discovered. If 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 (xxxi) of Section 4 thereof, then the Master
Servicer shall request that Residential Funding pay to the Trust Fund,
concurrently with and in addition to the remedies provided in the preceding
sentence, an amount equal to any liability, penalty or expense that was actually
incurred and paid out of or on behalf of the Trust Fund, and that directly
resulted from such breach, or if incurred and paid by the Trust Fund thereafter,
concurrently with such payment. In the event that Residential Funding elects to
substitute a Qualified Substitute Mortgage Loan or Loans for a Deleted Mortgage
Loan pursuant to this Section 2.04, Residential Funding shall deliver to the
Trustee for the benefit of the Certificateholders with respect to such Qualified
Substitute Mortgage Loan or Loans, the original Mortgage Note, the Mortgage, an
Assignment of the Mortgage in recordable form if required pursuant to Section
2.01, and such other documents and agreements as are required by Section 2.01,
with the Mortgage Note endorsed as required by Section 2.01. No substitution
will be made in any calendar month after the Determination Date for such month.
Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the
month of substitution shall not be part of the Trust Fund and will be retained
by the Master Servicer and remitted by the Master Servicer to Residential
Funding on the next succeeding Distribution Date. For the month of substitution,
distributions to the Certificateholders will include the Monthly Payment due on
a Deleted Mortgage Loan for such month and thereafter Residential Funding shall
be entitled to retain all amounts received in respect of such Deleted Mortgage
Loan. The Master Servicer shall amend or cause to be amended the Mortgage Loan
Schedule, and, if the Deleted Mortgage Loan
41
was a Discount Mortgage Loan, the Schedule of Discount Fractions, for the
benefit of the Certificateholders to reflect the removal of such Deleted
Mortgage Loan and the substitution of the Qualified Substitute Mortgage Loan or
Loans and the Master Servicer shall deliver the amended Mortgage Loan Schedule,
and, if the Deleted Mortgage Loan was a Discount Mortgage Loan, the amended
Schedule of Discount Fractions, to the Trustee. Upon such substitution, the
Qualified Substitute Mortgage Loan or Loans shall be subject to the terms of
this Agreement and the related Subservicing Agreement in all respects,
Residential Funding shall be deemed to have made the representations and
warranties with respect to the Qualified Substitute Mortgage Loan contained in
the related Assignment Agreement, and the Company and the Master Servicer shall
be deemed to have made with respect to any Qualified Substitute Mortgage Loan or
Loans, as of the date of substitution, the covenants, representations and
warranties set forth in this Section 2.04, in Section 2.03 hereof and in Section
4 of the Assignment Agreement, and the Master Servicer shall be obligated to
repurchase or substitute for any Qualified Substitute Mortgage Loan as to which
a Repurchase Event (as defined in the Assignment Agreement) has occurred
pursuant to Section 4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer will
determine the amount (if any) by which the aggregate principal balance of all
such Qualified Substitute Mortgage Loans as of the date of substitution is less
than the aggregate Stated Principal Balance of all such Deleted Mortgage Loans
(in each case after application of the principal portion of the Monthly Payments
due in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential Funding shall
deposit the amount of such shortfall into the Custodial Account on the day of
substitution, without any reimbursement therefor. Residential Funding shall give
notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall
and (subject to Section 10.01(f)) by an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code or (b) any portion of any
REMIC to fail to qualify as such at any time that any Certificate is
outstanding.
It is understood and agreed that the obligation of Residential Funding to
cure such breach or purchase or to substitute for, a 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 (xxxi) of Section 4 thereof shall
constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of Certificateholders. If the Master
Servicer is Residential Funding, then the Trustee shall also have the right to
give the notification and require the purchase or substitution provided for in
the second preceding paragraph in the event of such a breach of a representation
or warranty made by Residential Funding in the Assignment Agreement. In
connection with the purchase of or substitution for any such Mortgage Loan by
Residential Funding, the Trustee shall assign to Residential Funding all of the
Trustee's right, title and interest in respect of the Assignment Agreement
applicable to such Mortgage Loan.
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Section 2.05 Execution and Authentication of Certificates/Issuance of
Certificates Evidencing Interests in REMIC I.
As provided in Section 2.05 of the Series Supplement.
Section 2.06 Conveyance of Uncertificated REMIC I and REMIC II Regular
Interests; Acceptance by the Trustee.
As provided in Section 2.06 of the Series Supplement.
Section 2.07 Issuance of Certificates Evidencing Interests in REMIC II.
As provided in Section 2.07 of the Series Supplement.
Section 2.08 Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(a) to sell the Certificates to the Company in exchange for the Mortgage
Loans;
(b) to enter into and perform its obligations under this Agreement;
(c) to engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental thereto or connected
therewith; and
(d) subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing activities.
Notwithstanding the provisions of Section 11.01, the trust shall not engage in
any activity other than in connection with the foregoing or other than as
required or authorized by the terms of this Agreement while any Certificate is
outstanding, and this Section 2.08 may not be amended, without the consent of
the Certificateholders evidencing a majority of the aggregate Voting Rights of
the Certificates.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement and the respective Mortgage Loans
and shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do any and all things which it may deem necessary
or desirable in connection with such servicing and administration. Without
limiting the generality of the foregoing, the Master Servicer in its own name or
in the name of a Subservicer is hereby authorized and empowered by the Trustee
43
when the Master Servicer or the Subservicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
consent to assumption or modification in connection with a proposed conveyance,
or of assignment of any Mortgage and Mortgage Note in connection with the
repurchase of a Mortgage Loan and all other comparable instruments, or with
respect to the modification or re-recording of a Mortgage for the purpose of
correcting the Mortgage, the subordination of the lien of the Mortgage in favor
of a public utility company or government agency or unit with powers of eminent
domain, the taking of a deed in lieu of foreclosure, the commencement,
prosecution or completion of judicial or non-judicial foreclosure, the
conveyance of a Mortgaged Property to the related Insurer, the acquisition of
any property acquired by foreclosure or deed in lieu of foreclosure, or the
management, marketing and conveyance of any property acquired by foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans and with respect
to the Mortgaged Properties. The Master Servicer further is authorized and
empowered by the Trustee, on behalf of the Certificateholders and the Trustee,
in its own name or in the name of the Subservicer, when the Master Servicer or
the Subservicer, as the case may be, believes it is appropriate in its best
judgment to register any Mortgage Loan on the MERS(R) System, or cause the
removal from the registration of any Mortgage Loan on the MERS(R) System, to
execute and deliver, on behalf of the Trustee and the Certificateholders or any
of them, any and all instruments of assignment and other comparable instruments
with respect to such assignment or re-recording of a Mortgage in the name of
MERS, solely as nominee for the Trustee and its successors and assigns. Any
expenses incurred in connection with the actions described in the preceding
sentence shall be borne by the Master Servicer in accordance with Section
3.16(c), with no right of reimbursement; provided, that if, as a result of MERS
discontinuing or becoming unable to continue operations in connection with the
MERS System, it becomes necessary to remove any Mortgage Loan from registration
on the MERS System and to arrange for the assignment of the related Mortgages to
the Trustee, then any related expenses shall be reimbursable to the Master
Servicer. Notwithstanding the foregoing, subject to Section 3.07(a), the Master
Servicer shall not permit any modification with respect to any Mortgage Loan
that would both constitute a sale or exchange of such Mortgage Loan within the
meaning of Section 1001 of the Code and any proposed, temporary or final
regulations promulgated thereunder (other than in connection with a proposed
conveyance or assumption of such Mortgage Loan that is treated as a Principal
Prepayment in Full pursuant to Section 3.13(d) hereof) and cause any REMIC
formed under the Series Supplement to fail to qualify as a REMIC under the Code.
The Trustee shall furnish the Master Servicer with any powers of attorney and
other documents necessary or appropriate to enable the Master Servicer to
service and administer the Mortgage Loans. The Trustee shall not be liable for
any action taken by the Master Servicer or any Subservicer pursuant to such
powers of attorney. In servicing and administering any Nonsubserviced Mortgage
Loan, the Master Servicer shall, to the extent not inconsistent with this
Agreement, comply with the Program Guide as if it were the originator of such
Mortgage Loan and had retained the servicing rights and obligations in respect
thereof. In connection with servicing and administering the Mortgage Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may perform
services such as appraisals and brokerage services that are not customarily
provided by servicers of mortgage loans, and shall be entitled to reasonable
compensation therefor in accordance with Section 3.10 and (ii) may, at its own
discretion and on
44
behalf of the Trustee, obtain credit information in the form of a "credit score"
from a credit repository.
(b) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the amount owing under the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so
permit, and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(c) The Master Servicer may enter into one or more agreements in connection
with the offering of pass-through certificates evidencing interests in one or
more of the Certificates providing for the payment by the Master Servicer of
amounts received by the Master Servicer as servicing compensation hereunder and
required to cover certain Prepayment Interest Shortfalls on the Mortgage Loans,
which payment obligation will thereafter be an obligation of the Master Servicer
hereunder.
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers' Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the execution and
delivery of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer of a Mortgage Loan shall be entitled to receive
and retain, as provided in the related Subservicing Agreement and in Section
3.07, the related Subservicing Fee from payments of interest received on such
Mortgage Loan after payment of all amounts required to be remitted to the Master
Servicer in respect of such Mortgage Loan. For any Mortgage Loan that is a
Nonsubserviced Mortgage Loan, the Master Servicer shall be entitled to receive
and retain an amount equal to the Subservicing Fee from payments of interest.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in servicing the Mortgage Loans
include actions taken or to be taken by a Subservicer on behalf of the Master
Servicer. Each Subservicing Agreement will be upon such terms and conditions as
are generally required or permitted by the Program Guide and are not
inconsistent with this Agreement and as the Master Servicer and the Subservicer
have agreed. A representative form of Subservicing Agreement is attached to this
Agreement as Exhibit E. With the approval of the Master Servicer, a Subservicer
may delegate its servicing obligations to third-party servicers, but such
Subservicer will remain obligated under the related Subservicing Agreement. The
Master Servicer and a Subservicer may enter into amendments thereto or a
different form of Subservicing Agreement, and the form referred to or included
in the Program Guide is merely provided for information and shall not be deemed
to limit in any respect the discretion of the Master Servicer to modify or enter
into different Subservicing Agreements; provided, however, that any such
amendments or different forms shall be consistent with and not violate the
provisions of either this Agreement or the Program Guide in a manner which would
materially and adversely affect the interests of the Certificateholders. The
Program Guide and any other Subservicing Agreement entered into between the
Master Servicer and any Subservicer shall require the Subservicer to accurately
and fully report its borrower credit files to each of the Credit Repositories in
a timely manner.
45
(b) As part of its servicing activities hereunder, the Master Servicer, for
the benefit of the Trustee and the Certificateholders, shall use its best
reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement and of each Seller under the related Seller's
Agreement insofar as the Company's rights with respect to such obligation has
been assigned to the Trustee hereunder, to the extent that the non-performance
of any such Seller's obligation would have a material and adverse effect on a
Mortgage Loan, including, without limitation, the obligation to purchase a
Mortgage Loan on account of defective documentation, as described in Section
2.02, or on account of a breach of a representation or warranty, as described in
Section 2.04. Such enforcement, including, without limitation, the legal
prosecution of claims, termination of Subservicing Agreements or Seller's
Agreements, as appropriate, and the pursuit of other appropriate remedies, shall
be in such form and carried out to such an extent and at such time as the Master
Servicer would employ in its good faith business judgment and which are normal
and usual in its general mortgage servicing activities. The Master Servicer
shall pay the costs of such enforcement at its own expense, and shall be
reimbursed therefor only (i) from a general recovery resulting from such
enforcement to the extent, if any, that such recovery exceeds all amounts due in
respect of the related Mortgage Loan or (ii) from a specific recovery of costs,
expenses or attorneys fees against the party against whom such enforcement is
directed. For purposes of clarification only, the parties agree that the
foregoing is not intended to, and does not, limit the ability of the Master
Servicer to be reimbursed for expenses that are incurred in connection with the
enforcement of a Seller's obligations (insofar as the Company's rights with
respect to such Seller's obligations have been assigned to the Trustee
hereunder) and are reimbursable pursuant to Section 3.10(a)(viii).
Section 3.03 Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to have the
successor Subservicer assume liability for the representations and warranties
made by the terminated Subservicer in respect of the related Mortgage Loans and,
in the event of any such assumption by the successor Subservicer, the Master
Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
Section 3.04 Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a Subservicer or reference to actions taken through a Subservicer or otherwise,
the Master Servicer shall remain obligated and liable to the Trustee and the
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of
46
such obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the Company
and to the same extent and under the same terms and conditions as if the Master
Servicer alone were servicing and administering the Mortgage Loans. The Master
Servicer shall be entitled to enter into any agreement with a Subservicer or
Seller for indemnification of the Master Servicer and nothing contained in this
Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship Between Subservicer and Trustee or
Certificateholders.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Master Servicer alone and the Trustee and the
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer in
its capacity as such except as set forth in Section 3.06. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an
omission or defect or to repurchase a Mortgage Loan as referred to in Section
2.02 hereof.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee.
(a) If the Master Servicer shall for any reason no longer be the master
servicer (including by reason of an Event of Default), the Trustee, its designee
or its successor shall thereupon assume all of the rights and obligations of the
Master Servicer under each Subservicing Agreement that may have been entered
into. The Trustee, its designee or the successor servicer for the Trustee shall
be deemed to have assumed all of the Master Servicer's interest therein and to
have replaced the Master Servicer as a party to the Subservicing Agreement to
the same extent as if the Subservicing Agreement had been assigned to the
assuming party except that the Master Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but at the
expense of the Master Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement and the Mortgage Loans then
being serviced and an accounting of amounts collected and held by it and
otherwise use its best efforts to effect the orderly and efficient transfer of
each Subservicing Agreement to the assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account.
(a) The Master Servicer shall make reasonable efforts to collect all
payments called for under the terms and provisions of the Mortgage Loans, and
shall, to the extent such procedures shall be consistent with this Agreement and
the terms and provisions of any related Primary Insurance Policy, follow such
collection procedures as it would employ in its good faith business judgment and
which are normal and usual in its general mortgage servicing activities.
Consistent with the foregoing, the Master Servicer may in its discretion (i)
waive any late payment charge or any prepayment charge or penalty interest in
connection with the prepayment
47
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 such advance
would be a Nonrecoverable Advance. Consistent with the terms of this Agreement,
the Master Servicer may also waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if in the Master Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action);
provided, however, that the Master Servicer may not modify materially or permit
any Subservicer to modify any Mortgage Loan, including without limitation any
modification that would change the Mortgage Rate, forgive the payment of any
principal or interest (unless in connection with the liquidation of the related
Mortgage Loan or except in connection with prepayments to the extent that such
reamortization is not inconsistent with the terms of the Mortgage Loan),
capitalize any amounts owing on the Mortgage Loan by adding such amount to the
outstanding principal balance of the Mortgage Loan, or extend the final maturity
date of such Mortgage Loan, unless such Mortgage Loan is in default or, in the
judgment of the Master Servicer, such default is reasonably foreseeable;
provided, further, that (1) no such modification shall reduce the interest rate
on a Mortgage Loan below one-half of the Mortgage Rate as in effect on the
Cut-Off Date, but not less than the sum of the rates at which the Servicing Fee
and the Subservicing Fee with respect to such Mortgage Loan accrues plus the
rate at which the premium paid to the Certificate Insurer, if any, accrues, (2)
the final maturity date for any Mortgage Loan shall not be extended beyond the
Maturity Date, (3) the Stated Principal Balance of all Reportable Modified
Mortgage Loans subject to Servicing Modifications (measured at the time of the
Servicing Modification and after giving effect to any Servicing Modification)
can be no more than five percent of the aggregate principal balance of the
Mortgage Loans as of the Cut-off Date, unless such limit is increased from time
to time with the consent of the Rating Agencies and the Certificate Insurer, if
any. In addition, any amounts owing on a Mortgage Loan added to the outstanding
principal balance of such Mortgage Loan must be fully amortized over the
remaining term of such Mortgage Loan, and such amounts may be added to the
outstanding principal balance of a Mortgage Loan only once during the life of
such Mortgage Loan. Also, the addition of such amounts described in the
preceding sentence shall be implemented in accordance with the Program Guide and
may be implemented only by Subservicers that have been approved by the Master
Servicer for such purpose. In connection with any Curtailment of a Mortgage
Loan, the Master Servicer, to the extent not inconsistent with the terms of the
Mortgage Note and local law and practice, may permit the Mortgage Loan to be
reamortized such that the Monthly Payment is recalculated as an amount that will
fully amortize the remaining Stated Principal Balance thereof by the original
Maturity Date based on the original Mortgage Rate; provided, that such
re-amortization shall not be permitted if it would
48
constitute a reissuance of the Mortgage Loan for federal income tax purposes,
except if such reissuance is described in Treasury Regulation Section
1.860G-2(b)(3).
(b) The Master Servicer shall establish and maintain a Custodial Account in
which the Master Servicer shall deposit or cause to be deposited on a daily
basis, except as otherwise specifically provided herein, the following payments
and collections remitted by Subservicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest on the Mortgage Loans due on or before the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the principal
component of any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage Rate
on the Mortgage Loans, including Buydown Funds, if any, and the interest
component of any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to Section
2.02, 2.03, 2.04, 4.07 or 9.01 and all amounts required to be deposited in
connection with the substitution of a Qualified Substitute Mortgage Loan
pursuant to Section 2.03 or 2.04;
(v) Any amounts required to be deposited pursuant to Section 3.07(c)
or 3.21;
(vi) All amounts transferred from the Certificate Account to the
Custodial Account in accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by the
Master Servicer in respect of any Additional Collateral; and
(viii) Any amounts received by the Master Servicer in respect of
Pledged Assets.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off Date) and payments or collections in
the nature of prepayment charges or late payment charges or assumption fees may
but need not be deposited by the Master Servicer in the Custodial Account. In
the event any amount not required to be deposited in the Custodial Account is so
deposited, the Master Servicer may at any time withdraw such amount from the
Custodial Account, any provision herein to the contrary notwithstanding. The
Custodial Account may contain funds that belong to one or more trust funds
created for mortgage pass-through certificates of other series and may contain
other funds respecting payments on mortgage loans belonging to the Master
Servicer or
49
serviced or master serviced by it on behalf of others. Notwithstanding such
commingling of funds, the Master Servicer shall keep records that accurately
reflect the funds on deposit in the Custodial Account that have been identified
by it as being attributable to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds and
the proceeds of the purchase of any Mortgage Loan pursuant to Sections 2.02,
2.03, 2.04 and 4.07 received in any calendar month, the Master Servicer may
elect to treat such amounts as included in the Available Distribution Amount for
the Distribution Date in the month of receipt, but is not obligated to do so. If
the Master Servicer so elects, such amounts will be deemed to have been received
(and any related Realized Loss shall be deemed to have occurred) on the last day
of the month prior to the receipt thereof.
(c) The Master Servicer shall use its best efforts to cause the institution
maintaining the Custodial Account to invest the funds in the Custodial Account
attributable to the Mortgage Loans in Permitted Investments which shall mature
not later than the Certificate Account Deposit Date next following the date of
such investment (with the exception of the Amount Held for Future Distribution)
and which shall not be sold or disposed of prior to their maturities. All income
and gain realized from any such investment shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments attributable to the investment of amounts in
respect of the Mortgage Loans shall be deposited in the Custodial Account by the
Master Servicer out of its own funds immediately as realized without any right
of reimbursement.
(d) The Master Servicer shall give notice to the Trustee and the Company of
any change in the location of the Custodial Account and the location of the
Certificate Account prior to the use thereof.
Section 3.08 Subservicing Accounts; Servicing Accounts.
(a) In those cases where a Subservicer is servicing a Mortgage Loan
pursuant to a Subservicing Agreement, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to establish and maintain
one or more Subservicing Accounts which shall be an Eligible Account or, if such
account is not an Eligible Account, shall generally satisfy the requirements of
the Program Guide and be otherwise acceptable to the Master Servicer and each
Rating Agency. The Subservicer will be required thereby to deposit into the
Subservicing Account on a daily basis all proceeds of Mortgage Loans received by
the Subservicer, less its Subservicing Fees and unreimbursed advances and
expenses, to the extent permitted by the Subservicing Agreement. If the
Subservicing Account is not an Eligible Account, the Master Servicer shall be
deemed to have received such monies upon receipt thereof by the Subservicer. The
Subservicer shall not be required to deposit in the Subservicing Account
payments or collections in the nature of prepayment charges or late charges or
assumption fees. On or before the date specified in the Program Guide, but in no
event later than the Determination Date, the Master Servicer shall cause the
Subservicer, pursuant to the Subservicing Agreement, to remit to the Master
Servicer for deposit in the Custodial Account all funds held in the Subservicing
Account with respect to each Mortgage Loan serviced by such Subservicer that are
required to be remitted to the Master Servicer. The Subservicer will also be
required, pursuant to the
50
Subservicing Agreement, to advance on such scheduled date of remittance amounts
equal to any scheduled monthly installments of principal and interest less its
Subservicing Fees on any Mortgage Loans for which payment was not received by
the Subservicer. This obligation to advance with respect to each Mortgage Loan
will continue up to and including the first of the month following the date on
which the related Mortgaged Property is sold at a foreclosure sale or is
acquired by the Trust Fund by deed in lieu of foreclosure or otherwise. All such
advances received by the Master Servicer shall be deposited promptly by it in
the Custodial Account.
(b) The Subservicer may also be required, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the Custodial Account
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the
rate per annum at which the Servicing Fee accrues in the case of a Modified
Mortgage Loan) on any Curtailment received by such Subservicer in respect of a
Mortgage Loan from the related Mortgagor during any month that is to be applied
by the Subservicer to reduce the unpaid principal balance of the related
Mortgage Loan as of the first day of such month, from the date of application of
such Curtailment to the first day of the following month. Any amounts paid by a
Subservicer pursuant to the preceding sentence shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate Account, the
Master Servicer shall for any Nonsubserviced Mortgage Loan, and shall cause the
Subservicers for Subserviced Mortgage Loans to, establish and maintain one or
more Servicing Accounts and deposit and retain therein all collections from the
Mortgagors (or advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items for the account of the Mortgagors. Each
Servicing Account shall satisfy the requirements for a Subservicing Account and,
to the extent permitted by the Program Guide or as is otherwise acceptable to
the Master Servicer, may also function as a Subservicing Account. Withdrawals of
amounts related to the Mortgage Loans from the Servicing Accounts may be made
only to effect timely payment of taxes, assessments, hazard insurance premiums,
Primary Insurance Policy premiums, if applicable, or comparable items, to
reimburse the Master Servicer or Subservicer out of related collections for any
payments made pursuant to Sections 3.11 (with respect to the Primary Insurance
Policy) and 3.12(a) (with respect to hazard insurance), to refund to any
Mortgagors any sums as may be determined to be overages, to pay interest, if
required, to Mortgagors on balances in the Servicing Account or to clear and
terminate the Servicing Account at the termination of this Agreement in
accordance with Section 9.01 or in accordance with the Program Guide. As part of
its servicing duties, the Master Servicer shall, and the Subservicers will,
pursuant to the Subservicing Agreements, be required to pay to the Mortgagors
interest on funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to in the
preceding subsection that are not timely paid by the Mortgagors or advanced by
the Subservicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Master Servicer shall be required so to
advance only to the extent that such advances, in the good faith judgment of the
Master Servicer, will be recoverable by the Master Servicer out of Insurance
Proceeds, Liquidation Proceeds or otherwise.
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Section 3.09 Access to Certain Documentation and Information Regarding the
Mortgage Loans.
If compliance with this Section 3.09 shall make any Class of Certificates
legal for investment by federally insured savings and loan associations, the
Master Servicer shall provide, or cause the Subservicers to provide, to the
Trustee, the Office of Thrift Supervision or the FDIC and the supervisory agents
and examiners thereof access to the documentation regarding the Mortgage Loans
required by applicable regulations of the Office of Thrift Supervision, such
access being afforded without charge but only upon reasonable request and during
normal business hours at the offices designated by the Master Servicer. The
Master Servicer shall permit such representatives to photocopy any such
documentation and shall provide equipment for that purpose at a charge
reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10 Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.07 that are attributable to the Mortgage Loans for the following
purposes:
(i) to make deposits into the Certificate Account in the amounts and
in the manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for previously
unreimbursed Advances, Servicing Advances or other expenses made pursuant
to Sections 3.01, 3.07(a), 3.08, 3.11, 3.12(a), 3.14 and 4.04 or otherwise
reimbursable pursuant to the terms of this Agreement, such withdrawal right
being limited to amounts received on the related Mortgage Loans (including,
for this purpose, REO Proceeds, Insurance Proceeds, Liquidation Proceeds
and proceeds from the purchase of a Mortgage Loan pursuant to Section 2.02,
2.03, 2.04, 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) recoveries of amounts
in respect of which such advances were made in the case of Servicing
Advances;
(iii) to pay to itself or the related Subservicer (if not previously
retained by such Subservicer) out of each payment received by the Master
Servicer on account of interest on a Mortgage Loan as contemplated by
Sections 3.14 and 3.16, an amount equal to that remaining portion of any
such payment as to interest (but not in excess of the Servicing Fee and the
Subservicing Fee, if not previously retained) which, when deducted, will
result in the remaining amount of such interest being interest at the Net
Mortgage Rate (or Modified Net Mortgage Rate in the case of a Modified
Mortgage Loan) on the amount specified in the amortization schedule of the
related Mortgage Loan as the principal balance thereof at the beginning of
the period respecting which such interest was paid after giving effect to
any previous Curtailments;
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(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds and other property deposited
in or credited to the Custodial Account that it is entitled to withdraw
pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, any amounts remitted by Subservicers as interest in
respect of Curtailments pursuant to Section 3.08(b), and any amounts paid
by a Mortgagor in connection with a Principal Prepayment in Full in respect
of interest for any period during the calendar month in which such
Principal Prepayment in Full is to be distributed to the
Certificateholders;
(vi) to pay to itself, a Subservicer, a Seller, Residential Funding,
the Company or any other appropriate Person, as the case may be, with
respect to each Mortgage Loan or property acquired in respect thereof that
has been purchased or otherwise transferred pursuant to Section 2.02, 2.03,
2.04, 4.07 or 9.01, all amounts received thereon and not required to be
distributed to the Certificateholders as of the date on which the related
Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the extent provided
in subsection (c) below, and any Advance or Servicing Advance made in
connection with a modified Mortgage Loan that is in default or, in the
judgment of the Master Servicer, default is reasonably foreseeable pursuant
to Section 3.07(a), to the extent the amount of the Advance or Servicing
Advance was added to the Stated Principal Balance of the Mortgage Loan in a
prior calendar month, or any Advance reimbursable to the Master Servicer
pursuant to Section 4.02(a);
(viii) to reimburse itself or the Company for expenses incurred by and
reimbursable to it or the Company pursuant to Sections 3.01(a), 3.11, 3.13,
3.14(c), 6.03, 10.01 or otherwise, or in connection with enforcing, in
accordance with this Agreement, any repurchase, substitution or
indemnification obligation of any Seller (other than an Affiliate of the
Company) pursuant to the related Seller's Agreement;
(ix) to reimburse itself for Servicing Advances expended by it (a)
pursuant to Section 3.14 in good faith in connection with the restoration
of property damaged by an Uninsured Cause, and (b) in connection with the
liquidation of a Mortgage Loan or disposition of an REO Property to the
extent not otherwise reimbursed pursuant to clause (ii) or (viii) above;
and
(x) to withdraw any amount deposited in the Custodial Account that was
not required to be deposited therein pursuant to Section 3.07.
(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii),
(v) and (vi), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to such clauses.
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(c) The Master Servicer shall be entitled to reimburse itself or the
related Subservicer for any advance made in respect of a Mortgage Loan that the
Master Servicer determines to be a Nonrecoverable Advance by withdrawal from the
Custodial Account of amounts on deposit therein attributable to the Mortgage
Loans on any Certificate Account Deposit Date succeeding the date of such
determination. Such right of reimbursement in respect of a Nonrecoverable
Advance relating to an Advance pursuant to Section 4.04 on any such Certificate
Account Deposit Date shall be limited to an amount not exceeding the portion of
such advance previously paid to Certificateholders (and not theretofore
reimbursed to the Master Servicer or the related Subservicer).
Section 3.11 Maintenance of the Primary Insurance Policies; Collections
Thereunder.
(a) The Master Servicer shall not take, or permit any Subservicer to take,
any action which would result in non-coverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Master Servicer
or Subservicer, would have been covered thereunder. To the extent coverage is
available, the Master Servicer shall keep or cause to be kept in full force and
effect each such Primary Insurance Policy until the principal balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or less
of the Appraised Value in the case of such a Mortgage Loan having a
Loan-to-Value Ratio at origination in excess of 80%, provided that such Primary
Insurance Policy was in place as of the Cut-off Date and the Company had
knowledge of such Primary Insurance Policy. The Master Servicer shall be
entitled to cancel or permit the discontinuation of any Primary Insurance Policy
as to any Mortgage Loan, if the Stated Principal Balance of the Mortgage Loan is
reduced below an amount equal to 80% of the appraised value of the related
Mortgaged Property as determined in any appraisal thereof after the Closing
Date, or if the Loan-to-Value Ratio is reduced below 80% as a result of
principal payments on the Mortgage Loan after the Closing Date. In the event
that the Company gains knowledge that as of the Closing Date, a Mortgage Loan
had a Loan-to-Value Ratio at origination in excess of 80% and is not the subject
of a Primary Insurance Policy (and was not included in any exception to the
representation in Section 2.03(b)(iv)) and that such Mortgage Loan has a current
Loan-to-Value Ratio in excess of 80% then the Master Servicer shall use its
reasonable efforts to obtain and maintain a Primary Insurance Policy to the
extent that such a policy is obtainable at a reasonable price. The Master
Servicer shall not cancel or refuse to renew any such Primary Insurance Policy
applicable to a Nonsubserviced Mortgage Loan, or consent to any Subservicer
canceling or refusing to renew any such Primary Insurance Policy applicable to a
Mortgage Loan subserviced by it, that is in effect at the date of the initial
issuance of the Certificates and is required to be kept in force hereunder
unless the replacement Primary Insurance Policy for such canceled or non-renewed
policy is maintained with an insurer whose claims-paying ability is acceptable
to each Rating Agency for mortgage pass-through certificates having a rating
equal to or better than the lower of the then-current rating or the rating
assigned to the Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present or to cause the related
Subservicer to present, on behalf of the Master Servicer, the Subservicer, if
any, the Trustee and Certificateholders, claims to the related Insurer under any
Primary Insurance Policies, in a timely manner in accordance with such policies,
and, in this regard, to take or cause to be taken such reasonable action as
shall be necessary to permit recovery under any Primary Insurance Policies
respecting defaulted
54
Mortgage Loans. Pursuant to Section 3.07, any Insurance Proceeds collected by or
remitted to the Master Servicer under any Primary Insurance Policies shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.10.
Section 3.12 Maintenance of Fire Insurance and Omissions and Fidelity
Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan
(other than a Cooperative Loan) fire insurance with extended coverage in an
amount which is equal to the lesser of the principal balance owing on such
Mortgage Loan or 100 percent of the insurable value of the improvements;
provided, however, that such coverage may not be less than the minimum amount
required to fully compensate for any loss or damage on a replacement cost basis.
To the extent it may do so without breaching the related Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not cause such
insurance, to the extent it is available, to be maintained. The Master Servicer
shall also cause to be maintained on property acquired upon foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan (other than a Cooperative Loan),
fire insurance with extended coverage in an amount which is at least equal to
the amount necessary to avoid the application of any co-insurance clause
contained in the related hazard insurance policy. Pursuant to Section 3.07, any
amounts collected by the Master Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.10. Any cost incurred by the Master Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to the
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of related late payments by the
Mortgagor or out of Insurance Proceeds and Liquidation Proceeds to the extent
permitted by Section 3.10. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. Whenever the improvements securing a Mortgage
Loan (other than a Cooperative Loan) are located at the time of origination of
such Mortgage Loan in a federally designated special flood hazard area, the
Master Servicer shall cause flood insurance (to the extent available) to be
maintained in respect thereof. Such flood insurance shall be in an amount equal
to the lesser of (i) the amount required to compensate for any loss or damage to
the Mortgaged Property on a replacement cost basis and (ii) the maximum amount
of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
If the Master Servicer shall obtain and maintain a blanket fire insurance
policy with extended coverage insuring against hazard losses on all of the
Mortgage Loans, it shall conclusively be deemed to have satisfied its
obligations as set forth in the first sentence of this Section 3.12(a), it being
understood and agreed that such policy may contain a deductible clause, in which
case the Master Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property a policy complying with the first
sentence of this Section 3.12(a) and there shall have been a loss which would
have been covered by such policy, deposit in the
55
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made on the Certificate Account Deposit Date next preceding the Distribution
Date which occurs in the month following the month in which payments under any
such policy would have been deposited in the Custodial Account. In connection
with its activities as administrator and servicer of the Mortgage Loans, the
Master Servicer agrees to present, on behalf of itself, the Trustee and the
Certificateholders, claims under any such blanket policy.
(b) The Master Servicer shall obtain and maintain at its own expense and
keep in full force and effect throughout the term of this Agreement a blanket
fidelity bond and an errors and omissions insurance policy covering the Master
Servicer's officers and employees and other persons acting on behalf of the
Master Servicer in connection with its activities under this Agreement. The
amount of coverage shall be at least equal to the coverage that would be
required by ▇▇▇▇▇▇ ▇▇▇ 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
Company. Coverage of the Master Servicer under a policy or bond obtained by an
Affiliate of the Master Servicer and providing the coverage required by this
Section 3.12(b) shall satisfy the requirements of this Section 3.12(b).
Section 3.13 Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master
Servicer or Subservicer, to the extent it has knowledge of such conveyance,
shall enforce any due-on-sale clause contained in any Mortgage Note or Mortgage,
to the extent permitted under applicable law and governmental regulations, but
only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing:
(i) the Master Servicer shall not be deemed to be in default under
this Section 3.13(a) by reason of any transfer or assumption which the
Master Servicer is restricted by law from preventing; and
(ii) if the Master Servicer determines that it is reasonably likely
that any Mortgagor will bring, or if any Mortgagor does bring, legal action
to declare invalid or otherwise avoid enforcement of a due-on-sale clause
contained in any Mortgage Note or Mortgage, the Master Servicer shall not
be required to enforce the due-on-sale clause or to contest such action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.13(a), in any case in which a Mortgaged
Property is to be conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption or modification agreement or supplement to the Mortgage
Note or Mortgage which requires the signature of the Trustee, or if an
instrument of release signed by the Trustee is required releasing the Mortgagor
56
from liability on the Mortgage Loan, the Master Servicer is authorized, subject
to the requirements of the sentence next following, to execute and deliver, on
behalf of the Trustee, the assumption agreement with the Person to whom the
Mortgaged Property is to be conveyed and such modification agreement or
supplement to the Mortgage Note or Mortgage or other instruments as are
reasonable or necessary to carry out the terms of the Mortgage Note or Mortgage
or otherwise to comply with any applicable laws regarding assumptions or the
transfer of the Mortgaged Property to such Person; provided, however, none of
such terms and requirements shall either (i) both (A) constitute a "significant
modification" effecting an exchange or reissuance of such Mortgage Loan under
the REMIC Provisions and (B) cause any portion of any REMIC formed under the
Series Supplement to fail to qualify as a REMIC under the Code or (subject to
Section 10.01(f)), result in the imposition of any tax on "prohibited
transactions" or (ii) constitute "contributions" after the start-up date under
the REMIC Provisions. The Master Servicer shall execute and deliver such
documents only if it reasonably determines that (i) its execution and delivery
thereof will not conflict with or violate any terms of this Agreement or cause
the unpaid balance and interest on the Mortgage Loan to be uncollectible in
whole or in part, (ii) any required consents of insurers under any Required
Insurance Policies have been obtained and (iii) subsequent to the closing of the
transaction involving the assumption or transfer (A) the Mortgage Loan will
continue to be secured by a first mortgage lien pursuant to the terms of the
Mortgage, (B) such transaction will not adversely affect the coverage under any
Required Insurance Policies, (C) the Mortgage Loan will fully amortize over the
remaining term thereof, (D) no material term of the Mortgage Loan (including the
interest rate on the Mortgage Loan) will be altered nor will the term of the
Mortgage Loan be changed and (E) if the seller/transferor of the Mortgaged
Property is to be released from liability on the Mortgage Loan, such release
will not (based on the Master Servicer's or Subservicer's good faith
determination) adversely affect the collectability of the Mortgage Loan. Upon
receipt of appropriate instructions from the Master Servicer in accordance with
the foregoing, the Trustee shall execute any necessary instruments for such
assumption or substitution of liability as directed in writing by the Master
Servicer. Upon the closing of the transactions contemplated by such documents,
the Master Servicer shall cause the originals or true and correct copies of the
assumption agreement, the release (if any), or the modification or supplement to
the Mortgage Note or Mortgage to be delivered to the Trustee or the Custodian
and deposited with the Mortgage File for such Mortgage Loan. Any fee collected
by the Master Servicer or such related Subservicer for entering into an
assumption or substitution of liability agreement will be retained by the Master
Servicer or such Subservicer as additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for a partial release of
the related Mortgaged Property, the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged Property
(or, with respect to a Cooperative Loan, the related Cooperative Apartment)
without any right of reimbursement or other similar matters if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for,
and the timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby and that any portion of any REMIC formed under the
Series Supplement would not fail to continue to qualify as a REMIC under the
Code as a result thereof and (subject to Section 10.01(f)) that no tax on
"prohibited transactions" or "contributions" after the startup day would be
imposed on any such REMIC as a result thereof. Any fee collected by the Master
Servicer or the related Subservicer
57
for processing such a request will be retained by the Master Servicer or such
Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this Agreement,
the Trustee and Master Servicer shall be entitled to approve an assignment in
lieu of satisfaction with respect to any Mortgage Loan, provided the obligee
with respect to such Mortgage Loan following such proposed assignment provides
the Trustee and Master Servicer with a "Lender Certification for Assignment of
Mortgage Loan" in the form attached hereto as Exhibit M, in form and substance
satisfactory to the Trustee and Master Servicer, providing the following: (i)
that the substance of the assignment is, and is intended to be, a refinancing of
such Mortgage; (ii) that the Mortgage Loan following the proposed assignment
will have a rate of interest at least 0.25 percent below or above the rate of
interest on such Mortgage Loan prior to such proposed assignment; and (iii) that
such assignment is at the request of the borrower under the related Mortgage
Loan. Upon approval of an assignment in lieu of satisfaction with respect to any
Mortgage Loan, the Master Servicer shall receive cash in an amount equal to the
unpaid principal balance of and accrued interest on such Mortgage Loan and the
Master Servicer shall treat such amount as a Principal Prepayment in Full with
respect to such Mortgage Loan for all purposes hereof.
Section 3.14 Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise comparably
convert (which may include an REO Acquisition) the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07. Alternatively, the Master Servicer may take
other actions in respect of a defaulted Mortgage Loan, which may include (i)
accepting a short sale (a payoff of the Mortgage Loan for an amount less than
the total amount contractually owed in order to facilitate a sale of the
Mortgaged Property by the Mortgagor) or permitting a short refinancing (a payoff
of the Mortgage Loan for an amount less than the total amount contractually owed
in order to facilitate refinancing transactions by the Mortgagor not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment plan or (iii)
agreeing to a modification in accordance with Section 3.07. In connection with
such foreclosure or other conversion, the Master Servicer shall, consistent with
Section 3.11, follow such practices and procedures as it shall deem necessary or
advisable, as shall be normal and usual in its general mortgage servicing
activities and as shall be required or permitted by the Program Guide; provided
that the Master Servicer shall not be liable in any respect hereunder if the
Master Servicer is acting in connection with any such foreclosure or other
conversion in a manner that is consistent with the provisions of this Agreement.
The Master Servicer, however, shall not be required to expend its own funds or
incur other reimbursable charges in connection with any foreclosure, or
attempted foreclosure which is not completed, or towards the restoration of any
property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan to Holders of
Certificates of one or more Classes after reimbursement to itself for such
expenses or charges and (ii) that such expenses or charges will be recoverable
to it through Liquidation Proceeds, Insurance Proceeds, or REO Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 3.10, whether or not such expenses and
charges are actually recoverable from related Liquidation Proceeds, Insurance
Proceeds or REO Proceeds). In the event of such a
58
determination by the Master Servicer pursuant to this Section 3.14(a), the
Master Servicer shall be entitled to reimbursement of such amounts pursuant to
Section 3.10.
In addition to the foregoing, the Master Servicer shall use its best
reasonable efforts to realize upon any Additional Collateral for such of the
Additional Collateral Loans as come into and continue in default and as to which
no satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07; provided that the Master Servicer shall not, on behalf
of the Trustee, obtain title to any such Additional Collateral as a result of or
in lieu of the disposition thereof or otherwise; and provided further that (i)
the Master Servicer shall not proceed with respect to such Additional Collateral
in any manner that would impair the ability to recover against the related
Mortgaged Property, and (ii) the Master Servicer shall proceed with any REO
Acquisition in a manner that preserves the ability to apply the proceeds of such
Additional Collateral against amounts owed under the defaulted Mortgage Loan.
Any proceeds realized from such Additional Collateral (other than amounts to be
released to the Mortgagor or the related guarantor in accordance with procedures
that the Master Servicer would follow in servicing loans held for its own
account, subject to the terms and conditions of the related Mortgage and
Mortgage Note and to the terms and conditions of any security agreement,
guarantee agreement, mortgage or other agreement governing the disposition of
the proceeds of such Additional Collateral) shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.10. Any other payment
received by the Master Servicer in respect of such Additional Collateral shall
be deposited in the Custodial Account subject to withdrawal pursuant to Section
3.10.
For so long as the Master Servicer is the Master Servicer under the Credit
Support Pledge Agreement, the Master Servicer shall perform its obligations
under the Credit Support Pledge Agreement in accordance with such Agreement and
in a manner that is in the best interests of the Certificateholders. Further,
the Master Servicer shall use its best reasonable efforts to realize upon any
Pledged Assets for such of the Pledged Asset Loans as come into and continue in
default and as to which no satisfactory arrangements can be made for collection
of delinquent payments pursuant to Section 3.07; provided that the Master
Servicer shall not, on behalf of the Trustee, obtain title to any such Pledged
Assets as a result of or in lieu of the disposition thereof or otherwise; and
provided further that (i) the Master Servicer shall not proceed with respect to
such Pledged Assets in any manner that would impair the ability to recover
against the related Mortgaged Property, and (ii) the Master Servicer shall
proceed with any REO Acquisition in a manner that preserves the ability to apply
the proceeds of such Pledged Assets against amounts owed under the defaulted
Mortgage Loan. Any proceeds realized from such Pledged Assets (other than
amounts to be released to the Mortgagor or the related guarantor in accordance
with procedures that the Master Servicer would follow in servicing loans held
for its own account, subject to the terms and conditions of the related Mortgage
and Mortgage Note and to the terms and conditions of any security agreement,
guarantee agreement, mortgage or other agreement governing the disposition of
the proceeds of such Pledged Assets) shall be deposited in the Custodial
Account, subject to withdrawal pursuant to Section 3.10. Any other payment
received by the Master Servicer in respect of such Pledged Assets shall be
deposited in the Custodial Account subject to withdrawal pursuant to Section
3.10.
Concurrently with the foregoing, the Master Servicer may pursue any
remedies that may be available in connection with a breach of a representation
and warranty with respect to any
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such Mortgage Loan in accordance with Sections 2.03 and 2.04. However, the
Master Servicer is not required to continue to pursue both foreclosure (or
similar remedies) with respect to the Mortgage Loans and remedies in connection
with a breach of a representation and warranty if the Master Servicer determines
in its reasonable discretion that one such remedy is more likely to result in a
greater recovery as to the Mortgage Loan. Upon the occurrence of a Cash
Liquidation or REO Disposition, following the deposit in the Custodial Account
of all Insurance Proceeds, Liquidation Proceeds and other payments and
recoveries referred to in the definition of "Cash Liquidation" or "REO
Disposition," as applicable, upon receipt by the Trustee of written notification
of such deposit signed by a Servicing Officer, the Trustee or any Custodian, as
the case may be, shall release to the Master Servicer the related Mortgage File
and the Trustee shall execute and deliver such instruments of transfer or
assignment prepared by the Master Servicer, in each case without recourse, as
shall be necessary to vest in the Master Servicer or its designee, as the case
may be, the related Mortgage Loan, and thereafter such Mortgage Loan shall not
be part of the Trust Fund. Notwithstanding the foregoing or any other provision
of this Agreement, in the Master Servicer's sole discretion with respect to any
defaulted Mortgage Loan or REO Property as to either of the following
provisions, (i) a Cash Liquidation or REO Disposition may be deemed to have
occurred if substantially all amounts expected by the Master Servicer to be
received in connection with the related defaulted Mortgage Loan or REO Property
have been received, and (ii) for purposes of determining the amount of any
Liquidation Proceeds, Insurance Proceeds, REO Proceeds or any other unscheduled
collections or the amount of any Realized Loss, the Master Servicer may take
into account minimal amounts of additional receipts expected to be received or
any estimated additional liquidation expenses expected to be incurred in
connection with the related defaulted Mortgage Loan or REO Property.
(b) If title to any Mortgaged Property is acquired by the Trust Fund as an
REO Property by foreclosure or by deed in lieu of foreclosure, the deed or
certificate of sale shall be issued to the Trustee or to its nominee on behalf
of Certificateholders. Notwithstanding any such acquisition of title and
cancellation of the related Mortgage Loan, such REO Property shall (except as
otherwise expressly provided herein) be considered to be an Outstanding Mortgage
Loan held in the Trust Fund until such time as the REO Property shall be sold.
Consistent with the foregoing for purposes of all calculations hereunder so long
as such REO Property shall be considered to be an Outstanding Mortgage Loan it
shall be assumed that, notwithstanding that the indebtedness evidenced by the
related Mortgage Note shall have been discharged, such Mortgage Note and the
related amortization schedule in effect at the time of any such acquisition of
title (after giving effect to any previous Curtailments and before any
adjustment thereto by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) remain in effect.
(c) If the Trust Fund acquires any REO Property as aforesaid or otherwise
in connection with a default or imminent default on a Mortgage Loan, the Master
Servicer on behalf of the Trust Fund shall dispose of such REO Property as soon
as practicable, giving due consideration to the interests of the
Certificateholders, but in all cases within three full years after the taxable
year of its acquisition by the Trust Fund for purposes of Section 860G(a)(8) of
the Code (or such shorter period as may be necessary under applicable state
(including any state in which such property is located) law to maintain the
status of any portion of any REMIC formed under the Series Supplement as a REMIC
under applicable state law and avoid taxes resulting from such property failing
to be foreclosure property under applicable state law) or, at the
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expense of the Trust Fund, request, more than 60 days before the day on which
such grace period would otherwise expire, an extension of such grace period
unless the Master Servicer (subject to Section 10.01(f)) obtains for the Trustee
an Opinion of Counsel, addressed to the Trustee and the Master Servicer, to the
effect that the holding by the Trust Fund of such REO Property subsequent to
such period will not result in the imposition of taxes on "prohibited
transactions" as defined in Section 860F of the Code or cause any REMIC formed
under the Series Supplement to fail to qualify as a REMIC (for federal (or any
applicable State or local) income tax purposes) at any time that any
Certificates are outstanding, in which case the Trust Fund may continue to hold
such REO Property (subject to any conditions contained in such Opinion of
Counsel). The Master Servicer shall be entitled to be reimbursed from the
Custodial Account for any costs incurred in obtaining such Opinion of Counsel,
as provided in Section 3.10. Notwithstanding any other provision of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or (ii) subject the Trust Fund to the imposition
of any federal income taxes on the income earned from such REO Property,
including any taxes imposed by reason of Section 860G(c) of the Code, unless the
Master Servicer has agreed to indemnify and hold harmless the Trust Fund with
respect to the imposition of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or
repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as well
as any recovery resulting from a collection of Liquidation Proceeds, Insurance
Proceeds or REO Proceeds, will be applied in the following order of priority:
first, to reimburse the Master Servicer or the related Subservicer in accordance
with Section 3.10(a)(ii); second, to the Certificateholders to the extent of
accrued and unpaid interest on the Mortgage Loan, and any related REO Imputed
Interest, at the Net Mortgage Rate (or the Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan) to the Due Date prior to the Distribution Date
on which such amounts are to be distributed; third, to the Certificateholders as
a recovery of principal on the Mortgage Loan (or REO Property); fourth, to all
Servicing Fees and Subservicing Fees payable therefrom (and the Master Servicer
and the Subservicer shall have no claims for any deficiencies with respect to
such fees which result from the foregoing allocation); and fifth, to Foreclosure
Profits.
(e) In the event of a default on a Mortgage Loan one or more of whose
obligors is not a United States Person, in connection with any foreclosure or
acquisition of a deed in lieu of foreclosure (together, "foreclosure") in
respect of such Mortgage Loan, the Master Servicer will cause compliance with
the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto) necessary to assure that no withholding tax obligation arises with
respect to the proceeds of such foreclosure except to the extent, if any, that
proceeds of such foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
Section 3.15 Trustee to Cooperate; Release of Mortgage Files.
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or
upon the receipt by the Master Servicer of a notification that payment in full
will be escrowed in a manner customary for such purposes, the Master Servicer
will immediately notify the Trustee (if it holds
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the related Mortgage File) or the Custodian by a certification of a Servicing
Officer (which certification shall include a statement to the effect that all
amounts received or to be received in connection with such payment which are
required to be deposited in the Custodial Account pursuant to Section 3.07 have
been or will be so deposited), substantially in one of the forms attached hereto
as Exhibit F, or, in the case of the Custodian, an electronic request in a form
acceptable to the Custodian, requesting delivery to it of the Mortgage File.
Within two Business Days of receipt of such certification and request, the
Trustee shall release, or cause the Custodian to release, the related Mortgage
File to the Master Servicer. The Master Servicer is authorized to execute and
deliver to the Mortgagor the request for reconveyance, deed of reconveyance or
release or satisfaction of mortgage or such instrument releasing the lien of the
Mortgage, together with the Mortgage Note with, as appropriate, written evidence
of cancellation thereon and to cause the removal from the registration on the
MERS(R) System of such Mortgage and to execute and deliver, on behalf of the
Trustee and the Certificateholders or any of them, any and all instruments of
satisfaction or cancellation or of partial or full release. No expenses incurred
in connection with any instrument of satisfaction or deed of reconveyance shall
be chargeable to the Custodial Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure of
any Mortgage Loan, the Master Servicer shall deliver to the Custodian, with a
copy to the Trustee, a certificate of a Servicing Officer substantially in one
of the forms attached as Exhibit F hereto, or, in the case of the Custodian, an
electronic request in a form acceptable to the Custodian, requesting that
possession of all, or any document constituting part of, the Mortgage File be
released to the Master Servicer and certifying as to the reason for such release
and that such release will not invalidate any insurance coverage provided in
respect of the Mortgage Loan under any Required Insurance Policy. Upon receipt
of the foregoing, the Trustee shall deliver, or cause the Custodian to deliver,
the Mortgage File or any document therein to the Master Servicer. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Trustee, or the Custodian as agent for the Trustee when the
need therefor by the Master Servicer no longer exists, unless (i) the Mortgage
Loan has been liquidated and the Liquidation Proceeds relating to the Mortgage
Loan have been deposited in the Custodial Account or (ii) the Mortgage File or
such document has been delivered directly or through a Subservicer to an
attorney, or to a public trustee or other public official as required by law,
for purposes of initiating or pursuing legal action or other proceedings for the
foreclosure of the Mortgaged Property either judicially or non-judicially, and
the Master Servicer has delivered directly or through a Subservicer to the
Trustee a certificate of a Servicing Officer certifying as to the name and
address of the Person to which such Mortgage File or such document was delivered
and the purpose or purposes of such delivery. In the event of the liquidation of
a Mortgage Loan, the Trustee shall deliver the Request for Release with respect
thereto to the Master Servicer upon deposit of the related Liquidation Proceeds
in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf shall
execute and deliver to the Master Servicer, if necessary, any court pleadings,
requests for trustee's sale or other documents necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Together with such documents or pleadings (if signed by the Trustee),
the Master Servicer shall deliver to
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the Trustee a certificate of a Servicing Officer requesting that such pleadings
or documents be executed by the Trustee and certifying as to the reason such
documents or pleadings are required and that the execution and delivery thereof
by the Trustee will not invalidate any insurance coverage under any Required
Insurance Policy or invalidate or otherwise affect the lien of the Mortgage,
except for the termination of such a lien upon completion of the foreclosure or
trustee's sale.
Section 3.16 Servicing and Other Compensation; Compensating Interest.
(a) The Master Servicer, as compensation for its activities hereunder,
shall be entitled to receive on each Distribution Date the amounts provided for
by clauses (iii), (iv), (v) and (vi) of Section 3.10(a), subject to clause (e)
below. The amount of servicing compensation provided for in such clauses shall
be accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the event that
Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of amounts
reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect of a Cash
Liquidation or REO Disposition exceed the unpaid principal balance of such
Mortgage Loan plus unpaid interest accrued thereon (including REO Imputed
Interest) at a per annum rate equal to the related Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), the Master
Servicer shall be entitled to retain therefrom and to pay to itself and/or the
related Subservicer, any Foreclosure Profits and any Servicing Fee or
Subservicing Fee considered to be accrued but unpaid.
(b) Additional servicing compensation in the form of prepayment charges,
assumption fees, late payment charges, investment income on amounts in the
Custodial Account or the Certificate Account or otherwise shall be retained by
the Master Servicer or the Subservicer to the extent provided herein, subject to
clause (e) below.
(c) The Master Servicer shall be required to pay, or cause to be paid, all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of premiums for the Primary Insurance Policies, if any, to
the extent such premiums are not required to be paid by the related Mortgagors,
and the fees and expenses of the Trustee and any Custodian) and shall not be
entitled to reimbursement therefor except as specifically provided in Sections
3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation may not
be transferred in whole or in part except in connection with the transfer of all
of its responsibilities and obligations of the Master Servicer under this
Agreement.
(e) Notwithstanding any other provision herein, the amount of servicing
compensation that the Master Servicer shall be entitled to receive for its
activities hereunder for the period ending on each Distribution Date shall be
reduced (but not below zero) by an amount equal to Compensating Interest (if
any) for such Distribution Date. Such reduction shall be applied during such
period as follows: first, to any Servicing Fee or Subservicing Fee to which the
Master Servicer is entitled pursuant to Section 3.10(a)(iii) and second, to any
income or gain realized from any investment of funds held in the Custodial
Account or the Certificate Account to which the Master Servicer is entitled
pursuant to Sections 3.07(c) or 4.01(b), respectively. In making such reduction,
the Master Servicer (i) will not withdraw from the Custodial Account
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any such amount representing all or a portion of the Servicing Fee to which it
is entitled pursuant to Section 3.10(a)(iii) and (ii) will not withdraw from the
Custodial Account or Certificate Account any such amount to which it is entitled
pursuant to Section 3.07(c) or 4.01(b).
Section 3.17 Reports to the Trustee and the Company.
Not later than fifteen days after each Distribution Date, the Master
Servicer shall forward to the Trustee and the Company a statement, certified by
a Servicing Officer, setting forth the status of the Custodial Account as of the
close of business on such Distribution Date as it relates to the Mortgage Loans
and showing, for the period covered by such statement, the aggregate of deposits
in or withdrawals from the Custodial Account in respect of the Mortgage Loans
for each category of deposit specified in Section 3.07 and each category of
withdrawal specified in Section 3.10.
Section 3.18 Annual Statement as to Compliance.
The Master Servicer will deliver to the Company, the Trustee and any
Certificate Insurer on or before the earlier of (a) March 31 of each year or (b)
with respect to any calendar year during which the Company's annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, the date on which the annual report on
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, a servicer compliance certificate,
signed by an authorized officer of the Master Servicer, as described in Item
1123 of Regulation AB, to the effect that:
(i) A review of the Master Servicer's activities during the reporting
period and of its performance under this Agreement has been made under such
officer's supervision.
(ii) To the best of such officer's knowledge, based on such review, the
Master Servicer has fulfilled all of its obligations under this Agreement in all
materials respects throughout the reporting period or, if there has been a
failure to fulfill any such obligation in any material respect, specifying each
such failure known to such officer and the nature and status thereof.
The Master Servicer shall use commercially reasonable efforts to obtain
from all other parties participating in the servicing function any additional
certifications required under Item 1123 of Regulation AB to the extent required
to be included in a Report on Form 10-K; provided, however, that a failure to
obtain such certifications shall not be a breach of the Master Servicer's duties
hereunder if any such party fails to deliver such a certification.
Section 3.19 Annual Independent Public Accountants' Servicing Report.
On or before the earlier of (a) March 31 of each year or (b) with respect
to any calendar year during which the Company's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the annual report on Form 10-K
is required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the Master Servicer at its expense shall cause a
firm of independent public accountants, which shall be members of the American
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Institute of Certified Public Accountants, to furnish to the Company and the
Trustee the attestation required under Item 1122(b) of Regulation AB. In
rendering such statement, such firm may rely, as to matters relating to the
direct servicing of mortgage loans by Subservicers, upon comparable statements
for examinations conducted by independent public accountants substantially in
accordance with standards established by the American Institute of Certified
Public Accountants (rendered within one year of such statement) with respect to
such Subservicers.
Section 3.20 Rights of the Company in Respect of the Master Servicer.
The Master Servicer shall afford the Company, upon reasonable notice,
during normal business hours access to all records maintained by the Master
Servicer in respect of its rights and obligations hereunder and access to
officers of the Master Servicer responsible for such obligations. Upon request,
the Master Servicer shall furnish the Company with its most recent financial
statements and such other information as the Master Servicer possesses regarding
its business, affairs, property and condition, financial or otherwise. The
Master Servicer shall also cooperate with all reasonable requests for
information including, but not limited to, notices, tapes and copies of files,
regarding itself, the Mortgage Loans or the Certificates from any Person or
Persons identified by the Company or Residential Funding. The Company may, but
is not obligated to, enforce the obligations of the Master Servicer hereunder
and may, but is not obligated to, perform, or cause a designee to perform, any
defaulted obligation of the Master Servicer hereunder or exercise the rights of
the Master Servicer hereunder; provided that the Master Servicer shall not be
relieved of any of its obligations hereunder by virtue of such performance by
the Company or its designee. The Company shall not have any responsibility or
liability for any action or failure to act by the Master Servicer and is not
obligated to supervise the performance of the Master Servicer under this
Agreement or otherwise.
Section 3.21 Administration of Buydown Funds.
(a) With respect to any Buydown Mortgage Loan, the Subservicer has
deposited Buydown Funds in an account that satisfies the requirements for a
Subservicing Account (the "Buydown Account"). The Master Servicer shall cause
the Subservicing Agreement to require that upon receipt from the Mortgagor of
the amount due on a Due Date for each Buydown Mortgage Loan, the Subservicer
will withdraw from the Buydown Account the predetermined amount that, when added
to the amount due on such date from the Mortgagor, equals the full Monthly
Payment and transmit that amount in accordance with the terms of the
Subservicing Agreement to the Master Servicer together with the related payment
made by the Mortgagor or advanced by the Subservicer.
(b) If the Mortgagor on a Buydown Mortgage Loan prepays such loan in its
entirety during the period (the "Buydown Period") when Buydown Funds are
required to be applied to such Buydown Mortgage Loan, the Subservicer shall be
required to withdraw from the Buydown Account and remit any Buydown Funds
remaining in the Buydown Account in accordance with the related buydown
agreement. The amount of Buydown Funds which may be remitted in accordance with
the related buydown agreement may reduce the amount required to be paid by the
Mortgagor to fully prepay the related Mortgage Loan. If the Mortgagor on a
Buydown Mortgage Loan defaults on such Mortgage Loan during the Buydown Period
and the property
65
securing such Buydown Mortgage Loan is sold in the liquidation thereof (either
by the Master Servicer or the insurer under any related Primary Insurance
Policy), the Subservicer shall be required to withdraw from the Buydown Account
the Buydown Funds for such Buydown Mortgage Loan still held in the Buydown
Account and remit the same to the Master Servicer in accordance with the terms
of the Subservicing Agreement for deposit in the Custodial Account or, if
instructed by the Master Servicer, pay to the insurer under any related Primary
Insurance Policy if the Mortgaged Property is transferred to such insurer and
such insurer pays all of the loss incurred in respect of such default. Any
amount so remitted pursuant to the preceding sentence will be deemed to reduce
the amount owed on the Mortgage Loan.
Section 3.22 Advance Facility.
(a) The Master Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility") under which (1) the
Master Servicer sells, assigns or pledges to another Person (an "Advancing
Person") the Master Servicer's rights under this Agreement to be reimbursed for
any Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances and/or Servicing Advances required to be made by the Master
Servicer pursuant to this Agreement. No consent of the Depositor, the Trustee,
the Certificateholders or any other party shall be required before the Master
Servicer may enter into an Advance Facility. Notwithstanding the existence of
any Advance Facility under which an Advancing Person agrees to fund Advances
and/or Servicing Advances on the Master Servicer's behalf, the Master Servicer
shall remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement. If the Master Servicer
enters into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances including Nonrecoverable
Advances ("Advance Reimbursement Amounts") and/or Servicing Advances including
Nonrecoverable Advances ("Servicing Advance Reimbursement Amounts" and together
with Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to
the extent such type of Reimbursement Amount is included in the Advance
Facility), as applicable, pursuant to this Agreement, then the Master Servicer
shall identify such Reimbursement Amounts consistent with the reimbursement
rights set forth in Section 3.10(a)(ii) and (vii) and remit such Reimbursement
Amounts in accordance with this Section 3.22 or otherwise in accordance with the
documentation establishing the Advance Facility to such Advancing Person or to a
trustee, agent or custodian (an "Advance Facility Trustee") designated by such
Advancing Person in an Advance Facility Notice described below in Section
3.22(b). Notwithstanding the foregoing, if so required pursuant to the terms of
the Advance Facility, the Master Servicer may direct, and if so directed in
writing the Trustee is hereby authorized to and shall pay to the Advance
Facility Trustee the Reimbursement Amounts identified pursuant to the preceding
sentence. An Advancing Person whose obligations hereunder are limited to the
funding of Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Subservicer pursuant to Section 3.02(a)
or 6.02(c) hereof and shall not be deemed to be a Subservicer under this
Agreement. Notwithstanding anything to the contrary herein, in no event shall
Advance Reimbursement Amounts or Servicing Advance Reimbursement Amounts be
included in the Available Distribution Amount or distributed to
Certificateholders.
(b) If the Master Servicer enters into an Advance Facility and makes the
election set forth in Section 3.22(a), the Master Servicer and the related
Advancing Person shall deliver to
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the Trustee a written notice and payment instruction (an "Advance Facility
Notice"), providing the Trustee with written payment instructions as to where to
remit Advance Reimbursement Amounts and/or Servicing Advance Reimbursement
Amounts (each to the extent such type of Reimbursement Amount is included within
the Advance Facility) on subsequent Distribution Dates. The payment instruction
shall require the applicable Reimbursement Amounts to be distributed to the
Advancing Person or to an Advance Facility Trustee designated in the Advance
Facility Notice. An Advance Facility Notice may only be terminated by the joint
written direction of the Master Servicer and the related Advancing Person (and
any related Advance Facility Trustee).
(c) Reimbursement Amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Master Servicer would be permitted to reimburse itself in accordance
with Section 3.10(a)(ii) and (vii) hereof, assuming the Master Servicer or the
Advancing Person had made the related Advance(s) and/or Servicing Advance(s).
Notwithstanding the foregoing, except with respect to reimbursement of
Nonrecoverable Advances as set forth in Section 3.10(c) of this Agreement, no
Person shall be entitled to reimbursement from funds held in the Collection
Account for future distribution to Certificateholders pursuant to this
Agreement. Neither the Company nor the Trustee shall have any duty or liability
with respect to the calculation of any Reimbursement Amount, nor shall the
Company or the Trustee have any responsibility to track or monitor the
administration of the Advance Facility and the Depositor shall not have any
responsibility to track, monitor or verify the payment of Reimbursement Amounts
to the related Advancing Person or Advance Facility Trustee. The Master Servicer
shall maintain and provide to any Successor Master Servicer a detailed
accounting on a loan-by-loan basis as to amounts advanced by, sold, pledged or
assigned to, and reimbursed to any Advancing Person. The Successor Master
Servicer shall be entitled to rely on any such information provided by the
Master Servicer and the Successor Master Servicer shall not be liable for any
errors in such information.
(d) Upon the direction of and at the expense of the Master Servicer, the
Trustee agrees to execute such acknowledgments, certificates, and other
documents provided by the Master Servicer and reasonably satisfactory to the
Trustee recognizing the interests of any Advancing Person or Advance Facility
Trustee in such Reimbursement Amounts as the Master Servicer may cause to be
made subject to Advance Facilities pursuant to this Section 3.22, and such other
documents in connection with such Advance Facility as may be reasonably
requested from time to time by any Advancing Person or Advance Facility Trustee
and reasonably satisfactory to the Trustee.
(e) Reimbursement Amounts collected with respect to each Mortgage Loan
shall be allocated to outstanding unreimbursed Advances or Servicing Advances
(as the case may be) made with respect to that Mortgage Loan on a "first-in,
first out" ("FIFO") basis, subject to the qualifications set forth below:
(i) Any successor Master Servicer to Residential Funding (a "Successor
Master Servicer") and the Advancing Person or Advance Facility Trustee
shall be required to apply all amounts available in accordance with this
Section 3.22(e) to the reimbursement of Advances and Servicing Advances in
the manner provided for herein; provided, however, that after the
succession of a Successor Master Servicer, (A) to the
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extent that any Advances or Servicing Advances with respect to any
particular Mortgage Loan are reimbursed from payments or recoveries, if
any, from the related Mortgagor, and Liquidation Proceeds or Insurance
Proceeds, if any, with respect to that Mortgage Loan, reimbursement shall
be made, first, to the Advancing Person or Advance Facility Trustee in
respect of Advances and/or Servicing Advances related to that Mortgage Loan
to the extent of the interest of the Advancing Person or Advance Facility
Trustee in such Advances and/or Servicing Advances, second to the Master
Servicer in respect of Advances and/or Servicing Advances related to that
Mortgage Loan in excess of those in which the Advancing Person or Advance
Facility Trustee Person has an interest, and third, to the Successor Master
Servicer in respect of any other Advances and/or Servicing Advances related
to that Mortgage Loan, from such sources as and when collected, and (B)
reimbursements of Advances and Servicing Advances that are Nonrecoverable
Advances shall be made pro rata to the Advancing Person or Advance Facility
Trustee, on the one hand, and any such Successor Master Servicer, on the
other hand, on the basis of the respective aggregate outstanding
unreimbursed Advances and Servicing Advances that are Nonrecoverable
Advances owed to the Advancing Person, Advance Facility Trustee or Master
Servicer pursuant to this Agreement, on the one hand, and any such
Successor Master Servicer, on the other hand, and without regard to the
date on which any such Advances or Servicing Advances shall have been made.
In the event that, as a result of the FIFO allocation made pursuant to this
Section 3.22(e), some or all of a Reimbursement Amount paid to the
Advancing Person or Advance Facility Trustee relates to Advances or
Servicing Advances that were made by a Person other than Residential
Funding or the Advancing Person or Advance Facility Trustee, then the
Advancing Person or Advance Facility Trustee shall be required to remit any
portion of such Reimbursement Amount to the Person entitled to such portion
of such Reimbursement Amount. Without limiting the generality of the
foregoing, Residential Funding shall remain entitled to be reimbursed by
the Advancing Person or Advance Facility Trustee for all Advances and
Servicing Advances funded by Residential Funding to the extent the related
Reimbursement Amount(s) have not been assigned or pledged to an Advancing
Person or Advance Facility Trustee. The documentation establishing any
Advance Facility shall require Residential Funding to provide to the
related Advancing Person or Advance Facility Trustee loan by loan
information with respect to each Reimbursement Amount distributed to such
Advancing Person or Advance Facility Trustee on each date of remittance
thereof to such Advancing Person or Advance Facility Trustee, to enable the
Advancing Person or Advance Facility Trustee to make the FIFO allocation of
each Reimbursement Amount with respect to each Mortgage Loan.
(ii) By way of illustration, and not by way of limiting the generality
of the foregoing, if the Master Servicer resigns or is terminated at a time
when the Master Servicer is a party to an Advance Facility, and is replaced
by a Successor Master Servicer, and the Successor Master Servicer directly
funds Advances or Servicing Advances with respect to a Mortgage Loan and
does not assign or pledge the related Reimbursement Amounts to the related
Advancing Person or Advance Facility Trustee, then all payments and
recoveries received from the related Mortgagor or received in the form of
Liquidation Proceeds with respect to such Mortgage Loan (including
Insurance Proceeds collected in connection with a liquidation of such
Mortgage Loan) will be allocated first to the Advancing Person or Advance
Facility Trustee until the related
68
Reimbursement Amounts attributable to such Mortgage Loan that are owed to
the Master Servicer and the Advancing Person, which were made prior to any
Advances or Servicing Advances made by the Successor Master Servicer, have
been reimbursed in full, at which point the Successor Master Servicer shall
be entitled to retain all related Reimbursement Amounts subsequently
collected with respect to that Mortgage Loan pursuant to Section 3.10 of
this Agreement. To the extent that the Advances or Servicing Advances are
Nonrecoverable Advances to be reimbursed on an aggregate basis pursuant to
Section 3.10 of this Agreement, the reimbursement paid in this manner will
be made pro rata to the Advancing Person or Advance Facility Trustee, on
the one hand, and the Successor Master Servicer, on the other hand, as
described in clause (i)(B) above.
(f) The Master Servicer shall remain entitled to be reimbursed for all
Advances and Servicing Advances funded by the Master Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or pledged
to an Advancing Person.
(g) Any amendment to this Section 3.22 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.22, including amendments to
add provisions relating to a successor Master Servicer, may be entered into by
the Trustee, the Company and the Master Servicer without the consent of any
Certificateholder, with written confirmation from each Rating Agency that the
amendment will not result in the reduction of the ratings on any class of the
Certificates below the lesser of the then current or original ratings on such
Certificates, and an opinion of counsel as required by Section 11.01(c)
notwithstanding anything to the contrary in Section 11.01 of or elsewhere in
this Agreement.
(h) Any rights of set-off that the Trust Fund, the Trustee, the Company,
any Successor Master Servicer or any other Person might otherwise have against
the Master Servicer under this Agreement shall not attach to any rights to be
reimbursed for Advances or Servicing Advances that have been sold, transferred,
pledged, conveyed or assigned to any Advancing Person.
(i) At any time when an Advancing Person shall have ceased funding Advances
and/or Servicing Advances (as the case may be) and the Advancing Person or
related Advance Facility Trustee shall have received Reimbursement Amounts
sufficient in the aggregate to reimburse all Advances and/or Servicing Advances
(as the case may be) the right to reimbursement for which were assigned to the
Advancing Person, then upon the delivery of a written notice signed by the
Advancing Person and the Master Servicer or its successor or assign) to the
Trustee terminating the Advance Facility Notice (the "Notice of Facility
Termination"), the Master Servicer or its Successor Master Servicer shall again
be entitled to withdraw and retain the related Reimbursement Amounts from the
Custodial Account pursuant to Section 3.10.
(j) After delivery of any Advance Facility Notice, and until any such
Advance Facility Notice has been terminated by a Notice of Facility Termination,
this Section 3.22 may not be amended or otherwise modified without the prior
written consent of the related Advancing Person.
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ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01 Certificate Account.
(a) The Master Servicer on behalf of the Trustee shall establish and
maintain a Certificate Account in which the Master Servicer shall cause to be
deposited on behalf of the Trustee on or before 2:00 P.M. New York time on each
Certificate Account Deposit Date by wire transfer of immediately available funds
an amount equal to the sum of (i) any Advance for the immediately succeeding
Distribution Date, (ii) any amount required to be deposited in the Certificate
Account pursuant to Section 3.12(a), (iii) any amount required to be deposited
in the Certificate Account pursuant to Section 3.16(e) or Section 4.07 and (iv)
all other amounts constituting the Available Distribution Amount for the
immediately succeeding Distribution Date.
(b) The Trustee shall, upon written request from the Master Servicer,
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature or be payable on demand not later than the Business Day next preceding
the Distribution Date next following the date of such investment (except that
(i) any investment in the institution with which the Certificate Account is
maintained may mature or be payable on demand on such Distribution Date and (ii)
any other investment may mature or be payable on demand on such Distribution
Date if the Trustee shall advance funds on such Distribution Date to the
Certificate Account in the amount payable on such investment on such
Distribution Date, pending receipt thereof to the extent necessary to make
distributions on the Certificates) and shall not be sold or disposed of prior to
maturity. Subject to Section 3.16(e), all income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized without any
right of reimbursement.
Section 4.02 Distributions.
As provided in Section 4.02 of the Series Supplement.
Section 4.03 Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting.
(a) Concurrently with each distribution charged to the Certificate Account
and with respect to each Distribution Date the Master Servicer shall forward to
the Trustee and the Trustee shall either forward by mail or make available to
each Holder and the Company, via the Trustee's internet website, a statement
(and at its option, any additional files containing the same information in an
alternative format) setting forth information as to each Class of Certificates,
the Mortgage Pool and, if the Mortgage Pool is comprised of two or more Loan
Groups, each Loan Group, to the extent applicable. This statement will include
the information set forth in an
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exhibit to the Series Supplement. Such exhibit shall set forth the Trustee's
internet website address together with a phone number. The Trustee shall mail to
each Holder that requests a paper copy by telephone a paper copy via first class
mail. The Trustee may modify the distribution procedures set forth in this
Section provided that such procedures are no less convenient for the
Certificateholders. The Trustee shall provide prior notification to the Company,
the Master Servicer and the Certificateholders regarding any such modification.
In addition, the Master Servicer shall provide to any manager of a trust fund
consisting of some or all of the Certificates, upon reasonable request, such
additional information as is reasonably obtainable by the Master Servicer at no
additional expense to the Master Servicer. Also, at the request of a Rating
Agency, the Master Servicer shall provide the information relating to the
Reportable Modified Mortgage Loans substantially in the form attached hereto as
Exhibit Q to such Rating Agency within a reasonable period of time; provided,
however, that the Master Servicer shall not be required to provide such
information more than four times in a calendar year to any Rating Agency.
(b) Within a reasonable period of time after the end of each calendar year,
the Master Servicer shall prepare, or cause to be prepared, and shall forward,
or cause to be forwarded, to each Person who at any time during the calendar
year was the Holder of a Certificate, other than a Class R Certificate, a
statement containing the information set forth in clauses (i) and (ii) of the
exhibit to the Series Supplement referred to in subsection (a) above aggregated
for such calendar year or applicable portion thereof during which such Person
was a Certificateholder. Such obligation of the Master Servicer shall be deemed
to have been satisfied to the extent that substantially comparable information
shall be provided by the Master Servicer pursuant to any requirements of the
Code.
(c) Within a reasonable period of time after the end of each calendar year,
the Master Servicer shall prepare, or cause to be prepared, and shall forward,
or cause to be forwarded, to each Person who at any time during the calendar
year was the Holder of a Class R Certificate, a statement containing the
applicable distribution information provided pursuant to this Section 4.03
aggregated for such calendar year or applicable portion thereof during which
such Person was the Holder of a Class R Certificate. Such obligation of the
Master Servicer shall be deemed to have been satisfied to the extent that
substantially comparable information shall be provided by the Master Servicer
pursuant to any requirements of the Code.
(d) Upon the written request of any Certificateholder, the Master Servicer,
as soon as reasonably practicable, shall provide the requesting
Certificateholder with such information as is necessary and appropriate, in the
Master Servicer's sole discretion, for purposes of satisfying applicable
reporting requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Company and in respect of
the Trust Fund, sign and cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act, and the
rules and regulations of the Commission thereunder including, without
limitation, reports on Form 10-K, Form 10-D and Form 8-K. In connection with the
preparation and filing of such periodic reports, the Trustee shall timely
provide to the Master Servicer (I) a list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Trustee, as trustee
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hereunder, or the Trust Fund that are received by the Trustee, (III) notice of
all matters that, to the actual knowledge of a Responsible Officer of the
Trustee, have been submitted to a vote of the Certificateholders, other than
those matters that have been submitted to a vote of the Certificateholders at
the request of the Company or the Master Servicer, and (IV) notice of any
failure of the Trustee to make any distribution to the Certificateholders as
required pursuant to the Series Supplement. Neither the Master Servicer nor the
Trustee shall have any liability with respect to the Master Servicer's failure
to properly prepare or file such periodic reports resulting from or relating to
the Master Servicer's inability or failure to obtain any information not
resulting from the Master Servicer's own negligence or willful misconduct.
(f) Any Form 10-K filed with the Commission in connection with this Section
4.03 shall include, with respect to the Certificates relating to such 10-K:
(i) A certification, signed by the senior officer in charge of the
servicing functions of the Master Servicer, in the form attached as Exhibit
O hereto or such other form as may be required or permitted by the
Commission (the "Form 10-K Certification"), in compliance with Rules 13a-14
and 15d-14 under the Exchange Act and any additional directives of the
Commission.
(ii) A report regarding its assessment of compliance during the
preceding calendar year with all applicable servicing criteria set forth in
relevant Commission regulations with respect to mortgage-backed securities
transactions taken as a whole involving the Master Servicer that are backed
by the same types of assets as those backing the certificates, as well as
similar reports on assessment of compliance received from other parties
participating in the servicing function as required by relevant Commission
regulations, as described in Item 1122(a) of Regulation AB. The Master
Servicer shall obtain from all other parties participating in the servicing
function any required certifications.
(iii) With respect to each assessment report described immediately
above, a report by a registered public accounting firm that attests to, and
reports on, the assessment made by the asserting party, as set forth in
relevant Commission regulations, as described in Regulation 1122(b) of
Regulation AB and Section 3.19
(iv) The servicer compliance certificate required to be delivered
pursuant Section 3.18.
(g) In connection with the Form 10-K Certification, the Trustee shall
provide the Master Servicer with a back-up certification substantially in the
form attached hereto as Exhibit P.
(h) This Section 4.03 may be amended in accordance with this Agreement
without the consent of the Certificateholders.
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Section 4.04 Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer.
(a) Prior to the close of business on the Determination Date, the Master
Servicer shall furnish a written statement to the Trustee, any Certificate
Insurer, any Paying Agent and the Company (the information in such statement to
be made available to Certificateholders by the Master Servicer on request)
setting forth (i) the Available Distribution Amount and (ii) the amounts
required to be withdrawn from the Custodial Account and deposited into the
Certificate Account on the immediately succeeding Certificate Account Deposit
Date pursuant to clause (iii) of Section 4.01(a). The determination by the
Master Servicer of such amounts shall, in the absence of obvious error, be
presumptively deemed to be correct for all purposes hereunder and the Trustee
shall be protected in relying upon the same without any independent check or
verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account
Deposit Date, the Master Servicer shall either (i) deposit in the Certificate
Account from its own funds, or funds received therefor from the Subservicers, an
amount equal to the Advances to be made by the Master Servicer in respect of the
related Distribution Date, which shall be in an aggregate amount equal to the
aggregate amount of Monthly Payments (with each interest portion thereof
adjusted to the Net Mortgage Rate), less the amount of any related Servicing
Modifications, Debt Service Reductions or reductions in the amount of interest
collectable from the Mortgagor pursuant to the Relief Act, on the Outstanding
Mortgage Loans as of the related Due Date, which Monthly Payments were not
received as of the close of business as of the related Determination Date;
provided that no Advance shall be made if it would be a Nonrecoverable Advance,
(ii) withdraw from amounts on deposit in the Custodial Account and deposit in
the Certificate Account all or a portion of the Amount Held for Future
Distribution in discharge of any such Advance, or (iii) make advances in the
form of any combination of (i) and (ii) aggregating the amount of such Advance.
Any portion of the Amount Held for Future Distribution so used shall be replaced
by the Master Servicer by deposit in the Certificate Account on or before 11:00
A.M. New York time on any future Certificate Account Deposit Date to the extent
that funds attributable to the Mortgage Loans that are available in the
Custodial Account for deposit in the Certificate Account on such Certificate
Account Deposit Date shall be less than payments to Certificateholders required
to be made on the following Distribution Date. The Master Servicer shall be
entitled to use any Advance made by a Subservicer as described in Section
3.07(b) that has been deposited in the Custodial Account on or before such
Distribution Date as part of the Advance made by the Master Servicer pursuant to
this Section 4.04. The amount of any reimbursement pursuant to Section 4.02(a)
in respect of outstanding Advances on any Distribution Date shall be allocated
to specific Monthly Payments due but delinquent for previous Due Periods, which
allocation shall be made, to the extent practicable, to Monthly Payments which
have been delinquent for the longest period of time. Such allocations shall be
conclusive for purposes of reimbursement to the Master Servicer from recoveries
on related Mortgage Loans pursuant to Section 3.10.
The determination by the Master Servicer that it has made a Nonrecoverable
Advance or that any proposed Advance, if made, would constitute a Nonrecoverable
Advance, shall be evidenced by an Officers' Certificate of the Master Servicer
delivered to the Company and the Trustee.
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If the Master Servicer determines as of the Business Day preceding any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date, it shall give notice to the Trustee of
its inability to advance (such notice may be given by telecopy), not later than
3:00 P.M., New York time, on such Business Day, specifying the portion of such
amount that it will be unable to deposit. Not later than 3:00 P.M., New York
time, on the Certificate Account Deposit Date the Trustee shall, unless by 12:00
Noon, New York time, on such day the Trustee shall have been notified in writing
(by telecopy) that the Master Servicer shall have directly or indirectly
deposited in the Certificate Account such portion of the amount of the Advance
as to which the Master Servicer shall have given notice pursuant to the
preceding sentence, pursuant to Section 7.01, (a) terminate all of the rights
and obligations of the Master Servicer under this Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the Master Servicer
hereunder, including the obligation to deposit in the Certificate Account an
amount equal to the Advance for the immediately succeeding Distribution Date.
The Trustee shall deposit all funds it receives pursuant to this Section
4.04 into the Certificate Account.
Section 4.05 Allocation of Realized Losses.
As provided in Section 4.05 of the Series Supplement.
Section 4.06 Reports of Foreclosures and Abandonment of Mortgaged Property.
The Master Servicer or the Subservicers shall file information returns with
respect to the receipt of mortgage interests received in a trade or business,
the reports of foreclosures and abandonments of any Mortgaged Property and the
information returns relating to cancellation of indebtedness income with respect
to any Mortgaged Property required by Sections 6050H, 6050J and 6050P,
respectively, of the Code, and deliver to the Trustee an Officers' Certificate
on or before March 31 of each year stating that such reports have been filed.
Such reports shall be in form and substance sufficient to meet the reporting
requirements imposed by Sections 6050H, 6050J and 6050P of the Code.
Section 4.07 Optional Purchase of Defaulted Mortgage Loans.
As to any Mortgage Loan which is delinquent in payment by 90 days or more,
the Master Servicer may, at its option, purchase such Mortgage Loan from the
Trustee at the Purchase Price therefor. If at any time the Master Servicer makes
a payment to the Certificate Account covering the amount of the Purchase Price
for such a Mortgage Loan, and the Master Servicer provides to the Trustee a
certification signed by a Servicing Officer stating that the amount of such
payment has been deposited in the Certificate Account, then the Trustee shall
execute the assignment of such Mortgage Loan at the request of the Master
Servicer without recourse to the Master Servicer, which shall succeed to all the
Trustee's right, title and interest in and to such Mortgage Loan, and all
security and documents relative thereto. Such assignment shall be an assignment
outright and not for security. The Master Servicer will thereupon own such
Mortgage, and all
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such security and documents, free of any further obligation to the Trustee or
the Certificateholders with respect thereto.
If, however the Master Servicer shall have exercised its right to
repurchase a Mortgage Loan pursuant to this Section 4.07 upon the written
request of and with funds provided by the Junior Certificateholder and thereupon
transferred such Mortgage Loan to the Junior Certificateholder, the Master
Servicer shall so notify the Trustee in writing.
Section 4.08 Surety Bond.
(a) If a Required Surety Payment is payable pursuant to the Surety Bond
with respect to any Additional Collateral Loan, the Master Servicer shall so
notify the Trustee as soon as reasonably practicable and the Trustee shall
promptly complete the notice in the form of Attachment 1 to the Surety Bond and
shall promptly submit such notice to the Surety as a claim for a Required
Surety. The Master Servicer shall upon request assist the Trustee in completing
such notice and shall provide any information requested by the Trustee in
connection therewith.
(b) Upon receipt of a Required Surety Payment from the Surety on behalf of
the Holders of Certificates, the Trustee shall deposit such Required Surety
Payment in the Certificate Account and shall distribute such Required Surety
Payment, or the proceeds thereof, in accordance with the provisions of Section
4.02.
(c) The Trustee shall (i) receive as attorney-in-fact of each Holder of a
Certificate any Required Surety Payment from the Surety and (ii) disburse the
same to the Holders of such Certificates as set forth in Section 4.02.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
(a) The Senior, Class M, Class B and Class R Certificates shall be
substantially in the forms set forth in Exhibits A, B, C and D, respectively,
and shall, on original issue, be executed and delivered by the Trustee to the
Certificate Registrar for authentication and delivery to or upon the order of
the Company upon receipt by the Trustee or one or more Custodians of the
documents specified in Section 2.01. The Certificates shall be issuable in the
minimum denominations designated in the Preliminary Statement to the Series
Supplement.
The Certificates shall be executed by manual or facsimile signature on
behalf of an authorized officer of the Trustee. Certificates bearing the manual
or facsimile signatures of individuals who were at any time the proper officers
of the Trustee shall bind the Trustee, notwithstanding that such individuals or
any of them have ceased to hold such offices prior to the authentication and
delivery of such Certificate or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement, or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided for herein
executed by the Certificate Registrar by manual signature, and such certificate
upon any Certificate shall be conclusive evidence, and the only evidence, that
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such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
(b) Except as provided below, registration of Book-Entry Certificates may
not be transferred by the Trustee except to another Depository that agrees to
hold such Certificates for the respective Certificate Owners with Ownership
Interests therein. The Holders of the Book-Entry Certificates shall hold their
respective Ownership Interests in and to each of such Certificates through the
book-entry facilities of the Depository and, except as provided below, shall not
be entitled to Definitive Certificates in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
The Trustee, the Master Servicer and the Company may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
If (i)(A) the Company advises the Trustee in writing that the Depository is
no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Company is unable to locate a qualified successor or (ii)
the Company, with the consent of a majority of the Certificateholders, advises
the Trustee in writing that it elects to terminate the book-entry system through
the Depository, the Trustee shall notify all Certificate Owners, through the
Depository, of the occurrence of any such event and of the availability of
Definitive Certificates to Certificate Owners requesting the same. Upon
surrender to the Trustee of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration of
transfer, the Trustee shall issue the Definitive Certificates.
In addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such Certificate Owner's Percentage
Interest in the related Class of Certificates. In order to make such request,
such Certificate Owner shall, subject to the rules and procedures of the
Depository, provide the Depository or the related Depository Participant with
directions for the 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
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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 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.
None of the Company, the Master Servicer or the Trustee shall be liable for
any actions taken by the Depository or its nominee, including, without
limitation, any delay in delivery of any 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 all references herein
to obligations imposed upon or to be performed by the Depository in connection
with the issuance of the Definitive Certificates pursuant to this Section 5.01
shall be deemed to be imposed upon and performed by the Trustee, and the Trustee
and the Master Servicer shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(c) From time to time Residential Funding, as the initial Holder of the
Class A-V Certificates, may exchange such Holder's Class A-V Certificates for
Subclasses of Class A-V Certificates to be issued under this Agreement by
delivering a "Request for Exchange" substantially in the form attached hereto as
Exhibit N executed by an authorized officer, which Subclasses, in the aggregate,
will represent the Uncertificated Class A-V REMIC Regular Interests
corresponding to the Class A-V Certificates so surrendered for exchange. Any
Subclass so issued shall bear a numerical designation commencing with Class
A-V-1 and continuing sequentially thereafter, and will evidence ownership of the
Uncertificated Class A-V REMIC Regular Interest or Interests specified in
writing by such initial Holder to the Trustee. The Trustee may conclusively,
without any independent verification, rely on, and shall be protected in relying
on, Residential Funding's determinations of the Uncertificated Class A-V REMIC
Regular Interests corresponding to any Subclass, the Initial Notional Amount and
the initial Pass-Through Rate on a Subclass as set forth in such Request for
Exchange and the Trustee shall have no duty to determine if any Uncertificated
Class A-V REMIC Regular Interest designated on a Request for Exchange
corresponds to a Subclass which has previously been issued. Each Subclass so
issued shall be substantially in the form set forth in Exhibit A and shall, on
original issue, be executed and delivered by the Trustee to the Certificate
Registrar for authentication and delivery in accordance with Section 5.01(a).
Every Certificate presented or surrendered for exchange by the initial Holder
shall (if so required by the Trustee or the Certificate Registrar) be duly
endorsed by, or be accompanied by a written instrument of transfer attached to
such Certificate and shall be completed to the satisfaction of the Trustee and
the Certificate Registrar duly executed by, the initial Holder thereof or his
attorney duly authorized in writing. The Certificates of any Subclass of Class
A-V Certificates may be transferred in whole, but not in part, in accordance
with the provisions of Section 5.02.
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Section 5.02 Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to
be appointed by the Trustee in accordance with the provisions of Section 8.12 a
Certificate Register in which, subject to such reasonable regulations as it may
prescribe, the Trustee shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Trustee is
initially appointed Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided. The
Certificate Registrar, or the Trustee, shall provide the Master Servicer with a
certified list of Certificateholders as of each Record Date prior to the related
Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at any
office or agency of the Trustee maintained for such purpose pursuant to Section
8.12 and, in the case of any Class M, Class B or Class R Certificate, upon
satisfaction of the conditions set forth below, the Trustee shall execute and
the Certificate Registrar shall authenticate and deliver, in the name of the
designated transferee or transferees, one or more new Certificates of a like
Class (or Subclass) and aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class (or Subclass)
and aggregate Percentage Interest, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange the Trustee shall execute and the Certificate Registrar
shall authenticate and deliver the Certificates of such Class which the
Certificateholder making the exchange is entitled to receive. Every Certificate
presented or surrendered for transfer or exchange shall (if so required by the
Trustee or the Certificate Registrar) be duly endorsed by, or be accompanied by
a written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class B Certificate
shall be made unless such transfer, sale, pledge or other disposition is exempt
from the registration requirements of the Securities Act of 1933, as amended,
and any applicable state securities laws or is made in accordance with said Act
and laws. In the event that a transfer of a Class B Certificate is to be made
either (i)(A) the Trustee shall require a written Opinion of Counsel acceptable
to and in form and substance satisfactory to the Trustee and the Company that
such transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from said Act and laws or is being made
pursuant to said Act and laws, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer (except that, if such
transfer is made by the Company or the Master Servicer or any Affiliate thereof,
the Company or the Master Servicer shall provide such Opinion of Counsel at
their own expense); provided that such Opinion of Counsel will not be required
in connection with the initial transfer of any such Certificate by the Company
or any Affiliate thereof to the Company or an Affiliate of the Company and (B)
the Trustee shall require the transferee to execute a representation letter,
substantially in the form of Exhibit H hereto, and the Trustee shall require the
transferor to execute a representation letter, substantially in the form of
Exhibit I hereto, each acceptable to and in form and substance satisfactory to
the Company and the Trustee certifying to the Company and the Trustee the facts
surrounding such transfer, which representation letters
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shall not be an expense of the Trustee, the Company or the Master Servicer;
provided, however, that such representation letters will not be required in
connection with any transfer of any such Certificate by the Company or any
Affiliate thereof to the Company or an Affiliate of the Company, and the Trustee
shall be entitled to conclusively rely upon a representation (which, upon the
request of the Trustee, shall be a written representation) from the Company, of
the status of such transferee as an Affiliate of the Company or (ii) the
prospective transferee of such a Certificate shall be required to provide the
Trustee, the Company and the Master Servicer with an investment letter
substantially in the form of Exhibit J attached hereto (or such other form as
the Company in its sole discretion deems acceptable), which investment letter
shall not be an expense of the Trustee, the Company or the Master Servicer, and
which investment letter states that, among other things, such transferee (A) is
a "qualified institutional buyer" as defined under Rule 144A, acting for its own
account or the accounts of other "qualified institutional buyers" as defined
under Rule 144A, and (B) is aware that the proposed transferor intends to rely
on the exemption from registration requirements under the Securities Act
provided by Rule 144A. The Holder of any such Certificate desiring to effect any
such transfer, sale, pledge or other disposition shall, and does hereby agree
to, indemnify the Trustee, the Company, the Master Servicer and the Certificate
Registrar against any liability that may result if the transfer, sale, pledge or
other disposition is not so exempt or is not made in accordance with such
federal and state laws.
(e) (i) In the case of any Class B or Class R Certificate presented for
registration in the name of any Person, either (A) the Trustee shall require an
Opinion of Counsel acceptable to and in form and substance satisfactory to the
Trustee, the Company and the Master Servicer to the effect that the purchase and
holding of such Class B or Class R Certificate are permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under Section 406 of the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), or Section 4975 of the Code (or comparable provisions of any
subsequent enactments), and will not subject the Trustee, the Company or the
Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in this Agreement, which Opinion of Counsel shall not be an expense
of the Trustee, the Company or the Master Servicer or (B) the prospective
Transferee shall be required to provide the Trustee, the Company and the Master
Servicer with a certification to the effect set forth in paragraph six of
Exhibit H (with respect to any Class B Certificate) or paragraph fifteen of
Exhibit G-1 (with respect to any Class R Certificate), which the Trustee may
rely upon without further inquiry or investigation, or such other certifications
as the Trustee may deem desirable or necessary in order to establish that such
Transferee or the Person in whose name such registration is requested either (a)
is not an employee benefit plan or other plan subject to the prohibited
transaction provisions of ERISA or Section 4975 of the Code, or any Person
(including an investment manager, a named fiduciary or a trustee of any such
plan) who is using "plan assets" of any such plan to effect such acquisition
(each, a "Plan Investor") or (b) in the case of any Class B Certificate, the
following conditions are satisfied: (i) such Transferee is an insurance company,
(ii) the source of funds used to purchase or hold such Certificate (or interest
therein) is an "insurance company general account" (as defined in U.S.
Department of Labor Prohibited Transaction Class Exemption ("PTCE") 95-60, and
(iii) the conditions set forth in Sections I and III of PTCE 95-60 have been
satisfied (each entity that satisfies this clause (b), a "Complying Insurance
Company").
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(ii) Any Transferee of a Class M Certificate will be deemed to have
represented by virtue of its purchase or holding of such Certificate (or
interest therein) that either (a) such Transferee is not a Plan Investor,
(b) it has acquired and is holding such Certificate in reliance on
Prohibited Transaction Exemption ("PTE") 94-29, 59 Fed. Reg. 14674 (March
29, 1994), as amended by PTE 97-34, 62 Fed. Reg. 39021 (July 21, 1997), PTE
2000-58, 65 Fed. Reg. 67765 (November 13, 2000), and PTE 2002-41, 67 Fed.
Reg. 54487 (August 22, 2002) (the "RFC Exemption"), and that it understands
that there are certain conditions to the availability of the RFC Exemption
including that such Certificate must be rated, at the time of purchase, not
lower than "BBB-" (or its equivalent) by Standard & Poor's, Fitch or
▇▇▇▇▇'▇ or (c) such Transferee is a Complying Insurance Company.
(iii) (A) If any Class M Certificate (or any interest therein) is
acquired or held by any Person that does not satisfy the conditions
described in paragraph (ii) above, then the last preceding Transferee that
either (i) is not a Plan Investor, (ii) acquired such Certificate in
compliance with the RFC Exemption, or (iii) is a Complying Insurance
Company shall be restored, to the extent permitted by law, to all rights
and obligations as Certificate Owner thereof retroactive to the date of
such Transfer of such Class M Certificate. The Trustee shall be under no
liability to any Person for making any payments due on such Certificate to
such preceding Transferee.
(B) Any purported Certificate Owner whose acquisition or holding
of any Class M Certificate (or interest therein) was effected in
violation of the restrictions in this Section 5.02(e) shall indemnify
and hold harmless the Company, the Trustee, the Master Servicer, any
Subservicer, each Underwriter and the Trust Fund from and against any
and all liabilities, claims, costs or expenses incurred by such
parties as a result of such acquisition or holding.
(f) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as
a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Class R Certificate
until its receipt of, (I) an affidavit and agreement (a "Transfer
Affidavit and Agreement," in the form attached hereto as Exhibit G-1)
from the proposed Transferee, in form and substance satisfactory to
the Master Servicer, representing and warranting, among
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other things, that it is a Permitted Transferee, that it is not
acquiring its Ownership Interest in the Class R Certificate that is
the subject of the proposed Transfer as a nominee, trustee or agent
for any Person who is not a Permitted Transferee, that for so long as
it retains its Ownership Interest in a Class R Certificate, it will
endeavor to remain a Permitted Transferee, and that it has reviewed
the provisions of this Section 5.02(f) and agrees to be bound by them,
and (II) a certificate, in the form attached hereto as Exhibit G-2,
from the Holder wishing to transfer the Class R Certificate, in form
and substance satisfactory to the Master Servicer, representing and
warranting, among other things, that no purpose of the proposed
Transfer is to impede the assessment or collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee who is assigned to this Agreement
has actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an Ownership Interest in a Class R
Certificate to such proposed Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Class R Certificate and (y) not
to transfer its Ownership Interest unless it provides a certificate to
the Trustee in the form attached hereto as Exhibit G-2.
(E) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary
Treasury Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Class R Certificate, if it is, or
is holding an Ownership Interest in a Class R Certificate on behalf
of, a "pass-through interest holder."
(ii) The Trustee will register the Transfer of any Class R Certificate
only if it shall have received the Transfer Affidavit and Agreement, a
certificate of the Holder requesting such transfer in the form attached
hereto as Exhibit G-2 and all of such other documents as shall have been
reasonably required by the Trustee as a condition to such registration.
Transfers of the Class R Certificates to Non-United States Persons and
Disqualified Organizations (as defined in Section 860E(e)(5) of the Code)
are prohibited.
(iii) (A) If any Disqualified Organization shall become a holder of a
Class R Certificate, then the last preceding Permitted Transferee shall be
restored, to the extent permitted by law, to all rights and obligations as
Holder thereof retroactive to the date of registration of such Transfer of
such Class R Certificate. If a Non-United States Person shall become a
holder of a Class R Certificate, then the last preceding United States
Person shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration of
such Transfer of such Class R
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Certificate. If a transfer of a Class R Certificate is disregarded pursuant
to the provisions of Treasury Regulations Section 1.860E-1 or Section
1.860G-3, then the last preceding Permitted Transferee shall be restored,
to the extent permitted by law, to all rights and obligations as Holder
thereof retroactive to the date of registration of such Transfer of such
Class R Certificate. The Trustee shall be under no liability to any Person
for any registration of Transfer of a Class R Certificate that is in fact
not permitted by this Section 5.02(f) or for making any payments due on
such Certificate to the holder thereof or for taking any other action with
respect to such holder under the provisions of this Agreement.
(B) If any purported Transferee shall become a Holder of a Class
R Certificate in violation of the restrictions in this Section 5.02(f)
and to the extent that the retroactive restoration of the rights of
the Holder of such Class R Certificate as described in clause (iii)(A)
above shall be invalid, illegal or unenforceable, then the Master
Servicer shall have the right, without notice to the holder or any
prior holder of such Class R Certificate, to sell such Class R
Certificate to a purchaser selected by the Master Servicer on such
terms as the Master Servicer may choose. Such purported Transferee
shall promptly endorse and deliver each Class R Certificate in
accordance with the instructions of the Master Servicer. Such
purchaser may be the Master Servicer itself or any Affiliate of the
Master Servicer. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Master Servicer or its
Affiliates), expenses and taxes due, if any, will be remitted by the
Master Servicer to such purported Transferee. The terms and conditions
of any sale under this clause (iii)(B) shall be determined in the sole
discretion of the Master Servicer, and the Master Servicer shall not
be liable to any Person having an Ownership Interest in a Class R
Certificate as a result of its exercise of such discretion.
(iv) The Master Servicer, on behalf of the Trustee, shall make
available, upon written request from the Trustee, all information necessary
to compute any tax imposed (A) as a result of the Transfer of an Ownership
Interest in a Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess inclusions" of
such Class R Certificates required to be provided to the Internal Revenue
Service and certain Persons as described in Treasury Regulations Sections
1.860D-1(b)(5) and 1.860E-2(a)(5), and (B) as a result of any regulated
investment company, real estate investment trust, common trust fund,
partnership, trust, estate or organization described in Section 1381 of the
Code that holds an Ownership Interest in a Class R Certificate having as
among its record holders at any time any Person who is a Disqualified
Organization. Reasonable compensation for providing such information may be
required by the Master Servicer from such Person.
(v) The provisions of this Section 5.02(f) set forth prior to this
clause (v) may be modified, added to or eliminated, provided that there
shall have been delivered to the Trustee the following:
(A) written notification from each Rating Agency to the effect
that the modification, addition to or elimination of such
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provisions will not cause such Rating Agency to downgrade its
then-current ratings, if any, of any Class of the Senior, Class M or
Class B Certificates below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date by such
Rating Agency; and
(B) subject to Section 10.01(f), an Officers' Certificate of the
Master Servicer stating that the Master Servicer has received an
Opinion of Counsel, in form and substance satisfactory to the Master
Servicer, to the effect that such modification, addition to or absence
of such provisions will not cause any portion of any REMIC formed
under the Series Supplement to cease to qualify as a REMIC and will
not cause (x) any portion of any REMIC formed under the Series
Supplement to be subject to an entity-level tax caused by the Transfer
of any Class R Certificate to a Person that is a Disqualified
Organization or (y) a Certificateholder or another Person to be
subject to a REMIC-related tax caused by the Transfer of a Class R
Certificate to a Person that is not a Permitted Transferee.
(g) No service charge shall be made for any transfer or exchange of
Certificates of any Class, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04 Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Company, the Master Servicer, the Trustee, any Certificate Insurer, the
Certificate Registrar and any agent of
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the Company, the Master Servicer, the Trustee, any Certificate Insurer or the
Certificate Registrar may treat the Person in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.02 and for all other purposes whatsoever,
except as and to the extent provided in the definition of "Certificateholder,"
and neither the Company, the Master Servicer, the Trustee, any Certificate
Insurer, the Certificate Registrar nor any agent of the Company, the Master
Servicer, the Trustee, any Certificate Insurer or the Certificate Registrar
shall be affected by notice to the contrary except as provided in Section
5.02(f).
Section 5.05 Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to the Certificateholders pursuant to Section 4.02. In the event
of any such appointment, on or prior to each Distribution Date the Master
Servicer on behalf of the Trustee shall deposit or cause to be deposited with
the Paying Agent a sum sufficient to make the payments to the Certificateholders
in the amounts and in the manner provided for in Section 4.02, such sum to be
held in trust for the benefit of the Certificateholders.
The Trustee shall cause each Paying Agent to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee
that such Paying Agent will hold all sums held by it for the payment to the
Certificateholders in trust for the benefit of the Certificateholders entitled
thereto until such sums shall be paid to such Certificateholders. Any sums so
held by such Paying Agent shall be held only in Eligible Accounts to the extent
such sums are not distributed to the Certificateholders on the date of receipt
by such Paying Agent.
ARTICLE VI
THE COMPANY AND THE MASTER SERVICER
Section 6.01 Respective Liabilities of the Company and the Master Servicer.
The Company and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Company and the Master Servicer herein. By
way of illustration and not limitation, the Company is not liable for the
servicing and administration of the Mortgage Loans, nor is it obligated by
Section 7.01 or Section 10.01 to assume any obligations of the Master Servicer
or to appoint a designee to assume such obligations, nor is it liable for any
other obligation hereunder that it may, but is not obligated to, assume unless
it elects to assume such obligation in accordance herewith.
Section 6.02 Merger or Consolidation of the Company or the Master Servicer;
Assignment of Rights and Delegation of Duties by Master Servicer.
(a) The Company and the Master Servicer will each keep in full effect its
existence, rights and franchises as a corporation under the laws of the state of
its incorporation, and will each obtain and preserve its qualification to do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
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enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Company or the Master Servicer may be merged
or consolidated, or any corporation resulting from any merger or consolidation
to which the Company or the Master Servicer shall be a party, or any Person
succeeding to the business of the Company or the Master Servicer, shall be the
successor of the Company or the Master Servicer, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that the successor or surviving Person to the Master Servicer
shall be qualified to service mortgage loans on behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇
Mac; and provided further that each Rating Agency's ratings, if any, of the
Senior, Class M or Class B Certificates in effect immediately prior to such
merger or consolidation will not be qualified, reduced or withdrawn as a result
thereof (as evidenced by a letter to such effect from each Rating Agency).
(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to
the contrary, the Master Servicer may assign its rights and delegate its duties
and obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, is reasonably
satisfactory to the Trustee and the Company, is willing to service the Mortgage
Loans and executes and delivers to the Company and the Trustee an agreement, in
form and substance reasonably satisfactory to the Company and the Trustee, which
contains an assumption by such Person of the due and punctual performance and
observance of each covenant and condition to be performed or observed by the
Master Servicer under this Agreement; provided further that each Rating Agency's
rating of the Classes of Certificates that have been rated in effect immediately
prior to such assignment and delegation will not be qualified, reduced or
withdrawn as a result of such assignment and delegation (as evidenced by a
letter to such effect from each Rating Agency). In the case of any such
assignment and delegation, the Master Servicer shall be released from its
obligations under this Agreement, except that the Master Servicer shall remain
liable for all liabilities and obligations incurred by it as Master Servicer
hereunder prior to the satisfaction of the conditions to such assignment and
delegation set forth in the next preceding sentence. 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 Company, the Master Servicer
and Others.
Neither the Company, the Master Servicer nor any of the directors,
officers, employees or agents of the Company or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Company, the Master Servicer or any such Person
against any breach of warranties or representations or covenants made herein or
any liability which would otherwise be imposed by reason of willful misfeasance,
bad faith or gross negligence in the performance of duties or by reason of
reckless disregard of obligations and duties hereunder. The Company, the Master
Servicer and any director, officer, employee or agent of the Company or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Company,
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the Master Servicer and any director, officer, employee or agent of the Company
or the Master Servicer shall be indemnified by the Trust Fund and held harmless
against any loss, liability or expense incurred in connection with any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of willful misfeasance, bad faith or gross negligence in the performance
of duties hereunder or by reason of reckless disregard of obligations and duties
hereunder.
Neither the Company nor the Master Servicer shall be under any obligation
to appear in, prosecute or defend any legal or administrative action,
proceeding, hearing or examination that is not incidental to its respective
duties under this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Company or the Master Servicer
may in its discretion undertake any such action, proceeding, hearing or
examination that it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action, proceeding, hearing or examination and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Company and the Master Servicer shall be entitled to be reimbursed therefor out
of amounts attributable to the Mortgage Loans on deposit in the Custodial
Account as provided by Section 3.10 and, on the Distribution Date(s) following
such reimbursement, the aggregate of such expenses and costs shall be allocated
in reduction of the Accrued Certificate Interest on each Class entitled thereto
in the same manner as if such expenses and costs constituted a Prepayment
Interest Shortfall.
Section 6.04 Company and Master Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Company nor the
Master Servicer shall resign from its respective obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Company or the Master Servicer shall be evidenced by an
Opinion of Counsel to such effect delivered to the Trustee. No such resignation
by the Master Servicer shall become effective until the Trustee or a successor
servicer shall have assumed the Master Servicer's responsibilities and
obligations in accordance with Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default.
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to distribute or cause to be
distributed to the Holders of Certificates of any Class any distribution
required to be made under the terms
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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 Company or to the Master Servicer, the Company and the Trustee by the
Holders of Certificates of such Class evidencing Percentage Interests
aggregating not less than 25%; or
(ii) the Master Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in the Certificates of any Class or in this
Agreement and such failure shall continue unremedied for a period of 30
days (except that such number of days shall be 15 in the case of a failure
to pay the premium for any Required Insurance Policy) after the date on
which written notice of such failure, requiring the same to be remedied,
shall have been given to the Master Servicer by the Trustee or the Company,
or to the Master Servicer, the Company and the Trustee by the Holders of
Certificates of any Class evidencing, in the case of any such Class,
Percentage Interests aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or
appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Master Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of, or
relating to, the Master Servicer or of, or relating to, all or
substantially all of the property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer shall notify the Trustee pursuant to Section
4.04(b) that it is unable to deposit in the Certificate Account an amount
equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied, either the Company or the Trustee may, and at the
direction of Holders of Certificates entitled to at least 51% of the Voting
Rights, the Trustee shall, by notice in writing to the Master Servicer (and to
the Company if given by the Trustee or to the Trustee if given by the Company),
terminate all of the rights and obligations of the Master Servicer under this
Agreement and in and to the Mortgage Loans and the proceeds thereof, other than
its rights as a Certificateholder hereunder. If an Event of Default described in
clause (vi) hereof shall occur, the Trustee shall, by notice to
87
the Master Servicer and the Company, immediately terminate all of the rights and
obligations of the Master Servicer under this Agreement and in and to the
Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder as provided in Section 4.04(b). On or after the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder thereof) or the Mortgage Loans or
otherwise, shall subject to Section 7.02 pass to and be vested in the Trustee or
the Trustee's designee appointed pursuant to Section 7.02; and, without
limitation, the Trustee is hereby authorized and empowered to execute and
deliver, on behalf of the Master Servicer, as attorney-in-fact or otherwise, any
and all documents and other instruments, and to do or accomplish all other acts
or things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement or assignment of
the Mortgage Loans and related documents, or otherwise. The Master Servicer
agrees to cooperate with the Trustee in effecting the termination of the Master
Servicer's responsibilities and rights hereunder, including, without limitation,
the transfer to the Trustee or its designee for administration by it of all cash
amounts which shall at the time be credited to the Custodial Account or the
Certificate Account or thereafter be received with respect to the Mortgage
Loans. No such termination shall release the Master Servicer for any liability
that it would otherwise have hereunder for any act or omission prior to the
effective time of such termination.
Notwithstanding any termination of the activities of Residential Funding in
its capacity as Master Servicer hereunder, Residential Funding shall be entitled
to receive, out of any late collection of a Monthly Payment on a Mortgage Loan
which was due prior to the notice terminating Residential Funding's rights and
obligations as Master Servicer hereunder and received after such notice, that
portion to which Residential Funding would have been entitled pursuant to
Sections 3.10(a)(ii), (vi) and (vii) as well as its Servicing Fee in respect
thereof, and any other amounts payable to Residential Funding hereunder the
entitlement to which arose prior to the termination of its activities hereunder.
Upon the termination of Residential Funding as Master Servicer hereunder the
Company shall deliver to the Trustee a copy of the Program Guide.
Section 7.02 Trustee or Company to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 or resigns in accordance with Section 6.04,
the Trustee or, upon notice to the Company and with the Company's consent (which
shall not be unreasonably withheld) a designee (which meets the standards set
forth below) of the Trustee, shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer (except for the responsibilities, duties and liabilities contained in
Sections 2.02 and 2.03(a), excluding the duty to notify related Subservicers or
Sellers as set forth in such Sections, and its obligations to deposit amounts in
respect of losses incurred prior to such notice or termination on the investment
of funds in the Custodial Account or the Certificate Account pursuant to
Sections 3.07(c) and 4.01(b) by the terms and provisions hereof); provided,
however, that any failure to perform such duties or responsibilities caused by
the preceding Master Servicer's failure to provide information required by
Section 4.04 shall not be considered a default by the Trustee hereunder. As
compensation
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therefor, the Trustee shall be entitled to all funds relating to the Mortgage
Loans which the Master Servicer would have been entitled to charge to the
Custodial Account or the Certificate Account if the Master Servicer had
continued to act hereunder and, in addition, shall be entitled to the income
from any Permitted Investments made with amounts attributable to the Mortgage
Loans held in the Custodial Account or the Certificate Account. If the Trustee
has become the successor to the Master Servicer in accordance with Section 6.04
or Section 7.01, then notwithstanding the above, the Trustee may, if it shall be
unwilling to so act, or shall, if it is unable to so act, appoint, or petition a
court of competent jurisdiction to appoint, any established housing and home
finance institution, which is also a ▇▇▇▇▇▇ ▇▇▇- 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 Company, the Trustee, the
Custodian and such successor shall take such action, consistent with this
Agreement, as shall be necessary to effectuate any such succession. The
Servicing Fee for any successor Master Servicer appointed pursuant to this
Section 7.02 will be lowered with respect to those Mortgage Loans, if any, where
the Subservicing Fee accrues at a rate of less than 0.20% per annum in the event
that the successor Master Servicer is not servicing such Mortgage Loans directly
and it is necessary to raise the related Subservicing Fee to a rate of 0.20% per
annum in order to hire a Subservicer with respect to such Mortgage Loans. The
Master Servicer shall pay the reasonable expenses of the Trustee in connection
with any servicing transition hereunder.
(b) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS'
rules and regulations, or (ii) the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (b). The
successor Master Servicer shall cause such assignment to be delivered to the
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
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Section 7.03 Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register.
(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived.
Section 7.04 Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights affected by a
default or Event of Default hereunder may waive such default or Event of
Default; provided, however, that (a) a default or Event of Default under clause
(i) of Section 7.01 may be waived only by all of the Holders of Certificates
affected by such default or Event of Default and (b) no waiver pursuant to this
Section 7.04 shall affect the Holders of Certificates in the manner set forth in
Section 11.01(b)(i) or (ii). Upon any such waiver of a default or Event of
Default by the Holders representing the requisite percentage of Voting Rights
affected by such default or Event of Default, such default or Event of Default
shall cease to exist and shall be deemed to have been remedied for every purpose
hereunder. No such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon except to the extent
expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing or waiver of all Events of Default which may have occurred,
undertakes to perform such duties and only such duties as are specifically set
forth in this Agreement. In case an Event of Default has occurred (which has not
been cured or waived), the Trustee shall exercise such of the rights and powers
vested in it by this Agreement, and use the same degree of care and skill in
their exercise as a prudent investor would exercise or use under the
circumstances in the conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents.
The Trustee shall forward or cause to be forwarded in a timely fashion the
notices, reports and statements required to be forwarded by the Trustee pursuant
to Sections 4.03, 4.06,
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7.03 and 10.01. The Trustee shall furnish in a timely fashion to the Master
Servicer such information as the Master Servicer may reasonably request from
time to time for the Master Servicer to fulfill its duties as set forth in this
Agreement. The Trustee covenants and agrees that it shall perform its
obligations hereunder in a manner so as to maintain the status of any portion of
any REMIC formed under the Series Supplement as a REMIC under the REMIC
Provisions and (subject to Section 10.01(f)) to prevent the imposition of any
federal, state or local income, prohibited transaction, contribution or other
tax on the Trust Fund to the extent that maintaining such status and avoiding
such taxes are reasonably within the control of the Trustee and are reasonably
within the scope of its duties under this Agreement.
(b) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee by the Company or the Master Servicer and which on their
face, do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of Certificateholders of any Class holding
Certificates which evidence, as to such Class, Percentage Interests
aggregating not less than 25% as to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Agreement;
(iv) The Trustee shall not be charged with knowledge of any default
(other than a default in payment to the Trustee) specified in clauses (i)
and (ii) of Section 7.01 or an Event of Default under clauses (iii), (iv)
and (v) of Section 7.01 unless a Responsible Officer of the Trustee
assigned to and working in the Corporate Trust Office obtains actual
knowledge of such failure or event or the Trustee receives written notice
of such failure or event at its Corporate Trust Office from the Master
Servicer, the Company or any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision in
this Agreement shall require the Trustee to expend or risk its own funds
(including, without limitation, the making of any Advance) or otherwise
incur any personal financial liability
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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.
(c) The Trustee shall timely pay, from its own funds, the amount of any and
all federal, state and local taxes imposed on the Trust Fund or its assets or
transactions including, without limitation, (A) "prohibited transaction" penalty
taxes as defined in Section 860F of the Code, if, when and as the same shall be
due and payable, (B) any tax on contributions to a REMIC after the Closing Date
imposed by Section 860G(d) of the Code and (C) any tax on "net income from
foreclosure property" as defined in Section 860G(c) of the Code, but only if
such taxes arise out of a breach by the Trustee of its obligations hereunder,
which breach constitutes negligence or willful misconduct of the Trustee.
Section 8.02 Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to the
Trustee reasonable security or indemnity against the costs, expenses and
liabilities which may be incurred therein or thereby; nothing contained
herein shall, however, relieve the Trustee of the obligation, upon the
occurrence of an Event of Default (which has not been cured or waived), to
exercise such of the rights and powers vested in it by this Agreement, and
to use the same degree of care and skill in their exercise as a prudent
investor would exercise or use under the circumstances in the conduct of
such investor's own affairs;
(iv) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and after
the curing or waiver of all Events of Default which may have occurred, the
Trustee shall not be bound to make any investigation into the facts or
matters stated in any resolution,
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certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless requested
in writing so to do by Holders of Certificates of any Class evidencing, as
to such Class, Percentage Interests, aggregating not less than 50%;
provided, however, that if the payment within a reasonable time to the
Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Master
Servicer, if an Event of Default shall have occurred and is continuing, and
otherwise by the Certificateholder requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys; and
(vii) To the extent authorized under the Code and the regulations
promulgated thereunder, each Holder of a Class R Certificate hereby
irrevocably appoints and authorizes the Trustee to be its attorney-in-fact
for purposes of signing any Tax Returns required to be filed on behalf of
the Trust Fund. The Trustee shall sign on behalf of the Trust Fund and
deliver to the Master Servicer in a timely manner any Tax Returns prepared
by or on behalf of the Master Servicer that the Trustee is required to sign
as determined by the Master Servicer pursuant to applicable federal, state
or local tax laws, provided that the Master Servicer shall indemnify the
Trustee for signing any such Tax Returns that contain errors or omissions.
(b) Following the issuance of the Certificates, the Trustee shall not
accept any contribution of assets to the Trust Fund unless (subject to Section
10.01(f)) it shall have obtained or been furnished with an Opinion of Counsel to
the effect that such contribution will not (i) cause any portion of any REMIC
formed under the Series Supplement to fail to qualify as a REMIC at any time
that any Certificates are outstanding or (ii) cause the Trust Fund to be subject
to any federal tax as a result of such contribution (including the imposition of
any federal tax on "prohibited transactions" imposed under Section 860F(a) of
the Code).
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Company or the Master
Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document, or of MERS
or the MERS(R) System. Except as otherwise provided herein, the Trustee shall
not be accountable for the use or application by the Company or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Company or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account or the Certificate Account by the Company or the Master
Servicer.
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Section 8.04 Trustee May Own Certificates.
The Trustee in its individual or any other capacity may become the owner or
pledgee of Certificates with the same rights it would have if it were not
Trustee.
Section 8.05 Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification.
(a) The Master Servicer covenants and agrees to pay to the Trustee and any
co-trustee from time to time, and the Trustee and any co-trustee shall be
entitled to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an express trust)
for all services rendered by each of them in the execution of the trusts hereby
created and in the exercise and performance of any of the powers and duties
hereunder of the Trustee and any co-trustee, and the Master Servicer will pay or
reimburse the Trustee and any co-trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or any
co-trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ, and the expenses incurred by the
Trustee or any co-trustee in connection with the appointment of an office or
agency pursuant to Section 8.12) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee for, and to hold
the Trustee harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part, arising out of, or in connection
with, the acceptance and administration of the Trust Fund, including the costs
and expenses (including reasonable legal fees and expenses) of defending itself
against any claim in connection with the exercise or performance of any of its
powers or duties under this Agreement, and the Custodial Agreement and the
Master Servicer further agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in 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.
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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 the Certificateholders pursuant to the terms of this
Agreement.
Section 8.06 Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a corporation or a national
banking association having its principal office in a state and city acceptable
to the Company and organized and doing business under the laws of such state or
the United States of America, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least $50,000,000 and
subject to supervision or examination by federal or state authority. If such
corporation or national banking association publishes reports of condition at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this Section the
combined capital and surplus of such corporation shall be deemed to be its
combined capital and surplus as set forth in its most recent report of condition
so published. In case at any time the Trustee shall cease to be eligible in
accordance with the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07.
Section 8.07 Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Company. Upon receiving
such notice of resignation, the Company shall promptly appoint a successor
trustee by written instrument, in duplicate, one copy of which instrument shall
be delivered to the resigning Trustee and one copy to the successor trustee. If
no successor trustee shall have been so appointed and have accepted appointment
within 30 days after the giving of such notice of resignation, the resigning
Trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Company, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Company may
remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee. In addition, in the event that
the Company determines that the Trustee has failed (i) to distribute or cause to
be distributed to the Certificateholders any amount required to be distributed
hereunder, if such amount is held by the Trustee or its Paying Agent (other than
the Master Servicer or the Company) for distribution or (ii) to otherwise
observe or perform in any material respect any of
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its covenants, agreements or obligations hereunder, and such failure shall
continue unremedied for a period of 5 days (in respect of clause (i) above) or
30 days (in respect of clause (ii) above) after the date on which written notice
of such failure, requiring that the same be remedied, shall have been given to
the Trustee by the Company, then the Company may remove the Trustee and appoint
a successor trustee by written instrument delivered as provided in the preceding
sentence. In connection with the appointment of a successor trustee pursuant to
the preceding sentence, the Company shall, on or before the date on which any
such appointment becomes effective, obtain from each Rating Agency written
confirmation that the appointment of any such successor trustee will not result
in the reduction of the ratings on any class of the Certificates below the
lesser of the then current or original ratings on such Certificates.
(c) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Company, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
Section 8.08 Successor Trustee.
(a) Any successor trustee appointed as provided in Section 8.07 shall
execute, acknowledge and deliver to the Company and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held by a Custodian, which shall become the agent of any successor
trustee hereunder), and the Company, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless at the time of such acceptance such successor trustee shall be
eligible under the provisions of Section 8.06.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Company shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Company fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Company.
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Section 8.09 Merger or Consolidation of Trustee.
Any corporation or national banking association into which the Trustee may
be merged or converted or with which it may be consolidated or any corporation
or national banking association resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation or
national banking association succeeding to the business of the Trustee, shall be
the successor of the Trustee hereunder, provided such corporation or national
banking association shall be eligible under the provisions of Section 8.06,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding. The
Trustee shall mail notice of any such merger or consolidation to the
Certificateholders at their address as shown in the Certificate Register.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
(a) Notwithstanding any other provisions hereof, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust Fund or property securing the same may at the time be located, the
Master Servicer and the Trustee acting jointly shall have the power and shall
execute and deliver all instruments to appoint one or more Persons approved by
the Trustee to act as co-trustee or co-trustees, jointly with the Trustee, or
separate trustee or separate trustees, of all or any part of the Trust Fund, and
to vest in such Person or Persons, in such capacity, such title to the Trust
Fund, or any part thereof, and, subject to the other provisions of this Section
8.10, such powers, duties, obligations, rights and trusts as the Master Servicer
and the Trustee may consider necessary or desirable. If the Master Servicer
shall not have joined in such appointment within 15 days after the receipt by it
of a request so to do, or in case an Event of Default shall have occurred and be
continuing, the Trustee alone shall have the power to make such appointment. No
co-trustee or separate trustee hereunder shall be required to meet the terms of
eligibility as a successor trustee under Section 8.06 hereunder and no notice to
Holders of Certificates of the appointment of co-trustee(s) or separate
trustee(s) shall be required under Section 8.08 hereof.
(b) In the case of any appointment of a co-trustee or separate trustee
pursuant to this Section 8.10 all rights, powers, duties and obligations
conferred or imposed upon the Trustee shall be conferred or imposed upon and
exercised or performed by the Trustee, and such separate trustee or co-trustee
jointly, except to the extent that under any law of any jurisdiction in which
any particular act or acts are to be performed (whether as Trustee hereunder or
as successor to the Master Servicer hereunder), the Trustee shall be incompetent
or unqualified to perform such act or acts, in which event such rights, powers,
duties and obligations (including the holding of title to the Trust Fund or any
portion thereof in any such jurisdiction) shall be exercised and performed by
such separate trustee or co-trustee at the direction of the Trustee.
(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of
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this Agreement relating to the conduct of, affecting the liability of, or
affording protection to, the Trustee. Every such instrument shall be filed with
the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11 Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer and the Company,
or shall, at the direction of the Company and the Master Servicer, appoint one
or more Custodians who are not Affiliates of the Company, the Master Servicer or
any Seller to hold all or a portion of the Mortgage Files as agent for the
Trustee, by entering into a Custodial Agreement. Subject to Article VIII, the
Trustee agrees to comply with the terms of each Custodial Agreement and to
enforce the terms and provisions thereof against the Custodian for the benefit
of the Certificateholders. Each Custodian shall be a depository institution
subject to supervision by federal or state authority, shall have a combined
capital and surplus of at least $15,000,000 and shall be qualified to do
business in the jurisdiction in which it holds any Mortgage File. Each Custodial
Agreement may be amended only as provided in Section 11.01. The Trustee shall
notify the Certificateholders of the appointment of any Custodian (other than
the Custodian appointed as of the Closing Date) pursuant to this Section 8.11.
Section 8.12 Appointment of Office or Agency.
The Trustee will maintain an office or agency at the address designated in
Section 11.05 of the Series Supplement where Certificates may be surrendered for
registration of transfer or exchange. The Trustee will maintain an office at the
address stated in Section 11.05 of the Series Supplement where notices and
demands to or upon the Trustee in respect of this Agreement may be served.
ARTICLE IX
TERMINATION OR OPTIONAL PURCHASE OF ALL CERTIFICATES
Section 9.01 Optional Purchase by the Master Servicer of All Certificates;
Termination Upon Purchase by the Master Servicer or Liquidation of All Mortgage
Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Company, the Master Servicer and the Trustee created
hereby in respect of the Certificates (other than the obligation of the Trustee
to make certain payments after the Final Distribution Date to Certificateholders
and the obligation of the Company to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Final Distribution Date pursuant to this Article IX following the earlier
of:
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(i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, or
(ii) the purchase by Residential Funding 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 on the day of
repurchase plus unpaid accrued interest thereon at the Mortgage Rate (or
Modified 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, provided, however, that in no event shall the trust created
hereby continue beyond the expiration of 21 years from the death of the
last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador
of the United States to the Court of St. ▇▇▇▇▇, living on the date hereof
and provided further that the purchase price set forth above shall be
increased as is necessary, as determined by the Master Servicer, to avoid
disqualification of any portion of any REMIC formed under the Series
Supplement as a REMIC. The purchase price paid by Residential Funding shall
also include any amounts owed by Residential Funding pursuant to 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 (xxxi) of such Section that remain unpaid on the date of such
purchase.
The right of Residential Funding to purchase all the assets of the Trust
Fund pursuant to clause (ii) above is conditioned upon the Pool Stated Principal
Balance as of the Final Distribution Date, prior to giving effect to
distributions to be made on such Distribution Date, being less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans. If such right is
exercised by Residential Funding, 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 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 any Custodian shall, promptly following payment
of the purchase price, release to Residential Funding the Mortgage Files
pertaining to the Mortgage Loans being purchased.
In addition to the foregoing, on any Distribution Date on which the Pool
Stated Principal Balance, prior to giving effect to distributions to be made on
such Distribution Date, is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans, Residential Funding shall have the right, at its
option, to purchase the Certificates in whole, but not in part, at a price equal
to the outstanding Certificate Principal Balance of such Certificates plus the
sum of Accrued Certificate Interest thereon for the related Interest Accrual
Period and any previously unpaid Accrued Certificate Interest.
(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
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made to Certificateholders (whether as a result of the exercise by Residential
Funding of its right to purchase the assets of the Trust Fund or otherwise) or
on which the Master Servicer anticipates that the Certificates will be purchased
(as a result of the exercise by Residential Funding of its right to purchase the
outstanding Certificates). Notice of any termination, specifying the anticipated
Final Distribution Date (which shall be a date that would otherwise be a
Distribution Date) upon which the Certificateholders may surrender their
Certificates to the Trustee (if so required by the terms hereof) for payment of
the final distribution and cancellation or notice of any purchase of the
outstanding Certificates shall be given promptly by the Master Servicer (if
Residential Funding is exercising its right to purchase the assets of the Trust
Fund or to purchase the outstanding Certificates), or by the Trustee (in any
other case) by letter. Such notice shall be prepared by the Master Servicer (in
the case of Residential Funding exercising its right to purchase the assets of
the Trust Fund or to purchase the outstanding Certificates) or the Trustee (in
any other case) and mailed by the Trustee to the Certificateholders not earlier
than the 15th day and not later than the 25th day of the month next preceding
the month of such final distribution specifying:
(i) the anticipated Final Distribution Date upon which final payment
of the Certificates is anticipated to be made upon presentation and
surrender of Certificates at the office or agency of the Trustee therein
designated where required pursuant to this Agreement or, in the case of the
purchase by the Master Servicer of the outstanding Certificates, the
Distribution Date on which such purchase is to be made,
(ii) the amount of any such final payment, or in the case of the
purchase of the outstanding Certificates, the purchase price, in either
case, if known, and
(iii) that the Record Date otherwise applicable to such Distribution
Date is not applicable and that payment will be made only upon presentation
and surrender of the Certificates at the office or agency of the Trustee
therein specified.
If the Master Servicer is obligated to give notice to Certificateholders as
aforesaid, it shall give such notice to the Certificate Registrar at the time
such notice is given to Certificateholders and, if Residential Funding is
exercising its rights to purchase the outstanding Certificates, Residential
Funding shall give such notice to each Rating Agency at the time such notice is
given to Certificateholders. As a result of the exercise by Residential Funding
of its right to purchase the assets of the Trust Fund or the outstanding
Certificates, Residential Funding 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 provided above.
(c) Upon presentation and surrender of the Certificates by the
Certificateholders thereof in connection with the exercise by Residential
Funding of its right to purchase the Certificates, the Trustee shall distribute
to the Certificateholders on the Final Distribution Date the respective amounts
determined in accordance with Section 4.02. Nothwithstanding the reduction of
the Certificate Principal Balance of any Class of Subordinate Certificates to
zero, such Class will be outstanding hereunder until the termination of the
respective obligations and responsibilities of the Company, the Master Servicer
and the Trustee hereunder in accordance with Article IX.
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(d) If any Certificateholders shall not surrender their Certificates for
final payment and cancellation on or before the Final Distribution Date (if so
required by the terms hereof), the Trustee shall on such date cause all funds in
the Certificate Account not distributed in final distribution to
Certificateholders to be withdrawn therefrom and credited to the remaining
Certificateholders by depositing such funds in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer (if Residential
Funding exercised its right to purchase the assets of the Trust Fund), or the
Trustee (in any other case) shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within six months after the
second notice any Certificate shall not have been surrendered for cancellation,
the Trustee shall take appropriate steps as directed by the Master Servicer to
contact the remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the escrow account and of
contacting Certificateholders shall be paid out of the assets which remain in
the escrow account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to the Master Servicer all amounts distributable to the holders thereof and
the Master Servicer shall thereafter hold such amounts until distributed to such
Holders. No interest shall accrue or be payable to any Certificateholder on any
amount held in the escrow account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01.
(e) If any Certificateholders do not surrender their Certificates on or
before the Distribution Date on which a purchase of the outstanding Certificates
is to be made, the Trustee shall on such date cause all funds in the Custodial
Account deposited therein by Residential Funding pursuant to Section 9.01(b) to
be withdrawn therefrom and deposited in a separate escrow account for the
benefit of such Certificateholders, and the Master Servicer shall give a second
written notice to such Certificateholders to surrender their Certificates for
payment of the purchase price therefor. If within six months after the second
notice any Certificate shall not have been surrendered for cancellation, the
Trustee shall take appropriate steps as directed by the Master Servicer to
contact the Holders of such Certificates concerning surrender of their
Certificates. The costs and expenses of maintaining the escrow account and of
contacting Certificateholders shall be paid out of the assets which remain in
the escrow account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation in accordance with
this Section 9.01, the Trustee shall pay to the Master Servicer all amounts
distributable to the Holders thereof and the Master Servicer shall thereafter
hold such amounts until distributed to such Holders. No interest shall accrue or
be payable to any Certificateholder on any amount held in the escrow account or
by the Master Servicer as a result of such Certificateholder's failure to
surrender its Certificate(s) for payment in accordance with this Section 9.01.
Any Certificate that is not surrendered on the Distribution Date on which a
purchase pursuant to this Section 9.01 occurs as provided above will be deemed
to have been purchased and the Holder as of such date will have no rights with
respect thereto except to receive the purchase price therefor minus any costs
and expenses associated with such escrow account and notices allocated thereto.
(f) All rights of Residential Funding 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, Residential Funding shall have the right
to sell, transfer, pledge or otherwise assign the Call
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Rights at any time to any Person. Upon written notice by Residential Funding 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
Residential Funding 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 406 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). 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 REMIC that comprises the Trust Fund shall be terminated in
accordance with the following additional requirements, unless (subject to
Section 10.01(f)) the Trustee and the Master Servicer have received an Opinion
of Counsel (which Opinion of Counsel shall not be an expense of the Trustee) to
the effect that the failure of each such REMIC to comply with the requirements
of this Section 9.02 will not (i) result in the imposition on the Trust of taxes
on "prohibited transactions," as described in Section 860F of the Code, or (ii)
cause any such REMIC to fail to qualify as a REMIC at any time that any
Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation period
for each such REMIC and specify the first day of such period in a statement
attached to the Trust Fund's final Tax Return pursuant to Treasury
regulations Section 1.860F-1. The Master Servicer also shall satisfy all of
the requirements of a qualified liquidation for a REMIC under Section 860F
of the Code and regulations thereunder;
(ii) The Master Servicer shall notify the Trustee at the commencement
of such 90-day liquidation period and, at or prior to the time of making of
the final payment on the Certificates, the Trustee shall sell or otherwise
dispose of all of the remaining assets of the Trust Fund in accordance with
the terms hereof; and
(iii) If Residential Funding or the Company is exercising its right to
purchase the assets of the Trust Fund, Residential Funding 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
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each REMIC at the expense of the Trust Fund in accordance with the terms and
conditions of this Agreement.
Section 9.03 Termination of Multiple REMICs.
If the REMIC Administrator makes two or more separate REMIC elections, the
applicable REMIC shall be terminated on the earlier of the Final Distribution
Date and the date on which it is deemed to receive the last deemed distributions
on the related Uncertificated REMIC Regular Interests and the last distribution
due on the Certificates is made.
ARTICLE X
REMIC PROVISIONS
Section 10.01 REMIC Administration.
(a) The REMIC Administrator shall make an election to treat the Trust Fund
as one or more REMICs under the Code and, if necessary, under applicable state
law. The assets of each such REMIC will be set forth in the Series Supplement.
Such election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. For the purposes of each REMIC election in respect of
the Trust Fund, Certificates and interests to be designated as the "regular
interests" and the sole class of "residual interests" in the REMIC will be set
forth in Section 10.03 of the Series Supplement. The REMIC Administrator and the
Trustee shall not permit the creation of any "interests" (within the meaning of
Section 860G of the Code) in any REMIC elected in respect of the Trust Fund
other than the "regular interests" and "residual interests" so designated.
(b) The Closing Date is hereby designated as the "startup day" of the Trust
Fund within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate representing a
0.01% Percentage Interest each Class of the Class R Certificates and shall be
designated as "the tax matters person" with respect to each REMIC in the manner
provided under Treasury regulations section 1.860F-4(d) and Treasury regulations
section 301.6231(a)(7)-1. The REMIC Administrator, as tax matters person, shall
(i) act on behalf of each REMIC in relation to any tax matter or controversy
involving the Trust Fund and (ii) represent the Trust Fund in any administrative
or judicial proceeding relating to an examination or audit by any governmental
taxing authority with respect thereto. The legal expenses, including without
limitation attorneys' or accountants' fees, and costs of any such proceeding and
any liability resulting therefrom shall be expenses of the Trust Fund and the
REMIC Administrator shall be entitled to reimbursement therefor out of amounts
attributable to the Mortgage Loans on deposit in the Custodial Account as
provided by Section 3.10 unless such legal expenses and costs are incurred by
reason of the REMIC Administrator's willful misfeasance, bad faith or gross
negligence. If the REMIC Administrator is no longer the Master Servicer
hereunder, at its option the REMIC Administrator may continue its duties as
REMIC Administrator and shall be paid reasonable compensation not
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to exceed $3,000 per year by any successor Master Servicer hereunder for so
acting as the REMIC Administrator.
(d) The REMIC Administrator shall prepare or cause to be prepared all of
the Tax Returns that it determines are required with respect to each REMIC
created hereunder and deliver such Tax Returns in a timely manner to the Trustee
and the Trustee shall sign and file such Tax Returns in a timely manner. The
expenses of preparing such returns shall be borne by the REMIC Administrator
without any right of reimbursement therefor. The REMIC Administrator agrees to
indemnify and hold harmless the Trustee with respect to any tax or liability
arising from the Trustee's signing of Tax Returns that contain errors or
omissions. The Trustee and Master Servicer shall promptly provide the REMIC
Administrator with such information as the REMIC Administrator may from time to
time request for the purpose of enabling the REMIC Administrator to prepare Tax
Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class
R Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee, and the Trustee shall forward to the
Certificateholders, such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount and market discount or premium (using the Prepayment Assumption) and
(iii) to the Internal Revenue Service the name, title, address and telephone
number of the person who will serve as the representative of each REMIC.
(f) The Master Servicer and the REMIC Administrator shall take such actions
and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Master Servicer's or the REMIC Administrator's control and
the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status of each REMIC as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). The Master Servicer and the REMIC Administrator
shall not knowingly or intentionally take any action, cause the Trust Fund to
take any action or fail to take (or fail to cause to be taken) any action
reasonably within their respective control that, under the REMIC Provisions, if
taken or not taken, as the case may be, could (i) endanger the status of any
portion of any REMIC formed under the Series Supplement as a REMIC or (ii)
result in the imposition of a tax upon any such REMIC (including but not limited
to the tax on prohibited transactions as defined in Section 860F(a)(2) of the
Code and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) (either such event, in the absence of an Opinion of Counsel or the
indemnification referred to in this sentence, an "Adverse REMIC Event") unless
the Master Servicer or the REMIC Administrator, as applicable, has received an
Opinion of Counsel (at the expense of the party seeking to take such action or,
if such party fails to pay such expense, and the Master Servicer or the REMIC
Administrator, as applicable, determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to each REMIC created hereunder, endanger such status or,
unless the Master Servicer, the REMIC Administrator or both, as applicable,
determine in its or their sole discretion to indemnify the Trust Fund against
the imposition of such a tax,
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result in the imposition of such a tax. Wherever in this Agreement a
contemplated action may not be taken because the timing of such action might
result in the imposition of a tax on the Trust Fund, or may only be taken
pursuant to an Opinion of Counsel that such action would not impose a tax on the
Trust Fund, such action may nonetheless be taken provided that the indemnity
given in the preceding sentence with respect to any taxes that might be imposed
on the Trust Fund has been given and that all other preconditions to the taking
of such action have been satisfied. The Trustee shall not take or fail to take
any action (whether or not authorized hereunder) as to which the Master Servicer
or the REMIC Administrator, as applicable, has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action. In addition, prior to taking any action with
respect to any REMIC created hereunder or any related assets thereof, or causing
any such REMIC to take any action, which is not expressly permitted under the
terms of this Agreement, the Trustee will consult with the Master Servicer or
the REMIC Administrator, as applicable, or its designee, in writing, with
respect to whether such action could cause an Adverse REMIC Event to occur with
respect to any such REMIC, and the Trustee shall not take any such action or
cause any such REMIC to take any such action as to which the Master Servicer or
the REMIC Administrator, as applicable, has advised it in writing that an
Adverse REMIC Event could occur. The Master Servicer or the REMIC Administrator,
as applicable, may consult with counsel to make such written advice, and the
cost of same shall be borne by the party seeking to take the action not
expressly permitted by this Agreement, but in no event at the expense of the
Master Servicer or the REMIC Administrator. At all times as may be required by
the Code, the Master Servicer will to the extent within its control and the
scope of its duties more specifically set forth herein, maintain substantially
all of the assets of each REMIC created hereunder as "qualified mortgages" as
defined in Section 860G(a)(3) of the Code and "permitted investments" as defined
in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of any such REMIC as defined in Section
860G(c) of the Code, on any contributions to any such REMIC after the Startup
Day therefor pursuant to Section 860G(d) of the Code, or any other tax is
imposed by the Code or any applicable provisions of state or local tax laws,
such tax shall be charged (i) to the Master Servicer, if such tax arises out of
or results from a breach by the Master Servicer of any of its obligations under
this Agreement or the Master Servicer has in its sole discretion determined to
indemnify the Trust Fund against such tax, (ii) to the Trustee, if such tax
arises out of or results from a breach by the Trustee of any of its obligations
under this Article X, or (iii) otherwise against amounts on deposit in the
Custodial Account as provided by Section 3.10 and on the Distribution Date(s)
following such reimbursement the aggregate of such taxes shall be allocated in
reduction of the Accrued Certificate Interest on each Class entitled thereto in
the same manner as if such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC created
hereunder on a calendar year and on an accrual basis or as otherwise may be
required by the REMIC Provisions.
(i) Following the Startup Day, neither the Master Servicer nor the Trustee
shall accept any contributions of assets to any REMIC created hereunder unless
(subject to Section 10.01(f)) the Master Servicer and the Trustee shall have
received an Opinion of Counsel (at the
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expense of the party seeking to make such contribution) to the effect that the
inclusion of such assets in such REMIC will not cause the REMIC to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
the REMIC to any tax under the REMIC Provisions or other applicable provisions
of federal, state and local law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to Section
10.01(f)) enter into any arrangement by which any REMIC created hereunder will
receive a fee or other compensation for services nor permit any such REMIC to
receive any income from assets other than "qualified mortgages" as defined in
Section 860G(a)(3) of the Code or "permitted investments" as defined in Section
860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the Certificate
Principal Balance of each Class of Certificates (other than the Interest Only
Certificates) representing a regular interest in the applicable REMIC and the
Uncertificated Principal Balance of each Uncertificated REMIC Regular Interest
(other than each Uncertificated REMIC Regular Interest represented by a Class
A-V Certificate, if any) and the rights to the Interest Only Certificates and
Uncertificated REMIC Regular Interest represented by any Class A-V Certificate
would be reduced to zero is the Maturity Date for each such Certificate and
Interest.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for each REMIC created hereunder.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by deed in
lieu of foreclosure, (ii) the bankruptcy of any REMIC created hereunder, (iii)
the termination of any such REMIC pursuant to Article IX of this Agreement or
(iv) a purchase of Mortgage Loans pursuant to Article II or III of this
Agreement) nor acquire any assets for any such REMIC, nor sell or dispose of any
investments in the Custodial Account or the Certificate Account for gain nor
accept any contributions to any such REMIC after the Closing Date unless it has
received an Opinion of Counsel that such sale, disposition, substitution or
acquisition will not (a) affect adversely the status of such REMIC as a REMIC or
(b) unless the Master Servicer has determined in its sole discretion to
indemnify the Trust Fund against such tax, cause such REMIC to be subject to a
tax on "prohibited transactions" or "contributions" pursuant to the REMIC
Provisions.
Section 10.02 Master Servicer, REMIC Administrator and Trustee
Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Company, the REMIC
Administrator and the Master Servicer for any taxes and costs including, without
limitation, any reasonable attorneys fees imposed on or incurred by the Trust
Fund, the Company or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in Article VIII or this Article X.
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(b) The REMIC Administrator agrees to indemnify the Trust Fund, the
Company, the Master Servicer and the Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by
the Trust Fund, the Company, the Master Servicer or the Trustee, as a result of
a breach of the REMIC Administrator's covenants set forth in this Article X with
respect to compliance with the REMIC Provisions, including without limitation,
any penalties arising from the Trustee's execution of Tax Returns prepared by
the REMIC Administrator that contain errors or omissions; provided, however,
that such liability will not be imposed to the extent such breach is a result of
an error or omission in information provided to the REMIC Administrator by the
Master Servicer in which case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the Company,
the REMIC Administrator and the Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by
the Trust Fund, the Company, the REMIC Administrator or the Trustee, as a result
of a breach of the Master Servicer's covenants set forth in this Article X or in
Article III with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the Master Servicer that contain errors or omissions.
Section 10.03 Designation of REMIC(s).
As provided in Section 10.03 of the Series Supplement.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to
time by the Company, the Master Servicer and the Trustee, without the consent of
any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein, which
may be inconsistent with any other provisions herein or therein or to
correct any error,
(iii) to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or desirable to maintain the qualification of
the Trust Fund as a REMIC at all times that any Certificate is outstanding
or to avoid or minimize the risk of the imposition of any tax on the Trust
Fund pursuant to the Code that would be a claim against the Trust Fund,
provided that the Trustee has received an Opinion of Counsel to the effect
that (A) such action is necessary or desirable to maintain such
qualification or to avoid or minimize the risk of the imposition of any
such tax and (B) such action will not adversely affect in any material
respect the interests of any Certificateholder,
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(iv) to change the timing and/or nature of deposits into the Custodial
Account or the Certificate Account or to change the name in which the
Custodial Account is maintained, provided that (A) the Certificate Account
Deposit Date shall in no event be later than the related Distribution Date,
(B) such change shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any Certificateholder and
(C) such change shall not result in a reduction of the rating assigned to
any Class of Certificates below the lower of the then-current rating or the
rating assigned to such Certificates as of the Closing Date, as evidenced
by a letter from each Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(f)
or any other provision hereof restricting transfer of the Class R
Certificates, by virtue of their being the "residual interests" in a REMIC,
provided that (A) such change shall not result in reduction of the rating
assigned to any such Class of Certificates below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date, as evidenced by a letter from each Rating Agency to such
effect, and (B) such change shall not (subject to Section 10.01(f)), as
evidenced by an Opinion of Counsel (at the expense of the party seeking so
to modify, eliminate or add such provisions), cause any REMIC created
hereunder or any of the Certificateholders (other than the transferor) to
be subject to a federal tax caused by a transfer to a Person that is not a
Permitted Transferee,
(vi) to make any other provisions with respect to matters or questions
arising under this Agreement or such Custodial Agreement which shall not be
materially inconsistent with the provisions of this Agreement, provided
that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any
Certificateholder, or
(vii) to amend any provision herein or therein that is not material to
any of the Certificateholders.
(b) This Agreement or any Custodial Agreement may also be amended from time
to time by the Company, the Master Servicer and the Trustee with the consent of
the Holders of Certificates evidencing in the aggregate not less than 66% of the
Percentage Interests of each Class of Certificates with a Certificate Principal
Balance greater than zero affected thereby for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or such Custodial Agreement or of modifying in any manner the
rights of the Holders of Certificates of such Class; provided, however, that no
such amendment shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate,
(ii) reduce the aforesaid percentage of Certificates of any Class the
Holders of which are required to consent to any such amendment, in any such
case without the consent of the Holders of all Certificates of such Class
then outstanding.
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(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (subject to Section 10.01(f) and at the expense
of the party seeking such amendment) to the effect that such amendment or the
exercise of any power granted to the Master Servicer, the Company or the Trustee
in accordance with such amendment is permitted hereunder and will not result in
the imposition of a federal tax on the Trust Fund or cause any REMIC created
under the Series Supplement to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to the Custodian
and each Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(e) The Company shall have the option, in its sole discretion, to obtain
and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for the
purpose of protecting the Holders of the Class B Certificates against any or all
Realized Losses or other shortfalls. Any such instrument or fund shall be held
by the Trustee for the benefit of the Class B Certificateholders, but shall not
be and shall not be deemed to be under any circumstances included in the Trust
Fund. To the extent that any such instrument or fund constitutes a reserve fund
for federal income tax purposes, (i) any reserve fund so established shall be an
outside reserve fund and not an asset of the Trust Fund, (ii) any such reserve
fund shall be owned by the Company, and (iii) amounts transferred by the Trust
Fund to any such reserve fund shall be treated as amounts distributed by the
Trust Fund to the Company or any successor, all within the meaning of Treasury
Regulations Section 1.860G-2(h) as it reads as of the Cut-off Date. In
connection with the provision of any such instrument or fund, this Agreement and
any provision hereof may be modified, added to, deleted or otherwise amended in
any manner that is related or incidental to such instrument or fund or the
establishment or administration thereof, such amendment to be made by written
instrument executed or consented to by the Company but without the consent of
any Certificateholder and without the consent of the Master Servicer or the
Trustee being required unless any such amendment would impose any additional
obligation on, or otherwise adversely affect the interests of the Senior
Certificateholders, the Class M Certificateholders, the Master Servicer or the
Trustee, as applicable; provided that the Company obtains (subject to Section
10.01(f)) an Opinion of Counsel (which need not be an opinion of Independent
counsel) to the effect that any such amendment will not cause (a) any federal
tax to be imposed on the Trust Fund, including without limitation, any federal
tax imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or
on "contributions after the startup date" under Section 860G(d)(1) of the Code
and (b) any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificate is outstanding. In the event that the Company elects to
provide such coverage in the form of a limited guaranty provided by General
Motors Acceptance Corporation, the Company may elect that the text of such
amendment to this Agreement shall be substantially in the form attached hereto
as Exhibit K (in which case Residential Funding's Subordinate Certificate Loss
Obligation as described in such exhibit shall be established by Residential
Funding's consent to such
109
amendment) and that the limited guaranty shall be executed in the form attached
hereto as Exhibit K, with such changes as the Company shall deem to be
appropriate; it being understood that the Trustee has reviewed and approved the
content of such forms and that the Trustee's consent or approval to the use
thereof is not required.
Section 11.02 Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer and at its expense on direction by the Trustee (pursuant to the
request of Holders of Certificates entitled to at least 25% of the Voting
Rights), but only upon direction accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
(b) For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
Section 11.03 Limitation on Rights of Certificateholders.
(a) The death or incapacity of any Certificateholder shall not operate to
terminate this Agreement or the Trust Fund, nor entitle such Certificateholder's
legal representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust Fund, nor
otherwise affect the rights, obligations and liabilities of any of the parties
hereto.
(b) No Certificateholder shall have any right to vote (except as expressly
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth, or contained in the terms of the Certificates, be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third person by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
(c) No Certificateholder shall have any right by virtue of any provision of
this Agreement to institute any suit, action or proceeding in equity or at law
upon or under or with respect to this Agreement, unless such Holder previously
shall have given to the Trustee a written notice of default and of the
continuance thereof, as hereinbefore provided, and unless also the Holders of
Certificates of any Class evidencing in the aggregate not less than 25% of the
related Percentage Interests of such Class, shall have made written request upon
the Trustee to institute such action, suit or proceeding in its own name as
Trustee hereunder and shall have offered to the Trustee such reasonable
indemnity as it may require against the costs, expenses and liabilities to be
incurred therein or thereby, and the Trustee, for 60 days after its receipt of
such notice, request and offer of indemnity, shall have neglected or refused to
institute any such
110
action, suit or proceeding it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Holders of Certificates of any Class shall have any
right in any manner whatever by virtue of any provision of this Agreement to
affect, disturb or prejudice the rights of the Holders of any other of such
Certificates of such Class or any other Class, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the common
benefit of Certificateholders of such Class or all Classes, as the case may be.
For the protection and enforcement of the provisions of this Section 11.03, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 11.04 Governing Law.
This agreement and the Certificates shall be governed by and construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws.
Section 11.05 Notices.
As provided in Section 11.05 of the Series Supplement.
Section 11.06 Required Notices to Rating Agency and Subservicer.
The Company, the Master Servicer or the Trustee, as applicable, (i) shall
notify each Rating Agency at such time as it is otherwise required pursuant to
this Agreement to give notice of the occurrence of, any of the events described
in clause (a), (b), (c), (d), (g), (h), (i) or (j) below, (ii) shall notify the
Subservicer at such time as it is otherwise required pursuant to this Agreement
to give notice of the occurrence of, any of the events described in clause (a),
(b), (c)(1), (g)(1), or (i) below, or (iii) provide a copy to each Rating Agency
at such time as otherwise required to be delivered pursuant to this Agreement of
any of the statements described in clauses (e) and (f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) (1) the termination or appointment of a successor Master Servicer or
(2) the termination or appointment of a successor Trustee or a change in the
majority ownership of the Trustee,
(d) the filing of any claim under the Master Servicer's blanket fidelity
bond and the errors and omissions insurance policy required by Section 3.12 or
the cancellation or modification of coverage under any such instrument,
(e) the statement required to be delivered to the Holders of each Class of
Certificates pursuant to Section 4.03,
(f) the statements required to be delivered pursuant to Sections 3.18 and
3.19,
111
(g) (1) a change in the location of the Custodial Account or (2) a change
in the location of the Certificate Account,
(h) the occurrence of any monthly cash flow shortfall to the Holders of any
Class of Certificates resulting from the failure by the Master Servicer to make
an Advance pursuant to Section 4.04,
(i) the occurrence of the Final Distribution Date, and
(j) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the events
described in clauses (d), (g) or (h) above, the Master Servicer shall provide
prompt written notice to each Rating Agency and the Subservicer, if applicable,
of any such event known to the Master Servicer.
Section 11.07 Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.08 Supplemental Provisions for Resecuritization.
This Agreement may be supplemented by means of the addition of a separate
Article hereto (a "Supplemental Article") for the purpose of resecuritizing any
of the Certificates issued hereunder, under the following circumstances. With
respect to any Class or Classes of Certificates issued hereunder, or any portion
of any such Class, as to which the Company or any of its Affiliates (or any
designee thereof) is the registered Holder (the "Resecuritized Certificates"),
the Company may deposit such Resecuritized Certificates into a new REMIC,
grantor trust or custodial arrangement (a "Restructuring Vehicle") to be held by
the Trustee pursuant to a Supplemental Article. The instrument adopting such
Supplemental Article shall be executed by the Company, the Master Servicer and
the Trustee; provided, that neither the Master Servicer nor the Trustee shall
withhold their consent thereto if their respective interests would not be
materially adversely affected thereby. To the extent that the terms of the
Supplemental Article do not in any way affect any provisions of this Agreement
as to any of the Certificates initially issued hereunder, the adoption of the
Supplemental Article shall not constitute an "amendment" of this Agreement.
Each Supplemental Article shall set forth all necessary provisions relating
to the holding of the Resecuritized Certificates by the Trustee, the
establishment of the Restructuring Vehicle, the issuing of various classes of
new certificates by the Restructuring Vehicle and the distributions to be made
thereon, and any other provisions necessary for the purposes thereof. In
connection with each Supplemental Article, the Company shall deliver to the
Trustee an Opinion of Counsel to the effect that (i) the Restructuring Vehicle
will qualify as a REMIC, grantor trust or other entity not subject to taxation
for federal income tax purposes and (ii) the adoption of the
112
Supplemental Article will not endanger the status of the Trust Fund as a REMIC
or (subject to Section 10.01(f)) result in the imposition of a tax upon the
Trust Fund (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code and the tax on contributions to a
REMIC as set forth in Section 860G(d) of the Code).
Section 11.09 Allocation of Voting Rights.
As provided in Section 11.09 of the Series Supplement.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01 Intent of the Parties; Reasonableness.
The Company, the Trustee and the Master Servicer acknowledge and agree that
the purpose of this Article XII is to facilitate compliance by the Company with
the provisions of Regulation AB and related rules and regulations of the
Commission. The Company shall not exercise its right to request delivery of
information or other performance under these provisions other than in good
faith, or for purposes other than compliance with the Securities Act, the
Exchange Act and the rules and regulations of the Commission under the
Securities Act and the Exchange Act. Each of the Master Servicer and the Trustee
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Company in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. Each
of the Master Servicer and the Trustee shall cooperate fully with the Company to
deliver to the Company (including any of its assignees or designees), any and
all statements, reports, certifications, records and any other information
necessary in the good faith determination of the Company to permit the Company
or such Company to comply with the provisions of Regulation AB, together with
such disclosures relating to the Master Servicer, the Trustee and the Mortgage
Loans, or the servicing of the Mortgage Loans, reasonably believed by the
Company to be necessary in order to effect such compliance.
Section 12.02 Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent to the Company as of the date
on which information is first provided to the Company under Section 12.03 that,
except as disclosed in writing to the Company prior to such date: (i) it is not
aware and has not received notice that any default, early amortization or other
performance triggering event has occurred as to any other Securitization
Transaction due to any act or failure to act of the Trustee; (ii) it has not
been terminated as trustee in a securitization of mortgage loans; (iii) there
are no aspects of its financial condition that could have a material adverse
effect on the performance by it of its trustee obligations under this Agreement
or any other Securitization Transaction; (iv) there are no material legal or
governmental proceedings pending (or known to be contemplated) against it; and
(v) there are no affiliations, relationships or transactions relating to the
Trustee with respect
113
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 (each, a "Transaction
Party").
(b) If so requested by the Company on any date following the date on which
information is first provided to the Company under Section 12.03, the Trustee
shall, within five Business Days following such request, confirm in writing the
accuracy of the representations and warranties set forth in paragraph (a) of
this Section or, if any such representation and warranty is not accurate as of
the date of such request or such confirmation, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party.
Section 12.03 Information to be Provided by the Trustee.
(a) If so requested by the Company for the purpose of satisfying its
reporting obligation under the Exchange Act with respect to any class of
Certificates, the Trustee shall (i) notify the Company in writing of (A) any
material litigation or governmental proceedings pending against the Trustee and
(B) any affiliations or relationships that develop following the Closing Date
between the Trustee and any Transaction Party, and (ii) provide to the Company a
written description of such proceedings, affiliations or relationships.
(b) In addition to such information as the Trustee is obligated to provide
pursuant to other provisions of this Agreement, if so requested by the Company,
the Trustee shall provide such information reasonably available to the Trustee
regarding the performance or servicing of the Mortgage Loans as is reasonably
required to facilitate preparation of distribution reports in accordance with
Item 1121 of Regulation AB.
Section 12.04 Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, the Trustee shall:
(a) deliver to the Company a report (in form and substance reasonably
satisfactory to the Company) regarding the Trustee's assessment of compliance
with the Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Company and signed by an
authorized officer of the Trustee, and shall address each of the Servicing
Criteria specified on a certification substantially in the form of Exhibit R
hereto; and
(b) deliver to the Company a report of a registered public accounting firm
reasonably acceptable to the Company that attests to, and reports on, the
assessment of compliance made by the Trustee and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act.
Section 12.05 Indemnification; Remedies.
(a) The Trustee shall indemnify the Company, each affiliate of the Company,
the Master Servicer and each broker dealer acting as underwriter, placement
agent or initial
114
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'
letter or other material provided under this Article XII by or on behalf of
the Trustee (collectively, the "Trustee Information"), or (B) the omission
or alleged omission to state in the Trustee Information a material fact
required to be stated in the Trustee Information or necessary in order to
make the statements therein, in the light of the circumstances under which
they were made, not misleading; provided, by way of clarification, that
clause (B) of this paragraph shall be construed solely by reference to the
Trustee Information and not to any other information communicated in
connection with a sale or purchase of securities, without regard to whether
the Trustee Information or any portion thereof is presented together with
or separately from such other information;
(ii) any failure by the Trustee to deliver any information, report,
certification, accountants' letter or other material when and as required
under this Article XII; or
(iii) any breach by the Trustee of a representation or warranty set
forth in Section 12.02(a) or in a writing furnished pursuant to Section
12.02(b).
(b) In the case of any failure of performance described in clause (ii) of
this Section, the Trustee shall promptly reimburse the Company for all costs
reasonably incurred by each such party in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required by the Trustee.
115
EXHIBIT A
FORM OF CLASS A CERTIFICATE, [PRINCIPAL ONLY/CLASS A-P] CERTIFICATE
AND [INTEREST ONLY/CLASS A-V] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (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.]
A-1
Certificate No. [____] [____]% [Adjustable] [Variable]
Pass-Through Rate [based on a
Notional Amount]
Class [A-___] Senior Percentage Interest: ____%
Date of Pooling and Servicing Aggregate Initial [Certificate Principal
Agreement and Cut-off Date: Balance] [Interest Only/Class A-V]
[______________] [Notional Amount] [Subclass Notional
Amount] of the Class [A-___]
Certificates: $________
First Distribution Date: [Initial] [Certificate Principal
[______________] Balance] [Interest Only/Class A-V]
[Subclass] [Notional Amount] of this
Certificate: $[______________]
Master Servicer:
Residential Funding Corporation
[Assumed] [Scheduled] Final
Distribution Date: CUSIP
[______________] [______________]
MORTGAGE PASS-THROUGH CERTIFICATE
SERIES ________
evidencing a percentage interest in the
distributions allocable to the Class
[A-___] Certificates with respect to a
Trust Fund consisting primarily of a
pool of conventional one- to four-family
fixed interest rate first mortgage loans
formed and sold by RESIDENTIAL FUNDING
MORTGAGE SECURITIES I, 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 I, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Funding Mortgage Securities I, Inc.,
the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc.
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that _____________ is the registered owner of the Percentage
Interest evidenced by this Certificate [(obtained by dividing the [Initial
Certificate Principal Balance] [Initial [Interest Only/Class A-V] Notional
Amount] of this Certificate by the aggregate [Initial
2
Certificate Principal Balance of all Class A- Certificates] [Initial [Interest
Only/Class A-V] Notional Amounts of all [Interest Only/Class A-V] Certificates],
both as specified above)] in certain distributions with respect to the Trust
Fund consisting primarily of an interest in a pool of conventional one- to
four-family fixed interest rate first mortgage loans (the "Mortgage Loans"),
formed and sold by Residential Funding Mortgage Securities I, Inc. (hereinafter
called the "Company," which term includes any successor entity under the
Agreement referred to below). The Trust Fund was created pursuant to a Series
Supplement, dated as specified above, to the Standard Terms of Pooling and
Servicing Agreement dated as of ________________ (together, the "Pooling and
Servicing Agreement" or the "Agreement") among the Company, the Master Servicer
and _______________, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last day (or if such last day is not a Business Day,
the Business Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), from the [related]
Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount [(of interest
and principal, if any)] required to be distributed to Holders of Class A-
Certificates on such Distribution Date. [the [Interest Only/Class A-V] Notional
Amount of the [Interest Only/Class A-V] Certificates as of any date of
determination is equal to the aggregate stated Principal Balance of the Mortgage
Loans corresponding to the uncertificated REMIC regular interests represented by
such [Interest Only/Class A-V] Certificates.]
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. [The [Initial
Certificate Principal Balance] [Initial [Interest Only/Class A-V] Notional
Amount] of this Certificate is set forth above.] [The Certificate Principal
Balance hereof will be reduced to the extent of distributions allocable to
principal and any Realized Losses allocable hereto.]
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
3
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
4
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan [in the related
Loan Group] subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the
purchase by the Master Servicer from the Trust Fund of all remaining Mortgage
Loans [in the related Loan Group] and all property acquired in respect of such
Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at
a price determined as provided in the Agreement all remaining Mortgage Loans [in
the related Loan Group] and all property acquired in respect of any Mortgage
Loan or (ii) 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 Pool Stated Principal Balance of the Mortgage Loans [in the
related Loan Group] 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 Group [in the related Loan Group].
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ___________________ [TRUSTEE],
as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [A- ] Certificates referred to in the
within-mentioned Agreement.
[TRUSTEE],
as Certificate Registrar
By:
------------------------------------
Authorized Signatory
6
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated: ___________________
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _______________________for the account of __________________
account number ______________-, or, if mailed by check, to
____________________________. Applicable statements should be mailed to
________________________.
This information is provided by _____________________, the assignee named
above, or ________________, as its agent.
7
EXHIBIT B
FORM OF CLASS M CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE [RELATED]
SENIOR CERTIFICATES [CLASS M-1 CERTIFICATES] [AND CLASS M-2 CERTIFICATES] AS
DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986 (THE "CODE").
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
ANY TRANSFEREE OF THIS CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY
VIRTUE OF ITS PURCHASE OR HOLDING OF THIS CERTIFICATE (OR INTEREST HEREIN) THAT
EITHER (A) SUCH TRANSFEREE IS NOT AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A
TRUSTEE OF ANY PLAN, ACTING, DIRECTLY OR INDIRECTLY, ON BEHALF OF OR PURCHASING
ANY CERTIFICATE WITH "PLAN ASSETS" OF ANY PLAN (A "PLAN INVESTOR"), (B) IT HAS
ACQUIRED AND IS HOLDING SUCH CERTIFICATE IN RELIANCE ON PROHIBITED TRANSACTION
EXEMPTION ("PTE") 94-29, 59 FED. REG. 14674 (MARCH 29, 1994), AS AMENDED BY PTE
97-34, 62 FED. REG. 39021 (JULY 21, 1997), AND PTE 2000-58, 65 FED. REG. 67765
(DECEMBER 13, 2000)[, AND PTE 2002-41, 67 FED. REG. 54487 (AUGUST 22, 2002)]
(THE "RFC EXEMPTION"), AND THAT IT UNDERSTANDS THAT THERE ARE CERTAIN CONDITIONS
TO THE AVAILABILITY OF THE RFC EXEMPTION INCLUDING THAT SUCH CERTIFICATE MUST BE
RATED, AT THE TIME OF PURCHASE, NOT LOWER THAN "BBB-" (OR ITS EQUIVALENT) BY
STANDARD & POOR'S, FITCH OR MOODY'S OR (C)(I) THE TRANSFEREE IS AN INSURANCE
COMPANY, (II) THE SOURCE OF FUNDS TO BE USED BY IT TO PURCHASE THE CERTIFICATE
IS AN "INSURANCE COMPANY GENERAL ACCOUNT" (WITHIN THE MEANING OF U.S. DEPARTMENT
OF LABOR PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60), AND (III) THE
CONDITIONS SET FORTH IN SECTIONS I AND III OF PTCE 95-60 HAVE BEEN SATISFIED
(EACH ENTITY THAT SATISFIES THIS CLAUSE (C), A "COMPLYING INSURANCE COMPANY").
B-1
IF THIS CERTIFICATE (OR ANY INTEREST HEREIN) IS ACQUIRED OR HELD IN
VIOLATION OF THE PROVISIONS OF THE PRECEDING PARAGRAPH, THEN THE LAST PRECEDING
TRANSFEREE THAT EITHER (I) IS NOT A PLAN INVESTOR, (II) ACQUIRED SUCH
CERTIFICATE IN COMPLIANCE WITH THE RFC EXEMPTION OR (III) IS A COMPLYING
INSURANCE COMPANY SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL
RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF
SUCH TRANSFER OF THIS CERTIFICATE. THE TRUSTEE SHALL BE UNDER NO LIABILITY TO
ANY PERSON FOR MAKING ANY PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING
TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS
CERTIFICATE (OR INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS
IN SECTION 5.02(e) OF THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND
HOLD HARMLESS THE COMPANY, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER,
AND THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS, COSTS OR
EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR HOLDING.
B-2
Certificate No. [____] [____]% Pass-Through Rate
Class [M-___] Subordinate
Date of Pooling and Servicing Principal Balance of the Class M
Agreement and Cut-off Date: Certificates: $_______________
[______________]
First Distribution Date: Initial Certificate Principal Balance of
[______________] this Certificate: $[______________]
Master Servicer:
Residential Funding Corporation
[Assumed] [Schedule] Final
Distribution Date: CUSIP
[______________] [______________]
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES ________
evidencing a percentage interest in any
distributions allocable to the Class
M-___ Certificates with respect to the
Trust Fund consisting primarily of a
pool of conventional one- to four-family
fixed interest rate first mortgage loans
formed and sold by RESIDENTIAL FUNDING
MORTGAGE SECURITIES I, 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 I, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Funding Mortgage Securities I, Inc.,
the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc.
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the Certificate Principal
Balance of this Certificate by the aggregate Certificate Principal Balance of
all Class M-___ Certificates, both as specified above) in certain distributions
with respect to a Trust Fund consisting primarily of a pool of conventional one-
to four-family fixed interest rate first mortgage loans (the "Mortgage Loans"),
formed and sold by Residential Funding Mortgage Securities I, Inc. (hereinafter
called the
B-3
"Company," which term includes any successor entity under the Agreement referred
to below). The Trust Fund was created pursuant to a Series Supplement, dated as
specified above, to the Standard Terms of Pooling and Servicing Agreement dated
as of ________________ (together, the "Pooling and Servicing Agreement" or the
"Agreement") among the Company, the Master Servicer and ___________, as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last day (or if such last day is not a Business Day,
the Business Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), from the [related]
Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount (of interest
and principal, if any) required to be distributed to Holders of Class M-___
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal and any Realized Losses allocable hereto.
As described above, any transferee of this Certificate will be deemed to
have represented by virtue of its purchase or holding of this Certificate (or
interest herein) that either (A) such transferee is not a Plan Investor, (B) it
has acquired and is holding this 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 this Certificate must be rated, at the time of
purchase, not lower than "BBB-" (or its equivalent) by Standard & Poor's, Fitch
or Moody's or (C) the transferee is a Complying Insurance Company. In addition,
any purported Certificate Owner whose acquisition or holding of this Certificate
(or interest herein) was effected in violation of the restrictions in Section
5.02(e) of the Agreement shall indemnify and hold harmless the Company, the
Trustee, the Master Servicer, any Subservicer, and the Trust Fund from and
against any and all liabilities, claims, costs or expenses incurred by such
parties as a result of such acquisition or holding.
B-4
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
B-5
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan [in the related
Loan Group] subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the
purchase by the Master Servicer from the Trust Fund of all remaining Mortgage
Loans [in the related Loan Group] and all property acquired in respect of such
Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at
a price determined as provided in the Agreement all remaining Mortgage Loans [in
the related Loan Group] and all property acquired in respect of any Mortgage
Loan or (ii) 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 Pool Stated Principal Balance of the Mortgage Loans [in the
related Loan Group] 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 Group [in the related Loan Group].
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.
Dated: ___________________ [TRUSTEE],
as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [M- ] Certificates referred to in the
within-mentioned Agreement.
[TRUSTEE],
as Certificate Registrar
By:
------------------------------------
Authorized Signatory
B-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated: ___________________
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _______________________for the account of __________________
account number ______________-, or, if mailed by check, to
____________________________. Applicable statements should be mailed to
________________________.
This information is provided by _____________________, the assignee named
above, or ________________, as its agent.
B-8
EXHIBIT C
FORM OF CLASS B CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE RELATED SENIOR
CERTIFICATES AND THE RELATED CLASS M CERTIFICATES [AND CLASS B-1] [CLASS B-2
CERTIFICATES] DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY
NOT BE RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND
LAWS OR IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM
REGISTRATION UNDER SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN
ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE
COMPANY AND THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
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 AND WILL
NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
C-1
Certificate No. [____] [____]% Pass-Through Rate
Class [B-___] Subordinate
Date of Pooling and Servicing Principal Balance of the Class B-___
Agreement and Cut-off Date: Certificates as of the Cut-off Date:
[______________] $________
First Distribution Date: Initial Certificate Principal Balance of
[______________] this Certificate: $[______________]
Master Servicer:
Residential Funding Corporation
Assumed Final Distribution Date: CUSIP
[______________] [______________]
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES _______
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 interest rate first mortgage loans
formed and sold by RESIDENTIAL FUNDING
MORTGAGE SECURITIES I, 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 I, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Funding Mortgage Securities I, Inc.,
the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc.
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that _______________________ is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
Initial Certificate Principal Balance of this Certificate by the aggregate
Initial Certificate Principal Balance of all Class B-___ Certificates, both as
specified above) in certain distributions with respect to the Trust Fund
consisting primarily of an interest in a pool of conventional one- to
four-family fixed interest rate first mortgage loans (the "Mortgage Loans"),
formed and sold by Residential Funding Mortgage Securities I, Inc. (hereinafter
called the "Company," which term includes any successor entity
C-2
under the Agreement referred to below). The Trust Fund was created pursuant to a
Series Supplement, dated as specified above, to the Standard Terms of Pooling
and Servicing Agreement dated as of ________________ (together, the "Pooling and
Servicing Agreement" or the "Agreement") among the Company, the Master Servicer
and ___________, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing on the first
Distribution Date specified above, to the Person in whose name this Certificate
is registered at the close of business on the last day (or if such last day is
not a Business Day, the Business Day immediately preceding such last day) of the
month next preceding the month of such distribution (the "Record Date"), from
the [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 the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of the
distributions allocable to principal and any Realized Losses allocable hereto.
No transfer of this Class B Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event that such a transfer is to be made, (i) the
Trustee or the Company may require an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee and the Company that such
transfer is exempt (describing the applicable exemption and the basis therefor)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state
and (ii) the transferee shall execute an investment letter in the form described
by Section 5.02(e) of the Agreement. The Holder hereof desiring to effect such
transfer shall, and does hereby agree to, indemnify the Trustee, the Company,
the Master Servicer and the Certificate Registrar acting on behalf of the
Trustee against any liability that may result if the transfer is not so exempt
or is not made in accordance with such Federal and state laws. In connection
with any such transfer, the Trustee will also require either (i) an
C-3
opinion of counsel acceptable to and in form and substance satisfactory to the
Trustee, the Company and the Master Servicer with respect to the permissibility
of such transfer under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Internal Revenue Code (the "Code")
and stating, among other things, that the transferee's acquisition of a Class B
Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or subject the Master
Servicer, the Company or the Trustee to any obligation or liability in addition
to those undertaken in the Agreement, or (ii) a representation letter, in the
form as described by the Agreement, either stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan, or stating that the transferee is an insurance company, the
source of funds to be used by it to purchase the Certificate is an "insurance
company general account" (within the meaning of Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60), and the purchase is being made in
reliance upon the availability of the exemptive relief afforded under Sections I
and III of PTCE 95-60.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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.
C-4
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan [in the related
Loan Group] subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the
purchase by the Master Servicer from the Trust Fund of all remaining Mortgage
Loans [in the related Loan Group] and all property acquired in respect of such
Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at
a price determined as provided in the Agreement all remaining Mortgage Loans [in
the related Loan Group] and all property acquired in respect of any Mortgage
Loan or (ii) 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 Pool Stated Principal Balance of the Mortgage Loans [in the
related Loan Group] 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 Group [in the related Loan Group].
C-5
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-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: _________________________ [TRUSTEE],
as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [B- ] Certificates referred to in the
within-mentioned Agreement.
[TRUSTEE],
as Certificate Registrar
By:
------------------------------------
Authorized Signatory
C-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated: __________________________
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _______________________for the account of __________________
account number ______________-, or, if mailed by check, to
____________________________. Applicable statements should be mailed to
________________________.
This information is provided by _____________________, the assignee named
above, or ________________, as its agent.
C-8
EXHIBIT D
FORM OF CLASS R CERTIFICATE
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES
PERSON OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE
TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL
REVENUE CODE OF 1986 (THE "CODE").
NO TRANSFER OF THIS CERTIFICATE MAY BE MADE TO ANY PERSON, UNLESS THE
TRANSFEREE PROVIDES EITHER A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE
AGREEMENT OR AN OPINION OF COUNSEL SATISFACTORY TO THE MASTER SERVICER, THE
COMPANY AND THE TRUSTEE THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
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 AND WILL
NOT SUBJECT THE MASTER SERVICER, THE COMPANY OR THE TRUSTEE TO ANY OBLIGATION OR
LIABILITY IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE
ONLY IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER
SERVICER AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES,
ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY POSSESSION OF THE UNITED STATES,
OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING (OTHER THAN AN
INSTRUMENTALITY WHICH IS A CORPORATION IF ALL OF ITS ACTIVITIES ARE SUBJECT TO
TAX AND EXCEPT FOR ▇▇▇▇▇▇▇ MAC, A MAJORITY OF ITS BOARD OF DIRECTORS IS NOT
SELECTED BY SUCH GOVERNMENTAL UNIT), (B) A FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF EITHER OF THE FOREGOING, (C)
ANY ORGANIZATION (OTHER THAN CERTAIN FARMERS' COOPERATIVES DESCRIBED IN SECTION
521 OF THE CODE) WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE
UNLESS SUCH ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE
CODE (INCLUDING THE TAX IMPOSED BY SECTION 511 OF THE CODE ON UNRELATED BUSINESS
TAXABLE INCOME), (D) RURAL ELECTRIC AND TELEPHONE COOPERATIVES DESCRIBED IN
SECTION 1381(A)(2)(C) OF THE CODE, (E) AN ELECTING LARGE PARTNERSHIP UNDER
SECTION 775(A) OF THE CODE (ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES
(A), (B), (C), (D) OR (E) BEING HEREIN REFERRED TO AS A "DISQUALIFIED
ORGANIZATION"), OR (F) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2) NO PURPOSE
OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND (3)
D-1
SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO THE
FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION
IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS
CERTIFICATE TO A DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED
ORGANIZATION, SUCH REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR
EFFECT WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER
FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF
DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE
OF THIS CERTIFICATE SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS
PARAGRAPH.
D-2
Certificate No. [____] [____]% Pass-Through Rate
Class [R-___] Senior
Date of Pooling and Servicing Aggregate Initial Certificate Principal
Agreement and Cut-off Date: Balance of the Class R-___ Certificates:
[______________] $100.00
First Distribution Date: Initial Certificate Principal Balance of
[______________] this Certificate: $[______________]
Master Servicer: Percentage Interest: _____%
Residential Funding Corporation
Assumed Final Distribution Date: CUSIP
[______________] [______________]
MORTGAGE PASS-THROUGH CERTIFICATE,
SERIES _______
evidencing a percentage interest in the
distributions allocable to the Class
R[-__] Certificates with respect to a
Trust Fund consisting primarily of a
pool of conventional one- to four-family
fixed interest rate first mortgage loans
formed and sold by RESIDENTIAL FUNDING
MORTGAGE SECURITIES I, 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 I, Inc., the Master Servicer, the Trustee referred to below or GMAC
Mortgage Group, Inc. or any of their affiliates. Neither this Certificate nor
the underlying Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality or by Residential Funding Mortgage Securities I, Inc.,
the Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Company, the Master Servicer, GMAC Mortgage Group, Inc.
or any of their affiliates will have any obligation with respect to any
certificate or other obligation secured by or payable from payments on the
Certificates.
This certifies that is the registered owner of the Percentage Interest
evidenced by this Certificate (obtained by dividing the Initial Certificate
Principal Balance of this Certificate by the aggregate Initial Certificate
Principal Balance of all Class R[-__] Certificates, both as specified above) in
certain distributions with respect to the Trust Fund consisting primarily of an
interest in a pool of conventional one- to four-family fixed interest rate first
mortgage loans (the "Mortgage Loans"), formed and sold by Residential Funding
Mortgage Securities I, Inc. (hereinafter called the "Company," which term
includes any successor entity under the
D-3
Agreement referred to below). The Trust Fund was created pursuant to a Series
Supplement, dated as specified above, to the Standard Terms of Pooling and
Servicing Agreement dated as of ________________ (together, the "Pooling and
Servicing Agreement" or the "Agreement") among the Company, the Master Servicer
and ___________, as trustee (the "Trustee"), a summary of certain of the
pertinent provisions of which is set forth hereafter. To the extent not defined
herein, the capitalized terms used herein have the meanings assigned in the
Agreement. This Certificate is issued under and is subject to the terms,
provisions and conditions of the Agreement, to which Agreement the Holder of
this Certificate by virtue of the acceptance hereof assents and by which such
Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last day (or if such last day is not a Business Day,
the Business Day immediately preceding such last day) of the month immediately
preceding the month of such distribution (the "Record Date"), from the [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 Company will have the right, in its
sole discretion and without notice to the Holder of this Certificate, to sell
this Certificate to a purchaser selected by the Company, which purchaser may be
the Company, or any affiliate of the Company, on such terms and conditions as
the Company may choose.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Initial
Certificate Principal Balance of this Certificate is set forth above. The
Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
Notwithstanding the reduction of the Certificate Principal Balance hereof to
zero, this Certificate will remain outstanding under the Agreement and the
Holder hereof may have additional obligations with respect to this Certificate,
including tax liabilities, and may be entitled to certain additional
distributions hereon, in accordance with the terms and provisions of the
Agreement.
No transfer of this Class R[-__] Certificate will be made unless the
Trustee has received either (i) an opinion of counsel acceptable to and in form
and substance satisfactory to the
D-4
Trustee, the Company and the Master Servicer with respect to the permissibility
of such transfer under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), and Section 4975 of the Internal Revenue Code (the "Code")
and stating, among other things, that the transferee's acquisition of a Class R
Certificate will not constitute or result in a non-exempt prohibited transaction
under Section 406 of ERISA or Section 4975 of the Code or subject the Master
Servicer, the Company or the Trustee to any obligation or liability in addition
to those undertaken in the Agreement, or (ii) a representation letter, in the
form as described by the Agreement, stating that the transferee is not an
employee benefit or other plan subject to the prohibited transaction provisions
of ERISA or Section 4975 of the Code (a "Plan"), or any other person (including
an investment manager, a named fiduciary or a trustee of any Plan) acting,
directly or indirectly, on behalf of or purchasing any Certificate with "plan
assets" of any Plan.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Pass-Through Certificates of the
Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Company and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Company, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Company, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66.6% 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 New York,
duly endorsed by, or accompanied by an assignment in the form below or other
written instrument of transfer in form satisfactory to the Trustee and the
D-5
Certificate Registrar duly executed by the Holder hereof or such Holder's
attorney duly authorized in writing, and thereupon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Company, the Master Servicer, the Trustee and the Certificate Registrar
and any agent of the Company, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Company, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan [in the related
Loan Group] subject thereto or the disposition of all property acquired upon
foreclosure or deed in lieu of foreclosure of any Mortgage Loan and (ii) the
purchase by the Master Servicer from the Trust Fund of all remaining Mortgage
Loans [in the related Loan Group] and all property acquired in respect of such
Mortgage Loans, thereby effecting early retirement of the Certificates. The
Agreement permits, but does not require, the Master Servicer to (i) purchase at
a price determined as provided in the Agreement all remaining Mortgage Loans [in
the related Loan Group] and all property acquired in respect of any Mortgage
Loan or (ii) 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 Pool Stated Principal Balance of the Mortgage Loans [in the
related Loan Group] 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 Group [in the related Loan Group].
Reference is hereby made to the further provisions of this Certificate set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
D-6
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-7
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
Dated: ___________________________ [TRUSTEE],
as Trustee
By:
------------------------------------
Authorized Signatory
CERTIFICATE OF AUTHENTICATION
This is one of the Class [R- ] Certificates referred to in the
within-mentioned Agreement.
[TRUSTEE],
as Certificate Registrar
By:
------------------------------------
Authorized Signatory
D-8
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto (Please print or typewrite name and address including postal
zip code of assignee) a Percentage Interest evidenced by the within Mortgage
Pass-Through Certificate and hereby authorizes the transfer of registration of
such interest to assignee on the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
Dated: _____________________________
----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _______________________for the account of __________________
account number ______________-, or, if mailed by check, to
____________________________. Applicable statements should be mailed to
________________________.
This information is provided by _____________________, the assignee named
above, or ________________, as its agent.
D-9
EXHIBIT E
FORM OF SELLER/SERVICER CONTRACT
This Seller/Servicer Contract (as may be amended, supplemented or otherwise
modified from time to time, this "Contract") is made this day of _____________,
20__, by and between Residential Funding Corporation, its successors and assigns
("Residential Funding") and (the "Seller/Servicer," and, together with
Residential Funding, the "parties" and each, individually, a "party").
WHEREAS, the Seller/Servicer desires to sell Loans to, and/or service Loans
for, Residential Funding, and Residential Funding desires to purchase Loans from
the Seller/Servicer and/or have the Seller/Servicer service various of its
Loans, pursuant to the terms of this Contract and the Residential Funding Seller
and Servicer Guides incorporated herein by reference, as amended, supplemented
or otherwise modified, from time to time (together, the "Guides").
NOW, THEREFORE, in consideration of the premises, and the terms, conditions
and agreements set forth below, the parties agree as follows:
1. INCORPORATION OF GUIDES BY REFERENCE.
The Seller/Servicer acknowledges that it has received and read the Guides.
All provisions of the Guides are incorporated by reference into and made a part
of this Contract, and shall be binding upon the parties; provided, however, that
the Seller/Servicer shall be entitled to sell Loans to and/or service Loans for
Residential Funding only if and for so long as it shall have been authorized to
do so by Residential Funding in writing. Specific reference in this Contract to
particular provisions of the Guides and not to other provisions does not mean
that those provisions of the Guides not specifically cited in this Contract are
not applicable. All terms used herein shall have the same meanings as such terms
have in the Guides, unless the context clearly requires otherwise.
2. AMENDMENTS.
This Contract may not be amended or modified orally, and no provision of
this Contract may be waived or amended except in writing signed by the party
against whom enforcement is sought. Such a written waiver or amendment must
expressly reference this Contract. However, by their terms, the Guides may be
amended or supplemented by Residential Funding from time to time. Any such
amendment(s) to the Guides shall be binding upon the parties hereto.
3. REPRESENTATIONS AND WARRANTIES.
A. Reciprocal Representations and Warranties.
The Seller/Servicer and Residential Funding each represents and warrants to
the other that as of the date of this Contract:
(1) Each party is duly organized, validly existing, and in good standing under
the laws of its jurisdiction of organization, is qualified, if necessary, to do
business and in good standing in each
E-1
jurisdiction in which it is required to be so qualified, and has the requisite
power and authority to enter into this Contract and all other agreements which
are contemplated by this Contract and to carry out its obligations hereunder and
under the Guides and under such other agreements.
(2) This Contract has been duly authorized, executed and delivered by each party
and constitutes a valid and legally binding agreement of each party enforceable
in accordance with its terms.
(3) There is no action, proceeding or investigation pending or threatened, and
no basis therefor is known to either party, that could affect the validity or
prospective validity of this Contract.
(4) Insofar as its capacity to carry out any obligation under this Contract is
concerned, neither party is in violation of any charter, articles of
incorporation, bylaws, mortgage, indenture, indebtedness, agreement, instrument,
judgment, decree, order, statute, rule or regulation and none of the foregoing
adversely affects its capacity to fulfill any of its obligations under this
Contract. Its execution of, and performance pursuant to, this Contract will not
result in a violation of any of the foregoing.
B. Seller/Servicer's Representations, Warranties and Covenants.
In addition to the representations, warranties and covenants made by the
Seller/Servicer pursuant to subparagraph (a) of this paragraph 3, the
Seller/Servicer makes the representations, warranties and covenants set forth in
the Guides and, upon request, agrees to deliver to Residential Funding the
certified Resolution of Board of Directors which authorizes the execution and
delivery of this Contract.
4. REMEDIES OF RESIDENTIAL FUNDING.
If an Event of Seller Default or an Event of Servicer Default shall occur,
Residential Funding may, at its option, exercise one or more of those remedies
set forth in the Guides.
5. SELLER/SERVICER'S STATUS AS INDEPENDENT CONTRACTOR.
At no time shall the Seller/Servicer represent that it is acting as an
agent of Residential Funding. The Seller/Servicer shall, at all times, act as an
independent contractor.
6. PRIOR AGREEMENTS SUPERSEDED.
This Contract restates, amends and supersedes any and all prior Seller
Contracts or Servicer Contracts between the parties except that any subservicing
agreement executed by the Seller/Servicer in connection with any loan-security
exchange transaction shall not be affected.
7. ASSIGNMENT.
This Contract may not be assigned or transferred, in whole or in part, by
the Seller/Servicer without the prior written consent of Residential Funding.
Residential Funding may sell, assign, convey, hypothecate, pledge or in any
other way transfer, in whole or in part,
E-2
without restriction, its rights under this Contract and the Guides with respect
to any Commitment or Loan.
8. NOTICES.
All notices, requests, demands or other communications that are to be given
under this Contract shall be in writing, addressed to the appropriate parties
and sent by telefacsimile or by overnight courier or by United States mail,
postage prepaid, to the addresses and telefacsimile numbers specified below.
However, another name, address and/or telefacsimile number may be substituted by
the Seller/Servicer pursuant to the requirements of this paragraph 8, or
Residential Funding pursuant to an amendment to the Guides.
If to Residential Funding, notices must be sent to the appropriate address or
telefacsimile number specified in the Guides.
If to the Seller/Servicer, notice must be sent to:
Attention: __________________________________
Telefacsimile Number: (_____) _____-_________
9. JURISDICTION AND VENUE.
Each of the parties irrevocably submits to the jurisdiction of any state or
federal court located in Hennepin County, Minnesota, over any action, suit or
proceeding to enforce or defend any right under this Contract or otherwise
arising from any loan sale or servicing relationship existing in connection with
this Contract, and each of the parties irrevocably agrees that all claims in
respect of any such action or proceeding may be heard or determined in such
state or federal court. Each of the parties irrevocably waives the defense of an
inconvenient forum to the maintenance of any such action or proceeding and any
other substantive or procedural rights or remedies it may have with respect to
the maintenance of any such action or proceeding in any such forum. Each of the
parties agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in any other jurisdiction by suit on the judgment
or in any other manner provided by law. Each of the parties further agrees not
to institute any legal actions or proceedings against the other party or any
director, officer, employee, attorney, agent or property of the other party,
arising out of or relating to this Contract in any court other than as
hereinabove specified in this paragraph 9.
10. MISCELLANEOUS.
This Contract, including all documents incorporated by reference herein,
constitutes the entire understanding between the parties hereto and supersedes
all other agreements, covenants, representations, warranties, understandings and
communications between the parties, whether written or oral, with respect to the
transactions contemplated by this Contract. All paragraph headings contained
herein are for convenience only and shall not be construed as part of this
Contract. Any provision of this Contract that is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of
such prohibition or unenforceability without invalidating the remaining portions
hereof or affecting the validity or enforceability of such provision in any
other jurisdiction, and, to this end, the provisions hereof are severable.
E-3
This Contract shall be governed by, and construed and enforced in accordance
with, applicable federal laws and the laws of the State of Minnesota.
E-4
IN WITNESS WHEREOF, the duly authorized officers of the Seller/Servicer and
Residential Funding have executed this Seller/Servicer Contract as of the date
first above written.
ATTEST: SELLER/SERVICER
[Corporate Seal] (Name of Seller/Servicer)
By: By:
--------------------------------- ------------------------------------
(Signature) (Signature)
By: By:
--------------------------------- ------------------------------------
(Typed Name) (Typed Name)
Title: Title:
------------------------------ ---------------------------------
ATTEST: RESIDENTIAL FUNDING CORPORATION
[Corporate Seal]
By: By:
--------------------------------- ------------------------------------
(Signature) (Signature)
By: By:
Title: Title:
E-5
EXHIBIT F
FORMS OF REQUEST FOR RELEASE
DATE: _________________________
TO: ___________________________
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Series Supplement, to the Standard Terms of 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 Corporation
Authorized Signature
********************************************************************************
TO CUSTODIAN/TRUSTEE: Please acknowledge this request, and check off documents
being enclosed with a copy of this form. You should retain this form for your
files in accordance with the terms of the Pooling and Servicing Agreement.
Enclosed Documents: [ ] Promissory Note
[ ] Primary Insurance Policy
[ ] Mortgage or Deed of Trust
[ ] Assignment(s) of Mortgage or Deed of Trust
[ ] Title Insurance Policy
[ ] Other:
Name: _______________________________
Title: ______________________________
Date: _______________________________
F-1
EXHIBIT G-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF __________)
__________) ss.:
COUNTY OF __________)
[NAME OF OFFICER], being first duly sworn, deposes and says:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial
owner of the Mortgage 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.
G-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, clause (iii)(A) and (iii)(B) of Section 5.02(f) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event the Owner holds such
Certificates in violation of Section 5.02(f)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R[-__] Certificates will only be owned,
directly or indirectly, by an Owner that is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is ________________.
11. This affidavit and agreement relates only to the Class R[-__]
Certificates held by the Owner and not to any other holder of the Class R[-__]
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R[-__] Certificates.
12. That no purpose of the Owner relating to the transfer of any of the
Class R[-__] Certificates by the Owner is or will be to impede the assessment or
collection of any tax; in making this representation, the Owner warrants that
the Owner is familiar with (i) Treasury Regulation Section 1.860E-1(c) and
recent amendments thereto, effective as of July 19, 2002,
G-1-2
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 Purchaser is not an employee benefit plan or other plan subject
to the prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code"), or an investment manager, named
fiduciary or a trustee of any such plan, or any other Person acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
such plan; 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 Certificates are permissible under applicable
law, will not constitute or result in any non-exempt prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Trustee, the
Company or the Master Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in addition
to those undertaken in the Pooling and Servicing Agreement.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any Plan or person unless
either such Plan or person meets the requirements set forth in either (a) or (b)
above.
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
G-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__.
G-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.
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
1-1
collection of information should be received by September 17, 2002. Comments are
specifically requested concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including whether
the information will have practical utility;
The accuracy of the estimated burden associated with the collection of
information (see below);
How the quality, utility, and clarity of the information to be collected
may be enhanced;
How the burden of complying with the collection of information may be
minimized, including through the application of automated collection techniques
or other forms of information technology; and
Estimates of capital or start-up costs and costs of operation, maintenance,
and purchase of service to provide information.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an
estimated number of respondents of 470 and an estimated average annual burden
hours per respondent of one hour.
Books or records relating to a collection of information must be retained
as long as their contents may become material in the administration of any
internal revenue law. Generally, tax returns and tax return information are
confidential, as required by 26 U.S.C. 6103.
Background
This document contains final regulations regarding the proposed amendments
to 26 CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules governing
the transfer of noneconomic REMIC residual interests. In general, a transfer of
a noneconomic residual interest is disregarded for all tax purposes if a
significant purpose of the transfer is to
[[Page 47452]]
enable the transferor to impede the assessment or collection of tax. A purpose
to impede the assessment or collection of tax (a wrongful purpose) exists if the
transferor, at the time of the transfer, either knew or should have known that
the transferee would be unwilling or unable to pay taxes due on its share of the
REMIC's taxable income.
1-2
Under a safe harbor, the transferor of a REMIC noneconomic residual
interest is presumed not to have a wrongful purpose if two requirements are
satisfied: (1) the transferor conducts a reasonable investigation of the
transferee's financial condition (the investigation requirement); and (2) the
transferor secures a representation from the transferee to the effect that the
transferee understands the tax obligations associated with holding a residual
interest and intends to pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even in
situations where the economics of the transfer clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest. For
this reason, on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula test," an economic test. The
proposed regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any
consideration given to the transferee to acquire the interest; (2) the present
value of the expected future distributions on the interest; and (3) the present
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses.
The notice of proposed rulemaking also contained rules for FASITs. Section
1.860H-6(g) of the proposed regulations provides requirements for transfers of
FASIT ownership interests and adopts a safe harbor by reference to the safe
harbor provisions of the REMIC regulations.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335)
to set forth an alternative safe harbor that taxpayers could use while the IRS
and the Treasury considered comments on the proposed regulations. Under the
alternative safe harbor, if a transferor meets the investigation requirement and
the representation requirement but the transfer fails to meet the formula test,
the transferor may invoke the safe harbor if the transferee meets a two-prong
test (the asset test). A transferee generally meets the first prong of this test
if, at the time of the transfer, and in each of the two years preceding the year
of transfer, the transferee's gross assets exceed $100 million and its net
assets exceed $10 million. A transferee generally meets the second prong of this
test if it is a domestic, taxable corporation and agrees in writing not to
transfer the interest to any person other than another domestic, taxable
corporation that also satisfies the requirements of the asset test. A transferor
cannot rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit the
restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in
the case of a transfer or assignment of a noneconomic residual interest to a
foreign branch of an otherwise eligible transferee. If such a transfer or
assignment were permitted, a corporate taxpayer might seek to claim that the
provisions of an applicable income tax treaty would resource excess inclusion
income as foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset by foreign
tax credits. Such a claim would impede the assessment or collection of U.S. tax
on excess inclusion income, contrary to the congressional purpose of assuring
that such income will be taxable in all events. See, e.g., sections 860E(a)(1),
(b), (e) and 860G(b) of the Code.
1-3
The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E-1(c)(8) provides computational rules that a taxpayer may use
to qualify for safe harbor status under the formula test. Section
1.860E-1(c)(8)(i) provides that the transferee is presumed to pay tax at a rate
equal to the highest rate of tax specified in section 11(b). Some commentators
were concerned that this presumed rate of taxation was too high because it does
not take into consideration taxpayers subject to the alternative minimum tax
rate. In light of the comments received, this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative minimum tax rate to use the alternative minimum tax rate
applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in
the formula test are to be computed using a discount rate equal to the
applicable Federal short-term rate prescribed by section 1274(d). This is a
change from the proposed regulation and Rev. Proc. 2001-12. In those
publications the provision stated that "present values are computed using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded semiannually" and that "[a] lower discount rate may be used if the
transferee can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based on this
provision, certain taxpayers have been attempting to use unrealistically low or
zero interest rates to satisfy the formula test, frustrating the intent of the
test. Furthermore, the Treasury Department and the IRS believe that a rule
allowing for a rate other than a rate based on an objective index would add
unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if the
transferee can demonstrate that it regularly borrows substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate has been substituted for the applicable Federal rate. To simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term rates, provided that the present values are computed with a
corresponding period of compounding. With the exception of the provisions
relating to transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may choose to
apply the interest rate formula set forth in the proposed regulation and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
It is anticipated that when final regulations are adopted with respect to
[[Page 47453]]
FASITs, Sec. 1.860H-6(g) of the proposed regulations will be adopted in
substantially its present form, with the result that the final regulations
contained in this document will also govern
1-4
transfers of FASIT ownership interests with substantially the same applicability
date as is contained in this document.
Effect on Other Documents
Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is obsolete for transfers of
noneconomic residual interests in REMICs occurring on or after August 19, 2002.
Special Analyses
It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do
not apply to these regulations.
Drafting Information
The principal author of these regulations is ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. 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 * * *
1-5
EXHIBIT G-2
FORM OF TRANSFEROR CERTIFICATE
__________, 20__
Residential Funding Mortgage Securities I, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Trustee]
Attention: Residential Funding Corporation Series _______
Re: Mortgage Pass-Through Certificates, Series ________, Class R[-__]
Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
________________ (the "Seller") to _____________________ (the "Purchaser") of
$______________ Initial Certificate Principal Balance of Mortgage Pass-Through
Certificates, Series ________, Class R[-__] (the "Certificates"), pursuant to
Section 5.02 of the Series Supplement, dated as of ________________, to the
Standard Terms of Pooling and Servicing Agreement dated as of ________________
(together, the "Pooling and Servicing Agreement") among Residential Funding
Mortgage Securities I, Inc., as seller (the "Company"), Residential Funding
Corporation, as master servicer, and __________, as trustee (the "Trustee"). All
terms used herein and not otherwise defined shall have the meanings set forth in
the Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by
the Seller to the Purchaser is or will be to impede the assessment or collection
of any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee
and the Master Servicer a transfer affidavit and agreement in the form attached
to the Pooling and Servicing Agreement as Exhibit G-1. The Seller does not know
or believe that any representation contained therein is false.
3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R[-__]
Certificate may not be respected for United States income tax purposes (and the
Seller may continue to be liable for
▇-▇-▇
▇▇▇▇▇▇ ▇▇▇▇▇▇ income taxes Associated therewith) unless the Seller has conducted
such an investigation.
4. The Seller has no actual knowledge that the proposed Transferee is not
both a United States Person and a Permitted Transferee.
Very truly yours,
----------------------------------------
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
G-2-2
EXHIBIT H
FORM OF INVESTOR REPRESENTATION LETTER
______________, 20___
Residential Funding Mortgage Securities I, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Trustee]
Residential Funding Corporation
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: Residential Funding Corporation Series ________
RE: Mortgage Pass-Through Certificates, Series ________, [Class B- ]
Ladies and Gentlemen:
_________________- (the "Purchaser") intends to purchase from
_________________ (the "Seller") $_____________ Initial Certificate Principal
Balance of Mortgage Pass-Through Certificates, Series ________, Class (the
"Certificates"), issued pursuant to the Series Supplement, dated as of
________________, to the Standard Terms of Pooling and Servicing Agreement dated
as of ________________ (together, the "Pooling and Servicing Agreement") among
Residential Funding Mortgage Securities I, Inc., as seller (the "Company"),
Residential Funding Corporation, as master servicer (the "Master Servicer"), and
_____________, as trustee (the "Trustee"). All terms used herein and not
otherwise defined shall have the meanings set forth in the Pooling and Servicing
Agreement. The Purchaser hereby certifies, represents and warrants to, and
covenants with, the Company, the Trustee and the Master Servicer that:
1. The Purchaser understands that (a) the Certificates have not been and
will not be registered or qualified under the Securities Act of 1933, as amended
(the "Act") or any state securities law, (b) the Company is not required to so
register or qualify the Certificates, (c) the Certificates may be resold only if
registered and qualified pursuant to the provisions of the Act or any state
securities law, or if an exemption from such registration and qualification is
available, (d) the Pooling and Servicing Agreement contains restrictions
regarding the transfer of the Certificates and (e) the Certificates will bear a
legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any applicable
state securities laws.
H-1
3. The Purchaser is (a) a substantial, sophisticated institutional investor
having such knowledge and experience in financial and business matters, and, in
particular, in such matters related to securities similar to the Certificates,
such that it is capable of evaluating the merits and risks of investment in the
Certificates, (b) able to bear the economic risks of such an investment and (c)
an "accredited investor" within the meaning of Rule 501(a) promulgated pursuant
to the Act.
4. The Purchaser has been furnished with, and has had an opportunity to
review (a) [a copy of the Private Placement Memorandum, dated ___________,
20___, relating to the Certificates (b)] a copy of the Pooling and Servicing
Agreement and [b] [c] such other information concerning the Certificates, the
Mortgage Loans and the Company as has been requested by the Purchaser from the
Company or the Seller and is relevant to the Purchaser's decision to purchase
the Certificates. The Purchaser has had any questions arising from such review
answered by the Company or the Seller to the satisfaction of the Purchaser. [If
the Purchaser did not purchase the Certificates from the Seller in connection
with the initial distribution of the Certificates and was provided with a copy
of the Private Placement Memorandum (the "Memorandum") relating to the original
sale (the "Original Sale") of the Certificates by the Company, the Purchaser
acknowledges that such Memorandum was provided to it by the Seller, that the
Memorandum was prepared by the Company solely for use in connection with the
Original Sale and the Company did not participate in or facilitate in any way
the purchase of the Certificates by the Purchaser from the Seller, and the
Purchaser agrees that it will look solely to the Seller and not to the Company
with respect to any damage, liability, claim or expense arising out of,
resulting from or in connection with (a) error or omission, or alleged error or
omission, contained in the Memorandum, or (b) any information, development or
event arising after the date of the Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other similar
security to any person in any manner, (b) solicit any offer to buy or to accept
a pledge, disposition of other transfer of any Certificate, any interest in any
Certificate or any other similar security from any person in any manner, (c)
otherwise approach or negotiate with respect to any Certificate, any interest in
any Certificate or any other similar security with any person in any manner, (d)
make any general solicitation by means of general advertising or in any other
manner or (e) take any other action, that (as to any of (a) through (e) above)
would constitute a distribution of any Certificate under the Act, that would
render the disposition of any Certificate a violation of Section 5 of the Act or
any state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of the
Certificates, except in compliance with the provisions of the Pooling and
Servicing Agreement.
6. The Purchaser
(a) is not an employee benefit plan or other plan subject to the prohibited
transaction provisions of the Employee Retirement Income Security Act of 1974,
as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of 1986, as
amended ("Plan"), or any other person (including an investment manager, a named
fiduciary or a trustee of any Plan) acting, directly or
H-2
indirectly, on behalf of or purchasing any Certificate with "plan assets" of any
Plan within the meaning of the Department of Labor ("DOL") regulation at 29
C.F.R. Section 2510.3-101;
(b) is an insurance company, the source of funds to be used by it to
purchase the Certificates is an "insurance company general account" (within the
meaning of DOL Prohibited Transaction Class Exemption ("PTCE") 95-60), and the
purchase is being made in reliance upon the availability of the exemptive relief
afforded under Sections I and III of PTCE 95-60; or
(c) 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 Certificates are permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under ERISA or
Section 4975 of the Code and will not subject the Trustee, the Company or the
Master Servicer to any obligation or liability (including obligations or
liabilities under ERISA or Section 4975 of the Code) in addition to those
undertaken in the Pooling and Servicing Agreement.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any Plan or person unless such
Plan or person meets the requirements set forth in either 6(a), (b) or (c)
above.
Very truly yours,
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
H-3
EXHIBIT I
FORM OF TRANSFEROR REPRESENTATION LETTER
_________, 20___
Residential Funding Mortgage Securities I, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
[Trustee]
Attention: Residential Funding Corporation Series ________
Re: Mortgage Pass-Through Certificates, Series ________, [Class B-]
Ladies and Gentlemen:
In connection with the sale by ____________________ (the "Seller") to
____________________ (the "Purchaser") of __________________ Initial Certificate
Principal Balance of Mortgage Pass-Through Certificates, Series ________, Class
(the "Certificates"), issued pursuant to the Series Supplement, dated as of
________________, to the Standard Terms of Pooling and Servicing Agreement dated
as of ________________ (together, the "Pooling and Servicing Agreement") among
Residential Funding Mortgage Securities I, Inc., as seller (the "Company"),
Residential Funding Corporation, as master servicer, and __________, as trustee
(the "Trustee"). The Seller hereby certifies, represents and warrants to, and
covenants with, the Company and the Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The Seller will not act, in any
manner set forth in the foregoing sentence with respect to any Certificate. The
Seller has not and will not sell or otherwise transfer any of the Certificates,
except in compliance with the provisions of the Pooling and Servicing Agreement.
I-1
Very truly yours,
----------------------------------------
(Seller)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
I-2
EXHIBIT J
[FORM OF RULE 144A INVESTMENT REPRESENTATION]
Description of Rule 144A Securities, including numbers:
----------------------------------------
----------------------------------------
----------------------------------------
----------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the
"Buyer").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby
certifies the following facts: Neither the Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the Seller,
the Trustee and the Master Servicer (as defined in the Series Supplement, dated
as of ________________, to the Standard Terms of Pooling and Servicing Agreement
dated as of ________________ (the "Agreement") among Residential Funding
Corporation as Master Servicer, Residential Funding Mortgage Securities I, Inc.
as depositor pursuant to Section 5.02 of the Agreement and __________, as
trustee, as follows:
(a) The Buyer understands that the Rule 144A Securities have not been
registered under the 1933 Act or the securities laws of any state.
(b) The Buyer considers itself a substantial, sophisticated
institutional investor having such knowledge and experience in financial
and business matters that it is capable of evaluating the merits and risks
of investment in the Rule 144A Securities.
(c) The Buyer has been furnished with all information regarding the
Rule 144A Securities that it has requested from the Seller, the Trustee or
the Servicer.
J-1
(d) Neither the Buyer nor anyone acting on its behalf has offered,
transferred, pledged, sold or otherwise disposed of the Rule 144A
Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or
other disposition of the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security from, or otherwise approached
or negotiated with respect to the Rule 144A Securities, any interest in the
Rule 144A Securities or any other similar security with, any person in any
manner, or made any general solicitation by means of general advertising or
in any other manner, or taken any other action, that would constitute a
distribution of the Rule 144A Securities under the 1933 Act or that would
render the disposition of the Rule 144A Securities a violation of Section 5
of the 1933 Act or require registration pursuant thereto, nor will it act,
nor has it authorized or will it authorize any person to act, in such
manner with respect to the Rule 144A Securities.
(e) The Buyer is a "qualified institutional buyer" as that term is
defined in Rule 144A under the 1933 Act and has completed either of the
forms of certification to that effect attached hereto as Annex 1 or Annex
2. The Buyer is aware that the sale to it is being made in reliance on Rule
144A. The Buyer is acquiring the Rule 144A Securities for its own account
or the accounts of other qualified institutional buyers, understands that
such Rule 144A Securities may be resold, pledged or transferred only (i) to
a person reasonably believed to be a qualified institutional buyer that
purchases for its own account or for the account of a qualified
institutional buyer to whom notice is given that the resale, pledge or
transfer is being made in reliance on Rule 144A, or (ii) pursuant to
another exemption from registration under the 1933 Act.
[3. The Buyer
(a) is not an employee benefit or other plan subject to the prohibited
transaction provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code of
1986, as amended (a "Plan"), or any other person (including an investment
manager, a named fiduciary or a trustee of any Plan) acting, directly or
indirectly, on behalf of or purchasing any Certificate with "plan assets"
of any Plan within the meaning of the Department of Labor ("DOL")
regulation at 29 C.F.R. Section 2510.3-101;
(b) is an insurance company, the source of funds to be used by it to
purchase the Certificates is an "insurance company general account" (within
the meaning of DOL Prohibited Transaction Class Exemption ("PTCE") 95-60),
and the purchase is being made in reliance upon the availability of the
exemptive relief afforded under Sections I and III of PTCE 95-60; or
(c) 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 Certificates are permissible under applicable law,
will not constitute or result in any non-exempt prohibited transaction
under ERISA or Section 4975 of the Code and will not subject the Trustee,
the Company or the Master Servicer to any obligation or liability
J-2
(including obligations or liabilities under ERISA or Section 4975 of the
Code) in addition to those undertaken in the Pooling and Servicing
Agreement. ]
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
------------------------------------- ----------------------------------------
Print Name of Seller Print Name of Buyer
By: By:
--------------------------------- ------------------------------------
Name: Name:
------------------------------- ----------------------------------
Title: Title:
------------------------------ ---------------------------------
Taxpayer Identification Taxpayer Identification:
No. No:
--------------------------------- ------------------------------------
Date: Date:
------------------------------- ----------------------------------
J-3
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $ in securities (except for the excluded securities referred
to below) as of the end of the Buyer's most recent fiscal year (such amount
being calculated in accordance with Rule 144A) and (ii) the Buyer satisfies the
criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank, savings and
loan association or similar institution), Massachusetts or similar business
trust, partnership, or charitable organization described in Section 501(c)(3) of
the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution organized
under the laws of any State, territory or the District of Columbia, the business
of which is substantially confined to banking and is supervised by the State or
territorial banking commission or similar official or is a foreign bank or
equivalent institution, and (b) has an audited net worth of at least $25,000,000
as demonstrated in its latest annual financial statements, a copy of which is
attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association, building
and loan association, cooperative bank, homestead association or similar
institution, which is supervised and examined by a State or Federal authority
having supervision over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section 15 of
the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary and
predominant business activity is the writing of insurance or the reinsuring of
risks underwritten by insurance companies and which is subject to supervision by
the insurance commissioner or a similar official or agency of a State or
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and maintained by a
State, its political subdivisions, or any agency or instrumentality of the State
or its political subdivisions, for the benefit of its employees.
J-4
___ ERISA Plan. The Buyer is an employee benefit plan within the meaning of
Title I of the Employee Retirement Income Security Act of 1974.
___ Investment Adviser. The Buyer is an investment adviser registered under the
Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by the U.S.
Small Business Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. The Buyer is a business development company as
defined in Section 202(a)(22) of the Investment Advisers Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or trust
company and whose participants are exclusively (a) plans established and
maintained by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the benefit of
its employees, or (b) employee benefit plans within the meaning of Title I of
the Employee Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or H.R.10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that are part of an
unsold allotment to or subscription by the Buyer, if the Buyer is a dealer,
(iii) bank deposit notes and certificates of deposit, (iv) loan participations,
(v) repurchase agreements, (vi) securities owned but subject to a repurchase
agreement and (vii) currency, interest rate and commodity swaps.
4. For purposes of determining the aggregate amount of securities owned
and/or invested on a discretionary basis by the Buyer, the Buyer used the cost
of such securities to the Buyer and did not include any of the securities
referred to in the preceding paragraph. Further, in determining such aggregate
amount, the Buyer may have included securities owned by subsidiaries of the
Buyer, but only if such subsidiaries are consolidated with the Buyer in its
financial statements prepared in accordance with generally accepted accounting
principles and if the investments of such subsidiaries are managed under the
Buyer's direction. However, such securities were not included if the Buyer is a
majority-owned, consolidated subsidiary of another enterprise and the Buyer is
not itself a reporting company under the Securities Exchange Act of 1934.
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
[ ] [ ] Will the Buyer be purchasing the Rule 144A Securities only for the
Yes No 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
J-5
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:
----------------------------------
J-6
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
The Buyer owned $ in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year (such
amount being calculated in accordance with Rule 144A).
The Buyer is part of a Family of Investment Companies which owned in the
aggregate $ in securities (other than the excluded securities referred to below)
as of the end of the Buyer's most recent fiscal year (such amount being
calculated in accordance with Rule 144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
5. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's
J-7
purchase of Rule 144A Securities will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
----------------------------------------
Print Name of Buyer
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
IF AN ADVISOR:
----------------------------------------
Print Name of Buyer
Date:
----------------------------------
J-8
EXHIBIT K
[TEXT OF AMENDMENT TO POOLING AND SERVICING
AGREEMENT PURSUANT TO SECTION 11.01(E) FOR A
LIMITED GUARANTY]
ARTICLE XII
SUBORDINATE CERTIFICATE LOSS COVERAGE; LIMITED GUARANTY
Section 12.01. Subordinate Certificate Loss Coverage; Limited Guaranty. (a)
Subject to subsection (c) below, prior to the later of the third Business Day
prior to each Distribution Date or the related Determination Date, the Master
Servicer shall determine whether it or any Sub-Servicer will be entitled to any
reimbursement pursuant to Section 4.02(a) on such Distribution Date for Advances
or Sub-Servicer Advances previously made, (which will not be Advances or
Sub-Servicer Advances that were made with respect to delinquencies which were
subsequently determined to be Excess Special Hazard Losses, Excess Fraud Losses,
Excess Bankruptcy Losses or Extraordinary Losses) and, if so, the Master
Servicer shall demand payment from Residential Funding of an amount equal to the
amount of any Advances or Sub-Servicer Advances reimbursed pursuant to Section
4.02(a), to the extent such Advances or Sub-Servicer Advances have not been
included in the amount of the Realized Loss in the related Mortgage Loan, and
shall distribute the same to the Class B Certificateholders in the same manner
as if such amount were to be distributed pursuant to Section 4.02(a).
(b) Subject to subsection (c) below, prior to the later of the third
Business Day prior to each Distribution Date or the related Determination Date,
the Master Servicer shall determine whether any Realized Losses (other than
Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses and
Extraordinary Losses) will be allocated to the Class B Certificates on such
Distribution Date pursuant to Section 4.05, and, if so, the Master Servicer
shall demand payment from Residential Funding of the amount of such Realized
Loss and shall distribute the same to the Class B Certificateholders in the same
manner as if such amount were to be distributed pursuant to Section 4.02(a);
provided, however, that the amount of such demand in respect of any Distribution
Date shall in no event be greater than the sum of (i) the additional amount of
Accrued Certificate Interest that would have been paid for the Class B
Certificateholders on such Distribution Date had such Realized Loss or Losses
not occurred plus (ii) the amount of the reduction in the Certificate Principal
Balances of the Class B Certificates on such Distribution Date due to such
Realized Loss or Losses. Notwithstanding such payment, such Realized Losses
shall be deemed to have been borne by the Certificateholders for purposes of
Section 4.05. Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses and Extraordinary Losses allocated to the Class B Certificates
will not be covered by the Subordinate Certificate Loss Obligation.
(c) Demands for payments pursuant to this Section shall be made prior to
the later of the third Business Day prior to each Distribution Date or the
related Determination Date by the Master Servicer with written notice thereof to
the Trustee. The maximum amount that Residential Funding shall be required to
pay pursuant to this Section on any Distribution Date (the "Amount Available")
shall be equal to the lesser of (X) minus the sum of (i) all previous payments
made under subsections (a) and (b) hereof and (ii) all draws under the Limited
K-1
Guaranty made in lieu of such payments as described below in subsection (d) and
(Y) the then outstanding Certificate Principal Balances of the Class B
Certificates, or such lower amount as may be established pursuant to Section
12.02. Residential Funding's obligations as described in this Section are
referred to herein as the "Subordinate Certificate Loss Obligation."
(d) The Trustee will promptly notify General Motors Acceptance Corporation
of any failure of Residential Funding to make any payments hereunder and shall
demand payment pursuant to the limited guaranty (the "Limited Guaranty"),
executed by General Motors Acceptance Corporation, of Residential Funding's
obligation to make payments pursuant to this Section, in an amount equal to the
lesser of (i) the Amount Available and (ii) such required payments, by
delivering to General Motors Acceptance Corporation a written demand for payment
by wire transfer, not later than the second Business Day prior to the
Distribution Date for such month, with a copy to the Master Servicer.
(e) All payments made by Residential Funding pursuant to this Section or
amounts paid under the Limited Guaranty shall be deposited directly in the
Certificate Account, for distribution on the Distribution Date for such month to
the Class B Certificateholders.
(f) The Company shall have the option, in its sole discretion, to
substitute for either or both of the Limited Guaranty or the Subordinate
Certificate Loss Obligation another instrument in the form of a corporate
guaranty, an irrevocable letter of credit, a surety bond, insurance policy or
similar instrument or a reserve fund; provided that (i) the Company obtains
(subject to the provisions of Section 10.01(f) as if the Company was substituted
for the Master Servicer solely for the purposes of such provision) an Opinion of
Counsel (which need not be an opinion of Independent counsel) to the effect that
obtaining such substitute corporate guaranty, irrevocable letter of credit,
surety bond, insurance policy or similar instrument or reserve fund will not
cause either (a) any federal tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860(F)(a)(1) of the Code or on "contributions after the startup date"
under Section 860(G)(d)(1) of the Code or (b) the Trust Fund to fail to qualify
as a REMIC at any time that any Certificate is outstanding, and (ii) no such
substitution shall be made unless (A) the substitute Limited Guaranty or
Subordinate Certificate Loss Obligation is for an initial amount not less than
the then current Amount Available and contains provisions that are in all
material respects equivalent to the original Limited Guaranty or Subordinate
Certificate Loss Obligation (including that no portion of the fees,
reimbursements or other obligations under any such instrument will be borne by
the Trust Fund), (B) the long term debt obligations of any obligor of any
substitute Limited Guaranty or Subordinate Certificate Loss Obligation (if not
supported by the Limited Guaranty) shall be rated at least the lesser of (a) the
rating of the long term debt obligations of General Motors Acceptance
Corporation as of the date of issuance of the Limited Guaranty and (b) the
rating of the long term debt obligations of General Motors Acceptance
Corporation at the date of such substitution and (C) the Company obtains written
confirmation from each nationally recognized credit rating agency that rated the
Class B Certificates at the request of the Company that such substitution shall
not lower the rating on the Class B Certificates below the lesser of (a) the
then-current rating assigned to the Class B Certificates by such rating agency
and (b) the original rating assigned to the Class B Certificates by such rating
agency. Any replacement of the Limited Guaranty or Subordinate Certificate Loss
Obligation pursuant to this Section shall be accompanied by a written Opinion of
Counsel to the substitute guarantor or obligor, addressed to
K-2
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 12.02. Amendments Relating to the Limited Guaranty. Notwithstanding
Sections 11.01 or 12.01: (i) the provisions of this Article XII 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 XII may be amended in any manner; in each case by written instrument
executed or consented to by the Company and Residential Funding but without the
consent of any Certificateholder and without the consent of the Master Servicer
or the Trustee being required unless any such amendment would impose any
additional obligation on, or otherwise adversely affect the interests of, the
Master Servicer or the Trustee, as applicable; provided that the Company shall
also obtain a letter from each nationally recognized credit rating agency that
rated the Class B Certificates at the request of the Company to the effect that
such amendment, reduction, deletion or cancellation will not lower the rating on
the Class B Certificates below the lesser of (a) the then-current rating
assigned to the Class B Certificates by such rating agency and (b) the original
rating assigned to the Class B Certificates by such rating agency, unless (A)
the Holder of 100% of the Class B Certificates is Residential Funding or an
Affiliate of Residential Funding, or (B) such amendment, reduction, deletion or
cancellation is made in accordance with Section 11.01(e) and, provided further
that the Company obtains (subject to the provisions of Section 10.01(f) as if
the Company was substituted for the Master Servicer solely for the purposes of
such provision), in the case of a material amendment or 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 12.02.
K-3
EXHIBIT L
[FORM OF LIMITED GUARANTY]
LIMITED GUARANTY
RESIDENTIAL FUNDING MORTGAGE SECURITIES I, INC.
Mortgage Pass-Through Certificates
Series ________
___________, 20____
[Trustee]
Attention: Residential Funding Corporation Series ________
Ladies and Gentlemen:
WHEREAS, Residential Funding Corporation, a Delaware corporation
("Residential Funding"), an indirect wholly-owned subsidiary of General Motors
Acceptance Corporation, a New York corporation ("GMAC"), plans to incur certain
obligations as described under Section 12.01 of the Series Supplement, dated as
of ________________, to the Standard Terms of Pooling and Servicing Agreement
dated as of ________________ (together, the "Servicing Agreement"), among
Residential Funding Mortgage Securities I, Inc. (the "Company"), Residential
Funding and __________ (the "Trustee") as amended by Amendment No. thereto,
dated as of, with respect to the Mortgage Pass-Through Certificates, Series
________ (the "Certificates"); and
WHEREAS, pursuant to Section 12.01 of the Servicing Agreement, Residential
Funding agrees to make payments to the Holders of the Class B Certificates with
respect to certain losses on the Mortgage Loans as described in the Servicing
Agreement; and
WHEREAS, GMAC desires to provide certain assurances with respect to the
ability of Residential Funding to secure sufficient funds and faithfully to
perform its Subordinate Certificate Loss Obligation;
NOW THEREFORE, in consideration of the premises herein contained and
certain other good and valuable consideration, the receipt of which is hereby
acknowledged, GMAC agrees as follows:
1. Provision of Funds. (a) GMAC agrees to contribute and deposit in the
Certificate Account on behalf of Residential Funding (or otherwise provide to
Residential Funding, or to cause to be made available to Residential Funding),
either directly or through a subsidiary, in any case prior to the related
Distribution Date, such moneys as may be required by Residential Funding to
perform its Subordinate Certificate Loss Obligation when and as the same arises
from time to time upon the demand of the Trustee in accordance with Section
12.01 of the Servicing Agreement.
(b) The agreement set forth in the preceding clause (a) shall be absolute,
irrevocable and unconditional and shall not be affected by the transfer by GMAC
or any other person of all
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or any part of its or their interest in Residential Funding, by any insolvency,
bankruptcy, dissolution or other proceeding affecting Residential Funding or any
other person, by any defense or right of counterclaim, set-off or recoupment
that GMAC may have against Residential Funding or any other person or by any
other fact or circumstance. Notwithstanding the foregoing, GMAC's obligations
under clause (a) shall terminate upon the earlier of (x) substitution for this
Limited Guaranty pursuant to Section 12.01(f) of the Servicing Agreement, or (y)
the termination of the Trust Fund pursuant to the Servicing Agreement.
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 12.02 of the Servicing Agreement. The obligations of GMAC under
this Limited Guaranty shall continue and remain in effect so long as the
Servicing Agreement is not modified or amended in any way that might affect the
obligations of GMAC under this Limited Guaranty without the prior written
consent of GMAC.
4. Successor. Except as otherwise expressly provided herein, the guarantee
herein set forth shall be binding upon GMAC and its respective successors.
5. Governing Law. This Limited Guaranty shall be governed by the laws of
the State of New York.
6. Authorization and Reliance. GMAC understands that a copy of this Limited
Guaranty shall be delivered to the Trustee in connection with the execution of
Amendment No. 1 to the Servicing Agreement and GMAC hereby authorizes the
Company and the Trustee to rely on the covenants and agreements set forth
herein.
7. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meaning given them in the Servicing Agreement.
8. Counterparts. This Limited Guaranty may be executed in any number of
counterparts, each of which shall be deemed to be an original and such
counterparts shall constitute but one and the same instrument.
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IN WITNESS WHEREOF, GMAC has caused this Limited Guaranty to be executed
and delivered by its respective officers thereunto duly authorized as of the day
and year first above written.
GENERAL MOTORS ACCEPTANCE CORPORATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Acknowledged by:
[Trustee], as Trustee
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
RESIDENTIAL FUNDING MORTGAGE
SECURITIES I, INC.
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
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EXHIBIT M
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
_____________, 20______
Residential Funding Mortgage Securities I, Inc.
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▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
[Trustee]
Attention: Residential Funding Corporation Series ________
Re: Mortgage Pass-Through Certificates, Series ________ Assignment of
Mortgage Loan
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
___________ (the "Trustee") to _____________________ (the "Lender") of
__________________(the "Mortgage Loan") pursuant to Section 3.13(d) of the
Series Supplement, dated as of ________________, to the Standard Terms of
Pooling and Servicing Agreement dated as of ________________ (together, the
"Pooling and Servicing Agreement") among Residential Funding Mortgage Securities
I, Inc., as seller (the "Company"), Residential Funding Corporation, as master
servicer, and the Trustee. All terms used herein and not otherwise defined shall
have the meanings set forth in the Pooling and Servicing Agreement. The Lender
hereby certifies, represents and warrants to, and covenants with, the Master
Servicer and the Trustee that:
(a) 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;
(b) 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;
M-1
(c) 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 such
assignment is at the request of the borrower under the related Mortgage Loan.
Very truly yours,
(Lender)
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT N
FORM OF REQUEST FOR EXCHANGE
[Date]
U.S. Bank National Association
U.S. Bank Corporate Trust Services
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▇▇-▇▇-▇▇▇▇
▇▇. ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Re: Residential Funding Mortgage Securities I, Inc. Mortgage Pass-Through
Certificates, Series [________]
Residential Funding Corporation, as the Holder of a ____% Percentage
Interest of the [Class/Subclass] of Class A-V Certificates, hereby requests the
Trustee to exchange the above-referenced Certificates for the Subclasses
referred to below:
1. Class A-V Certificates, corresponding to the following Uncertificated
REMIC Regular Interests: [List numbers corresponding to the related
loans and Pool Strip Rates from the Mortgage Loan Schedule]. The
Initial Subclass Notional Amount and the initial Pass-Through Rate on
the Class A-V Certificates will be $___________ and _____%,
respectively.
[2. Repeat as appropriate.]
The Subclasses requested above will represent in the aggregate all of the
Uncertificated REMIC Regular Interests represented by the Class A-V Certificates
surrendered for exchange.
The capitalized terms used but not defined herein shall have the meanings
set forth in the Pooling and Servicing Agreement, dated as of _______, among
Residential Funding Mortgage Securities I, Inc., Residential Funding Corporation
and U.S. Bank National Association, as trustee.
RESIDENTIAL FUNDING CORPORATION
By:
------------------------------------
Name:
Title:
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EXHIBIT O
FORM OF FORM 10-K CERTIFICATE
I, [identify the certifying individual], certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of the trust (the Exchange Act periodic reports) created pursuant to the
Pooling and Servicing Agreement dated __________ (the "Agreement") among
Residential Funding Mortgage Securities I, Inc., Residential Funding Corporation
(the "Master Servicer") and [Name of Trustee] (the "Trustee");
2. 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;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
4. I am responsible for reviewing the activities performed by the Master
Servicer and based on my knowledge and the compliance review conducted in
preparing the servicer compliance statement required in this report under Item
1123 of Regulation AB and except as disclosed in the Exchange Act periodic
reports, the Master Servicer has fulfilled its obligations under the Agreement;
and
5. All of the reports on assessment of compliance with servicing criteria
for asset-backed securities and their related attestation reports on assessment
of compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
Date:
------------
*
------------------------------------
[Signature]
Name:
-------------------------------
Title:
------------------------------
* - to be signed by the senior officer in charge of the servicing functions of
the Master Servicer
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EXHIBIT P
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of U.S. Bank National Association
(the "Trustee") certifies that:
1. The Trustee has performed all of the duties specifically required to be
performed by it pursuant to the provisions of the Pooling and Servicing
Agreement dated _________ (the "Agreement") by and among Residential Funding
Mortgage Securities I, Inc. (the "Company"), Residential Funding Corporation
(the "Master Servicer") and 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___.
Name:
----------------------------------
Title:
---------------------------------
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EXHIBIT Q
INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING
AGENCIES RELATING TO REPORTABLE MODIFIED MORTGAGE LOANS
Account number
Transaction Identifier
Unpaid Principal Balance prior to Modification
Next Due Date
Monthly Principal and Interest Payment
Total Servicing Advances
Current Interest Rate
Original Maturity Date
Original Term to Maturity (Months)
Remaining Term to Maturity (Months)
Trial Modification Indicator
Mortgagor Equity Contribution
Total Servicer Advances
Trial Modification 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
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EXHIBIT R
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
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REFERENCE CRITERIA
-------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
1122(d)(1)(ii) If any material servicing activities are outsourced to third
parties, policies and procedures are instituted to monitor
the third party's performance and compliance with such
servicing activities.
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain a
back-up servicer for the pool assets are maintained.
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in effect
on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of the
transaction agreements.
CASH COLLECTION AND ADMINISTRATION
1122(d)(2)(i) Payments on pool assets are deposited into the appropriate X
custodial bank accounts and related bank clearing accounts no
more than two business days following receipt, or such other
number of days specified in the transaction agreements.
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an obligor X
or to an investor are made only by authorized personnel.
1122(d)(2)(iii) Advances of funds or guarantees regarding collections,
cash flows or distributions, and any interest or other
fees charged for such advances, are made, reviewed and
approved as specified in the transaction agreements.
1122(d)(2)(iv) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g., with
respect to commingling of cash) as set forth in the
transaction agreements.
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent unauthorized
access.
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts. These
reconciliations are (A) mathematically accurate; (B) prepared
within 30 calendar days after the bank statement cutoff date,
or such other number of days specified in the transaction
agreements; (C) reviewed and approved by someone other than
the person who prepared the reconciliation; and (D) contain
explanations for reconciling items. These reconciling items
are resolved within 90 calendar days of their original
identification, or such other number of days specified in the
transaction agreements.
INVESTOR REMITTANCES AND REPORTING
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the transaction
agreements and applicable Commission requirements.
Specifically, such reports (A) are prepared in accordance
with timeframes and other terms set forth in the transaction
agreements; (B) provide information calculated in accordance
with the terms specified in the transaction agreements; (C)
are filed with the Commission as required by its rules and
regulations; and (D) agree with investors' or the trustee's
records as to the total unpaid principal balance and number
of pool assets serviced by the servicer.
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APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
-------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in X
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
1122(d)(3)(iii) Disbursements made to an investor are posted within two X
business days to the servicer's investor records, or such
other number of days specified in the transaction agreements.
1122(d)(3)(iv) Amounts remitted to investors per the investor reports agree X
with cancelled checks, or other form of payment, or custodial
bank statements.
POOL ASSET ADMINISTRATION
1122(d)(4)(i) Collateral or security on pool assets is maintained as X
required by the transaction agreements or related asset pool
documents.
1122(d)(4)(ii) Pool asset and related documents are safeguarded as required X
by the transaction agreements
1122(d)(4)(iii) Any additions, removals or substitutions to the asset
pool are made, reviewed and approved in accordance with
any conditions or requirements in the transaction
agreements.
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in
accordance with the related pool assets documents are posted
to the servicer's obligor records maintained no more than two
business days after receipt, or such other number of days
specified in the transaction agreements, and allocated to
principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
1122(d)(4)(v) The servicer's records regarding the pool assets agree with
the servicer's records with respect to an obligor's unpaid
principal balance.
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
pool asset (e.g., loan modifications or re-agings) are made,
reviewed and approved by authorized personnel in accordance
with the transaction agreements and related pool asset
documents.
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance plans,
modifications and deeds in lieu of foreclosure, foreclosures
and repossessions, as applicable) are initiated, conducted
and concluded in accordance with the timeframes or other
requirements established by the transaction agreements.
1122(d)(4)(viii) Records documenting collection efforts are maintained during
the period a pool asset is delinquent in accordance with the
transaction agreements. Such records are maintained on at
least a monthly basis, or such other period specified in the
transaction agreements, and describe the entity's activities
in monitoring delinquent pool assets including, for example,
phone calls, letters and payment rescheduling plans in cases
where delinquency is deemed temporary (e.g., illness or
unemployment).
1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool
assets with variable rates are computed based on the related
pool asset documents.
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in accordance
with the obligor's pool asset documents, on at least an
annual basis, or such other period specified in the
transaction agreements; (B) interest on such funds is paid,
or credited, to obligors in accordance with applicable pool
asset documents and state laws; and (C) such funds are
returned to the obligor within 30 calendar days of full
repayment of the related pool asset, or such other number of
days specified in the transaction agreements.
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related penalty
or expiration dates, as indicated on the appropriate bills or
notices for such payments, provided that such support has
been received by the servicer at least 30 calendar days prior
to these dates, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xii) Any late payment penalties in connection with any payment to
be made on behalf of an obligor are paid from the servicer's
funds and not charged to the obligor, unless the late payment
was due to the obligor's error or omission.
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APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
-------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted within
two business days to the obligor's records maintained by the
servicer, or such other number of days specified in the
transaction agreements.
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
1122(d)(4)(xv) Any external enhancement or other support, identified in Item
1114(a)(1) through (3) or Item 1115 of Regulation AB, is
maintained as set forth in the transaction agreements.
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