MBR&M DRAFT 7/13/06
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.,
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
JPMORGAN CHASE BANK, N.A.,
Trustee
POOLING AND SERVICING AGREEMENT
DATED AS OF JUNE 1, 2006
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
Series 2006-RS4
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
Section 1.01. Definitions................................................................................3
Section 1.02. Determination of LIBOR....................................................................50
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans..............................................................51
Section 2.02. Acceptance by Trustee.....................................................................56
Section 2.03. Representations, Warranties and Covenants of the Master Servicer and the Depositor........57
Section 2.04. Representations and Warranties of Residential Funding.....................................60
Section 2.05. Execution and Authentication of Certificates; Conveyance of REMIC Regular Interests.......61
Section 2.06. Purposes and Powers of the Trust..........................................................62
Section 2.07. Agreement Regarding Ability to Disclose...................................................63
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer........................................................63
Section 3.02. Subservicing Agreements Between Master Servicer and Subservicers; Enforcement of
Subservicers' Obligations.................................................................65
Section 3.03. Successor Subservicers....................................................................66
Section 3.04. Liability of the Master Servicer..........................................................67
Section 3.05. No Contractual Relationship Between Subservicer and Trustee or Certificateholders.........67
Section 3.06. Assumption or Termination of Subservicing Agreements by Trustee...........................67
Section 3.07. Collection of Certain Mortgage Loan Payments; Deposits to Custodial Account...............68
Section 3.08. Subservicing Accounts; Servicing Accounts.................................................70
Section 3.09. Access to Certain Documentation and Information Regarding the Mortgage Loans..............72
Section 3.10. Permitted Withdrawals from the Custodial Account..........................................72
Section 3.11. Maintenance of Primary Insurance Coverage.................................................74
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity Coverage.........................75
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TABLE OF CONTENTS
(continued)
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Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and Modification Agreements;
Certain Assignments.......................................................................76
Section 3.14. Realization Upon Defaulted Mortgage Loans.................................................78
Section 3.15. Trustee to Cooperate; Release of Mortgage Files...........................................81
Section 3.16. Servicing and Other Compensation; Eligible Master Servicing Compensation..................82
Section 3.17. Reports to the Trustee and the Depositor..................................................83
Section 3.18. Annual Statement as to Compliance and Servicing Assessment................................83
Section 3.19. Annual Independent Public Accountants' Servicing Report...................................84
Section 3.20. Right of the Depositor in Respect of the Master Servicer..................................84
Section 3.21. Advance Facility..........................................................................84
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account.......................................................................88
Section 4.02. Distributions.............................................................................89
Section 4.03. Statements to Certificateholders; Statements to Rating Agencies; Exchange Act
Reporting.................................................................................95
Section 4.04. Distribution of Reports to the Trustee and the Depositor; Advances by the
Master Servicer..........................................................................100
Section 4.05. Allocation of Realized Losses............................................................101
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged Property............................104
Section 4.07. Optional Purchase of Defaulted Mortgage Loans............................................104
Section 4.08. Limited Mortgage Loan Repurchase Right...................................................104
Section 4.09. The Yield Maintenance Agreement..........................................................105
Section 4.10. Final Maturity Reserve Trust.............................................................106
Section 4.11. Derivative Contracts.....................................................................107
Section 4.12. Tax Treatment of Yield Maintenance Payments..............................................108
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.........................................................................108
Section 5.02. Registration of Transfer and Exchange of Certificates....................................111
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates........................................116
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TABLE OF CONTENTS
(continued)
PAGE
Section 5.04. Persons Deemed Owners....................................................................116
Section 5.05. Appointment of Paying Agent..............................................................117
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master Servicer..........................117
Section 6.02. Merger or Consolidation of the Depositor or the Master Servicer; Assignment of
Rights and Delegation of Duties by Master Servicer.......................................117
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer and Others.................118
Section 6.04. Depositor and Master Servicer Not to Resign..............................................119
ARTICLE VII
DEFAULT
Section 7.01. Events of Default........................................................................119
Section 7.02. Trustee or Depositor to Act; Appointment of Successor....................................121
Section 7.03. Notification to Certificateholders.......................................................123
Section 7.04. Waiver of Events of Default..............................................................123
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee........................................................................123
Section 8.02. Certain Matters Affecting the Trustee....................................................125
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans....................................126
Section 8.04. Trustee May Own Certificates.............................................................127
Section 8.05. Master Servicer to Pay Trustee's Fees and Expenses; Indemnification......................127
Section 8.06. Eligibility Requirements for Trustee.....................................................128
Section 8.07. Resignation and Removal of the Trustee...................................................128
Section 8.08. Successor Trustee........................................................................129
Section 8.09. Merger or Consolidation of Trustee.......................................................130
Section 8.10. Appointment of Co-Trustee or Separate Trustee............................................130
Section 8.11. Appointment of Custodians................................................................131
Section 8.12. Appointment of Office or Agency..........................................................131
Section 8.13. DTC Letter of Representations............................................................132
Section 8.14. Yield Maintenance Agreement..............................................................132
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TABLE OF CONTENTS
(continued)
PAGE
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by Residential Funding or Liquidation of All Mortgage
Loans....................................................................................132
Section 9.02. Additional Termination Requirements......................................................136
Section 9.03. Termination of the Final Maturity Reserve Trust..........................................137
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.....................................................................137
Section 10.02. Master Servicer, REMIC Administrator and Trustee Indemnification.........................140
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment................................................................................141
Section 11.02. Recordation of Agreement; Counterparts...................................................144
Section 11.03. Limitation on Rights of Certificateholders...............................................144
Section 11.04. Governing Law............................................................................145
Section 11.05. Notices..................................................................................145
Section 11.06. Notices to Rating Agencies...............................................................146
Section 11.07. Severability of Provisions...............................................................147
Section 11.08. Supplemental Provisions for Resecuritization.............................................147
Section 11.09. [Reserved]...............................................................................147
Section 11.10. Third Party Beneficiaries................................................................147
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of the Parties; Reasonableness....................................................148
Section 12.02. Additional Representations and Warranties of the Trustee.................................148
Section 12.03. Information to Be Provided by the Trustee................................................149
Section 12.04. Report on Assessment of Compliance and Attestation.......................................149
Section 12.05. Indemnification; Remedies................................................................150
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EXHIBITS
--------
Exhibit A Form of Class A Certificate
Exhibit B Form of Class M Certificate
Exhibit C [Reserved]
Exhibit D Form of Class SB Certificate
Exhibit E Form of Class R Certificate
Exhibit F Form of Custodial Agreement
Exhibit G Mortgage Loan Schedule
Exhibit H Forms of Request for Release
Exhibit I-1 Form of Transfer Affidavit and Agreement
Exhibit I-2 Form of Transferor Certificate
Exhibit J Form of Investor Representation Letter
Exhibit K Form of Transferor Representation Letter
Exhibit L Text of Amendment to Pooling and Servicing Agreement
Pursuant to Section 11.01(e) for a Limited Guaranty
Exhibit M Form of Limited Guaranty
Exhibit N Form of Lender Certification for Assignment of Mortgage Loan
Exhibit O Form of Rule 144A Investment Representation
Exhibit P [Reserved]
Exhibit Q Form of ERISA Representation Letter
Exhibit R-1 Form 10-K Certification
Exhibit R-2 Form 10-K Back-up Certification
Exhibit S Information to be Provided by the Master Servicer to the
Rating Agencies Relating to Reportable Modified Mortgage Loans
Exhibit T Final Maturity Reserve Fund Schedule
Exhibit U Yield Maintenance Agreement
Exhibit V Servicing Criteria To Be Addressed In Assessment of Compliance
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This Pooling and Servicing Agreement, effective as of June 1, 2006, among
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., as depositor (together with its
permitted successors and assigns, the "Depositor"), RESIDENTIAL FUNDING
CORPORATION, as master servicer (together with its permitted successors and
assigns, the "Master Servicer"), and JPMORGAN CHASE BANK, N.A., a national
banking association organized under the laws of the United States, as trustee
(together with its permitted successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Depositor intends to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
sixteen Classes, which in the aggregate will evidence the entire beneficial
ownership interest in the Mortgage Loans (as defined herein) and certain other
related assets.
REMIC I
As provided herein, the REMIC Administrator will make an election to treat
the segregated pool of assets consisting of the Mortgage Loans and certain other
related assets (exclusive of the Final Maturity Reserve Fund and the Yield
Maintenance Agreement and any payments thereunder) subject to this Agreement as
a real estate mortgage investment conduit (a "REMIC") for federal income tax
purposes, and such segregated pool of assets will be designated as "REMIC I."
The Class R-I Certificates will represent the sole Class of "residual interests"
in REMIC I for purposes of the REMIC Provisions (as defined herein) under
federal income tax law. The following table irrevocably sets forth the
designation, remittance rate (the "Uncertificated REMIC I Pass-Through Rate")
and initial Uncertificated Principal Balance for each of the "regular interests"
in REMIC I (the "REMIC I Regular Interests"). The "latest possible maturity
date" (determined for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii)) for the REMIC I Regular Interests shall be the 360th
Distribution Date. The REMIC I Regular Interests will not be certificated.
UNCERTIFICATED REMIC I INITIAL UNCERTIFICATED REMIC I LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY DATE
----------- ----------------- ----------------- -------------
AA Variable(1) $906,500,619.40 July 25, 2036
A-1 Variable(1) $3,813,430 July 25, 2036
A-2 Variable(1) $1,011,260 July 25, 2036
A-3 Variable(1) $1,767,510 July 25, 2036
A-4 Variable(1) $738,390 July 25, 2036
M-1 Variable(1) $323,750 July 25, 2036
M-2 Variable(1) $356,130 July 25, 2036
M-3 Variable(1) $161,880 July 25, 2036
M-4 Variable(1) $152,630 July 25, 2036
M-5 Variable(1) $143,380 July 25, 2036
M-6 Variable(1) $87,880 July 25, 2036
M-7 Variable(1) $106,380 July 25, 2036
M-8 Variable(1) $87,880 July 25, 2036
M-9 Variable(1) $124,880 July 25, 2036
ZZ Variable(1) $9,624,632.70 July 25, 2036
LTX Variable(1) N/A(2) July 25, 2036
(1) Calculated in accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate" herein.
(2) The uncertificated REMIC I Regular Interest Class LTX does not have a
principal balance and will accrue interest on its Uncertificated Notional
Amount.
REMIC II
As provided herein, the REMIC Administrator will elect to treat the
segregated pool of assets consisting of the REMIC I Regular Interests as a REMIC
for federal income tax purposes, and such segregated pool of assets will be
designated as "REMIC II". The Class R-II Certificates will represent the sole
class of "residual interests" in REMIC II for purposes of the REMIC Provisions
under federal income tax law. The following table irrevocably sets forth the
designation, Pass-Through Rate, aggregate Initial Certificate Principal Balance,
certain features, Final Scheduled Distribution Date and initial ratings for each
Class of Certificates comprising the interests representing "regular interests"
in REMIC II. The "latest possible maturity date" (determined for purposes of
satisfying Treasury Regulation Section 1.860G-1(a)(4)(iii)) for each Class of
REMIC II Regular Interests shall be the 360th Distribution Date.
AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH PRINCIPAL FINAL SCHEDULED
DESIGNATION TYPE RATE BALANCE DISTRIBUTION DATE INITIAL RATINGS
----------- ---- ---- ------- ----------------- ---------------
▇▇▇▇▇'▇ S&P
Class A-1(1) Senior Adjustable(2) (3) $ 381,343,000 October 25, 2028 Aaa AAA
Class A-2(1) Senior Adjustable(2) (3) $ 101,126,000 January 25, 2031 Aaa AAA
Class A-3(1) Senior Adjustable(2) (3) $ 176,751,000 May 25, 2035 Aaa AAA
Class A-4(1) Senior Adjustable(2) (3) $ 73,839,000 July 25, 2036 Aaa AAA
2
Class M-1(1) Mezzanine Adjustable(2) (3) $ 32,375,000 July 25, 2036 Aa1 AA+
Class M-2(1) Mezzanine Adjustable(2) (3) $ 35,613,000 July 25, 2036 Aa2 AA
Class M-3(1) Mezzanine Adjustable(2) (3) $ 16,188,000 July 25, 2036 Aa3 AA-
Class M-4(1) Mezzanine Adjustable(2) (3) $ 15,263,000 July 25, 2036 A1 A+
Class M-5(1) Mezzanine Adjustable(2) (3) $ 14,338,000 Jully 25, 2036 A2 A
Class M-6(1) Mezzanine Adjustable(2) (3) $ 8,788,000 July 25, 2036 A3 A-
Class M-7(1) Mezzanine Adjustable(2) (3) $ 10,638,000 July 25, 2036 A3 BBB+
Class M-8(1) Mezzanine Adjustable(2) (3) $ 8,788,000 July 25, 2036 Baa1 BBB
Class M-9(1) Mezzanine Adjustable(2) (3) $ 12,488,000 July 25, 2036 Baa2 BBB-
Class SB Interest Subordinate Variable(4) $ 37,462,632.10 N/A N/R N/R
Class R-I Residual N/A N/A N/A N/R N/R
Class R-II Residual N/A N/A N/A N/R N/R
(1) The Class A Certificates and Class M Certificates will represent
ownership of REMIC II Regular Interests together with certain rights to
payments to be made from amounts received under the Yield Maintenance
Agreement which will be treated as an interest rate cap contract, the
payments on which will be deemed made for federal income tax purposes
outside of REMIC II.
(2) The REMIC II Regular Interests, the ownership of which is represented
by the Class A Certificates and Class M Certificates, will accrue interest
at a per annum rate equal to LIBOR plus the applicable Margin, each subject
to payment caps as described in the definition of "Pass-Through Rate" and
the provisions for the payment of Class A Basis Risk Shortfall
Carry-Forward Amounts and Class M Basis Risk Shortfall Carry-Forward
Amounts herein, which payments will not be part of the entitlement of the
REMIC II Regular Interests related to such Certificates.
(3) The Class A Certificates and Class M Certificates will also entitle
their holders to certain payments from the Holder of the Class SB
Certificates from amounts to which the related REMIC II Regular Interest
components are entitled and from amounts received under the Yield
Maintenance Agreement, which will not be a part of their ownership of the
REMIC II Regular Interests.
(4) The Class SB Certificates will accrue interest as described in the
definition of Accrued Certificate Interest. The Class SB Certificates will
not accrue interest on their Certificate Principal Balance. The Class SB
Certificates will be comprised of three REMIC II regular interests, a
principal only regular interest designated component SB-PO and two interest
only regular interest components designated as SB-IO and SB-X, which will
be entitled to distributions as set forth herein. The rights of the Holder
of the Class SB Certificates to payments from the Yield Maintenance
Agreement shall be outside and apart from its rights under the REMIC II
Regular Interests SB-IO, SB-PO and SB-X.
The Mortgage Loans have an aggregate Cut-off Date Principal Balance equal
to $925,000,632.10. The Mortgage Loans are fixed-rate and adjustable-rate, fully
amortizing, first lien mortgage loans having terms to maturity at origination or
modification of generally not more than 30 years.
In consideration of the mutual agreements herein contained, the Depositor,
the Master Servicer and the Trustee agree as follows:
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ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases, unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution Date and
the Class A Certificates and Class M Certificates, interest accrued during the
related Interest Accrual Period on the Certificate Principal Balance thereof
immediately prior to such Distribution Date at the related Pass-Through Rate for
that Distribution Date.
The amount of Accrued Certificate Interest on each Class of Certificates
shall be reduced by the amount of Prepayment Interest Shortfalls on the Mortgage
Loans during the prior calendar month (to the extent not covered by Eligible
Master Servicing Compensation pursuant to Section 3.16) and by the amount of
Relief Act Shortfalls on the Mortgage Loans during the related Due Period, in
each case to the extent allocated to that Class of Certificates pursuant to
Section 4.02(g). Accrued Certificate Interest for each Class on any Distribution
Date shall be further reduced by the interest portion of Realized Losses
allocated to any Class of Certificates pursuant to Section 4.05.
With respect to each Distribution Date and the Class SB Certificates,
interest accrued during the preceding Interest Accrual Period at the related
Pass-Through Rate for that Distribution Date on the Uncertificated Notional
Amount as specified in the definition of Pass-Through Rate, immediately prior to
such Distribution Date, reduced (except in the case of the REMIC II Regular
Interest SB-X component of the Class SB Certificates) by any interest shortfalls
with respect to the Mortgage Loans, including Prepayment Interest Shortfalls to
the extent not covered by Eligible Master Servicing Compensation pursuant to
Section 3.16 or by the Excess Cash Flow pursuant to clauses (xvi) and (xvii) of
Section 4.02(c). In addition, Accrued Certificate Interest with respect to each
Distribution Date, as to the Class SB Certificates, shall be reduced (except in
the case of the REMIC II Regular Interest SB-X component of the Class SB
Certificates) by an amount equal to the interest portion of Realized Losses
allocated to the Overcollateralization Amount pursuant to Section 4.05 hereof.
Accrued Certificate Interest on the Class A Certificates and Class M
Certificates shall accrue on the basis of a 360-day year and the actual number
of days in the related Interest Accrual Period. Accrued Certificate Interest on
the Class SB Certificates shall accrue on the basis of a 360 day year consisting
of twelve 30 day months.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and any date of
determination, the Mortgage Rate borne by the related Mortgage Note, less the
related Subservicing Fee Rate.
Adjustment Date: With respect to each adjustable-rate Mortgage Loan, each
date set forth in the related Mortgage Note on which an adjustment to the
interest rate on such Mortgage Loan becomes effective.
4
Advance: With respect 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.
Agreement: This Pooling and Servicing Agreement and all amendments hereof
and supplements hereto.
Amount Held for Future Distribution: With respect to any Distribution Date,
the total of the amounts held in the Custodial Account at the close of business
on the preceding Determination Date on account of (i) Liquidation Proceeds,
Subsequent Recoveries, REO Proceeds, Insurance Proceeds, Principal Prepayments,
Mortgage Loan purchases made pursuant to Section 2.02, 2.03, 2.04, 4.07 or 4.08
and Mortgage Loan substitutions made pursuant to Section 2.03 or 2.04 received
or made in the month of such Distribution Date (other than such Liquidation
Proceeds, Insurance Proceeds, REO Proceeds, Subsequent Recoveries and purchases
of Mortgage Loans that the Master Servicer has deemed to have been received in
the preceding month in accordance with Section 3.07(b)) and (ii) payments which
represent early receipt of scheduled payments of principal and interest due on a
date or dates subsequent to the Due Date in the related Due Period.
Appraised Value: With respect to any Mortgaged Property, one of the
following: (i) the lesser of (a) the appraised value of such Mortgaged Property
based upon the appraisal made at the time of the origination of the related
Mortgage Loan, and (b) the sales price of the Mortgaged Property at such time of
origination, (ii) in the case of a Mortgaged Property securing a refinanced or
modified Mortgage Loan, one of (1) the appraised value based upon the appraisal
made at the time of origination of the loan which was refinanced or modified,
(2) the appraised value determined in an appraisal made at the time of
refinancing or modification or (3) the sales price of the Mortgaged Property, or
(iii) with respect to the Mortgage Loans for which a broker's price opinion was
obtained, the value contained in such opinion.
Assignment: An assignment of the Mortgage, notice of transfer or equivalent
instrument, in recordable form, sufficient under the laws of the jurisdiction
wherein the related Mortgaged Property is located to reflect of record the sale
of the Mortgage Loan to the Trustee for the benefit of Certificateholders, which
assignment, notice of transfer or equivalent instrument may be in the form of
one or more blanket assignments covering Mortgages secured by Mortgaged
Properties located in the same county, if permitted by law and accompanied by an
Opinion of Counsel to that effect.
Assignment Agreement: The Assignment and Assumption Agreement, dated the
Closing Date, between Residential Funding and the Depositor relating to the
transfer and assignment of the Mortgage Loans.
5
Assignment of Proprietary Lease: With respect to a Cooperative Loan, the
assignment of the related Cooperative Lease from the Mortgagor to the originator
of the Cooperative Loan.
Available Distribution Amount: With respect to any Distribution Date, an
amount equal to (a) the sum of (i) the amount relating to the Mortgage Loans on
deposit in the Custodial Account as of the close of business on the immediately
preceding Determination Date, including any Subsequent Recoveries, and amounts
deposited in the Custodial Account in connection with the substitution of
Qualified Substitute Mortgage Loans, (ii) the amount of any Advance made on the
immediately preceding Certificate Account Deposit Date with respect to the
Mortgage Loans, (iii) any amount deposited in the Certificate Account on the
related Certificate Account Deposit Date pursuant to Section 3.12(a) in respect
of the Mortgage Loans, (iv) any amount that the Master Servicer is not permitted
to withdraw from the Custodial Account pursuant to Section 3.16(e) in respect of
the Mortgage Loans and (v) any amount deposited in the Certificate Account
pursuant to Section 4.07 or 4.08 and any amounts deposited in the Custodial
Account pursuant to Section 9.01, reduced by (b) the sum as of the close of
business on the immediately preceding Determination Date of: (w) any payments or
collections consisting of prepayment charges on the Mortgage Loans that were
received during the related Prepayment Period, (x) the Amount Held for Future
Distribution, (y) amounts permitted to be withdrawn by the Master Servicer from
the Custodial Account pursuant to clauses (ii)-(x), inclusive, of Section
3.10(a) and (z) with respect to any Distribution Date on or after the
Distribution Date in July 2016 to and including the Distribution Date in June
2026, any Final Maturity Reserve Fund Addition for that Distribution Date.
Balloon Loan: Each of the Mortgage Loans having an original term to
maturity that is shorter than the related amortization term.
Balloon Payment: With respect to any Balloon Loan, the related Monthly
Payment payable on the stated maturity date of such Balloon Loan.
Bankruptcy Code: The Bankruptcy Code of 1978, as amended.
Basis Risk Shortfall: Any Class A Basis Risk Shortfall or Class M Basis
Risk Shortfall, as applicable.
Basis Risk Shortfall Carry-Forward Amount: Any Class A Basis Risk Shortfall
Carry-Forward Amount or Class M Basis Risk Shortfall Carry-Forward Amount, as
applicable.
Book-Entry Certificate: Any Certificate registered in the name of the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or (ii) a day
on which banking institutions in the States of New York, Minnesota, Illinois,
Texas or Michigan (and such other state or states in which the Custodial Account
or the Certificate Account are at the time located) are required or authorized
by law or executive order to be closed.
Call Rights: As defined in Section 9.01(e).
6
Capitalization Reimbursement Amount: With respect to any Distribution Date,
the amount of unreimbursed Advances or Servicing Advances that were added to the
Stated Principal Balance of the related Mortgage Loans during the preceding
calendar month and reimbursed to the Master Servicer or Subservicer pursuant to
Section 3.10(a)(vii) on or prior to such Distribution Date.
Cash Liquidation: With respect to any defaulted Mortgage Loan other than a
Mortgage Loan as to which an REO Acquisition occurred, a determination by the
Master Servicer that it has received all Insurance Proceeds, Liquidation
Proceeds and other payments or cash recoveries which the Master Servicer
reasonably and in good faith expects to be finally recoverable with respect to
such Mortgage Loan.
Certificate: Any Class A Certificate, Class M Certificate, Class SB
Certificate or Class R Certificate.
Certificate Account: The account or accounts created and maintained
pursuant to Section 4.01, which shall be entitled "JPMorgan Chase Bank, N.A. as
trustee, in trust for the registered holders of Residential Asset Mortgage
Products, Inc., Mortgage Asset-Backed Pass-Through Certificates, Series
2006-RS4" and which account shall be held for the benefit of the
Certificateholders and which must be an Eligible Account.
Certificate Account Deposit Date: With respect to any Distribution Date,
the Business Day prior thereto.
Certificate Owner: With respect to a Book-Entry Certificate, the Person who
is the beneficial owner of such Certificate, as reflected on the books of an
indirect participating brokerage firm for which a Depository Participant acts as
agent, if any, and otherwise on the books of a Depository Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Class A or Class M
Certificate, on any date of determination, an amount equal to (i) the Initial
Certificate Principal Balance of such Certificate as specified on the face
thereof minus (ii) the sum of (x) the aggregate of all amounts previously
distributed with respect to such Certificate (or any predecessor Certificate)
and applied to reduce the Certificate Principal Balance thereof pursuant to
Section 4.02(c) and 4.02(d) and (y) the aggregate of all reductions in
Certificate Principal Balance deemed to have occurred in connection with
Realized Losses which were previously allocated to such Certificate (or any
predecessor Certificate) pursuant to Section 4.05, provided, that with respect
to any Distribution Date, the Certificate Principal Balance of each class of
Class A Certificates and Class M Certificates to which a Realized Loss was
previously allocated and remains unreimbursed will be increased, sequentially,
as follows: first, the Class A Certificates on a pro rata basis, then the Class
▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8
and Class M-9 Certificates, in that order, to the extent of Realized Losses
previously allocated thereto and remaining unreimbursed, but only to the extent
of Subsequent Recoveries received during the previous calendar month and
available for distribution pursuant to Section 4.02(c)(xii). With respect to
each Class SB Certificate, on any date of determination, an amount equal to the
Percentage Interest evidenced by such Certificate times an amount equal to the
excess, if any, of (A) the then aggregate Stated Principal Balance of the
Mortgage Loans
7
over (B) the then aggregate Certificate Principal Balance of the Class A
Certificates and Class M Certificates then outstanding. The Class R Certificates
will not have a Certificate Principal Balance.
Certificate Register and Certificate Registrar: The register maintained and
the registrar appointed pursuant to Section 5.02.
Certificateholder or Holder: The Person in whose name a Certificate is
registered in the Certificate Register, except that neither a Disqualified
Organization nor a Non-United States Person shall be a holder of a Class R
Certificate for any purpose hereof. Solely for the purpose of giving any consent
or direction pursuant to this Agreement, any Certificate, other than a Class R
Certificate, registered in the name of the Depositor, the Master Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be outstanding and
the Percentage Interest or Voting Rights evidenced thereby shall not be taken
into account in determining whether the requisite amount of Percentage Interests
or Voting Rights necessary to effect any such consent or direction has been
obtained. All references herein to "Holders" or "Certificateholders" shall
reflect the rights of Certificate Owners as they may indirectly exercise such
rights through the Depository and participating members thereof, except as
otherwise specified herein; provided, however, that the Trustee shall be
required to recognize as a "Holder" or "Certificateholder" only the Person in
whose name a Certificate is registered in the Certificate Register.
Class: Collectively, all of the Certificates or uncertificated interests
bearing the same designation.
Class A Basis Risk Shortfall: With respect to each Class of the Class A
Certificates and any Distribution Date for which the Pass-Through Rate for any
such Class of Certificates is equal to the Net WAC Cap Rate, the excess, if any,
of (x) Accrued Certificate Interest on that Class of Certificates on such
Distribution Date, calculated at a rate equal to LIBOR plus the related Class A
Margin, as calculated for such Distribution Date, over (y) Accrued Certificate
Interest on such Class of Class A Certificates for such Distribution Date
calculated at the Net WAC Cap Rate.
Class A Basis Risk Shortfall Carry-Forward Amount: With respect to each
Class of Class A Certificates and any Distribution Date, the sum of (a) the
aggregate amount of Class A Basis Risk Shortfall for such Class on such
Distribution Date plus (b) any Class A Basis Risk Shortfall Carry-Forward Amount
for such Class remaining unpaid from the preceding Distribution Date, plus (c)
one month's interest on the amount in clause (b) (based on the number of days in
the preceding Interest Accrual Period), to the extent previously unreimbursed by
the Excess Cash Flow pursuant to Section 4.02(c)(xvii), at a rate equal to the
related Pass-Through Rate.
Class A Certificate: Any one of the Class A-1, Class A-2, Class A-3 or
Class A-4 Certificates.
Class A Interest Distribution Amount: With respect to each Class of Class A
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed
8
to the holders of each such Class of Class A Certificates for such Distribution
Date, plus any related Accrued Certificate Interest thereon remaining unpaid
from any prior Distribution Date.
Class A Margin: With respect to the Class A-1 Certificates, initially
0.080% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.080% per
annum. With respect to the Class A-2 Certificates, initially 0.110% per annum,
and on any Distribution Date on or after the second Distribution Date after the
first possible Optional Termination Date, 0.220% per annum. With respect to the
Class A-3 Certificates, initially 0.170% per annum, and on any Distribution Date
on or after the second Distribution Date after the first possible Optional
Termination Date, 0.340% per annum. With respect to the Class A-4 Certificates,
initially 0.280% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.560% per
annum.
Class A Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the Principal
Distribution Amount for that Distribution Date or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, the lesser
of:
(i) the Principal Distribution Amount for that Distribution Date; and
(ii) the excess, if any, of (A) the aggregate Certificate Principal
Balance of the Class A Certificates immediately prior to that Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination Percentage and (2) the aggregate Stated Principal Balance of
the Mortgage Loans after giving effect to distributions to be made on that
Distribution Date and (y) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class A-1 Certificate: Any one of the Class A-1 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class A Basis Risk Shortfall Carry-Forward Amount from the
Excess Cash Flow to the extent described herein.
Class A-2 Certificate: Any one of the Class A-2 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class A Basis Risk Shortfall Carry-Forward Amount from the
Excess Cash Flow to the extent described herein.
Class A-3 Certificate: Any one of the Class A-3 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A,
9
senior to the Class M, Class SB and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to receive the Class
A Basis Risk Shortfall Carry-Forward Amount from the Excess Cash Flow to the
extent described herein.
Class A-4 Certificate: Any one of the Class A-4 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit A, senior to the Class M, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class A Basis Risk Shortfall Carry-Forward Amount from the
Excess Cash Flow to the extent described herein.
Class LTX Strip Rate: With respect to (a) each Distribution Date prior to
the Distribution Date in July 2016, zero, (b) each Distribution Date on or after
the Distribution Date in July 2016 to and including the Distribution Date in
June 2026, 0.0043% per annum, and (c) each Distribution Date thereafter, zero.
Class M Basis Risk Shortfall: With respect to the Class ▇-▇, ▇▇▇▇▇ ▇-▇,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Certificates and any Distribution Date for which the Pass-Through Rate for any
such Class of Certificates is equal to the Net WAC Cap Rate, the excess, if any,
of (x) Accrued Certificate Interest on that Class of Certificates on such
Distribution Date, using LIBOR plus the related Class M Margin, as calculated
for such Distribution Date, over (y) Accrued Certificate Interest on such Class
of Class M Certificates for such Distribution Date calculated at the Net WAC Cap
Rate.
Class M Basis Risk Shortfall Carry-Forward Amount: With respect to the
Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9 Certificates and any Distribution Date, the sum of (a)
the aggregate amount of Class M Basis Risk Shortfall for each such Class on such
Distribution Date plus (b) any Class M Basis Risk Shortfall Carry-Forward Amount
for such Classes remaining unpaid from the preceding Distribution Date, plus (c)
one month's interest on the amount in clause (b) (based on the number of days in
the preceding Interest Accrual Period), to the extent previously unreimbursed by
the Excess Cash Flow pursuant to Section 4.02(c)(xvii), at a rate equal to the
related Pass-Through Rate.
Class M Certificate: Any one of the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8 or Class M-9 Certificates.
Class M Margin: With respect to the Class M-1 Certificates, initially
0.350% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.525% per
annum. With respect to the Class M-2 Certificates, initially 0.380% per annum,
and on any Distribution Date on or after the second Distribution Date after the
first possible Optional Termination Date, 0.570% per annum. With respect to the
Class M-3 Certificates, initially 0.440% per annum, and on any Distribution Date
on or after the second Distribution Date after the first possible Optional
Termination Date, 0.660% per annum.
10
With respect to the Class M-4 Certificates, initially 0.500% per annum, and on
any Distribution Date on or after the second Distribution Date after the first
possible Optional Termination Date, 0.750% per annum. With respect to the Class
M-5 Certificates, initially 0.550% per annum, and on any Distribution Date on or
after the second Distribution Date after the first possible Optional Termination
Date, 0.825% per annum. With respect to the Class M-6 Certificates, initially
0.600% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 0.900% per
annum. With respect to the Class M-7 Certificates, initially 1.050% per annum,
and on any Distribution Date on or after the second Distribution Date after the
first possible Optional Termination Date, 1.575% per annum. With respect to the
Class M-8 Certificates, initially 1.300% per annum, and on any Distribution Date
on or after the second Distribution Date after the first possible Optional
Termination Date, 1.950% per annum. With respect to the Class M-9 Certificates,
initially 2.400% per annum, and on any Distribution Date on or after the second
Distribution Date after the first possible Optional Termination Date, 3.600% per
annum.
Class M-1 Certificate: Any one of the Class M-1 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from the
Excess Cash Flow to the extent described herein.
Class M-1 Interest Distribution Amount: With respect to the Class M-1
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-1 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount or (ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates (after taking
into account the payment of the Class A Principal Distribution Amount for
that Distribution Date) and (2) the Certificate Principal Balance of the
Class M-1 Certificates immediately prior to that Distribution Date over (B)
the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal Balance
of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.
11
Class M-2 Certificate: Any one of the Class M-2 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9, Class SB and Class R Certificates
with respect to distributions and the allocation of Realized Losses as set forth
in Section 4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC II for purposes of the REMIC Provisions and (ii) the right to
receive the Class M Basis Risk Shortfall Carry-Forward Amount from Excess Cash
Flow to the extent described herein.
Class M-2 Interest Distribution Amount: With respect to the Class M-2
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-2 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class A
Principal Distribution Amount and the Class M-1 Principal Distribution Amount or
(ii) on or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A Principal Distribution Amount and
the Class M-1 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A Certificates and Class M-1
Certificates (after taking into account the payment of the Class A
Principal Distribution Amount and the Class M-1 Principal Distribution
Amount for that Distribution Date) and (2) the Certificate Principal
Balance of the Class M-2 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-3 Certificate: Any one of the Class M-3 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-4, Class M-5, Class M-6,
Class M-7, Class M-8, Class M-9, Class SB and Class R Certificates with respect
to distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to receive the Class
M Basis Risk Shortfall Carry-Forward Amount from Excess Cash Flow to the extent
described herein.
Class M-3 Interest Distribution Amount: With respect to the Class M-3
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to
12
the holders of such Class for such Distribution Date, plus any related Accrued
Certificate Interest remaining unpaid from any prior Distribution Date.
Class M-3 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class
A, Class M-1 and Class M-2 Principal Distribution Amounts or (ii) on or after
the Stepdown Date if a Trigger Event is not in effect for that Distribution
Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A, Class M-1 and Class M-2 Principal
Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1 and Class M-2
Certificates (after taking into account the payment of the Class A, Class
M-1 and Class M-2 Principal Distribution Amounts for that Distribution
Date) and (2) the Certificate Principal Balance of the Class M-3
Certificates immediately prior to that Distribution Date over (B) the
lesser of (x) the product of (1) the applicable Subordination Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date and (y)
the excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-4 Certificate: Any one of the Class M-4 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-5, Class M-6, Class M-7,
Class M-8, Class M-9, Class SB and Class R Certificates with respect to
distributions and the allocation of Realized Losses as set forth in Section
4.05, and evidencing (i) an interest designated as a "regular interest" in REMIC
II for purposes of the REMIC Provisions and (ii) the right to receive the Class
M Basis Risk Shortfall Carry-Forward Amount from the Excess Cash Flow to the
extent described herein.
Class M-4 Interest Distribution Amount: With respect to the Class M-4
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-4 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class
A, Class M-1, Class M-2 and Class M-3 Principal Distribution Amounts or (ii) on
or after the Stepdown Date if a Trigger Event is not in effect for that
Distribution Date, the lesser of:
13
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A, Class M-1, Class M-2 and Class M-3
Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2 and
Class M-3 Certificates (after taking into account the payment of the Class
A, Class M-1, Class M-2 and Class M-3 Principal Distribution Amounts for
that Distribution Date) and (2) the Certificate Principal Balance of the
Class M-4 Certificates immediately prior to that Distribution Date over (B)
the lesser of (x) the product of (1) the applicable Subordination
Percentage and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal Balance
of the Mortgage Loans after giving effect to distributions to be made on
that Distribution Date, over the Overcollateralization Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-6, Class M-7, Class M-8,
Class M-9, Class SB and Class R Certificates with respect to distributions and
the allocation of Realized Losses as set forth in Section 4.05, and evidencing
(i) an interest designated as a "regular interest" in REMIC II for purposes of
the REMIC Provisions and (ii) the right to receive the Class M Basis Risk
Shortfall Carry-Forward Amount from Excess Cash Flow to the extent described
herein.
Class M-5 Interest Distribution Amount: With respect to the Class M-5
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-5 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class
A, Class M-1, Class M-2, Class M-3 and Class M-4 Principal Distribution Amounts
or (ii) on or after the Stepdown Date if a Trigger Event is not in effect for
that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A, Class M-1, Class M-2, Class M-3 and
Class M-4 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class
M-3 and Class M-4 Certificates (after taking into account the payment of
the Class A, Class M-1, Class M-2, Class M-3 and Class M-4 Principal
Distribution Amounts for that Distribution Date) and (2) the Certificate
Principal Balance of the Class M-5 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the
14
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-6 Certificate: Any one of the Class M-6 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-7, Class M-8, Class M-9,
Class SB and Class R Certificates with respect to distributions and the
allocation of Realized Losses as set forth in Section 4.05, and evidencing (i)
an interest designated as a "regular interest" in REMIC II for purposes of the
REMIC Provisions and (ii) the right to receive the Class M Basis Risk Shortfall
Carry-Forward Amount from Excess Cash Flow to the extent described herein.
Class M-6 Interest Distribution Amount: With respect to the Class M-6
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-6 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5 Principal
Distribution Amounts or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A, Class M-1, Class M-2, Class M-3,
Class M-4 and Class M-5 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class
M-3, Class M-4 and Class M-5 Certificates (after taking into account the
payment of the Class A, Class M-1, Class M-2, Class M-3, Class M-4 and
Class M-5 Principal Distribution Amounts for that Distribution Date) and
(2) the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to that Distribution Date over (B) the lesser of (x) the
product of (1) the applicable Subordination Percentage and (2) the
aggregate Stated Principal Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution Date and (y) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage
Loans after giving effect to distributions to be made on that Distribution
Date, over the Overcollateralization Floor.
Class M-7 Certificate: Any one of the Class M-7 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-8, Class M-9, Class SB
and Class R Certificates with respect to distributions and the allocation of
Realized Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the REMIC
Provisions and (ii) the right to receive the Class M Basis Risk Shortfall
Carry-Forward Amount from the Excess Cash Flow to the extent described herein.
15
Class M-7 Interest Distribution Amount: With respect to the Class M-7
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-7 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class M-6 Principal
Distribution Amounts or (ii) on or after the Stepdown Date if a Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5 and Class M-6 Principal Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5 and Class M-6 Certificates (after taking into
account the payment of the Class A, Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Principal Distribution Amounts for that
Distribution Date) and (2) the Certificate Principal Balance of the Class
M-7 Certificates immediately prior to that Distribution Date over (B) the
lesser of (x) the product of (1) the applicable Subordination Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date and (y)
the excess, if any, of the aggregate Stated Principal Balance of the
Mortgage Loans after giving effect to distributions to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-8 Certificate: Any one of the Class M-8 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class M-9, Class SB and Class R
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest designated as a
"regular interest" in REMIC II for purposes of the REMIC Provisions and (ii) the
right to receive the Class M Basis Risk Shortfall Carry-Forward Amount from the
Excess Cash Flow to the extent described herein.
Class M-8 Interest Distribution Amount: With respect to the Class M-8
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-8 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6 and Class
M-7 Principal Distribution Amounts or (ii) on or after the Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the lesser of:
16
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6 and Class M-7 Principal Distribution
Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Certificates (after
taking into account the payment of the Class A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6 and Class M-7 Principal Distribution
Amounts for that Distribution Date) and (2) the Certificate Principal
Balance of the Class M-8 Certificates immediately prior to that
Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-9 Certificate: Any one of the Class M-9 Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit B, senior to the Class SB Certificates and Class
R Certificates with respect to distributions and the allocation of Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest designated
as a "regular interest" in REMIC II for purposes of the REMIC Provisions and
(ii) the right to receive the Class M Basis Risk Shortfall Carry-Forward Amount
from Excess Cash Flow to the extent described herein.
Class M-9 Interest Distribution Amount: With respect to the Class M-9
Certificates and any Distribution Date, the aggregate amount of Accrued
Certificate Interest to be distributed to the holders of such Class for such
Distribution Date, plus any related Accrued Certificate Interest remaining
unpaid from any prior Distribution Date.
Class M-9 Principal Distribution Amount: With respect to any Distribution
Date (i) prior to the Stepdown Date or on or after the Stepdown Date if a
Trigger Event is in effect for that Distribution Date, the remaining Principal
Distribution Amount for that Distribution Date after distribution of the Class
A, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7
and Class M-8 Principal Distribution Amounts or (ii) on or after the Stepdown
Date if a Trigger Event is not in effect for that Distribution Date, (a) the
lesser of:
(i) the remaining Principal Distribution Amount for that Distribution
Date after distribution of the Class A, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Principal
Distribution Amounts; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate Principal Balance of the Class A, Class M-1, Class M-2, Class
M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8 Certificates
(after taking into account the payment of the Class A, Class M-1, Class
M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7 and Class M-8
Principal Distribution Amounts for that Distribution Date) and (2) the
Certificate Principal Balance of the Class M-9 Certificates immediately
prior to
17
that Distribution Date over (B) the lesser of (x) the product of (1) the
applicable Subordination Percentage and (2) the aggregate Stated Principal
Balance of the Mortgage Loans after giving effect to distributions to be
made on that Distribution Date and (y) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans after giving effect to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class R Certificates: Collectively, the Class R-I Certificates and the
Class R-II Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit E and evidencing an interest designated as a
"residual interest" in REMIC I for purposes of the REMIC Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates executed by
the Trustee and authenticated by the Certificate Registrar substantially in the
form annexed hereto as Exhibit E and evidencing an interest designated as a
"residual interest" in REMIC II for purposes of the REMIC Provisions.
Class SB Certificate: Any one of the Class SB Certificates executed by the
Trustee and authenticated by the Certificate Registrar substantially in the form
annexed hereto as Exhibit D, subordinate to the Class A Certificates and Class M
Certificates with respect to distributions and the allocation of Realized Losses
as set forth in Section 4.05, and evidencing an interest comprised of "regular
interests" in REMIC II, together with certain rights to payments under the Yield
Maintenance Agreement for purposes of the REMIC Provisions.
Closing Date: June 28, 2006.
Code: The Internal Revenue Code of 1986, as amended.
Commission: The Securities and Exchange Commission.
Cooperative: A private, cooperative housing corporation which owns or
leases land and all or part of a building or buildings, including apartments,
spaces used for commercial purposes and common areas therein and whose board of
directors authorizes, among other things, the sale of Cooperative Stock.
Cooperative Apartment: A dwelling unit in a multi-dwelling building owned
or leased by a Cooperative, which unit the Mortgagor has an exclusive right to
occupy pursuant to the terms of a proprietary lease or occupancy agreement.
Cooperative Lease: With respect to a Cooperative Loan, the proprietary
lease or occupancy agreement with respect to the Cooperative Apartment occupied
by the Mortgagor and relating to the related Cooperative Stock, which lease or
agreement confers an exclusive right to the holder of such Cooperative Stock to
occupy such apartment.
18
Cooperative Loans: Any of the Mortgage Loans made in respect of a
Cooperative Apartment, evidenced by a Mortgage Note and secured by (i) a
Security Agreement, (ii) the related Cooperative Stock Certificate, (iii) an
assignment of the Cooperative Lease, (iv) financing statements and (v) a stock
power (or other similar instrument), and ancillary thereto, a recognition
agreement between the Cooperative and the originator of the Cooperative Loan,
each of which was transferred and assigned to the Trustee pursuant to Section
2.01 and are from time to time held as part of the Trust Fund.
Cooperative Stock: With respect to a Cooperative Loan, the single
outstanding class of stock, partnership interest or other ownership instrument
in the related Cooperative.
Cooperative Stock Certificate: With respect to a Cooperative Loan, the
stock certificate or other instrument evidencing the related Cooperative Stock.
Corporate Trust Office: The principal office of the Trustee at which at any
particular time its corporate trust business with respect to this Agreement
shall be administered, which office at the date of the execution of this
instrument is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇,
Attention: Worldwide Securities Services/Structured Finance Services, RAMP,
Series 2006-RS4.
Credit Repository: Equifax, Transunion and Experian, or their successors in
interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created and maintained
pursuant to Section 3.07 in the name of a depository institution, as custodian
for the holders of the Certificates, for the holders of certain other interests
in mortgage loans serviced or sold by the Master Servicer and for the Master
Servicer, into which the amounts set forth in Section 3.07 shall be deposited
directly. Any such account or accounts shall be an Eligible Account.
Custodial Agreement: An agreement that may be entered into among the
Depositor, the Master Servicer, the Trustee and a Custodian in substantially the
form of Exhibit F hereto.
Custodian: A custodian appointed pursuant to a Custodial Agreement.
Cut-off Date: June 1, 2006.
Cut-off Date Balance: $925,000,632.10
Cut-off Date Principal Balance: With respect to any Mortgage Loan, the
unpaid principal balance thereof at the Cut-off Date after giving effect to all
installments of principal due on or prior thereto (or due during the month of
the Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a reduction in
the scheduled Monthly Payment for such Mortgage Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such a reduction
constituting a Deficient Valuation or any reduction that results in a permanent
forgiveness of principal.
19
Deficient Valuation: With respect to any Mortgage Loan, a valuation by a
court of competent jurisdiction of the Mortgaged Property in an amount less than
the then outstanding indebtedness under the Mortgage Loan, or any reduction in
the amount of principal to be paid in connection with any scheduled Monthly
Payment that constitutes a permanent forgiveness of principal, which valuation
or reduction results from a proceeding under the Bankruptcy Code.
Definitive Certificate: Any definitive, fully registered Certificate.
Deleted Mortgage Loan: A Mortgage Loan replaced or to be replaced with a
Qualified Substitute Mortgage Loan.
Delinquent: As used herein, a Mortgage Loan is considered to be: "30 to 59
days" or "30 or more days" delinquent when a payment due on any scheduled due
date remains unpaid as of the close of business on the next following monthly
scheduled due date; "60 to 89 days" or "60 or more days" delinquent when a
payment due on any scheduled due date remains unpaid as of the close of business
on the second following monthly scheduled due date; and so on. The determination
as to whether a Mortgage Loan falls into these categories is made as of the
close of business on the last business day of each month. For example, a
Mortgage Loan with a payment due on July 1 that remained unpaid as of the close
of business on August 31 would then be considered to be 30 to 59 days
delinquent. Delinquency information as of the Cut-off Date is determined and
prepared as of the close of business on the last business day immediately prior
to the Cut-off Date.
Depositor: As defined in the preamble hereto.
Depository: The Depository Trust Company, or any successor Depository
hereafter named. The nominee of the initial Depository for purposes of
registering those Certificates that are to be Book-Entry Certificates is Cede &
Co. The Depository shall at all times be a "clearing corporation" as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New York and
a "clearing agency" registered pursuant to the provisions of Section 17A of the
Exchange Act.
Depository Participant: A broker, dealer, bank or other financial
institution or other Person for whom from time to time a Depository effects
book-entry transfers and pledges of securities deposited with the Depository.
Derivative Contract: Any ISDA Master Agreement, together with the related
Schedule and Confirmation, entered into by the Trustee and a Derivative
Counterparty in accordance with Section 4.11.
Derivative Counterparty: Any counterparty to a Derivative Contract as
provided in Section 4.11.
Destroyed Mortgage Note: A Mortgage Note the original of which was
permanently lost or destroyed and has not been replaced.
20
Determination Date: With respect to any Distribution Date, the 20th day (or
if such 20th day is not a Business Day, the Business Day immediately following
such 20th day) of the month of the related Distribution Date.
Disqualified Organization: Any organization defined as a "disqualified
organization" under Section 860E(e)(5) of the Code, which includes any of the
following: (i) the United States, any State or political subdivision thereof,
any possession of the United States, or any agency or instrumentality of any of
the foregoing (other than an instrumentality which is a corporation if all of
its activities are subject to tax and, except for ▇▇▇▇▇▇▇ Mac, a majority of its
board of directors is not selected by such governmental unit), (ii) a foreign
government, any international organization, or any agency or instrumentality of
any of the foregoing, (iii) any organization (other than certain farmers'
cooperatives described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code (including the tax imposed by Section 511 of
the Code on unrelated business taxable income) and (iv) rural electric and
telephone cooperatives described in Section 1381(a)(2)(C) of the Code. A
Disqualified Organization also includes any "electing large partnership," as
defined in Section 775(a) of the Code and any other Person so designated by the
Trustee based upon an Opinion of Counsel that the holding of an Ownership
Interest in a Class R Certificate by such Person may cause any REMIC or any
Person having an Ownership Interest in any Class of Certificates (other than
such Person) to incur a liability for any federal tax imposed under the Code
that would not otherwise be imposed but for the Transfer of an Ownership
Interest in a Class R Certificate to such Person. The terms "United States",
"State" and "international organization" shall have the meanings set forth in
Section 7701 of the Code or successor provisions.
Distribution Date: The 25th day of any month beginning in the month
immediately following the month of the initial issuance of the Certificates or,
if such 25th day is not a Business Day, the Business Day immediately following
such 25th day.
DTC Letter: The Letter of Representations, dated June 28, 2006, between the
Trustee, on behalf of the Trust Fund, and the Depository.
Due Date: With respect to any Distribution Date and any Mortgage Loan, the
day during the related Due Period on which the Monthly Payment is due.
Due Period: With respect to any Distribution Date, the calendar month of
such Distribution Date.
Eligible Account: An account that is any of the following: (i) maintained
with a depository institution the debt obligations of which have been rated by
each Rating Agency in its highest rating available, or (ii) an account or
accounts in a depository institution in which such accounts are fully insured to
the limits established by the FDIC, provided that any deposits not so insured
shall, to the extent acceptable to each Rating Agency, as evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel delivered to the
Trustee and each Rating Agency) the registered Holders of Certificates have a
claim with respect to the funds in such account or a perfected first security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution with which such account is
maintained, or (iii) in the case
21
of the Custodial Account, either (A) a trust account or accounts maintained in
the corporate trust department of JPMorgan Chase Bank, N.A., or (B) an account
or accounts maintained in the corporate asset services department of JPMorgan
Chase Bank, N.A. as long as its short term debt obligations are rated P-1 (or
the equivalent) or better by each Rating Agency, and its long term debt
obligations are rated A2 (or the equivalent) or better, by each Rating Agency,
or (iv) in the case of the Certificate Account and the Insurance Account, a
trust account or accounts maintained in the corporate trust division of JPMorgan
Chase Bank, N.A., or (v) an account or accounts of a depository institution
acceptable to each Rating Agency (as evidenced in writing by each Rating Agency
that use of any such account as the Custodial Account or the Certificate Account
will not reduce the rating assigned to any Class of Certificates by such Rating
Agency below the lower of the then-current rating or the rating assigned to such
Certificates as of the Closing Date by such Rating Agency).
Eligible Master Servicing Compensation: With respect to any Distribution
Date, an amount equal to Prepayment Interest Shortfalls resulting from Principal
Prepayments in Full or Curtailments during the related Prepayment Period, but
not more than the lesser of (a) one-twelfth of 0.125% of the Stated Principal
Balance of the Mortgage Loans immediately preceding such Distribution Date and
(b) the sum of the Servicing Fee, all income and gain on amounts held in the
Custodial Account and the Certificate Account and amounts payable to the
Certificateholders with respect to such Distribution Date and servicing
compensation to which the Master Servicer may be entitled pursuant to Section
3.10(a)(v), and (vi) provided that for purposes of this definition the amount of
the Servicing Fee will not be reduced pursuant to Section 7.02(a) except as may
be required pursuant to the last sentence of such Section 7.02(a).
ERISA: The Employee Retirement Income Security Act of 1974, as amended.
Event of Default: As defined in Section 7.01.
Excess Cash Flow: With respect to the Mortgage Loans and any Distribution
Date, an amount equal to the sum of (A) the excess of (1) the Available
Distribution Amount for that Distribution Date over (2) the sum of (x) the
Interest Distribution Amount for that Distribution Date, (y) the lesser of (i)
the aggregate Certificate Principal Balance of the Class A Certificates and
Class M Certificates immediately prior to such Distribution Date and (ii) the
Principal Remittance Amount for that Distribution Date to the extent not used to
pay interest on the Class A Certificates and Class M Certificates on such
Distribution Date and (z) the Final Maturity Reserve Fund Addition for that
Distribution Date, (B) the Overcollateralization Reduction Amount, if any, for
that Distribution Date and (C) any Yield Maintenance Payment for that
Distribution Date.
Excess Overcollateralization Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Overcollateralization Amount on such Distribution
Date over (b) the Required Overcollateralization Amount for such Distribution
Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
22
▇▇▇▇▇▇ ▇▇▇: ▇▇▇▇▇▇ ▇▇▇, a federally chartered and privately owned
corporation organized and existing under the Federal National Mortgage
Association Charter Act, or any successor thereto.
FDIC: The Federal Deposit Insurance Corporation or any successor thereto.
FHA: The Federal Housing Administration, or its successor.
Final Certification: As defined in Section 2.02.
Final Distribution Date: The Distribution Date on which the final
distribution in respect of the Certificates will be made pursuant to Section
9.01, which Final Distribution Date shall in no event be later than the end of
the 90-day liquidation period described in Section 9.02.
Final Maturity Reserve Fund: As defined in Section 4.10(a) hereof.
Final Maturity Reserve Fund Addition: With respect to each Distribution
Date on or after the Distribution Date in July 2016 to and including the
Distribution Date in June 2026, the lesser of (x) a portion of the interest
collections equal to the Final Maturity Reserve Fund Rate multiplied by the
aggregate Stated Principal Balance of the Mortgage Loans, to the extent
available after payment of certain fees and expenses of the trust but before
payment of interest on the Class A Certificates and Class M Certificates, and
(y) the Final Maturity Reserve Shortfall for that Distribution Date.
Final Maturity Reserve Fund Rate: A per annum rate equal to 0.0043%.
Final Maturity Reserve Fund Schedule: With respect to each Distribution
Date on or after the Distribution Date in July 2016 to and including the
Distribution Date in June 2026, the amount set forth on Exhibit T for that
Distribution Date.
Final Maturity Reserve Fund Shortfall: With respect to any Distribution
Date, the excess of (a) the Stated Principal Balance of the Mortgage Loans
having 40-year original terms to maturity (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) over (b) amounts on deposit in the Final Maturity
Reserve Fund (after giving effect to all distributions on such Distribution Date
other than distributions from the Final Maturity Reserve Fund).
Final Maturity Reserve Trust: As defined in Section 4.10(a) hereof.
Final Maturity Reserve Trust Trustee: JPMorgan Chase Bank, N.A., not in its
individual capacity but solely in ints capacity as trustee of the Final Maturity
Reserve Trust.
23
Final Scheduled Distribution Date: Solely for purposes of the face of the
Certificates, as follows: with respect to the Class A-1 Certificates, the
Distribution Date in October 2028; with respect to the Class A-2 Certificates,
the Distribution Date in January 2031; with respect to each of the Class A-3
Certificates, the Distribution Date in May 2035; with respect to each of the
Class A-4 Certificates, the Distribution Date in July 2036; with respect to the
Class M-1 Certificates, the Distribution Date in July 2036; with respect to the
Class M-2 Certificates, the Distribution Date in July 2036; with respect to the
Class M-3 Certificates, the Distribution Date in July 2036; with respect to the
Class M-4 Certificates, the Distribution Date in July 2036; with respect to the
Class M-5 Certificates, the Distribution Date in July 2036; with respect to the
Class M-6 Certificates, the Distribution Date in July 2036; with respect to the
Class M-7 Certificates, the Distribution Date in July 2036; with respect to the
Class M-8 Certificates, the Distribution Date in July 2036; with respect to the
Class M-9 Certificates, the Distribution Date in July 2036; and with respect to
the Class SB Certificates, the Distribution Date in July 2036. No event of
default under this Agreement will arise or become applicable solely by reason of
the failure to retire the entire Certificate Principal Balance of any Class of
Class A Certificates or Class M Certificates on or before its Final Scheduled
Distribution Date.
Foreclosure Profits: With respect to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition occurred in the
related Prepayment Period over the sum of the unpaid principal balance of such
Mortgage Loan or REO Property (determined, in the case of an REO Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest at the Mortgage
Rate on such unpaid principal balance from the Due Date to which interest was
last paid by the Mortgagor to the first day of the month following the month in
which such Cash Liquidation or REO Disposition occurred.
▇▇▇▇▇▇▇ Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each adjustable rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note and indicated in Exhibit G
hereto as the "NOTE MARGIN," which percentage is added to the related Index on
each Adjustment Date to determine (subject to rounding in accordance with the
related Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the
Minimum Mortgage Rate) the interest rate to be borne by such Mortgage Loan until
the next Adjustment Date.
Independent: When used with respect to any specified Person, means such a
Person who (i) is in fact independent of the Depositor, the Master Servicer and
the Trustee, or any Affiliate thereof, (ii) does not have any direct financial
interest or any material indirect financial interest in the Depositor, the
Master Servicer or the Trustee or in an Affiliate thereof, and (iii) is not
connected with the Depositor, the Master Servicer or the Trustee as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions.
24
Index: With respect to any adjustable rate Mortgage Loan and as to any
Adjustment Date therefor, the related index as stated in the related Mortgage
Note.
Initial Certificate Principal Balance: With respect to each Class of
Certificates (other than the Class R Certificates), the Certificate Principal
Balance of such Class of Certificates as of the Closing Date as set forth in the
Preliminary Statement hereto.
Insurance Proceeds: Proceeds paid in respect of the Mortgage Loans pursuant
to any Primary Insurance Policy or any other related insurance policy covering a
Mortgage Loan, to the extent such proceeds are payable to the mortgagee under
the Mortgage, any Subservicer, the Master Servicer or the Trustee and are not
applied to the restoration of the related Mortgaged Property or released to the
Mortgagor in accordance with the procedures that the Master Servicer would
follow in servicing mortgage loans held for its own account.
Interest Accrual Period: With respect to the Class A Certificates and Class
M Certificates, (i) with respect to the Distribution Date in July 2006, the
period commencing on the Closing Date and ending on the day preceding the
Distribution Date in July 2006, and (ii) with respect to any Distribution Date
after the Distribution Date in July 2006, the period commencing on the
Distribution Date in the month immediately preceding the month in which such
Distribution Date occurs and ending on the day preceding such Distribution Date.
With respect to the Class SB Certificates and any Distribution Date, the prior
calendar month.
Interest Distribution Amount: The sum of the Class A, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8 and Class M-9
Interest Distribution Amounts.
Interested Person: As of any date of determination, the Depositor, the
Master Servicer, the Trustee, any Mortgagor, any Manager of a Mortgaged
Property, or any Person known to a Responsible Officer of the Trustee to be an
Affiliate of any of them.
Interim Certification: As defined in Section 2.02.
Late Collections: With respect to any Mortgage Loan, all amounts received
during any Due Period, whether as late payments of Monthly Payments or as
Insurance Proceeds, Liquidation Proceeds or otherwise, which represent late
payments or collections of Monthly Payments due but delinquent for a previous
Due Period and not previously recovered.
LIBOR: With respect to any Distribution Date, the arithmetic mean of the
London interbank offered rate quotations for one-month U.S. Dollar deposits,
expressed on a per annum basis, determined in accordance with Section 1.02.
LIBOR Business Day: Any day other than (i) a Saturday or Sunday or (ii) a
day on which banking institutions in London, England are required or authorized
to by law to be closed.
LIBOR Rate Adjustment Date: With respect to each Distribution Date, the
second LIBOR Business Day immediately preceding the commencement of the related
Interest Accrual Period.
25
Limited Repurchase Right Holder: RFC Asset Holdings II, Inc., or its
successor.
Liquidation Proceeds: Amounts (other than Insurance Proceeds) received by
the Master Servicer in connection with the taking of an entire Mortgaged
Property by exercise of the power of eminent domain or condemnation or in
connection with the liquidation of a defaulted Mortgage Loan through trustee's
sale, foreclosure sale or otherwise, other than REO Proceeds and Subsequent
Recoveries.
Loan-to-Value Ratio: As of any date, the fraction, expressed as a
percentage, the numerator of which is the current principal balance of the
related Mortgage Loan at the date of determination and the denominator of which
is the Appraised Value of the related Mortgaged Property.
Marker Rate: With respect to the Class SB Certificates or the REMIC II
Regular Interest SB-IO and any Distribution Date, a per annum rate equal to two
(2) multiplied by the weighted average of the Uncertificated REMIC I
Pass-Through Rates for each REMIC I Regular Interest (other than the REMIC I
Regular Interest AA and the REMIC I Regular Interest LTX) with the rates on each
such REMIC I Regular Interest (other than REMIC I Regular Interest ZZ) subject
to a cap equal to the Pass-Through Rate for the corresponding Class for such
REMIC I Regular Interest, and the rate on REMIC I Regular Interest ZZ subject to
a cap of zero, in each case for purposes of this calculation.
Maturity Date: With respect to each Class of Certificates representing
ownership of regular interest or Uncertificated Regular Interests issued by each
of REMIC I and REMIC II the latest possible maturity date, solely for purposes
of Section 1.860G-1(a)(4)(iii) of the Treasury Regulations, by which the
Certificate Principal Balance of each such Class of Certificates representing a
regular interest in the Trust Fund would be reduced to zero, which is, for each
such regular interest, the Distribution Date in July 2036, which is the
Distribution Date occurring in the month following the last scheduled monthly
payment of the Mortgage Loans.
Maximum Mortgage Rate: With respect to any adjustable rate Mortgage Loan,
the rate indicated in Exhibit G hereto as the "NOTE CEILING," which rate is the
maximum interest rate that may be applicable to such adjustable rate Mortgage
Loan at any time during the life of such Mortgage Loan.
Maximum Net Mortgage Rate: With respect to any adjustable rate Mortgage
Loan and any date of determination, the Maximum Mortgage Rate minus the sum of
(i) the Subservicing Fee Rate and (ii) the Servicing Fee Rate.
MERS: Mortgage Electronic Registration Systems, Inc., a corporation
organized and existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R) System: The system of recording transfers of Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans registered with
MERS on the MERS(R) System.
26
Minimum Mortgage Rate: With respect to any adjustable rate Mortgage Loan,
the greater of (i) the Note Margin and (ii) the rate indicated in Exhibit G
hereto as the "NOTE FLOOR", which rate may be applicable to such adjustable rate
Mortgage Loan at any time during the life of such adjustable rate Mortgage Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the subject of a
Servicing Modification.
Modified Mortgage Rate: With respect to any Mortgage Loan that is the
subject of a Servicing Modification, the Mortgage Rate, minus the rate per annum
by which the Mortgage Rate on such Mortgage Loan was reduced.
Modified Net Mortgage Rate: With respect to any Mortgage Loan that is the
subject of a Servicing Modification, the Net Mortgage Rate, minus the rate per
annum by which the Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as the mortgagee
of such Mortgage Loan, solely as nominee for the originator of such Mortgage
Loan and its successors and assigns, at the origination thereof.
Monthly Payment: With respect to any Mortgage Loan (including any REO
Property) and the Due Date in any Due Period, the payment of principal and
interest due thereon in accordance with the amortization schedule at the time
applicable thereto (after adjustment, if any, for Curtailments and for Deficient
Valuations occurring prior to such Due Date but before any adjustment to such
amortization schedule by reason of any bankruptcy, other than a Deficient
Valuation, or similar proceeding or any moratorium or similar waiver or grace
period and before any Servicing Modification that constitutes a reduction of the
interest rate on such Mortgage Loan).
Moody's: ▇▇▇▇▇'▇ Investors Service, Inc., or its successor in interest.
Mortgage: With respect to each Mortgage Note related to a Mortgage Loan,
the mortgage, deed of trust or other comparable instrument creating a first lien
on an estate in fee simple interest in real property securing a Mortgage Note.
Mortgage File: The mortgage documents listed in Section 2.01 pertaining to
a particular Mortgage Loan and any additional documents required to be added to
the Mortgage File pursuant to this Agreement.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached hereto as
Exhibit G (as amended from time to time to reflect the addition of Qualified
Substitute Mortgage Loans), which lists shall set forth at a minimum the
following information as to each Mortgage Loan:
(i) the Mortgage Loan identifying number ("RFC LOAN #");
(ii) [reserved];
27
(iii) the maturity of the Mortgage Note ("MATURITY DATE" or "MATURITY
DT") for Mortgage Loans;
(iv) the Mortgage Rate as of origination ("ORIG RATE");
(v) the Mortgage Rate as of the Cut-off Date for an adjustable rate
Mortgage Loan ("CURR RATE");
(vi) the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vii) the scheduled monthly payment of principal, if any, and interest
as of the Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I" for the
adjustable rate Mortgage Loans);
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T", "BT" or "CT" under the column "LN FEATURE," indicating
that the Mortgage Loan is secured by a second or vacation residence (the
absence of any such code means the Mortgage Loan is secured by a primary
residence);
(xi) a code "N" under the column "OCCP CODE", indicating that the
Mortgage Loan is secured by a non-owner occupied residence (the absence of
any such code means the Mortgage Loan is secured by an owner occupied
residence);
(xii) the Maximum Mortgage Rate for the adjustable rate Mortgage Loans
("NOTE CEILING");
(xiii) the Maximum Net Mortgage Rate for the adjustable rate Mortgage
Loans ("NET CEILING");
(xiv) the Note Margin for the adjustable rate Mortgage Loans ("NOTE
MARGIN");
(xv) the first Adjustment Date after the Cut-off Date for the
adjustable rate Mortgage Loans ("NXT INT CHG DT");
(xvi) the Periodic Cap for the adjustable rate Mortgage Loans
("PERIODIC DECR" or "PERIODIC INCR"); and
(xvii) (the rounding of the semi-annual or annual adjustment to the
Mortgage Rate with respect to the adjustable rate Mortgage Loans ("NOTE
METHOD").
Such schedules may consist of multiple reports that collectively set forth
all of the information required.
Mortgage Loans: Such of the Mortgage Loans transferred and assigned to the
Trustee pursuant to Section 2.01 as from time to time are held or deemed to be
held as a part of the
28
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 Note: The originally executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan,
together with any modification thereto.
Mortgage Rate: With respect to any Mortgage Loan, the interest rate borne
by the related Mortgage Note, or any modification thereto other than a Servicing
Modification. The Mortgage Rate on the adjustable rate Mortgage Loans will
adjust on each Adjustment Date to equal the sum (rounded to the nearest multiple
of one-eighth of one percent (0.125%) or up to the nearest one-eighth of one
percent, which are indicated by a "U" on Exhibit G, except in the case of the
adjustable rate Mortgage Loans indicated by an "X" on Exhibit G or hereto under
the heading "NOTE METHOD"), of the related Index plus the Note Margin, in each
case subject to the applicable Periodic Cap, Maximum Mortgage Rate and Minimum
Mortgage Rate.
Mortgaged Property: The underlying real property securing a Mortgage Loan
or, with respect to a Cooperative Loan, the related Cooperative Lease and
Cooperative Stock.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: With respect to any Mortgage Loan as of any date of
determination, a per annum rate equal to the Mortgage Rate for such Mortgage
Loan as of such date minus the sum of (i) the related Servicing Fee Rate and
(ii) the related Subservicing Fee Rate.
Net WAC Cap Rate: With respect to any Distribution Date, a per annum rate
(which will not be less than zero) equal to the excess of (i) the product of (a)
the weighted average of the Net Mortgage Rates (or, if applicable, the Modified
Net Mortgage Rates) of the Mortgage Loans using the Net Mortgage Rates in effect
for the Monthly Payments due on such Mortgage Loans during the related Due
Period, weighted on the basis of the respective Stated Principal Balances
thereof on the first day of the related Due Period and (b) a fraction expressed
as a percentage, the numerator of which is 30 and the denominator of which is
the actual number of days in the related Interest Accrual Period, over (ii) the
product of (a) a fraction expressed as a percentage the numerator of which is
the amount of any Final Maturity Reserve Fund Addition for that Distribution
Date and the denominator of which is the aggregate Stated Principal Balance of
the Mortgage Loans before giving effect to distributions of principal to be made
on that Distribution Date, and (b) 12. For all federal income tax purposes, the
Net WAC Cap Rate shall be computed as a per annum rate equal to the weighted
average of the Uncertificated REMIC I Pass-Through Rates on the REMIC I Regular
Interests (other than REMIC I Regular Interest LTX), weighted on the basis of
the Uncertificated Principal Balance of each such REMIC I Regular Interest.
29
Non-Primary Residence Loans: The Mortgage Loans designated as secured by
second or vacation residences, or by non-owner occupied residences, on the
Mortgage Loan Schedule.
Non-United States Person: Any Person other than a United States Person.
Nonrecoverable Advance: Any Advance previously made or proposed to be made
by the Master Servicer or Subservicer in respect of a Mortgage Loan (other than
a Deleted Mortgage Loan) which, in the good faith judgment of the Master
Servicer, will not, or, in the case of a proposed Advance, would not, be
ultimately recoverable by the Master Servicer from related Late Collections,
Insurance Proceeds, Liquidation Proceeds or REO Proceeds. To the extent that any
Mortgagor is not obligated under the related Mortgage documents to pay or
reimburse any portion of any Servicing Advances that are outstanding with
respect to the related Mortgage Loan as a result of a modification of such
Mortgage Loan by the Master Servicer, which forgives amounts which the Master
Servicer or Subservicer had previously advanced, and the Master Servicer
determines that no other source of payment or reimbursement for such advances is
available to it, such Servicing Advances shall be deemed to be Nonrecoverable
Advances. The determination by the Master Servicer that it has made a
Nonrecoverable Advance shall be evidenced by an Officer's Certificate delivered
to the Depositor, the Trustee and the Master Servicer setting forth such
determination, which shall include any other information or reports obtained by
the Master Servicer such as property operating statements, rent rolls, property
inspection reports and engineering reports, which may support such
determinations. Notwithstanding the above, the Trustee shall be entitled to rely
upon any determination by the Master Servicer that any Advance previously made
is a Nonrecoverable Advance or that any proposed Advance, if made, would
constitute a Nonrecoverable Advance.
Nonsubserviced Mortgage Loan: Any Mortgage Loan that, at the time of
reference thereto, is not subject to a Subservicing Agreement.
Note Margin: With respect to each adjustable rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note and indicated in Exhibit G
hereto as the "NOTE MARGIN," which percentage is added to the Index on each
Adjustment Date to determine (subject to rounding in accordance with the related
Mortgage Note, the Periodic Cap, the Maximum Mortgage Rate and the Minimum
Mortgage Rate) the interest rate to be borne by such adjustable rate Mortgage
Loan until the next Adjustment Date.
Notional Amount: With respect to the Class SB Certificates or the REMIC II
Regular Interest SB-IO, immediately prior to any Distribution Date, the
aggregate of the Uncertificated Principal Balances of the REMIC I Regular
Interests.
Officer's Certificate: A certificate signed by the Chairman of the Board,
the President, a Vice President, Assistant Vice President, Director, Managing
Director, the Treasurer, the Secretary, an Assistant Treasurer or an Assistant
Secretary of the Depositor or the Master Servicer, as the case may be, and
delivered to the Trustee, as required by this Agreement.
Opinion of Counsel: A written opinion of counsel acceptable to the Trustee
and the Master Servicer, who may be counsel for the Depositor or the Master
Servicer, provided that any opinion of counsel (i) referred to in the definition
of "Disqualified Organization" or (ii) relating
30
to the qualification of REMIC I or REMIC II as REMICs or compliance with the
REMIC Provisions must, unless otherwise specified, be an opinion of Independent
counsel.
Optional Termination Date: Any Distribution Date on or after which the
Stated Principal Balance (after giving effect to distributions to be made on
such Distribution Date) of the Mortgage Loans is less than 10.00% of the Cut-off
Date Balance.
Outstanding Mortgage Loan: With respect to the Due Date in any Due Period,
a Mortgage Loan (including an REO Property) that was not the subject of a
Principal Prepayment in Full, Cash Liquidation or REO Disposition and that was
not purchased, deleted or substituted for prior to such Due Date pursuant to
Section 2.02, 2.03, 2.04, 4.07 or 4.08.
Overcollateralization Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans before giving effect to distributions of principal to be made on such
Distribution Date over (b) the aggregate Certificate Principal Balance of the
Class A Certificates and Class M Certificates as of such date, before taking
into account distributions of principal to be made on that Distribution Date.
Overcollateralization Floor: An amount equal to the product of 0.50% and
the Cut-off Date Balance.
Overcollateralization Increase Amount: With respect to any Distribution
Date, an amount equal to the lesser of (i) the Excess Cash Flow for that
Distribution Date available to make payments pursuant to Section 4.02(c)(xiv)
and (ii) the excess, if any, of (x) the Required Overcollateralization Amount
for that Distribution Date over (y) the Overcollateralization Amount for that
Distribution Date.
Overcollateralization Reduction Amount: With respect to any Distribution
Date for which the Excess Overcollateralization Amount is, or would be, after
taking into account all other distributions to be made on such Distribution
Date, greater than zero, an amount equal to the lesser of (i) the Excess
Overcollateralization Amount for that Distribution Date and (ii) the Principal
Remittance Amount for such Distribution Date.
Ownership Interest: With respect to any Certificate, any ownership or
security interest in such Certificate, including any interest in such
Certificate as the Holder thereof and any other interest therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to the Class A Certificates and each
Interest Accrual Period, a per annum rate equal to the lesser of (i) LIBOR plus
the related Class A Margin and (ii) the Net WAC Cap Rate. With respect to the
Class M Certificates and each Interest Accrual Period, a per annum rate equal to
the least of (i) LIBOR plus the related Class M Margin and (ii) the Net WAC Cap
Rate.
With respect to the REMIC II Regular Interest SB-IO component of the Class
SB Certificates, a per annum rate equal to the percentage equivalent of a
fraction, the numerator of which is (x) the sum, for each REMIC I Regular
Interest (other than the REMIC I Regular Interest LTX), of the excess of the
Uncertificated REMIC I Pass-Through Rate for such REMIC I Regular Interest over
the Marker Rate, applied to a notional amount equal to the Uncertificated
Principal Balance of such REMIC I Regular Interest and the denominator of which
is (y) the applicable Uncertificated Notional Amount of the REMIC I Regular
Interests.
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With respect to the REMIC II Regular Interest SB-X component of the Class
SB Certificates, 100 percent of the interest distributable in respect of the
REMIC I Regular Interest LTX.
Paying Agent: JPMorgan Chase Bank, N.A., or any successor Paying Agent
appointed by the Trustee.
Percentage Interest: With respect to any Class A or Class M Certificate,
the undivided percentage ownership interest in the related Class evidenced by
such Certificate, which percentage ownership interest shall be equal to the
Initial Certificate Principal Balance thereof divided by the aggregate Initial
Certificate Principal Balance of all of the Certificates of the same Class. The
Percentage Interest with respect to a Class SB Certificate or Class R
Certificate shall be stated on the face thereof.
Periodic Cap: With respect to each adjustable rate Mortgage Loan, the
periodic rate cap that limits the increase or the decrease of the related
Mortgage Rate on any Adjustment Date pursuant to the terms of the related
Mortgage Note.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by the
United States or any agency or instrumentality thereof when such
obligations are backed by the full faith and credit of the United States;
(ii) repurchase agreements on obligations specified in clause (i)
maturing not more than one month from the date of acquisition thereof,
provided that the unsecured obligations of the party agreeing to repurchase
such obligations are at the time rated by each Rating Agency in its highest
short-term rating available;
(iii) federal funds, certificates of deposit, demand deposits, time
deposits and bankers' acceptances (which shall each have an original
maturity of not more than 90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity of more than 365 days or a
remaining maturity of more than 30 days) denominated in United States
dollars of any U.S. depository institution or trust company incorporated
under the laws of the United States or any state thereof or of any domestic
branch of a foreign depository institution or trust company; provided that
the debt obligations of such depository institution or trust company at the
date of acquisition thereof have been rated by each Rating Agency in its
highest short-term rating available; and, provided further that, if the
original maturity of such short-term obligations of a domestic branch of a
foreign depository institution or trust company shall exceed 30 days, the
short-term rating of such institution shall be A-1+ in the case of Standard
& Poor's if Standard & Poor's is a Rating Agency;
(iv) commercial paper and demand notes (having original maturities of
not more than 365 days) of any corporation incorporated under the laws of
the United States
32
or any state thereof which on the date of acquisition has been rated by
each Rating Agency in its highest short-term rating available; provided
that such commercial paper and demand notes shall have a remaining maturity
of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by each
Rating Agency in its highest long-term rating available (which may be
managed by the Trustee or one of its Affiliates); and
(vi) other obligations or securities that are acceptable to each
Rating Agency as a Permitted Investment hereunder and will not reduce the
rating assigned to any Class of Certificates by such Rating Agency below
the then-current rating by such Rating Agency, as evidenced in writing;
provided, however, that no instrument shall be a Permitted Investment if it
represents, either (1) the right to receive only interest payments with respect
to the underlying debt instrument or (2) the right to receive both principal and
interest payments derived from obligations underlying such instrument and the
principal and interest payments with respect to such instrument provide a yield
to maturity greater than 120% of the yield to maturity at par of such underlying
obligations. References herein to the highest rating available on unsecured
long-term debt shall mean AAA in the case of Standard & Poor's and Aaa in the
case of Moody's, and for purposes of this Agreement, any references herein to
the highest rating available on unsecured commercial paper and short-term debt
obligations shall mean the following: A-1+ in the case of Standard & Poor's and
P-1 in the case of Moody's; provided, however, that any Permitted Investment
that is a short-term debt obligation rated A-1 by Standard & Poor's must satisfy
the following additional conditions: (i) the total amount of debt from A-1
issuers must be limited to the investment of monthly principal and interest
payments (assuming fully amortizing collateral); (ii) the total amount of A-1
investments must not represent more than 20% of the aggregate outstanding
Certificate Principal Balance of the Certificates and each investment must not
mature beyond 30 days; (iii) the terms of the debt must have a predetermined
fixed dollar amount of principal due at maturity that cannot vary; and (iv) if
the investments may be liquidated prior to their maturity or are being relied on
to meet a certain yield, interest must be tied to a single interest rate index
plus a single fixed spread (if any) and must move proportionately with that
index. Any Permitted Investment may be purchased by or through the Trustee or
its Affiliates.
Permitted Transferee: Any Transferee of a Class R Certificate, other than a
Disqualified Organization or Non-United States Person.
Person: Any individual, corporation, limited liability company,
partnership, joint venture, association, joint-stock company, trust,
unincorporated organization or government or any agency or political subdivision
thereof.
Pool Stated Principal Balance: With respect to any date of determination,
the aggregate of the Stated Principal Balances of each Mortgage Loan that was an
Outstanding Mortgage Loan on the Due Date immediately preceding the Due Period
preceding such date of determination.
Prepayment Assumption: With respect to the Class A Certificates and Class M
Certificates, the prepayment assumption to be used for determining the accrual
of original issue
33
discount and premium and market discount on such Certificates for federal income
tax purposes, which assumes a prepayment rate of 20% HEP with respect to the
fixed-rate Mortgage Loans, and 100% PPC with respect to the adjustable-rate
Mortgage Loans.
Prepayment Interest Shortfall: With respect to any Distribution Date and
any Mortgage Loan (other than a Mortgage Loan relating to an REO Property) that
was the subject of (a) a Principal Prepayment in Full during the related
Prepayment Period, an amount equal to the excess of one month's interest at the
related Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan) on the Stated Principal Balance of such Mortgage Loan
over the amount of interest (adjusted to the related Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan)) paid by the
Mortgagor for such Prepayment Period to the date of such Principal Prepayment in
Full or (b) a Curtailment during the prior calendar month, an amount equal to
one month's interest at the related Net Mortgage Rate (or Modified Net Mortgage
Rate in the case of a Modified Mortgage Loan) on the amount of such Curtailment.
Prepayment Period: With respect to any Distribution Date, the calendar
month preceding the month of distribution.
Primary Insurance Policy: Each primary policy of mortgage guaranty
insurance as indicated by a numeric code on Exhibit G with the exception of
either code "23" or "96" under the column "MI CO CODE".
Principal Distribution Amount: With respect to any Distribution Date, the
lesser of (a) the excess of (i) the Available Distribution Amount for such
Distribution Date, plus for inclusion in Excess Cash Flow for purposes of
clauses (b)(v) and (b)(vi) below, the amounts received by the Trustee under the
Yield Maintenance Agreement for such Distribution Date, over (ii) the Interest
Distribution Amount and (b) the sum of:
(i) the principal portion of each Monthly Payment received or Advanced
with respect to the related Due Period on each Outstanding Mortgage Loan;
(ii) the Stated Principal Balance of any Mortgage Loan repurchased
during the related Prepayment Period (or deemed to have been so repurchased
in accordance with Section 3.07(b)) pursuant to Section 2.02, 2.03, 2.04,
4.07 or 4.08, the amount of any shortfall deposited in the Custodial
Account in connection with the substitution of a Deleted Mortgage Loan
pursuant to Section 2.03 or 2.04 during the related Prepayment Period and
the Stated Principal Balance of Mortgage Loans purchased pursuant to
Section 9.01 in connection with such Distribution Date, if applicable;
(iii) the principal portion of all other unscheduled collections,
other than Subsequent Recoveries, on the Mortgage Loans (including, without
limitation, Principal Prepayments in Full, Curtailments, Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during the
related Prepayment Period to the extent applied by the Master Servicer as
recoveries of principal of the Mortgage Loans pursuant to Section 3.14;
34
(iv) the lesser of (a) Subsequent Recoveries for such Distribution
Date and (b) the principal portion of any Realized Losses allocated to any
Class of Certificates on a prior Distribution Date and remaining unpaid;
(v) the lesser of (a) Excess Cash Flow for that Distribution Date (to
the extent not used pursuant to clause (iv) of this definition on such
Distribution Date) and (b) the principal portion of any Realized Losses
incurred (or deemed to have been incurred) on any Mortgage Loans in the
calendar month preceding such Distribution Date to the extent covered by
Excess Cash Flow for that Distribution Date; and
(vi) the lesser of (a) the Excess Cash Flow for such Distribution Date
(to the extent not used to cover Realized Losses pursuant to clause (iv)
and (v) of this definition on such Distribution Date) and (b) the
Overcollateralization Increase Amount for such Distribution Date to the
extent covered by Excess Cash Flow for that Distribution Date;
minus
(vii) any Overcollateralization Reduction Amount for such Distribution
Date; and
(viii) any Capitalization Reimbursement Amount for such Distribution
Date;
provided, however, that the Principal Distribution Amount on any Distribution
Date shall not be less than zero or greater than the aggregate Certificate
Principal Balance of the Class A Certificates and Class M Certificates.
Principal Prepayment: Any payment of principal or other recovery on a
Mortgage Loan, including a recovery that takes the form of Liquidation Proceeds
or Insurance Proceeds, which is received in advance of its scheduled Due Date
and is not accompanied by an amount as to interest representing scheduled
interest on such payment due on any date or dates in any month or months
subsequent to the month of prepayment.
Principal Prepayment in Full: Any Principal Prepayment made by a Mortgagor
of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date, the sum
of the amounts described in clauses (b)(i), (b)(ii) and (b)(iii) of the
definition of Principal Distribution Amount for that Distribution Date.
Program Guide: The Residential Funding Seller Guide for mortgage collateral
sellers that participate in Residential Funding's standard mortgage programs,
and Residential Funding's Servicing Guide and any other subservicing
arrangements which Residential Funding has arranged to accommodate the servicing
of the Mortgage Loans.
Purchase Price: With respect to any Mortgage Loan (or REO Property)
required to be or otherwise purchased on any date pursuant to Section 2.02,
2.03, 2.04, 4.07 or 4.08, an amount equal to the sum of (i) (a) if such Mortgage
Loan (or REO Property) is being purchased pursuant to Sections 2.02, 2.03, 2.04
or 4.07 of this Agreement, 100% of the Stated Principal Balance
35
thereof plus the principal portion of any related unreimbursed Advances or (b)
if such Mortgage Loan (or REO Property) is being purchased pursuant to Section
4.08 of this Agreement, the greater of (1) 100% of the Stated Principal Balance
thereof plus the principal portion of any related unreimbursed Advances on such
Mortgage Loan (or REO Property) and (2) the fair market value thereof plus the
principal portion of any related unreimbursed Advances and (ii) unpaid accrued
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate in the
case of a Modified Mortgage Loan) plus the rate per annum at which the Servicing
Fee is calculated, or (b) in the case of a purchase made by the Master Servicer,
at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified Mortgage Loan), in each case on the Stated Principal Balance thereof
to, but not including, the first day of the month following the month of
purchase from the Due Date to which interest was last paid by the Mortgagor.
Qualified Insurer: A mortgage guaranty insurance company duly qualified as
such under the laws of the state of its principal place of business and each
state having jurisdiction over such insurer in connection with the insurance
policy issued by such insurer, duly authorized and licensed in such states to
transact a mortgage guaranty insurance business in such states and to write the
insurance provided by the insurance policy issued by it, approved as a FNMA- or
FHLMC-approved mortgage insurer or having a claims paying ability rating of at
least "AA" or equivalent rating by a nationally recognized statistical rating
organization. Any replacement insurer with respect to a Mortgage Loan must have
at least as high a claims paying ability rating as the insurer it replaces had
on the Closing Date.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted by
Residential Funding or the Depositor for a Deleted Mortgage Loan which must, on
the date of such substitution, as confirmed in an Officers' Certificate
delivered to the Trustee, (i) have an outstanding principal balance, after
deduction of the principal portion of the monthly payment due in the month of
substitution (or in the case of a substitution of more than one Mortgage Loan
for a Deleted Mortgage Loan, an aggregate outstanding principal balance, after
such deduction), not in excess of the Stated Principal Balance of the Deleted
Mortgage Loan (the amount of any shortfall to be deposited by Residential
Funding, in the Custodial Account in the month of substitution); (ii) have a
Mortgage Rate and a Net Mortgage Rate no lower than and not more than 1% per
annum higher than the Mortgage Rate and Net Mortgage Rate, respectively, of the
Deleted Mortgage Loan as of the date of substitution; (iii) have a Loan-to-Value
Ratio at the time of substitution no higher than that of the Deleted Mortgage
Loan at the time of substitution; (iv) have a remaining term to stated maturity
not greater than (and not more than one year less than) that of the Deleted
Mortgage Loan; (v) comply with each representation and warranty set forth in
Sections 2.03 and 2.04 hereof and Section 4 of the Assignment Agreement; and
(vi) in the case of the adjustable rate Mortgage Loans, (w) have a Mortgage Rate
that adjusts with the same frequency and based upon the same Index as that of
the Deleted Mortgage Loan, (x) have a Note Margin not less than that of the
Deleted Mortgage Loan; (y) have a Periodic Rate Cap that is equal to that of the
Deleted Mortgage Loan; and (z) have a next Adjustment Date no later than that of
the Deleted Mortgage Loan.
Rating Agency: ▇▇▇▇▇'▇ and Standard & Poor's. If any agency or a successor
is no longer in existence, "Rating Agency" shall be such statistical credit
rating agency, or other comparable Person, designated by the Depositor, notice
of which designation shall be given to the Trustee and the Master Servicer.
36
Realized Loss: With respect to each Mortgage Loan (or REO Property) as to
which a Cash Liquidation or REO Disposition has occurred, an amount (not less
than zero) equal to (i) the Stated Principal Balance of the Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage Rate (or
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan) from the Due
Date as to which interest was last paid or advanced to Certificateholders up to
the last day of the month in which the Cash Liquidation (or REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan (or REO Property)
outstanding during each Due Period that such interest was not paid or advanced,
minus (iii) the proceeds, if any, received during the month in which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied as recoveries
of interest at the Net Mortgage Rate (or Modified Net Mortgage Rate in the case
of a Modified Mortgage Loan) and to principal of the Mortgage Loan, net of the
portion thereof reimbursable to the Master Servicer or any Subservicer with
respect to related Advances, Servicing Advances or other expenses as to which
the Master Servicer or Subservicer is entitled to reimbursement thereunder but
which have not been previously reimbursed. With respect to each Mortgage Loan
which is the subject of a Servicing Modification, (a) (1) the amount by which
the interest portion of a Monthly Payment or the principal balance of such
Mortgage Loan was reduced or (2) the sum of any other amounts owing under the
Mortgage Loan that were forgiven and that constitute Servicing Advances that are
reimbursable to the Master Servicer or a Subservicer, and (b) any such amount
with respect to a Monthly Payment that was or would have been due in the month
immediately following the month in which a Principal Prepayment or the Purchase
Price of such Mortgage Loan is received or is deemed to have been received. With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation. With respect
to each Mortgage Loan which has become the object of a Debt Service Reduction,
the amount of such Debt Service Reduction attributable to interest.
Notwithstanding the above, neither a Deficient Valuation nor a Debt Service
Reduction shall be deemed a Realized Loss hereunder so long as the Master
Servicer has notified the Trustee in writing that the Master Servicer is
diligently pursuing any remedies that may exist in connection with the
representations and warranties made regarding the related Mortgage Loan and
either (A) the related Mortgage Loan is not in default with regard to payments
due thereunder or (B) delinquent payments of principal and interest under the
related Mortgage Loan and any premiums on any applicable primary hazard
insurance policy and any related escrow payments in respect of such Mortgage
Loan are being advanced on a current basis by the Master Servicer or a
Subservicer, in either case without giving effect to any Debt Service Reduction.
Realized Losses allocated to the Class SB Certificates shall be allocated
first to the REMIC II Regular Interest SB-IO in reduction of the accrued but
unpaid interest thereon until such accrued and unpaid interest shall have been
reduced to zero and then to the REMIC II Regular Interest SB-PO in reduction of
the Principal Balance thereof.
Record Date: With respect to each Distribution Date and the Class A
Certificates and Class M Certificates which are Book-Entry Certificates, the
close of business on the Business Day prior to such Distribution Date.
37
With respect to each Distribution Date and the Certificates (other than the
Class A Certificates and Class M Certificates), the close of business on the
last Business Day of the month next preceding the month in which the related
Distribution Date occurs, except in the case of the first Record Date, which
shall be the Closing Date.
Reference Bank Rate: As defined in Section 1.02.
Regular Interest: Any one of the regular interests in the Trust Fund.
Regulation AB: Subpart 229.1100 - Asset Backed Securities (Regulation AB),
17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from time to time, and
subject to such clarification and interpretation as have been provided by the
Commission in the adopting release (Asset-Backed Securities, Securities Act
Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or its staff
from time to time.
Relief Act: The Servicemembers Civil Relief Act, as amended.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans resulting
from the Relief Act or similar legislation or regulations.
REMIC: A "real estate mortgage investment conduit" within the meaning of
Section 860D of the Code. As used herein, the term "REMIC" shall mean REMIC I
and REMIC II.
REMIC Administrator: Residential Funding 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 successor master servicer shall appoint
a successor REMIC Administrator, subject to assumption of the REMIC
Administrator obligations under this Agreement.
REMIC I: The segregated pool of assets subject hereto (exclusive of the
Final Maturity Reserve Fund and the Yield Maintenance Agreement and any payments
thereunder, which are not assets of any REMIC), constituting a portion of the
primary trust created hereby and to be administered hereunder, with respect to
which a separate REMIC election is to be made, consisting of: (i) the Mortgage
Loans and the related Mortgage Files; (ii) all payments on and collections in
respect of the Mortgage Loans due after the Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date) as shall be on deposit in the
Custodial Account or in the Certificate Account and identified as belonging to
the Trust Fund; (iii) property which secured a Mortgage Loan and which has been
acquired for the benefit of the Certificateholders by foreclosure or deed in
lieu of foreclosure; (iv) the hazard insurance policies and Primary Insurance
Policies pertaining to the Mortgage Loans, if any; and (v) all proceeds of
clauses (i) through (iv) above.
REMIC I Regular Interest: Any of the separate non-certificated beneficial
ownership interests in REMIC I issued hereunder and designated as a "regular
interest" in REMIC I. Each REMIC I Regular Interest shall accrue interest at the
related Uncertificated REMIC I Pass-Through Rate in effect from time to time,
and shall be entitled to distributions of principal,
38
subject to the terms and conditions hereof, in an aggregate amount equal to its
initial Uncertificated Principal Balance as set forth in the Preliminary
Statement hereto. The designations for the respective REMIC I Regular Interests
are set forth in the Preliminary Statement hereto.
REMIC I Interest Loss Allocation Amount: With respect to any Distribution
Date, an amount equal to (a) the product of (i) the aggregate Uncertificated
Principal Balance of the REMIC I Regular Interests then outstanding and (ii) the
Uncertificated Pass-Through Rate for REMIC I Regular Interest AA minus the
Marker Rate, divided by (b) 12.
REMIC I Overcollateralized Amount: With respect to any date of
determination, (i) 1% of the aggregate Uncertificated Principal Balances of the
REMIC I Regular Interests minus (ii) the aggregate Uncertificated Principal
Balances of the REMIC I Regular Interests (other than REMIC I Regular Interests
AA and ZZ), in each case as of such date of determination.
REMIC I Principal Loss Allocation Amount: With respect to any Distribution
Date, an amount equal to the product of (i) the aggregate Stated Principal
Balance of the Mortgage Loans then outstanding and (ii) 1 minus a fraction, the
numerator of which is two times the sum of the Uncertificated Principal Balances
of REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-1, M-2, ▇-▇, ▇-▇, ▇-▇, ▇-▇,
▇-▇, M-8 and M-9 and the denominator of which is the sum of the Uncertificated
Principal Balances of ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-6, M-7,
M-8, M-9 and ZZ.
REMIC I Regular Interest AA: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest A-1: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest A-2: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest A-3: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest A-4: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
39
REMIC I Regular Interest LTX : A regular interest in REMIC I that is held
as an asset of REMIC II, that has no initial or other principal balance, that
bears interest at the related Uncertificated REMIC I Pass-Through Rate applied
to its applicable Uncertificated Notional Amount, and that has such other terms
as are described herein.
REMIC I Regular Interest M-1: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-2: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-3: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-4: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-5: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-6: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-7: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-8: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest M-9: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal Balance, that bears interest at the related
Uncertificated REMIC I Pass-Through Rate, and that has such other terms as are
described herein.
REMIC I Regular Interest ZZ: A regular interest in REMIC I that is held as
an asset of REMIC II, that has an initial principal balance equal to the related
Uncertificated Principal
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Balance, that bears interest at the related Uncertificated REMIC I Pass-Through
Rate, and that has such other terms as are described herein.
REMIC I Regular Interest ZZ Maximum Interest Deferral Amount: With respect
to any Distribution Date, the excess of (i) Uncertificated Accrued Interest
calculated with the REMIC I Regular Interest ZZ Uncertificated Pass-Through Rate
and an Uncertificated Principal Balance equal to the excess of (x) the
Uncertificated Principal Balance of REMIC I Regular Interest ZZ over (y) the
REMIC I Overcollateralized Amount, in each case for such Distribution Date, over
(ii) the sum of Uncertificated Accrued Interest on REMIC I Regular Interest A-1
through REMIC I Regular Interest M-9, with the rate on each such REMIC I Regular
Interest subject to a cap equal to the Pass-Through Rate for the corresponding
Class for the purpose of this calculation.
REMIC II: The segregated pool of assets described in the Preliminary
Statement.
REMIC II Regular Interest: Any "regular interest" issued by REMIC II the
ownership of which is evidenced by a Class A Certificate, a Class M Certificate
or the Class SB Certificate.
REMIC II Regular Interest SB-IO: A separate non-certificated regular
interest of REMIC II designated as a REMIC II Regular Interest. REMIC II Regular
Interest SB-IO shall have no entitlement to principal and shall be entitled to
distributions of interest pursuant to the terms and conditions hereof.
REMIC II Regular Interest SB-PO: A separate non-certificated regular
interest of REMIC II designated as a REMIC II Regular Interest. REMIC II Regular
Interest SB-PO shall have no entitlement to interest and shall be entitled to
distributions of principal subject to the terms and conditions hereof, in an
aggregate amount equal to principal distributable with respect to the Class SB
Certificates pursuant to the terms and conditions hereof.
REMIC II Regular Interest SB-X: A separate non-certificated regular
interest of REMIC II designated as a REMIC II Regular Interest. REMIC II Regular
Interest SB-X shall have no entitlement to principal and shall be entitled to
distributions of interest pursuant to the terms and conditions hereof.
REMIC Provisions: Provisions of the federal income tax law relating to real
estate mortgage investment conduits, which appear at Sections 860A through 860G
of Subchapter M of Chapter 1 of the Code, and related provisions, and temporary
and final regulations (or, to the extent not inconsistent with such temporary or
final regulations, proposed regulations) and published rulings, notices and
announcements promulgated thereunder, as the foregoing may be in effect from
time to time.
REMIC Regular Interests: the REMIC I Regular Interests and REMIC II Regular
Interests.
REO Acquisition: The acquisition by the Master Servicer on behalf of the
Trustee for the benefit of the Certificateholders of any REO Property pursuant
to Section 3.14.
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REO Disposition: With respect to any REO Property, a determination by the
Master Servicer that it has received substantially all Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and recoveries (including
proceeds of a final sale) which the Master Servicer expects to be finally
recoverable from the sale or other disposition of the REO Property.
REO Imputed Interest: With respect to any REO Property, for any period, an
amount equivalent to interest (at a rate equal to the sum of the Net Mortgage
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of any REO
Property (including, without limitation, proceeds from the rental of the related
Mortgaged Property or with respect to a Cooperative Loan, the related
Cooperative Apartment) which proceeds are required to be deposited into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master Servicer, on
behalf of the Trust Fund for the benefit of the Certificateholders pursuant to
Section 3.14, through foreclosure or deed in lieu of foreclosure in connection
with a defaulted Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (i) has been
subject to an interest rate reduction, (ii) has been subject to a term extension
or (iii) has had amounts owing on such Mortgage Loan capitalized by adding such
amount to the Stated Principal Balance of such Mortgage Loan; provided, however,
that a Mortgage Loan modified in accordance with clause (i) above for a
temporary period shall not be a Reportable Modified Mortgage Loan if such
Mortgage Loan has not been delinquent in payments of principal and interest for
six months since the date of such modification if that interest rate reduction
is not made permanent thereafter.
Repurchase Event: As defined in the Assignment Agreement.
Request for Release: A request for release, the form of which is attached
as Exhibit H hereto, or an electronic request in a form acceptable to the
Custodian.
Required Insurance Policy: With respect to any Mortgage Loan, any insurance
policy which is required to be maintained from time to time under this
Agreement, the Program Guide or the related Subservicing Agreement in respect of
such Mortgage Loan.
Required Overcollateralization Amount: With respect to any Distribution
Date, (a) if such Distribution Date is prior to the Stepdown Date, 4.05% of the
Cut-off Date Balance, or (b) if such Distribution Date is on or after the
Stepdown Date, the greater of (i) 8.10% of the then current aggregate Stated
Principal Balance of the Mortgage Loans as of the end of the related Due Period
and (ii) the Overcollateralization Floor; provided, however, that if a Trigger
Event is in effect, the Required Overcollateralization Amount shall be equal to
the Required Overcollateralization Amount for the immediately preceding
Distribution Date. The Required Overcollateralization Amount may be reduced from
time to time with notification to the Rating Agencies.
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Residential Funding: Residential Funding Corporation, a Delaware
corporation, in its capacity as seller of the Mortgage Loans to the Depositor
and not in its capacity as Master Servicer, and any successor thereto.
Responsible Officer: When used with respect to the Trustee or Final
Maturity Reserve Trust Trustee, any officer of the Worldwide Securities
Services/Structured Finance Services Department of the Trustee or Final Maturity
Reserve Trust Trustee, including any Senior Vice President, any Vice President,
any Assistant Vice President, any Assistant Secretary, any Trust Officer or
Assistant Trust Officer, or any other officer of the Trustee or Final Maturity
Reserve Trust Trustee, in each case, with direct responsibility for the
administration of this Agreement.
RFC Exemption: As defined in Section 5.02(e)(ii).
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect from
time to time.
Securities Act: Securities Act of 1933, as amended.
Security Agreement: With respect to a Cooperative Loan, the agreement
creating a security interest in favor of the originator in the related
Cooperative Stock.
Securitization Transaction: Any transaction involving a sale or other
transfer of mortgage loans directly or indirectly to an issuing entity in
connection with an issuance of publicly offered or privately placed, rated or
unrated mortgage-backed securities.
Senior Enhancement Percentage: For any Distribution Date, the fraction,
expressed as a percentage, the numerator of which is (x) the sum of (i) the
aggregate Certificate Principal Balance of the Class M Certificates and (ii) the
Overcollateralization Amount, in each case prior to the distribution of the
Principal Distribution Amount on such Distribution Date and the denominator of
which is (y) the aggregate Stated Principal Balance of the Mortgage Loans after
giving effect to distributions to be made on that Distribution Date.
Servicing Accounts: The account or accounts created and maintained pursuant
to Section 3.08.
Servicing Advances: All customary, reasonable and necessary "out of pocket"
costs and expenses incurred in connection with a default, delinquency or other
unanticipated event by the Master Servicer or a Subservicer in the performance
of its servicing obligations, including, but not limited to, the cost of (i) the
preservation, restoration and protection of a Mortgaged Property (or, with
respect to a Cooperative Loan, the related Cooperative Apartment), (ii) any
enforcement or judicial proceedings, including foreclosures, including any
expenses incurred in relation to any such proceedings that result from the
Mortgage Loan being registered on the MERS System, (iii) the management and
liquidation of any REO Property, (iv) any mitigation procedures implemented in
accordance with Section 3.07 and (v) compliance with the obligations under
Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the Master Servicer
or any Affiliate of the Master Servicer provides services such as appraisals and
brokerage services that are customarily provided by Persons other than servicers
of mortgage loans, reasonable compensation for such services.
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Servicing Criteria: The "servicing criteria" set forth in Item 1122(d) of
Regulation AB, as such may be amended from time to time.
Servicing Fee: With respect to any Mortgage Loan and Distribution Date, the
fee payable monthly to the Master Servicer in respect of master servicing
compensation that accrues at an annual rate equal to the Servicing Fee Rate
multiplied by the Stated Principal Balance of such Mortgage Loan as of the
related Due Date in the related Due Period, as may be adjusted pursuant to
Section 3.16(e).
Servicing Fee Rate: With respect to any Mortgage Loan, the per annum rate
designated on the Mortgage Loan Schedule as the "MSTR SERV FEE" as may be
adjusted with respect to successor Master Servicers as provided in Section 7.02,
which rate shall never be greater than the Mortgage Rate of such Mortgage Loan.
Servicing Modification: Any reduction of the interest rate on or the Stated
Principal Balance of a Mortgage Loan, any extension of the final maturity date
of a Mortgage Loan, and any increase to the Stated Principal Balance of a
Mortgage Loan by adding to the Stated Principal Balance unpaid principal and
interest and other amounts owing under the Mortgage Loan, in each case pursuant
to a modification of a Mortgage Loan that is in default, or for which, in the
judgment of the Master Servicer, default is reasonably foreseeable in accordance
with Section 3.07(a).
Servicing Officer: Any officer of the Master Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and specimen signature appear on a list of servicing officers furnished to
the Trustee on the Closing Date by the Master Servicer, as such list may from
time to time be amended.
Sixty-Plus Delinquency Percentage: With respect to any Distribution Date
and the Mortgage Loans, the arithmetic average, for each of the three
Distribution Dates ending with such Distribution Date, of the fraction,
expressed as a percentage, equal to (x) the aggregate Stated Principal Balance
of the Mortgage Loans that are 60 or more days delinquent in payment of
principal and interest for that Distribution Date, including Mortgage Loans in
bankruptcy that are 60 or more days delinquent, foreclosure and REO Properties,
over (y) the aggregate Stated Principal Balance of all of the Mortgage Loans
immediately preceding that Distribution Date.
Standard & Poor's: Standard & Poor's Ratings Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its successors in interest.
Startup Date: The day designated as such pursuant to Article X hereof.
Stated Principal Balance: With respect to any Mortgage Loan or related REO
Property, at any given time, (i) the sum of (a) the Cut-off Date Principal
Balance of the Mortgage Loan, and (b) any amount by which the Stated Principal
Balance of the Mortgage Loan has been increased pursuant to a Servicing
Modification, minus (ii) the sum of (a) the principal portion of the Monthly
Payments due with respect to such Mortgage Loan or REO Property during each Due
Period commencing on the first Due Period after the Cut-Off Date and ending with
the Due Period related to the 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
44
REO Property, and all Insurance Proceeds, Liquidation Proceeds and REO Proceeds,
to the extent applied by the Master Servicer as recoveries of principal in
accordance with Section 3.14 with respect to such Mortgage Loan or REO Property,
in each case which were distributed pursuant to Section 4.02 or 4.03 on any
previous Distribution Date, and (c) any Realized Loss incurred with respect to
such Mortgage Loan allocated to Certificateholders with respect thereto for any
previous Distribution Date.
Stepdown Date: The Distribution Date which is the earlier to occur of (i)
the Distribution Date immediately succeeding the Distribution Date on which the
aggregate Certificate Principal Balance of the Class A Certificates has been
reduced to zero or (ii) the later to occur of (x) the Distribution Date
occurring in July 2009 and (y) the first Distribution Date on which the Senior
Enhancement Percentage is equal to or greater than 41.50%.
Subordination: The provisions described in Section 4.05 relating to the
allocation of Realized Losses.
Subordination Percentage: With respect to the Class A Certificates, 58.50%;
with respect to the Class M-1 Certificates, 65.50%; with respect to the Class
M-2 Certificates, 73.20%; with respect to the Class M-3 Certificates, 76.70%;
with respect to the Class M-4 Certificates, 80.00%; with respect to the Class
M-5 Certificates, 83.10%; with respect to the Class M-6 Certificates, 85.00%;
with respect to the Class M-7 Certificates, 87.30%; with respect to the Class
M-8 Certificates, 89.20%; and with respect to the Class M-9 Certificates,
91.90%.
Subsequent Recoveries: As of any Distribution Date, amounts received by the
Master Servicer (net of any related expenses permitted to be reimbursed pursuant
to Section 3.10) or surplus amounts held by the Master Servicer to cover
estimated expenses (including, but not limited to, recoveries in respect of the
representations and warranties made by the related Seller pursuant to the
applicable Seller's Agreement and assigned to the Trustee pursuant to Section
2.04) specifically related to a Mortgage Loan that was the subject of a Cash
Liquidation or an REO Disposition prior to the related Prepayment Period and
that resulted in a Realized Loss.
Subserviced Mortgage Loan: Any Mortgage Loan that, at the time of reference
thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has entered into a
Subservicing Agreement and who generally satisfied the requirements set forth in
the Program Guide in respect of the qualification of a Subservicer as of the
date of its approval as a Subservicer by the Master Servicer.
Subservicer Advance: Any delinquent installment of principal and interest
on a Mortgage Loan which is advanced by the related Subservicer (net of its
Subservicing Fee) pursuant to the Subservicing Agreement.
Subservicing Account: An account established by a Subservicer in accordance
with Section 3.08.
45
Subservicing Agreement: The written contract between the Master Servicer
and any Subservicer relating to servicing and administration of certain Mortgage
Loans as provided in Section 3.02, generally in the form of the servicer
contract referred to or contained in the Program Guide or in such other form as
has been approved by the Master Servicer and the Depositor.
Subservicing Fee: With respect to any Mortgage Loan, the fee payable
monthly to the related Subservicer (or, in the case of a Nonsubserviced Mortgage
Loan, to the Master Servicer) in respect of subservicing and other compensation
that accrues with respect to each Distribution Date at an annual rate equal to
the Subservicing Fee Rate multiplied by the Stated Principal Balance of such
Mortgage Loan as of the related Due Date in the related Due Period.
Subservicing Fee Rate: The per annum rate designated on the Mortgage Loan
Schedule as the "SUBSERV FEE".
Supplemental Final Maturity Reserve Amount: With respect to any
Distribution Date (i) prior to the Distribution Date in July 2026, zero, and
(ii) on and after the Distribution Date in July 2026 to and including the
earlier of (a) the Final Scheduled Distribution Date, and (b) the termination of
the trust, the excess of (1) the Stated Principal Balance of the Mortgage Loans
having 40-year original terms to maturity (after giving effect to scheduled
payments of principal due during the related Due Period, to the extent received
or advanced, and unscheduled collections of principal received during the
related Prepayment Period) over (2) the sum of (A) amounts on deposit in the
Final Maturity Reserve Fund and (B) the Overcollateralization Amount with
respect to such Distribution Date (in each case, after giving effect to all
other distributions on that Distribution Date).
Tax Returns: The federal income tax return on Internal Revenue Service Form
1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including
Schedule Q thereto, Quarterly Notice to Residual Interest Holders of REMIC
Taxable Income or Net Loss Allocation, or any successor forms, to be filed on
behalf of any REMIC due to its classification as a REMIC under the REMIC
Provisions, together with any and all other information, reports or returns that
may be required to be furnished to the Certificateholders or filed with the
Internal Revenue Service or any other governmental taxing authority under any
applicable provisions of federal, state or local tax laws.
Telerate Screen Page 3750: As defined in Section 1.02.
Transaction Party: As defined in Section 12.02(a).
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.
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Trigger Event: A Trigger Event is in effect with respect to any
Distribution Date if either (i) with respect to any Distribution Date, the
three-month average of the Sixty-Plus Delinquency Percentage, as determined on
that Distribution Date and the immediately preceding two Distribution Dates,
equals or exceeds 30.75% of the Senior Enhancement Percentage or (ii) the
aggregate amount of Realized Losses on the Mortgage Loans as a percentage of the
Cut-off Date Balance exceeds the applicable amount set forth below:
sJuly 2008 to June 2009 1.55% with respect to July 2008, plus an
additional 1/12th of 1.95% for each month
thereafter.
July 2009 to June 2010 3.50% with respect to July 2009, plus an
additional 1/12th of 2.05% for each month
thereafter.
July 2010 to June 2011 5.55% with respect to July 2010, plus an
additional 1/12th of 1.65% for each month
thereafter.
July 2011 to June 2012 7.20% with respect to July 2011, plus an
additional 1/12th of 0.90% for each month
thereafter.
July 2012 to June 2013 8.10% with respect to July 2012, plus an
additional 1/12th of 0.15% for each month
thereafter.
July 2013 and thereafter 8.25%.
Trust Fund: The segregated pool of assets subject hereto, consisting of:
(i) the Mortgage Loans and the related Mortgage Files; (ii) all payments on and
collections in respect of the Mortgage Loans due after the Cut-off Date (other
than Monthly Payments due in the month of the Cut-off Date) as shall be on
deposit in the Custodial Account or in the Certificate Account and identified as
belonging to the Trust Fund; (iii) property which secured a Mortgage Loan and
which has been acquired for the benefit of the Certificateholders by foreclosure
or deed in lieu of foreclosure; (iv) the hazard insurance policies and Primary
Insurance Policies pertaining to the Mortgage Loans, if any; (v) rights under
the Yield Maintenance Agreement and any payments thereunder; (vi) the Final
Maturity Reserve Fund and (vii) all proceeds of clauses (i) through (v) above.
Trustee Information: As specified in Section 12.05(a)(i)(A).
Uncertificated Accrued Interest: With respect to any REMIC I Regular
Interest for any Distribution Date, one month's interest at the related
Uncertificated REMIC I Pass-Through Rate for such Distribution Date, accrued on
its Uncertificated Principal Balance or Uncertificated Notional Amount, as
applicable, immediately prior to such Distribution Date. Uncertificated Accrued
Interest for the REMIC I Regular Interests shall accrue on the basis of a
360-day year consisting of twelve 30-day months. For purposes of calculating the
amount of Uncertificated
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Accrued Interest for the REMIC I Regular Interests for any Distribution Date,
any Prepayment Interest Shortfalls and Relief Act Shortfalls (to the extent not
covered by Compensating Interest) relating to the Mortgage Loans for any
Distribution Date shall be allocated first, to Uncertificated Accrued Interest
payable to REMIC I Regular Interest AA and REMIC I Regular Interest ZZ up to an
aggregate amount equal to the REMIC I Interest Loss Allocation Amount, 98% and
2%, respectively, and thereafter any remaining Prepayment Interest Shortfalls
(to the extent not covered by Eligible Master Servicing Compensation) for any
Distribution Date shall be allocated among REMIC I Regular Interest AA, REMIC I
Regular Interest A-1, REMIC I Regular Interest A-2, REMIC I Regular Interest
A-3, REMIC I Regular Interest A-4, REMIC I Regular Interest M-1, REMIC I Regular
Interest M-2, REMIC I Regular Interest M-3, REMIC I Regular Interest M-1, REMIC
I Regular Interest M-4, REMIC I Regular Interest M-5, REMIC I Regular Interest
M-6, REMIC I Regular Interest M-7, REMIC I Regular Interest M-8, REMIC I Regular
Interest M-9 and REMIC I Regular Interest ZZ, pro rata based on, and to the
extent of, Uncertificated Accrued Interest, as calculated without application of
this sentence.
Uncertificated Notional Amount: With respect to the REMIC II Regular
Interest SB-IO component of the Class SB Certificates and any Distribution Date,
an amount equal to the aggregate Uncertificated Principal Balance of the REMIC I
Regular Interests for such Distribution Date. With respect to REMIC I Regular
Interest LTX and any Distribution Date, an amount equal to the aggregate Stated
Principal Balance of the Mortgage Loans.
Uncertificated Principal Balance: As of the Closing Date, the
Uncertificated Principal Balance of each REMIC I Regular Interest shall equal
the amount set forth in the Preliminary Statement hereto as its initial
Uncertificated Principal Balance. On each Distribution Date, the Uncertificated
Principal Balance of each REMIC I Regular Interest shall be reduced by all
distributions of principal deemed made on such REMIC Regular Interest on such
Distribution Date pursuant to Section 4.02 and, if and to the extent necessary
and appropriate, shall be further reduced on such Distribution Date by Realized
Losses as provided in Section 4.05, and the Uncertificated Principal Balance of
REMIC I Regular Interest ZZ shall be increased by the related interest deferrals
as provided in Section 4.02. The Uncertificated Principal Balance of each REMIC
I Regular Interest shall never be less than zero. With respect to the REMIC II
Regular Interest SB-PO, an initial amount equal to the amount set forth in the
Preliminary Statement hereto as its initial Uncertificated Principal Balance. On
each Distribution Date, the Uncertificated Principal Balance of each REMIC II
Regular Interest shall be reduced by all distributions of principal deemed made
on such REMIC Regular Interest on such Distribution Date pursuant to Section
4.02 and, if and to the extent necessary and appropriate, shall be further
reduced on such Distribution Date by Realized Losses as provided in Section
4.05.
Uncertificated REMIC I Pass-Through Rate: With respect to each REMIC I
Regular Interest (other than REMIC I Regular Interest LTX) and any Distribution
Date, a per annum rate equal to the weighted average of the Net Mortgage Rates
of the Mortgage Loans in effect for the scheduled Monthly Payments due on such
Mortgage Loans during the related Due Period, minus the Class LTX Strip Rate.
With respect to REMIC I Regular Interest LTX and any Distribution Date, the
Class LTX Strip Rate.
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.
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United States Person: A citizen or resident of the United States, a
corporation, partnership or other entity (treated as a corporation or
partnership for United States federal income tax purposes) created or organized
in, or under the laws of, the United States, any state thereof, or the District
of Columbia (except in the case of a partnership, to the extent provided in
Treasury regulations) provided that, for purposes solely of the restrictions on
the transfer of Class R Certificates, no partnership or other entity treated as
a partnership for United States federal income tax purposes shall be treated as
a United States Person unless all persons that own an interest in such
partnership either directly or through any entity that is not a corporation for
United States federal income tax purposes are required by the applicable
operative agreement to be United States Persons, or an estate that is described
in Section 7701(a)(30)(D) of the Code, or a trust that is described in Section
7701(a)(30)(E) of the Code.
VA: The Veterans Administration, or its successor.
Voting Rights: The portion of the voting rights of all of the Certificates
which is allocated to any Certificate. 98.00% of all of the Voting Rights shall
be allocated among Holders of the Class A Certificates and Class M Certificates,
in proportion to the outstanding Certificate Principal Balances of their
respective Certificates; 1% of all of the Voting Rights shall be allocated among
the Holders of the Class SB Certificates; 0.50% and 0.50%, of all of the Voting
Rights shall be allocated to each of the Holders of the Class R-I and Class R-II
Certificates, respectively; in each case to be allocated among the Certificates
of such Class in accordance with their respective Percentage Interest.
Yield Maintenance Agreement: The yield maintenance agreement, effective as
of June 28, 2006, between the Yield Maintenance Agreement Provider and the
Trustee, on behalf of the Trust, which agreement provides for Yield Maintenance
Payments and Yield Maintenance Termination Payments to be paid, as provided
therein, together with any schedules, confirmations or other agreements relating
thereto, attached hereto as Exhibit U.
Yield Maintenance Agreement Notional Balance: With respect to any
Distribution Date specified below and the Yield Maintenance Agreement, the
lesser of (1) the aggregate Certificate Principal Balance of the Class A
Certificates and Class M Certificates immediately prior to that Distribution
Date and (2) the amount specified below for that Distribution Date:
49
NOTIONAL NOTIONAL
DISTRIBUTION DATE BALANCE ($) DISTRIBUTION DATE BALANCE ($)
----------------- ----------- ----------------- -----------
July 2006.............. 0.00 April 2009.......... 231,445,307.00
August 2006............ 871,272,546.99 May 2009............ 221,280,138.23
September 2006......... 858,494,226.46 June 2009........... 211,527,720.65
October 2006........... 843,267,729.44 July 2009........... 202,170,267.81
November 2006.......... 825,643,479.76 August 2009......... 202,170,267.81
December 2006.......... 805,664,305.50 September 2009...... 202,170,267.81
January 2007........... 783,441,119.76 October 2009........ 198,236,042.61
February 2007.......... 759,401,537.79 November 2009....... 191,010,028.71
March 2007............. 733,927,966.41 December 2009....... 184,072,551.31
April 2007............. 707,354,774.81 January 2010........ 177,411,300.86
May 2007............... 681,407,982.13 February 2010....... 171,014,499.16
June 2007.............. 656,375,839.18 March 2010.......... 164,870,896.82
July 2007.............. 632,208,502.34 April 2010.......... 158,969,746.99
August 2007............ 608,908,867.42 May 2010............ 153,300,782.54
September 2007......... 586,336,195.18 June 2010........... 147,854,185.90
October 2007........... 564,519,751.51 July 2010........... 142,620,577.09
November 2007.......... 543,469,342.72 August 2010......... 137,590,990.86
December 2007.......... 523,020,412.43 September 2010...... 132,756,834.00
January 2008........... 502,831,001.06 October 2010........ 128,109,941.10
February 2008.......... 482,427,629.05 November 2010....... 123,642,474.86
March 2008............. 452,514,390.38 December 2010....... 119,346,958.16
April 2008............. 422,633,551.98 January 2011........ 115,216,184.36
May 2008............... 394,922,637.35 February 2011....... 111,243,321.43
June 2008.............. 369,430,108.77 March 2011.......... 107,421,576.40
July 2008.............. 346,271,678.06 April 2011.......... 103,744,742.35
August 2008............ 330,147,959.53 May 2011............ 100,206,291.28
September 2008......... 315,863,939.34 June 2011........... 96,801,073.96
October 2008........... 302,227,369.78 July 2011........... 93,523,946.88
November 2008.......... 289,158,645.51 August 2011......... 90,369,659.74
December 2008.......... 276,628,946.17 September 2011...... 87,333,201.49
January 2009........... 264,614,667.30 October 2011........ 84,409,768.62
February 2009.......... 253,093,353.87
March 2009............. 242,043,728.49
Yield Maintenance Agreement Provider: The yield maintenance agreement
provider under the Yield Maintenance Agreement required to make payments to the
Trustee for payment to the Trust Fund pursuant to the terms of the Yield
Maintenance Agreement, and any successor in interest or assign. Initially, the
Yield Maintenance Agreement Provider shall be Bank of America, N.A..
Yield Maintenance Agreement Termination Payment: Upon the designation of an
"Early Termination Date" as defined in the Yield Maintenance Agreement, the
payment to be made by the Yield Maintenance Agreement Provider to the Trustee
for payment to the Trust Fund pursuant to the terms of the Yield Maintenance
Agreement.
Yield Maintenance Payment: With respect to each Distribution Date, any
payment received by the Trustee, on behalf of the Trust Fund, from the Yield
Maintenance Agreement Provider pursuant to the terms of the Yield Maintenance
Agreement, with respect to such Distribution Date, provided that such payment
shall not include any payment received by the Trustee, on behalf of the Trust
Fund, that is a Yield Maintenance Agreement Termination Payment, except as set
forth in Section 4.09(e).
50
Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on the Class A
Certificates and Class M Certificates for any Interest Accrual Period will be
determined on each LIBOR Rate Adjustment Date. On each LIBOR Rate Adjustment
Date, or if such LIBOR Rate Adjustment Date is not a Business Day, then on the
next succeeding Business Day, LIBOR shall be established by the Trustee and, as
to any Interest Accrual Period, will equal the rate for one month United States
dollar deposits that appears on the Telerate Screen Page 3750 as of 11:00 a.m.,
London time, on such LIBOR Rate Adjustment Date. "Telerate Screen Page 3750"
means the display designated as page 3750 on the Bridge Telerate Service (or
such other page as may replace page 3750 on that service for the purpose of
displaying London interbank offered rates of major banks). If such rate does not
appear on such page (or such other page as may replace that page on that
service, or if such service is no longer offered, LIBOR shall be so established
by use of such other service for displaying LIBOR or comparable rates as may be
selected by the Trustee after consultation with the Master Servicer), the rate
will be the Reference Bank Rate. The "Reference Bank Rate" will be determined on
the basis of the rates at which deposits in U.S. Dollars are offered by the
reference banks (which shall be any three major banks that are engaged in
transactions in the London interbank market, selected by the Trustee after
consultation with the Master Servicer) as of 11:00 a.m., London time, on the
LIBOR Rate Adjustment Date to prime banks in the London interbank market for a
period of one month in amounts approximately equal to the aggregate Certificate
Principal Balance of the Class A Certificates and Class M Certificates then
outstanding. The Trustee shall request the principal London office of each of
the reference banks to provide a quotation of its rate. If at least two such
quotations are provided, the rate will be the arithmetic mean of the quotations
rounded up to the next multiple of 1/16%. If on such date fewer than two
quotations are provided as requested, the rate will be the arithmetic mean of
the rates quoted by one or more major banks in New York City, selected by the
Trustee after consultation with the Master Servicer, as of 11:00 a.m., New York
City time, on such date for loans in U.S. Dollars to leading European banks for
a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Class A Certificates and Class M
Certificates then outstanding. If no such quotations can be obtained, the rate
will be LIBOR for the prior Distribution Date; provided however, if, under the
priorities described above, LIBOR for a Distribution Date would be based on
LIBOR for the previous Distribution Date for the third consecutive Distribution
Date, the Trustee shall select an alternative comparable index (over which the
Trustee has no control), used for determining one-month Eurodollar lending rates
that is calculated and published (or otherwise made available) by an independent
party. The establishment of LIBOR by the Trustee on any LIBOR Rate Adjustment
Date and the Trustee's subsequent calculation of the Pass-Through Rates
applicable to the Class A Certificates and Class M Certificates for the relevant
Interest Accrual Period, in the absence of manifest error, will be final and
binding. Promptly following each LIBOR Rate Adjustment Date the Trustee shall
supply the Master Servicer with the results of its determination of LIBOR on
such date. Furthermore, the Trustee shall supply to any Certificateholder so
requesting by calling the Trustee at ▇-▇▇▇-▇▇▇-▇▇▇▇ the Pass-Through Rate on the
Class A Certificates and Class M Certificates for the current and the
immediately preceding Interest Accrual Period.
51
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery hereof,
does hereby assign to the Trustee without recourse all the right, title and
interest of the Depositor in and to (i) the Mortgage Loans, including all
interest and principal on or with respect to the Mortgage Loans due on or after
the Cut-off Date (other than Monthly Payments due on the Mortgage Loans in the
month of the Cut-off Date); and (ii) all proceeds of the foregoing. In addition,
on the Closing Date, the Trustee is hereby directed to enter into the Yield
Maintenance Agreement on behalf of the Trust Fund with the Yield Maintenance
Agreement Provider.
The Depositor, the Master Servicer and the Trustee agree that it is not
intended that any mortgage loan be included in the Trust Fund that is either (i)
a "High-Cost Home Loan" as defined in the New Jersey Home Ownership Security Act
effective November 27, 2003, (ii) a "High-Cost Home Loan" as defined in the New
Mexico Home Loan Protection Act effective January 1, 2004, (iii) a "High Cost
Home Mortgage Loan" as defined in the Massachusetts Predatory Home Loan
Practices Act effective November 7, 2004 or (iv) a "High-Cost Home Loan" as
defined in the Indiana Home Loan Practices Act effective as of January 1, 2005.
(b) In connection with such assignment, and contemporaneously with the
delivery of this Agreement, the Depositor delivered or caused to be delivered
hereunder to the Trustee, the Yield Maintenance Agreement (the delivery of which
shall evidence that the fixed payment for the Yield Maintenance Agreement has
been paid and the Trustee and the Trust Fund shall have no further payment
obligation thereunder and that such fixed payment has been authorized hereby),
and except as set forth in Section 2.01(c) below and subject to Section 2.01(d)
below, the Depositor does hereby deliver to, and deposit with, the Trustee, or
to and with one or more Custodians, as the duly appointed agent or agents of the
Trustee for such purpose, the following documents or instruments (or copies
thereof as permitted by this Section) with respect to each Mortgage Loan (other
than a 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) The original Mortgage, noting the presence of the MIN of the
Mortgage Loan (if the Mortgage Loan is registered on the MERS(R) System)
and language indicating that the Mortgage Loan is a MOM Loan if the
Mortgage Loan is a MOM Loan, with evidence of recording indicated thereon
or, if the original Mortgage has not yet been returned from the public
recording office, a copy of the original Mortgage with evidence of
recording indicated thereon;
52
(iii) Unless the Mortgage Loan is registered on the MERS(R) System,
the Assignment (which may be included in one or more blanket assignments if
permitted by applicable law) of the Mortgage to the Trustee with evidence
of recording indicated thereon or a copy of such assignment with evidence
of recording indicated thereon;
(iv) The original recorded assignment or assignments of the Mortgage
showing an unbroken chain of title from the originator to the Person
assigning it to the Trustee (or to MERS, if the Mortgage Loan is registered
on the MERS(R) System and noting the presence of a MIN) with evidence of
recordation noted thereon or attached thereto, or a copy of such assignment
or assignments of the Mortgage with evidence of recording indicated
thereon; and
(v) The original of each modification, assumption agreement or
preferred loan agreement, if any, relating to such Mortgage Loan, or a copy
of each modification, assumption agreement or preferred loan agreement.
(II) with respect to each Cooperative Loan so assigned:
(i) The original Mortgage Note, endorsed without recourse to the order
of the Trustee and showing an unbroken chain of endorsements from
the originator thereof to the Person endorsing it to the Trustee, or
with respect to any Destroyed Mortgage Note, an original lost note
affidavit from the related Seller or Residential Funding stating
that the original Mortgage Note was lost, misplaced or destroyed,
together with a copy of the related Mortgage Note;
(ii) A counterpart of the Cooperative Lease and the Assignment of
Proprietary Lease to the originator of the Cooperative Loan with
intervening assignments showing an unbroken chain of title from such
originator to the Trustee;
(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 or amendments of the security
interest referenced in clause (vi) above showing an unbroken chain
of title from the originator to the Trustee, each with evidence of
recording thereof, evidencing the interest of the originator under
the Security Agreement and the Assignment of Proprietary Lease;
53
(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
(x) A duly completed UCC-1 financing statement showing the Master
Servicer as debtor, the Depositor as secured party and the Trustee
as assignee and a duly completed UCC-1 financing statement showing
the Depositor as debtor and the Trustee as secured party, each in a
form sufficient for filing, evidencing the interest of such debtors
in the Cooperative Loans.
The Depositor may, in lieu of delivering the original of the documents set
forth in Section 2.01(b)(ii), (iii), (iv) and (v) (or copies thereof as
permitted by Section 2.01(b)) to the Trustee or the Custodian, 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)(ii), (iii),
(iv) and (v) (or copies thereof as permitted by such Section) for any Mortgage
Loan and (ii) a written request by the Trustee to deliver those documents with
respect to any or all of the Mortgage Loans then being held by the Master
Servicer, the Master Servicer shall deliver a complete set of such documents to
the Trustee or the Custodian that is the duly appointed agent of the Trustee.
(c) Notwithstanding the provisions of Section 2.01(b), in the event that in
connection with any Mortgage Loan, if the Depositor cannot deliver the original
of the Mortgage, any assignment, modification, assumption agreement or preferred
loan agreement (or copy thereof as permitted by Section 2.01(b)) with evidence
of recording thereon concurrently with the execution and delivery of this
Agreement because of (i) a delay caused by the public recording office where
such Mortgage, assignment, modification, assumption agreement or preferred loan
agreement as the case may be, has been delivered for recordation, or (ii) a
delay in the receipt of certain information necessary to prepare the related
assignments, the Depositor shall deliver or cause to be delivered to the Trustee
or the respective Custodian a copy of such Mortgage, assignment, modification,
assumption agreement or preferred loan agreement.
The Depositor shall promptly cause to be recorded in the appropriate public
office for real property records the Assignment referred to in clause (iii) of
Section 2.01(b), except (a) in states where, in the Opinion of Counsel
acceptable to the Master Servicer, such recording is not required to protect the
Trustee's interests in the Mortgage Loan or (b) if MERS is identified on the
Mortgage or on a properly recorded assignment of the Mortgage as the mortgagee
of record solely as nominee for Residential Funding and its successors and
assigns, and shall promptly cause to be filed the Form UCC-3 assignment and
UCC-1 financing statement referred to in clause (II)(vii) and (x), respectively,
of Section 2.01(b). If any Assignment, Form UCC-3 or Form UCC-1,
54
as applicable, is lost or returned unrecorded to the Depositor because of any
defect therein, the Depositor shall prepare a substitute Assignment, Form UCC-3
or Form UCC-1, as applicable, or cure such defect, as the case may be, and cause
such Assignment to be recorded in accordance with this paragraph. The Depositor
shall promptly deliver or cause to be delivered to the 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 best efforts to file timely continuation statements with regard to each
financing statement and assignment relating to Cooperative Loans as to which the
related Cooperative Apartment is located outside of the State of New York.
If the Depositor delivers to the Trustee or Custodian any Mortgage Note or
Assignment of Mortgage in blank, the Depositor shall, or shall cause the
Custodian to, complete the endorsement of the Mortgage Note and the Assignment
of Mortgage in the name of the Trustee in conjunction with the Interim
Certification issued by the Custodian, as contemplated by Section 2.02.
Any of the items set forth in Sections 2.01(b)(ii), (iii), (iv) and (v)
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 Depositor further agrees that it will cause, at the
Depositor's own expense, within 30 Business Days after the Closing Date, the
MERS(R) System to indicate that such Mortgage Loans have been assigned by the
Depositor to the Trustee in accordance with this Agreement for the benefit of
the Certificateholders by including (or deleting, in the case of Mortgage Loans
which are repurchased in accordance with this Agreement) in such computer files
(a) the code in the field which identifies the specific Trustee and (b) the code
in the field "Pool Field" which identifies the series of the Certificates issued
in connection with such Mortgage Loans. The Depositor further agrees that it
will not, and will not permit the Master Servicer to, and the Master Servicer
agrees that it will not, alter the codes referenced in this paragraph with
respect to any Mortgage Loan during the term of this Agreement unless and until
such Mortgage Loan is repurchased in accordance with the terms of this
Agreement.
(d) It is intended that the conveyances by the Depositor to the Trustee of
the Mortgage Loans as provided for in this Section 2.01 be construed as a sale
by the Depositor to the Trustee of the Mortgage Loans for the benefit of the
Certificateholders. Further, it is not intended that any such conveyance be
deemed to be a pledge of the Mortgage Loans by the Depositor to the Trustee to
secure a debt or other obligation of the Depositor. However, in the event that
the Mortgage Loans are held to be property of the Depositor or of Residential
Funding, or if for any reason this Agreement is held or deemed to create a
security interest in the Mortgage Loans, then it is intended that (a) this
Agreement shall also be deemed to be a security agreement within the meaning of
Articles 8 and 9 of the New York Uniform Commercial Code and the Uniform
Commercial Code of any other applicable jurisdiction; (b) the conveyances
provided for in this Section 2.01 shall be deemed to be (1) a grant by the
Depositor to the Trustee of a security interest in all of the Depositor's right
(including the power to convey title thereto), title and interest, whether now
owned or hereafter acquired, in and to (A) the Mortgage Loans, including (a)(i)
with respect to each Cooperative Loan, the related Mortgage Note, Security
Agreement, Assignment of Proprietary Lease, Cooperative Stock
55
Certificate and Cooperative Lease, (ii) with respect to each Mortgage Loan other
than a Cooperative Loan, the related Mortgage Note and Mortgage, and (b) any
insurance policies and all other documents in the related Mortgage File, (B) all
amounts payable pursuant to the Mortgage Loans or the Yield Maintenance
Agreement in accordance with the terms thereof and (C) any and all general
intangibles, payment intangibles, accounts, chattel paper, instruments,
documents, money, deposit accounts, certificates of deposit, goods, letters of
credit, advices of credit and investment property and other property of whatever
kind or description now existing or hereafter acquired consisting of, arising
from or relating to any of the foregoing, and all proceeds of the conversion,
voluntary or involuntary, of the foregoing into cash, instruments, securities or
other property, including without limitation all amounts from time to time held
or invested in the Certificate Account or the Custodial Account, whether in the
form of cash, instruments, securities or other property and (2) an assignment by
the Depositor to the Trustee of any security interest in any and all of
Residential Funding's right (including the power to convey title thereto), title
and interest, whether now owned or hereafter acquired, in and to the property
described in the foregoing clauses (1)(A), (B) and (C) granted by Residential
Funding to the Depositor pursuant to the Assignment Agreement; (c) the
possession by the Trustee, the Custodian or any other agent of the Trustee of
Mortgage Notes or such other items of property as they constitute instruments,
money, payment intangibles, negotiable documents, goods, deposit accounts,
letters of credit, advices of credit, investment property, certificated
securities or chattel paper shall be deemed to be "possession by the secured
party," or possession by a purchaser or a person designated by such secured
party, for purposes of perfecting the security interest pursuant to the Uniform
Commercial Code as in effect in the States of New York and Minnesota and any
other applicable jurisdiction; and (d) notifications to persons holding such
property, and acknowledgments, receipts or confirmations from persons holding
such property, shall be deemed notifications to, or acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents of, or persons
holding for, (as applicable) the Trustee for the purpose of perfecting such
security interest under applicable law.
The Depositor and, at the Depositor's direction, Residential Funding and
the Trustee shall, to the extent consistent with this Agreement, take such
reasonable actions as may be necessary to ensure that, if this Agreement were
deemed to create a security interest in the Mortgage Loans and the other
property described above, such security interest would be deemed to be a
perfected security interest of first priority under applicable law and will be
maintained as such throughout the term of this Agreement. Without limiting the
generality of the foregoing, the Depositor shall prepare and deliver to the
Trustee not less than 15 days prior to any filing date and, the Trustee shall
forward for filing, or shall cause to be forwarded for filing, at the expense of
the Depositor, all filings necessary to maintain the effectiveness of any
original filings necessary under the Uniform Commercial Code as in effect in any
jurisdiction to perfect the Trustee's security interest in or lien on the
Mortgage Loans, as evidenced by an Officers' Certificate of the Depositor,
including without limitation (x) continuation statements, and (y) such other
statements as may be occasioned by (1) any change of name of Residential
Funding, the Depositor or the Trustee (such preparation and filing shall be at
the expense of the Trustee, if occasioned by a change in the Trustee's name),
(2) any change of location of the place of business or the chief executive
office of Residential Funding or the Depositor or (3) any transfer of any
interest of Residential Funding or the Depositor in any Mortgage Loan.
56
Section 2.02. Acceptance by Trustee.
The Trustee acknowledges receipt (or, with respect to Mortgage Loans
subject to a Custodial Agreement, and based solely upon a receipt or
certification executed by the Custodian, receipt by the respective Custodian as
the duly appointed agent of the Trustee) of the documents referred to in Section
2.01(b)(i) above (except that for purposes of such acknowledgment only, a
Mortgage Note may be endorsed in blank and an Assignment of Mortgage may be in
blank) and declares that it, or a Custodian as its agent, holds and will hold
such documents and the other documents constituting a part of the Mortgage Files
delivered to it, or a Custodian as its agent, in trust for the use and benefit
of all present and future Certificateholders. 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 Depositor or the
Master Servicer, the Trustee shall acknowledge receipt (or, with respect to
Mortgage Loans subject to a Custodial Agreement, and based solely upon a receipt
or certification (the "Final Certification") executed by the Custodian, receipt
by the respective Custodian as the duly appointed agent of the Trustee) of the
documents referred to in Section 2.01(b) above.
If the Custodian, as the Trustee's agent, finds any document or documents
constituting a part of a Mortgage File to be missing or defective, upon receipt
of notification from the Custodian as specified in the succeeding sentence, the
Trustee shall promptly so notify or cause the Custodian to notify the Master
Servicer and the Depositor; provided, that if the Mortgage Loan related to such
Mortgage File is listed on Schedule A of the Assignment Agreement, no
notification shall be necessary. Pursuant to Section 2.3 of the Custodial
Agreement, the Custodian will notify the Master Servicer, the Depositor and the
Trustee of any such omission or defect found by it in respect of any Mortgage
File held by it in respect of the items received by it pursuant to the Custodial
Agreement. If such omission or defect materially and adversely affects the
interests in the related Mortgage Loan of the Certificateholders, 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, then Residential Funding shall purchase such Mortgage
Loan from the Trust Fund at its Purchase Price, in either case within 90 days
from the date the Master Servicer was notified of such omission or defect;
provided that if the omission or defect would cause the Mortgage Loan to be
other than a "qualified mortgage" as defined in Section 860G(a)(3) of the Code,
any such cure or repurchase must occur within 90 days from the date such breach
was discovered; and provided further, that no cure, substitution or repurchase
shall be required if such omission or defect is in respect of a Mortgage Loan
listed on Schedule A of the Assignment Agreement. The Purchase Price for any
such
57
Mortgage Loan shall be deposited or caused to be deposited by the Master
Servicer in the Custodial Account maintained by it pursuant to Section 3.07 and,
upon receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee or any Custodian, as the case may be, shall
release to Residential Funding the related Mortgage File and the Trustee shall
execute and deliver such instruments of transfer or assignment prepared by the
Master Servicer, in each case without recourse, as shall be necessary to vest in
Residential Funding or its designee any Mortgage Loan released pursuant hereto
and thereafter such Mortgage Loan shall not be part of the Trust Fund. In
furtherance of the foregoing, if the Subservicer or Residential Funding that
repurchases the Mortgage Loan is not a member of MERS and the Mortgage is
registered on the MERS System, the Master Servicer, at its own expense and
without any right of reimbursement, shall cause MERS to execute and deliver an
assignment of the Mortgage in recordable form to transfer the Mortgage from MERS
to such Subservicer or Residential Funding and shall cause such Mortgage to be
removed from registration on the MERS System in accordance with MERS's rules and
regulations. It is understood and agreed that the obligation of Residential
Funding, to so cure or purchase any Mortgage Loan as to which a material and
adverse defect in or omission of a constituent document exists shall constitute
the sole remedy respecting such defect or omission available to
Certificateholders or the Trustee on behalf of Certificateholders.
Section 2.03. Representations, Warranties and Covenants of the Master
Servicer and the Depositor.
(a) The Master Servicer hereby represents and warrants to the Trustee for
the benefit of the Certificateholders that:
(i) The Master Servicer is a 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 Depositor, constitutes a valid, legal and
binding obligation of the Master Servicer, enforceable against it in
accordance with the terms hereof subject to applicable bankruptcy,
insolvency, reorganization, moratorium and other laws affecting the
enforcement of creditors' rights generally and to general principles of
equity, regardless of whether such enforcement is considered in a
proceeding in equity or at law;
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(iv) The Master Servicer is not in default with respect to any order
or decree of any court or any order, regulation or demand of any federal,
state, municipal or governmental agency, which default might have
consequences that would materially and adversely affect the condition
(financial or other) or operations of the Master Servicer or its properties
or might have consequences that would materially adversely affect its
performance hereunder;
(v) No litigation is pending or, to the best of the Master Servicer's
knowledge, threatened against the Master Servicer which would prohibit its
entering into this Agreement or performing its obligations under this
Agreement;
(vi) The Master Servicer shall comply in all material respects in the
performance of this Agreement with all reasonable rules and requirements of
each insurer under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement furnished
in writing or report delivered to the Depositor, any Affiliate of the
Depositor or the Trustee by the Master Servicer will, to the knowledge of
the Master Servicer, contain any untrue statement of a material fact or
omit a material fact necessary to make the information, certificate,
statement or report not misleading;
(viii) The Master Servicer has examined each existing, and will
examine each new, Subservicing Agreement and is or will be familiar with
the terms thereof. The terms of each existing Subservicing Agreement and
each designated Subservicer are acceptable to the Master Servicer and any
new Subservicing Agreements will comply with the provisions of Section
3.02; and
(ix) The Master Servicer is a member of MERS in good standing, and
will comply in all material respects with the rules and procedures of MERS
in connection with the servicing of the Mortgage Loans that are registered
with MERS.
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(a) shall survive delivery of the respective Mortgage
Files to the Trustee or any Custodian. Upon discovery by either the Depositor,
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
breach would cause the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section 860G(a)(3) of the Code, any such cure or repurchase must
occur within 90 days from the date such breach was discovered. The obligation of
the Master Servicer to cure such breach or to so purchase such Mortgage Loan
shall constitute the sole remedy in respect of a breach of a representation and
warranty set forth
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in this Section 2.03(a) available to the Certificateholders or the Trustee on
behalf of the Certificateholders.
(b) The Depositor hereby represents and warrants to the Trustee for the
benefit of the Certificateholders that as of the Closing Date (or, if otherwise
specified below, as of the date so specified): (i) the information set forth in
Exhibit G hereto with respect to each Mortgage Loan or the Mortgage Loans, as
the case may be, is true and correct in all material respects at the respective
date or dates which such information is furnished; (ii) immediately prior to the
conveyance of the Mortgage Loans to the Trustee, the Depositor had good title
to, and was the sole owner of, each Mortgage Loan free and clear of any pledge,
lien, encumbrance or security interest (other than rights to servicing and
related compensation) and such conveyance validly transfers ownership of the
Mortgage Loans to the Trustee free and clear of any pledge, lien, encumbrance or
security interest; and (iii) each Mortgage Loan constitutes a qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations Section
1.860G-2(a)(1).
It is understood and agreed that the representations and warranties set
forth in this Section 2.03(b) shall survive delivery of the respective Mortgage
Files to the Trustee or any Custodian.
Upon discovery by any of the Depositor, the Master Servicer, the Trustee or
any Custodian of a breach of any of the representations and warranties set forth
in this Section 2.03(b) which materially and adversely affects the interests of
the Certificateholders 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); provided, however, that in the event of
a breach of the representation and warranty set forth in Section 2.03(b)(iii),
the party discovering such breach shall give such notice within five days of
discovery. Within 90 days of its discovery or its receipt of notice of breach,
the Depositor shall either (i) cure such breach in all material respects or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase Price and in the
manner set forth in Section 2.02; provided that the Depositor shall have the
option to substitute a Qualified Substitute Mortgage Loan or Loans for such
Mortgage Loan if such substitution occurs within two years following the Closing
Date; provided that if the omission or defect would cause the Mortgage Loan to
be other than a "qualified mortgage" as defined in Section 860G(a)(3) of the
Code, any such cure, substitution or repurchase must occur within 90 days from
the date such breach was discovered. Any such substitution shall be effected by
the Depositor under the same terms and conditions as provided in Section 2.04
for substitutions by Residential Funding. It is understood and agreed that the
obligation of the Depositor to cure such breach or to so purchase or substitute
for any Mortgage Loan as to which such a breach has occurred and is continuing
shall constitute the sole remedy respecting such breach available to the
Certificateholders or the Trustee on behalf of the Certificateholders.
Notwithstanding the foregoing, the Depositor shall not be required to cure
breaches or purchase or substitute for Mortgage Loans as provided in this
Section 2.03(b) if the substance of the breach of a representation set forth
above also constitutes fraud in the origination of the Mortgage Loan.
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Section 2.04. Representations and Warranties of Residential Funding.
The Depositor, as assignee of Residential Funding under the Assignment
Agreement, hereby assigns to the Trustee for the benefit of the
Certificateholders all of its right, title and interest in respect of the
Assignment Agreement applicable to a Mortgage Loan. Insofar as the Assignment
Agreement relates to the representations and warranties made by Residential
Funding in respect of such Mortgage Loan and any remedies provided thereunder
for any breach of such representations and warranties, such right, title and
interest may be enforced by the Master Servicer on behalf of the Trustee and the
Certificateholders.
Upon the discovery by the Depositor, the Master Servicer, the Trustee or
any Custodian of a breach of any of the representations and warranties made in
the Assignment Agreement in respect of any Mortgage Loan or of any Repurchase
Event which materially and adversely affects the interests of the
Certificateholders 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 or Repurchase Event and request that
Residential Funding either (i) cure such breach or Repurchase Event in all
material respects within 90 days from the date the Master Servicer was notified
of such breach or Repurchase Event or (ii) purchase such Mortgage Loan from the
Trust Fund at the Purchase Price and in the manner set forth in Section 2.02;
provided that, in the case of a breach or Repurchase Event under the Assignment
Agreement, Residential Funding shall have the option to substitute a Qualified
Substitute Mortgage Loan or Loans for such Mortgage Loan if such substitution
occurs within two years following the Closing Date; provided that if the breach
would cause the Mortgage Loan to be other than a "qualified mortgage" as defined
in Section 860G(a)(3) of the Code, any such cure or substitution must occur
within 90 days from the date the breach was discovered. If the breach of
representation and warranty that gave rise to the obligation to repurchase or
substitute a Mortgage Loan pursuant to Section 4 of the Assignment Agreement was
the representation and warranty set forth in clause (bb) of Section 4 thereof,
then the Master Servicer shall request that Residential Funding pay to the Trust
Fund, concurrently with and in addition to the remedies provided in the
preceding sentence, an amount equal to any liability, penalty or expense that
was actually incurred and paid out of or on behalf of the Trust Fund, and that
directly resulted from such breach, or if incurred and paid by the Trust Fund
thereafter, concurrently with such payment. In the event that Residential
Funding elects to substitute a Qualified Substitute Mortgage Loan or Loans for a
Deleted Mortgage Loan pursuant to this Section 2.04, Residential Funding shall
deliver to the Trustee or the Custodian for the benefit of the
Certificateholders with respect to such Qualified Substitute Mortgage Loan or
Loans, the original Mortgage Note, the Mortgage, an Assignment of the Mortgage
in recordable form, and such other documents and agreements as are required by
Section 2.01, with the Mortgage Note endorsed as required by Section 2.01. No
substitution will be made in any calendar month after the Determination Date for
such month. Monthly Payments due with respect to Qualified Substitute Mortgage
Loans in the month of substitution shall not be part of the Trust Fund and will
be retained by the Master Servicer and remitted by the Master Servicer to
Residential Funding on the next succeeding Distribution Date. For the month of
substitution, distributions to the Certificateholders will include the Monthly
Payment due on a Deleted Mortgage Loan for such month and thereafter Residential
Funding shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan. The Master Servicer shall amend or cause to be amended
the Mortgage Loan Schedule for the benefit
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of the Certificateholders to reflect the removal of such Deleted Mortgage Loan
and the substitution of the Qualified Substitute Mortgage Loan or Loans and the
Master Servicer shall deliver the amended Mortgage Loan Schedule to the Trustee
and the Custodian. Upon such substitution, the Qualified Substitute Mortgage
Loan or Loans shall be subject to the terms of this Agreement and the related
Subservicing Agreement in all respects, and Residential Funding shall be deemed
to have made the representations and warranties with respect to the Qualified
Substitute Mortgage Loan contained in Section 4 of the Assignment Agreement, as
of the date of substitution, and the covenants, representations and warranties
set forth in this Section 2.04, and in Section 2.03 hereof and in Section 4 of
the Assignment Agreement, and the Master Servicer shall be obligated to
repurchase or substitute for any Qualified Substitute Mortgage Loan as to which
a Repurchase Event (as defined in the Assignment Agreement) has occurred
pursuant to Section 4 of the Assignment Agreement.
In connection with the substitution of one or more Qualified Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the Master Servicer shall
determine the amount (if any) by which the Stated Principal Balance of all such
Qualified Substitute Mortgage Loans as of the date of substitution is less than
the aggregate Stated Principal Balance of all such Deleted Mortgage Loans (in
each case after application of the principal portion of the Monthly Payments due
in the month of substitution that are to be distributed to the
Certificateholders in the month of substitution). Residential Funding shall
deposit the amount of such shortfall into the Custodial Account on the day of
substitution, without any reimbursement therefor. Residential Funding shall give
notice in writing to the Trustee of such event, which notice shall be
accompanied by an Officers' Certificate as to the calculation of such shortfall
and (subject to Section 10.01(f)) by an Opinion of Counsel to the effect that
such substitution will not cause (a) any federal tax to be imposed on the Trust
Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code or (b) any portion of any
REMIC created hereunder to fail to qualify as a REMIC at any time that any
Certificate is outstanding.
It is understood and agreed that the obligation of Residential Funding to
cure such breach or purchase (or substitute for) such Mortgage Loan as to which
such a breach has occurred and is continuing and to make any additional payments
required under the Assignment Agreement in connection with a breach of the
representation and warranty in clause (bb) of Section 4 thereof shall constitute
the sole remedy respecting such breach available to the Certificateholders or
the Trustee on behalf of the Certificateholders. If the Master Servicer is
Residential Funding, then the Trustee shall also have the right (i) 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 or (ii) to give
the notification and require the purchase or substitution provided for in
Section 6 of the Assignment Agreement. In connection with the purchase of or
substitution for any such Mortgage Loan by Residential Funding, the Trustee
shall assign to Residential Funding all of the right, title and interest in
respect of the Assignment Agreement applicable to such Mortgage Loan.
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Section 2.05. Execution and Authentication of Certificates; Conveyance of
REMIC Regular Interests.
(a) The Trustee acknowledges the assignment to it of the Mortgage Loans and
the delivery of the Mortgage Files to it, or any Custodian on its behalf,
subject to any exceptions noted, together with the assignment to it of all other
assets included in the Trust Fund, receipt of which is hereby acknowledged.
Concurrently with such delivery and in exchange therefor, the Trustee, pursuant
to the written request of the Depositor executed by an officer of the Depositor,
has executed and caused to be authenticated and delivered to or upon the order
of the Depositor the Certificates in authorized denominations which evidence
ownership of the entire Trust Fund.
(b) The Depositor, as of the Closing Date, and concurrently with the
execution and delivery hereof, does hereby assign without recourse all the
right, title and interest of the Depositor in and to the Uncertificated REMIC I
Regular Interests to the Trustee for the benefit of the holders of each Class of
Certificates (other than the Class R-I Certificates). The Trustee acknowledges
receipt of the Uncertificated REMIC I Regular Interests and declares that it
holds and will hold the same in trust for the exclusive use and benefit of all
present and future holders of each Class of Certificates (other than the Class
R-I Certificates).
(c) The Depositor concurrently with the execution and delivery hereof, does
hereby transfer, assign, set over and otherwise convey in trust to the Trustee
without recourse all the right, title and interest of the Depositor in and to
the REMIC I Regular Interests, and the other assets of REMIC II for the benefit
of the holders of the REMIC II Regular Interests and the Class R-II
Certificates. The Trustee acknowledges receipt of the REMIC I Regular Interests
(which are uncertificated) and the other assets of REMIC II and declares that it
holds and will hold the same in trust for the exclusive use and benefit of the
holders of the REMIC II Regular Interests and the Class R-II Certificates.
Section 2.06. Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in the
following activities:
(a) To sell the Certificates to the Depositor in exchange for the Mortgage
Loans;
(b) To enter into and perform its obligations under this Agreement and the
Yield Maintenance Agreement;
(c) To engage in those activities that are necessary, suitable or
convenient to accomplish the foregoing or are incidental hereto or connected
therewith; and
(d) Subject to compliance with this Agreement, to engage in such other
activities as may be required in connection with conservation of the Trust Fund
and the making of distributions to the Certificateholders.
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The trust is hereby authorized to engage in the foregoing activities.
Notwithstanding the provisions of Section 11.01, the trust shall not engage in
any activity other than in connection with the foregoing or other than as
required or authorized by the terms of this Agreement while any Certificate is
outstanding, and this Section 2.06 may not be amended, without the consent of
the Certificateholders evidencing a majority of the aggregate Voting Rights of
the Certificates.
Section 2.07. Agreement Regarding Ability to Disclose.
The Depositor, the Master Servicer and the Trustee hereby agree,
notwithstanding any other express or implied agreement to the contrary, that any
and all Persons, and any of their respective employees, representatives, and
other agents may disclose, immediately upon commencement of discussions, to any
and all Persons, without limitation of any kind, the tax treatment and tax
structure of the transaction and all materials of any kind (including opinions
or other tax analyses) that are provided to any of them relating to such tax
treatment and tax structure. For purposes of this paragraph, the terms "tax
treatment" and "tax structure" are defined under Treasury Regulation ss.
1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01. Master Servicer to Act as Servicer.
(a) The Master Servicer shall service and administer the Mortgage Loans in
accordance with the terms of this Agreement and the respective Mortgage Loans,
following such procedures as it would employ in its good faith business judgment
and which are normal and usual in its general mortgage servicing activities, and
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do any and all things which it may deem necessary
or desirable in connection with such servicing and administration. Without
limiting the generality of the foregoing, the Master Servicer in its own name or
in the name of a Subservicer is hereby authorized and empowered by the Trustee
when the Master Servicer or the Subservicer, as the case may be, believes it
appropriate in its best judgment, to execute and deliver, on behalf of the
Certificateholders and the Trustee or any of them, any and all instruments of
satisfaction or cancellation, or of partial or full release or discharge, or of
consent to assumption or modification in connection with a proposed conveyance,
or of assignment of any Mortgage and Mortgage Note in connection with the
repurchase of a Mortgage Loan and all other comparable instruments, or with
respect to the modification or re-recording of a Mortgage for the purpose of
correcting the Mortgage, the subordination of the lien of the Mortgage in favor
of a public utility company or government agency or unit with powers of eminent
domain, the taking of a deed in lieu of foreclosure, the commencement,
prosecution or completion of judicial or non-judicial foreclosure, the
conveyance of a Mortgaged Property to the related insurer, the acquisition of
any property acquired by foreclosure or deed in lieu of foreclosure, or the
management, marketing and conveyance of any property acquired by foreclosure or
deed in lieu of foreclosure with respect to the Mortgage Loans and with respect
to the Mortgaged Properties. The Master Servicer further is authorized and
empowered by the Trustee, on behalf of the Certificateholders and the Trustee,
in its own name or in the name of the Subservicer, when the Master Servicer or
the Subservicer, as the case may be, believes it is appropriate in its best
judgment to register any Mortgage Loan on the MERS(R) System, or cause the
removal from the
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registration of any Mortgage Loan on the MERS(R) System, to execute and deliver,
on behalf of the Trustee and the Certificateholders or any of them, any and all
instruments of assignment and other comparable instruments with respect to such
assignment or re-recording of a Mortgage in the name of MERS, solely as nominee
for the Trustee and its successors and assigns. Any expenses incurred in
connection with the actions described in the preceding sentence shall be borne
by the Master Servicer in accordance with Section 3.16(c), with no right of
reimbursement; provided, that if, as a result of MERS discontinuing or becoming
unable to continue operations in connection with the MERS(R) System, it becomes
necessary to remove any Mortgage Loan from registration on the MERS(R) System
and to arrange for the assignment of the related Mortgages to the Trustee, then
any related expenses shall be reimbursable to the Master Servicer as set forth
in Section 3.10(a)(ii). Notwithstanding the foregoing, subject to Section
3.07(a), the Master Servicer shall not permit any modification with respect to
any Mortgage Loan that would both constitute a sale or exchange of such Mortgage
Loan within the meaning of Section 1001 of the Code and any proposed, temporary
or final regulations promulgated thereunder (other than in connection with a
proposed conveyance or assumption of such Mortgage Loan that is treated as a
Principal Prepayment in Full pursuant to Section 3.13(d) hereof) and cause any
REMIC created hereunder to fail to qualify as a REMIC under the Code. The
Trustee shall furnish the Master Servicer with any powers of attorney and other
documents necessary or appropriate to enable the Master Servicer to service and
administer the Mortgage Loans. The Trustee shall not be liable for any action
taken by the Master Servicer or any Subservicer pursuant to such powers of
attorney or other documents. In servicing and administering any Nonsubserviced
Mortgage Loan, the Master Servicer shall, to the extent not inconsistent with
this Agreement, comply with the Program Guide as if it were the originator of
such Mortgage Loan and had retained the servicing rights and obligations in
respect thereof.
(b) The Master Servicer shall, to the extent consistent with the servicing
standards set forth herein, take whatever actions as may be necessary to file a
claim under or enforce or allow the Trustee to file a claim under or enforce any
title insurance policy with respect to any Mortgage Loan including, without
limitation, joining in or causing any Subservicer (or any other party in
possession of any title insurance policy) to join in any claims process,
negotiations, actions or proceedings necessary to make a claim under or enforce
any title insurance policy. Notwithstanding anything in this Agreement to the
contrary, the Master Servicer shall not (unless the Mortgagor is in default with
respect to the Mortgage Loan or such default is, in the judgment of the Master
Servicer, reasonably foreseeable) make or permit any modification, waiver, or
amendment of any term of any Mortgage Loan that would both (i) effect an
exchange or reissuance of such Mortgage Loan under Section 1001 of the Code (or
final, temporary or proposed Treasury regulations promulgated thereunder) (other
than in connection with a proposed conveyance or assumption of such Mortgage
Loan that is treated as a Principal Prepayment in Full pursuant to Section
3.13(d) hereof) and cause any REMIC created hereunder to fail to qualify as a
REMIC under the Code or the imposition of any tax on "prohibited transactions"
or "contributions" after the startup date under the REMIC Provisions.
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(c) In connection with servicing and administering the Mortgage Loans, the
Master Servicer and any Affiliate of the Master Servicer (i) may perform
services such as appraisals and brokerage services that are customarily provided
by Persons other than servicers of mortgage loans, and shall be entitled to
reasonable compensation therefor in accordance with Section 3.10 and (ii) may,
at its own discretion and on behalf of the Trustee, obtain credit information in
the form of a "credit score" from a credit repository.
(d) All costs incurred by the Master Servicer or by Subservicers in
effecting the timely payment of taxes and assessments on the properties subject
to the Mortgage Loans shall not, for the purpose of calculating monthly
distributions to the Certificateholders, be added to the amount owing under the
related Mortgage Loans, notwithstanding that the terms of such Mortgage Loan so
permit, and such costs shall be recoverable to the extent permitted by Section
3.10(a)(ii).
(e) The Master Servicer may enter into one or more agreements in connection
with the offering of pass-through certificates evidencing interests in one or
more of the Certificates providing for the payment by the Master Servicer of
amounts received by the Master Servicer as servicing compensation hereunder and
required to cover certain Prepayment Interest Shortfalls on the Mortgage Loans,
which payment obligation will thereafter be an obligation of the Master Servicer
hereunder.
(f) The relationship of the Master Servicer (and of any successor to the
Master Servicer) to the Depositor under this Agreement is intended by the
parties to be that of an independent contractor and not that of a joint
venturer, partner or agent.
Section 3.02. Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' Obligations.
(a) The Master Servicer may continue in effect Subservicing Agreements
entered into by Residential Funding and Subservicers prior to the execution and
delivery of this Agreement, and may enter into new Subservicing Agreements with
Subservicers, for the servicing and administration of all or some of the
Mortgage Loans. Each Subservicer shall be either (i) an institution the accounts
of which are insured by the FDIC or (ii) another entity that engages in the
business of originating or servicing mortgage loans, and in either case shall be
authorized to transact business in the state or states in which the related
Mortgaged Properties it is to service are situated, if and to the extent
required by applicable law to enable the Subservicer to perform its obligations
hereunder and under the Subservicing Agreement, and in either case shall be a
▇▇▇▇▇▇▇ Mac, ▇▇▇▇▇▇ ▇▇▇ or HUD approved mortgage servicer. In addition, any
Subservicer of a Mortgage Loan insured by the FHA must be an FHA-approved
servicer, and any Subservicer of a Mortgage Loan guaranteed by the VA must be a
VA-approved servicer. Each Subservicer of a Mortgage Loan shall be entitled to
receive and retain, as provided in the related Subservicing Agreement and in
Section 3.07, the related Subservicing Fee from payments of interest received on
such Mortgage Loan after payment of all amounts required to be remitted to the
Master Servicer in respect of such Mortgage Loan. For any Mortgage Loan that is
a Nonsubserviced Mortgage Loan, the Master Servicer shall be entitled to receive
and retain an amount equal to the Subservicing Fee from payments of interest.
Unless the context otherwise requires, references in this Agreement to actions
taken or to be taken by the Master Servicer in
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servicing the Mortgage Loans include actions taken or to be taken by a
Subservicer on behalf of the Master Servicer. Each Subservicing Agreement will
be upon such terms and conditions as are generally required by, permitted by or
consistent with the Program Guide and are not inconsistent with this Agreement
and as the Master Servicer and the Subservicer have agreed. With the approval of
the Master Servicer, a Subservicer may delegate its servicing obligations to
third-party servicers, but such Subservicer will remain obligated under the
related Subservicing Agreement. The Master Servicer and a Subservicer may enter
into amendments thereto or a different form of Subservicing Agreement, and the
form referred to or included in the Program Guide is merely provided for
information and shall not be deemed to limit in any respect the discretion of
the Master Servicer to modify or enter into different Subservicing Agreements;
provided, however, that any such amendments or different forms shall be
consistent with and not violate the provisions of either this Agreement or the
Program Guide in a manner which would materially and adversely affect the
interests of the Certificateholders. The Program Guide and any other
Subservicing Agreement entered into between the Master Servicer and any
Subservicer shall require the Subservicer to accurately and fully report its
borrower credit files to each of the Credit Repositories in a timely manner.
(b) As part of its servicing activities hereunder, the Master Servicer, for
the benefit of the Trustee and the Certificateholders, shall use its best
reasonable efforts to enforce the obligations of each Subservicer under the
related Subservicing Agreement, to the extent that the non-performance of any
such obligation would have a material and adverse effect on a Mortgage Loan,
including, without limitation, the obligation to purchase a Mortgage Loan on
account of defective documentation, as described in Section 2.02, or on account
of a breach of a representation or warranty, as described in Section 2.04. Such
enforcement, including, without limitation, the legal prosecution of claims,
termination of Subservicing Agreements, as appropriate, and the pursuit of other
appropriate remedies, shall be in such form and carried out to such an extent
and at such time as the Master Servicer would employ in its good faith business
judgment and which are normal and usual in its general mortgage servicing
activities. The Master Servicer shall pay the costs of such enforcement at its
own expense, and shall be reimbursed therefor only (i) from a general recovery
resulting from such enforcement to the extent, if any, that such recovery
exceeds all amounts due in respect of the related Mortgage Loan or (ii) from a
specific recovery of costs, expenses or attorneys' fees against the party
against whom such enforcement is directed. For purposes of clarification only,
the parties agree that the foregoing is not intended to, and does not, limit the
ability of the Master Servicer to be reimbursed for expenses that are incurred
in connection with the enforcement of a Seller's obligations and are
reimbursable pursuant to Section 3.10(a)(viii).
Section 3.03. Successor Subservicers.
The Master Servicer shall be entitled to terminate any Subservicing
Agreement that may exist in accordance with the terms and conditions of such
Subservicing Agreement and without any limitation by virtue of this Agreement;
provided, however, that in the event of termination of any Subservicing
Agreement by the Master Servicer or the Subservicer, the Master Servicer shall
either act as servicer of the related Mortgage Loan or enter into a Subservicing
Agreement with a successor Subservicer which will be bound by the terms of the
related Subservicing Agreement. If the Master Servicer or any Affiliate of
Residential Funding acts as servicer, it will not assume liability for the
representations and warranties of the Subservicer which it replaces. If the
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Master Servicer enters into a Subservicing Agreement with a successor
Subservicer, the Master Servicer shall use reasonable efforts to have the
successor Subservicer assume liability for the representations and warranties
made by the terminated Subservicer in respect of the related Mortgage Loans and,
in the event of any such assumption by the successor Subservicer, the Master
Servicer may, in the exercise of its business judgment, release the terminated
Subservicer from liability for such representations and warranties.
Section 3.04. Liability of the Master Servicer.
Notwithstanding any Subservicing Agreement, any of the provisions of this
Agreement relating to agreements or arrangements between the Master Servicer or
a Subservicer or reference to actions taken through a Subservicer or otherwise,
the Master Servicer shall remain obligated and liable to the Trustee and
Certificateholders for the servicing and administering of the Mortgage Loans in
accordance with the provisions of Section 3.01 without diminution of such
obligation or liability by virtue of such Subservicing Agreements or
arrangements or by virtue of indemnification from the Subservicer or the
Depositor and to the same extent and under the same terms and conditions as if
the Master Servicer alone were servicing and administering the Mortgage Loans.
The Master Servicer shall be entitled to enter into any agreement with a
Subservicer for indemnification of the Master Servicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05. No Contractual Relationship Between Subservicer and Trustee
or Certificateholders.
Any Subservicing Agreement that may be entered into and any other
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such and not as an originator shall be deemed to be between
the Subservicer and the Master Servicer alone and the Trustee and
Certificateholders shall not be deemed parties thereto and shall have no claims,
rights, obligations, duties or liabilities with respect to the Subservicer in
its capacity as such except as set forth in Section 3.06. The foregoing
provision shall not in any way limit a Subservicer's obligation to cure an
omission or defect or to repurchase a Mortgage Loan as referred to in Section
2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing Agreements by
Trustee.
(a) In the event the Master Servicer shall for any reason no longer be the
master servicer (including by reason of an Event of Default), the Trustee, as
successor Master Servicer, its designee or its successor shall thereupon assume
all of the rights and obligations of the Master Servicer under each Subservicing
Agreement that may have been entered into. The Trustee, its designee or the
successor servicer for the Trustee shall be deemed to have assumed all of the
Master Servicer's interest therein and to have replaced the Master Servicer as a
party to the Subservicing Agreement to the same extent as if the Subservicing
Agreement had been assigned to the assuming party except that the Master
Servicer shall not thereby be relieved of any liability or obligations under the
Subservicing Agreement.
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(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
(subject to the terms and conditions of the Assignment Agreement) (i) waive any
late payment charge or any prepayment charge or penalty interest in connection
with the prepayment of a Mortgage Loan and (ii) extend the Due Date for payments
due on a Mortgage Loan in accordance with the Program Guide, provided, however,
that the Master Servicer shall first determine that any such waiver or extension
will not impair the coverage of any related Primary Insurance Policy or
materially adversely affect the lien of the related Mortgage. Notwithstanding
anything in this Section to the contrary, the Master Servicer or any Subservicer
shall not enforce any prepayment charge to the extent that such enforcement
would violate any applicable law. In the event of any such arrangement, the
Master Servicer shall make timely advances on the related Mortgage Loan during
the scheduled period in accordance with the amortization schedule of such
Mortgage Loan without modification thereof by reason of such arrangements unless
otherwise agreed to by the Holders of the Classes of Certificates affected
thereby; provided, however, that no such extension shall be made if any advance
would be a Nonrecoverable Advance. Consistent with the terms of this Agreement,
the Master Servicer may also waive, modify or vary any term of any Mortgage Loan
or consent to the postponement of strict compliance with any such term or in any
manner grant indulgence to any Mortgagor if in the Master Servicer's
determination such waiver, modification, postponement or indulgence is not
materially adverse to the interests of the Certificateholders (taking into
account any estimated Realized Loss that might result absent such action),
provided, however, that the Master Servicer may not modify materially or permit
any Subservicer to modify any Mortgage Loan, including without limitation any
modification that would change the Mortgage Rate, forgive the payment of any
principal or interest (unless in connection with the liquidation of the related
Mortgage Loan or except in connection with prepayments to the extent that such
reamortization is not inconsistent with the terms of the Mortgage Loan),
capitalize any amounts owing on the Mortgage Loan by adding such amount to the
outstanding principal balance of the Mortgage Loan, or extend the final maturity
date of such Mortgage Loan, unless such Mortgage Loan is in default or, in the
judgment of the Master Servicer, such default is reasonably foreseeable. For
purposes of delinquency calculations, any capitalized Mortgage Loan shall be
deemed to be current as of the date of the related Servicing Modification. No
such modification shall reduce the Mortgage Rate (i) with respect to a fixed
rate Mortgage Loan, (A) below one-half of the Mortgage Rate as in effect on the
Cut-off Date or (B) below the sum of the rates at which the Servicing Fee and
the Subservicing Fee with respect to such Mortgage Loan accrue or (ii) with
respect to an adjustable
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rate Mortgage Loan, (A) below the greater of (1) one-half of the Mortgage Rate
as in effect on the Cut-off Date and (2) one-half of the Mortgage Rate as in
effect on the date of the Servicing Modification or (B) below the sum of the
rates at which the Servicing Fee and the Subservicing Fee with respect to such
Mortgage Loan accrue. The final maturity date for any Mortgage Loan shall not be
extended beyond the Maturity Date. Also, the Stated Principal Balance of all
Reportable Modified Mortgage Loans subject to Servicing Modifications (measured
at the time of the Servicing Modification and after giving effect to any
Servicing Modification) can be no more than five percent of the aggregate
Cut-off Date Principal Balance of the Mortgage Loans, unless such limit is
increased from time to time with the consent of the Rating Agencies. In
addition, any amounts owing on a Mortgage Loan added to the outstanding
principal balance of such Mortgage Loan must be fully amortized over the term of
such Mortgage Loan, and such amounts may be added to the outstanding principal
balance of a Mortgage Loan only once during the life of such Mortgage Loan.
Also, the addition of such amounts described in the preceding sentence shall be
implemented in accordance with the Program Guide and may be implemented only by
Subservicers that have been approved by the Master Servicer for such purposes.
In connection with any Curtailment of a Mortgage Loan, the Master Servicer, to
the extent not inconsistent with the terms of the Mortgage Note and local law
and practice, may permit the Mortgage Loan to be re-amortized such that the
Monthly Payment is recalculated as an amount that will fully amortize the
remaining Stated Principal Balance thereof by the original Maturity Date based
on the original Mortgage Rate; provided, that such reamortization shall not be
permitted if it would constitute a reissuance of the Mortgage Loan for federal
income tax purposes.
(b) The Master Servicer shall establish and maintain a Custodial Account in
which the Master Servicer shall deposit or cause to be deposited on a daily
basis, except as otherwise specifically provided herein, the following payments
and collections remitted by Subservicers or received by it in respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of Monthly
Payments due before or in the month of the Cut-off Date):
(i) All payments on account of principal, including Principal
Prepayments made by Mortgagors on the Mortgage Loans and the principal
component of any Subservicer Advance or of any REO Proceeds received in
connection with an REO Property for which an REO Disposition has occurred;
(ii) All payments on account of interest at the Adjusted Mortgage Rate
on the Mortgage Loans, including the interest component of any Subservicer
Advance or of any REO Proceeds received in connection with an REO Property
for which an REO Disposition has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
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(iv) All proceeds of any Mortgage Loans purchased pursuant to Section
2.02, 2.03, 2.04, 4.07, 4.08 or 9.01 (including amounts received from
Residential Funding pursuant to the last paragraph of Section 4 of the
Assignment Agreement in respect of any liability, penalty or expense that
resulted from a breach of the representation and warranty set forth in
clause (bb) of Section 4 of the Assignment Agreement) and all amounts
required to be deposited in connection with the substitution of a Qualified
Substitute Mortgage Loan pursuant to Section 2.03 or 2.04; and
(v) Any amounts required to be deposited pursuant to Section 3.07(c)
and any payments or collections received in the nature of prepayment
charges.
The foregoing requirements for deposit in the Custodial Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments on the Mortgage Loans which are not part of the Trust
Fund (consisting of Monthly Payments due before or in the month of the Cut-off
Date) and payments or collections consisting of late payment charges or
assumption fees may but need not be deposited by the Master Servicer in the
Custodial Account. In the event any amount not required to be deposited in the
Custodial Account is so deposited, the Master Servicer may at any time withdraw
such amount from the Custodial Account, any provision herein to the contrary
notwithstanding. The Custodial Account may contain funds that belong to one or
more trust funds created for mortgage pass-through certificates of other series
and may contain other funds respecting payments on mortgage loans belonging to
the Master Servicer or serviced or master serviced by it on behalf of others.
Notwithstanding such commingling of funds, the Master Servicer shall keep
records that accurately reflect the funds on deposit in the Custodial Account
that have been identified by it as being attributable to the Mortgage Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds,
Subsequent Recoveries and the proceeds of the purchase of any Mortgage Loan
pursuant to Sections 2.02, 2.03, 2.04, 4.07 and 4.08 received in any calendar
month, the Master Servicer may elect to treat such amounts as included in the
Available Distribution Amount for the Distribution Date in the month of receipt,
but is not obligated to do so. If the Master Servicer so elects, such amounts
will be deemed to have been received (and any related Realized Loss shall be
deemed to have occurred) on the last day of the month prior to the receipt
thereof.
(c) The Master Servicer shall use its best efforts to cause the institution
maintaining the Custodial Account to invest the funds in the Custodial Account
attributable to the Mortgage Loans in Permitted Investments which shall mature
not later than the Certificate Account Deposit Date next following the date of
such investment (with the exception of the Amount Held for Future Distribution)
and which shall not be sold or disposed of prior to their maturities. All income
and gain realized from any such investment shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time. The amount of any losses incurred in
respect of any such investments attributable to the investment of amounts in
respect of the Mortgage Loans shall be deposited in the Custodial Account by the
Master Servicer out of its own funds immediately as realized.
(d) The Master Servicer shall give written notice to the Trustee and the
Depositor of any change in the location of the Custodial Account and the
location of the Certificate Account prior to the use thereof.
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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 late charges or assumption fees, or
payments or collections received in the nature of prepayment charges to the
extent that the Subservicer is entitled to retain such amounts pursuant to the
Subservicing Agreement. On or before the date specified in the Program Guide,
but in no event later than the Determination Date, the Master Servicer shall
cause the Subservicer, pursuant to the Subservicing Agreement, to remit to the
Master Servicer for deposit in the Custodial Account all funds held in the
Subservicing Account with respect to each Mortgage Loan serviced by such
Subservicer that are required to be remitted to the Master Servicer. The
Subservicer will also be required, pursuant to the Subservicing Agreement, to
advance on such scheduled date of remittance amounts equal to any scheduled
monthly installments of principal and interest less its Subservicing Fees on any
Mortgage Loans for which payment was not received by the Subservicer. This
obligation to advance with respect to each Mortgage Loan will continue up to and
including the first of the month following the date on which the related
Mortgaged Property is sold at a foreclosure sale or is acquired by the Trust
Fund by deed in lieu of foreclosure or otherwise. All such advances received by
the Master Servicer shall be deposited promptly by it in the Custodial Account.
(b) The Subservicer may also be required, pursuant to the Subservicing
Agreement, to remit to the Master Servicer for deposit in the Custodial Account
interest at the Adjusted Mortgage Rate (or Modified Net Mortgage Rate plus the
rate per annum at which the Servicing Fee accrues in the case of a Modified
Mortgage Loan) on any Curtailment received by such Subservicer in respect of a
Mortgage Loan from the related Mortgagor during any month that is to be applied
by the Subservicer to reduce the unpaid principal balance of the related
Mortgage Loan as of the first day of such month, from the date of application of
such Curtailment to the first day of the following month. Any amounts paid by a
Subservicer pursuant to the preceding sentence shall be for the benefit of the
Master Servicer as additional servicing compensation and shall be subject to its
withdrawal or order from time to time pursuant to Sections 3.10(a)(iv) and (v).
(c) In addition to the Custodial Account and the Certificate Account, the
Master Servicer shall for any Nonsubserviced Mortgage Loan, and shall cause the
Subservicers for Subserviced Mortgage Loans to, establish and maintain one or
more Servicing Accounts and deposit and retain therein all collections from the
Mortgagors (or advances from Subservicers) for the payment of taxes,
assessments, hazard insurance premiums, Primary Insurance Policy premiums, if
applicable, or comparable items for the account of the
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Mortgagors. Each Servicing Account shall satisfy the requirements for a
Subservicing Account and, to the extent permitted by the Program Guide or as is
otherwise acceptable to the Master Servicer, may also function as a Subservicing
Account. Withdrawals of amounts related to the Mortgage Loans from the Servicing
Accounts may be made only to effect timely payment of taxes, assessments, hazard
insurance premiums, Primary Insurance Policy premiums, if applicable, or
comparable items, to reimburse the Master Servicer or Subservicer out of related
collections for any payments made pursuant to Sections 3.11 (with respect to the
Primary Insurance Policy) and 3.12(a) (with respect to hazard insurance), to
refund to any Mortgagors any sums as may be determined to be overages, to pay
interest, if required, to Mortgagors on balances in the Servicing Account or to
clear and terminate the Servicing Account at the termination of this Agreement
in accordance with Section 9.01 or in accordance with the Program Guide. As part
of its servicing duties, the Master Servicer shall, and the Subservicers will,
pursuant to the Subservicing Agreements, be required to pay to the Mortgagors
interest on funds in this account to the extent required by law.
(d) The Master Servicer shall advance the payments referred to in the
preceding subsection that are not timely paid by the Mortgagors or advanced by
the Subservicers on the date when the tax, premium or other cost for which such
payment is intended is due, but the Master Servicer shall be required so to
advance only to the extent that such advances, in the good faith judgment of the
Master Servicer, will be recoverable by the Master Servicer out of Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and Information Regarding the
Mortgage Loans.
In the event that compliance with this Section 3.09 shall make any Class of
Certificates legal for investment by federally insured savings and loan
associations, the Master Servicer shall provide, or cause the Subservicers to
provide, to the Trustee, the Office of Thrift Supervision or the FDIC and the
supervisory agents and examiners thereof access to the documentation regarding
the Mortgage Loans required by applicable regulations of the Office of Thrift
Supervision, such access being afforded without charge but only upon reasonable
request and during normal business hours at the offices designated by the Master
Servicer. The Master Servicer shall permit such representatives to photocopy any
such documentation and shall provide equipment for that purpose at a charge
reasonably approximating the cost of such photocopying to the Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial Account.
(a) The Master Servicer may, from time to time as provided herein, make
withdrawals from the Custodial Account of amounts on deposit therein pursuant to
Section 3.07 that are attributable to the Mortgage Loans for the following
purposes:
(i) to remit to the Trustee for deposit into the Certificate Account
in the amounts and in the manner provided for in Section 4.01;
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(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, 4.08 or 9.01) which represent (A) Late Collections of
Monthly Payments for which any such advance was made in the case of
Subservicer Advances or Advances pursuant to Section 4.04 and (B) late
recoveries of the payments for which such advances were made in the case of
Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not previously
retained by such Subservicer) out of each payment received by the Master
Servicer on account of interest on a Mortgage Loan as contemplated by
Sections 3.14 and 3.16, an amount equal to that remaining portion of any
such payment as to interest (but not in excess of the Servicing Fee and the
Subservicing Fee, if not previously retained) which, when deducted, will
result in the remaining amount of such interest being interest at a rate
per annum equal to the Net Mortgage Rate (or Modified Net Mortgage Rate in
the case of a Modified Mortgage Loan) on the amount specified in the
amortization schedule of the related Mortgage Loan as the principal balance
thereof at the beginning of the period respecting which such interest was
paid after giving effect to any previous Curtailments;
(iv) to pay to itself as additional servicing compensation any
interest or investment income earned on funds deposited in the Custodial
Account that it is entitled to withdraw pursuant to Section 3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure Profits, and any amounts remitted by Subservicers as interest
in respect of Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, Residential Funding, the
Depositor or any other appropriate Person, as the case may be, with respect
to each Mortgage Loan or property acquired in respect thereof that has been
purchased or otherwise transferred pursuant to Section 2.02, 2.03, 2.04,
4.07, 4.08 or 9.01, all amounts received thereon and not required to be
distributed to Certificateholders as of the date on which the related
Stated Principal Balance or Purchase Price is determined;
(vii) to reimburse itself or the related Subservicer for any
Nonrecoverable Advance or Advances in the manner and to the extent provided
in subsection (c) below, and any Advance or Servicing Advance made in
connection with a modified Mortgage Loan that is in default or, in the
judgment of the Master Servicer, default is reasonably foreseeable pursuant
to Section 3.07(a), to the extent the amount of the Advance or Servicing
Advance was added to the Stated Principal Balance of the Mortgage Loan in
the preceding calendar month;
(viii) to reimburse itself or the Depositor for expenses incurred by
and reimbursable to it or the Depositor pursuant to Section 3.14(c), 6.03,
10.01 or otherwise;
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(ix) to reimburse itself for amounts expended by it (a) pursuant to
Section 3.14 in good faith in connection with the restoration of property
damaged by an Uninsured Cause, and (b) in connection with the liquidation
of a Mortgage Loan or disposition of an REO Property to the extent not
otherwise reimbursed pursuant to clause (ii) or (viii) above; and
(x) to withdraw any amount deposited in the Custodial Account that was
not required to be deposited therein pursuant to Section 3.07, including
any payoff fees or penalties or any other additional amounts payable to the
Master Servicer or Subservicer pursuant to the terms of the Mortgage Note.
(b) Since, in connection with withdrawals pursuant to clauses (ii), (iii),
(v) and (vi), the Master Servicer's entitlement thereto is limited to
collections or other recoveries on the related Mortgage Loan, the Master
Servicer shall keep and maintain separate accounting, on a Mortgage Loan by
Mortgage Loan basis, for the purpose of justifying any withdrawal from the
Custodial Account pursuant to such clauses.
(c) The Master Servicer shall be entitled to reimburse itself or the
related Subservicer for any advance made in respect of a Mortgage Loan that the
Master Servicer determines to be a Nonrecoverable Advance by withdrawal from the
Custodial Account of amounts on deposit therein attributable to the Mortgage
Loans on any Certificate Account Deposit Date succeeding the date of such
determination. Such right of reimbursement in respect of a Nonrecoverable
Advance relating to an Advance made pursuant to Section 4.04 on any such
Certificate Account Deposit Date shall be limited to an amount not exceeding the
portion of such advance previously paid to Certificateholders (and not
theretofore reimbursed to the Master Servicer or the related Subservicer).
Section 3.11. Maintenance of Primary Insurance Coverage.
(a) The Master Servicer shall not take, or permit any Subservicer to take,
any action which would result in noncoverage under any applicable Primary
Insurance Policy of any loss which, but for the actions of the Master Servicer
or Subservicer, would have been covered thereunder. To the extent coverage is
available, the Master Servicer shall keep or cause to be kept in full force and
effect each such Primary Insurance Policy until the principal balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced to 80% or less
of the Appraised Value at origination in the case of such a Mortgage Loan having
a Loan-to-Value Ratio at origination in excess of 80%, provided that such
Primary Insurance Policy was in place as of the Cut-off Date and the Master
Servicer had knowledge of such Primary Insurance Policy. The Master Servicer
shall not cancel or refuse to renew any such Primary Insurance Policy applicable
to a Nonsubserviced Mortgage Loan, or consent to any Subservicer canceling or
refusing to renew any such Primary Insurance Policy applicable to a Mortgage
Loan subserviced by it, that is in effect at the date of the initial issuance of
the Certificates and is required to be kept in force hereunder unless the
replacement Primary Insurance Policy for such canceled or non-renewed policy is
maintained with an insurer whose claims-paying ability is acceptable to each
Rating Agency for mortgage pass-through certificates having a rating equal to or
better than the then-current rating assigned to the Certificates by such Rating
Agency.
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(b) In connection with its activities as administrator and servicer of the
Mortgage Loans, the Master Servicer agrees to present or to cause the related
Subservicer to present, on behalf of the Master Servicer, the Subservicer, if
any, the Trustee and Certificateholders, claims to the insurer under any Primary
Insurance Policies, in a timely manner in accordance with such policies, and, in
this regard, to take or cause to be taken such reasonable action as shall be
necessary to permit recovery under any Primary Insurance Policies respecting
defaulted Mortgage Loans. Pursuant to Section 3.07, any Insurance Proceeds
collected by or remitted to the Master Servicer under any Primary Insurance
Policies shall be deposited in the Custodial Account, subject to withdrawal
pursuant to Section 3.10.
Section 3.12. Maintenance of Fire Insurance and Omissions and Fidelity
Coverage.
(a) The Master Servicer shall cause to be maintained for each Mortgage Loan
fire insurance with extended coverage in an amount which is equal to the lesser
of the principal balance owing on such Mortgage Loan (together with the
principal balance of any mortgage loan secured by a lien that is senior to the
Mortgage Loan) or 100 percent of the insurable value of the improvements;
provided, however, that such coverage may not be less than the minimum amount
required to fully compensate for any loss or damage on a replacement cost basis.
To the extent it may do so without breaching the related Subservicing Agreement,
the Master Servicer shall replace any Subservicer that does not cause such
insurance, to the extent it is available, to be maintained. The Master Servicer
shall also cause to be maintained on property acquired upon foreclosure, or deed
in lieu of foreclosure, of any Mortgage Loan (other than a Cooperative Loan),
fire insurance with extended coverage in an amount which is at least equal to
the amount necessary to avoid the application of any co-insurance clause
contained in the related hazard insurance policy. Pursuant to Section 3.07, any
amounts collected by the Master Servicer under any such policies (other than
amounts to be applied to the restoration or repair of the related Mortgaged
Property or property thus acquired or amounts released to the Mortgagor in
accordance with the Master Servicer's normal servicing procedures) shall be
deposited in the Custodial Account, subject to withdrawal pursuant to Section
3.10. Any cost incurred by the Master Servicer in maintaining any such insurance
shall not, for the purpose of calculating monthly distributions to
Certificateholders, be added to the amount owing under the Mortgage Loan,
notwithstanding that the terms of the Mortgage Loan so permit. Such costs shall
be recoverable by the Master Servicer out of related late payments by the
Mortgagor or out of Insurance Proceeds and Liquidation Proceeds to the extent
permitted by Section 3.10. It is understood and agreed that no earthquake or
other additional insurance is to be required of any Mortgagor or maintained on
property acquired in respect of a Mortgage Loan other than pursuant to such
applicable laws and regulations as shall at any time be in force and as shall
require such additional insurance. Whenever the improvements securing a Mortgage
Loan are located at the time of origination of such Mortgage Loan in a federally
designated special flood hazard area, the Master Servicer shall cause flood
insurance (to the extent available) to be maintained in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the amount
required to compensate for any loss or damage to the Mortgaged Property on a
replacement cost basis and (ii) the maximum amount of such insurance available
for the related Mortgaged Property under the national flood insurance program
(assuming that the area in which such Mortgaged Property is located is
participating in such program).In the event that the Master Servicer shall
obtain and maintain a blanket fire insurance policy with extended coverage
insuring against hazard losses on all of the Mortgage Loans, it shall
conclusively be deemed to
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have satisfied its obligations as set forth in the first sentence of this
Section 3.12(a), it being understood and agreed that such policy may contain a
deductible clause, in which case the Master Servicer shall, in the event that
there shall not have been maintained on the related Mortgaged Property a policy
complying with the first sentence of this Section 3.12(a) and there shall have
been a loss which would have been covered by such policy, deposit in the
Certificate Account the amount not otherwise payable under the blanket policy
because of such deductible clause. Any such deposit by the Master Servicer shall
be made from its own funds and shall be made on the Certificate Account Deposit
Date next preceding the Distribution Date which occurs in the month following
the month in which payments under any such policy would have been deposited in
the Custodial Account. In connection with its activities as administrator and
servicer of the Mortgage Loans, the Master Servicer agrees to present, on behalf
of itself, the Trustee and Certificateholders, claims under any such blanket
policy.
(b) The Master Servicer shall obtain and maintain at its own expense and
keep in full force and effect throughout the term of this Agreement a blanket
fidelity bond and an errors and omissions insurance policy covering the Master
Servicer's officers and employees and other persons acting on behalf of the
Master Servicer in connection with its activities under this Agreement. The
amount of coverage shall be at least equal to the coverage that would be
required by ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac, whichever is greater, with respect to the
Master Servicer if the Master Servicer were servicing and administering the
Mortgage Loans for ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac. In the event that any such bond or
policy ceases to be in effect, the Master Servicer shall obtain a comparable
replacement bond or policy from an issuer or insurer, as the case may be,
meeting the requirements, if any, of the Program Guide and acceptable to the
Depositor. Coverage of the Master Servicer under a policy or bond obtained by an
Affiliate of the Master Servicer and providing the coverage required by this
Section 3.12(b) shall satisfy the requirements of this Section 3.12(b).
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.
(a) When any Mortgaged Property is conveyed by the Mortgagor, the Master
Servicer or Subservicer, to the extent it has knowledge of such conveyance,
shall enforce any due-on-sale clause contained in any Mortgage Note or Mortgage,
to the extent permitted under applicable law and governmental regulations, but
only to the extent that such enforcement will not adversely affect or jeopardize
coverage under any Required Insurance Policy. Notwithstanding the foregoing: (i)
the Master Servicer shall not be deemed to be in default under this Section
3.13(a) by reason of any transfer or assumption which the Master Servicer is
restricted by law from preventing; and (ii) if the Master Servicer determines
that it is reasonably likely that any Mortgagor will bring, or if any Mortgagor
does bring, legal action to declare invalid or otherwise avoid enforcement of a
due-on-sale clause contained in any Mortgage Note or Mortgage, the Master
Servicer shall not be required to enforce the due-on-sale clause or to contest
such action.
(b) Subject to the Master Servicer's duty to enforce any due-on-sale clause
to the extent set forth in Section 3.13(a), in any case in which a Mortgaged
Property is to be conveyed to a Person by a Mortgagor, and such Person is to
enter into an assumption or modification agreement or supplement to the Mortgage
Note or Mortgage which requires the signature of the
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Trustee, or if an instrument of release signed by the Trustee is required
releasing the Mortgagor from liability on the Mortgage Loan, the Master Servicer
is authorized, subject to the requirements of the sentence next following, to
execute and deliver, on behalf of the Trustee, the assumption agreement with the
Person to whom the Mortgaged Property is to be conveyed and such modification
agreement or supplement to the Mortgage Note or Mortgage or other instruments as
are reasonable or necessary to carry out the terms of the Mortgage Note or
Mortgage or otherwise to comply with any applicable laws regarding assumptions
or the transfer of the Mortgaged Property to such Person; provided, however,
none of such terms and requirements shall both constitute a "significant
modification" effecting an exchange or reissuance of such Mortgage Loan under
the Code (or final, temporary or proposed Treasury regulations promulgated
thereunder) and cause any REMIC created hereunder to fail to qualify as REMICs
under the Code or the imposition of any tax on "prohibited transactions" or
"contributions" after the startup date under the REMIC Provisions. The Master
Servicer shall execute and deliver such documents only if it reasonably
determines that (i) its execution and delivery thereof will not conflict with or
violate any terms of this Agreement or cause the unpaid balance and interest on
the Mortgage Loan to be uncollectible in whole or in part, (ii) any required
consents of insurers under any Required Insurance Policies have been obtained
and (iii) subsequent to the closing of the transaction involving the assumption
or transfer (A) the Mortgage Loan will continue to be secured by a first
mortgage lien pursuant to the terms of the Mortgage, (B) such transaction will
not adversely affect the coverage under any Required Insurance Policies, (C) the
Mortgage Loan will fully amortize over the remaining term thereof, (D) no
material term of the Mortgage Loan (including the interest rate on the Mortgage
Loan) will be altered nor will the term of the Mortgage Loan be changed and (E)
if the seller/transferor of the Mortgaged Property is to be released from
liability on the Mortgage Loan, the buyer/transferee of the Mortgaged Property
would be qualified to assume the Mortgage Loan based on generally comparable
credit quality and such release will not (based on the Master Servicer's or
Subservicer's good faith determination) adversely affect the collectability of
the Mortgage Loan. Upon receipt of appropriate instructions from the Master
Servicer in accordance with the foregoing, the Trustee shall execute any
necessary instruments for such assumption or substitution of liability as
directed by the Master Servicer. Upon the closing of the transactions
contemplated by such documents, the Master Servicer shall cause the originals or
true and correct copies of the assumption agreement, the release (if any), or
the modification or supplement to the Mortgage Note or Mortgage to be delivered
to the Trustee or the Custodian and deposited with the Mortgage File for such
Mortgage Loan. Any fee collected by the Master Servicer or such related
Subservicer for entering into an assumption or substitution of liability
agreement will be retained by the Master Servicer or such Subservicer as
additional servicing compensation.
(c) The Master Servicer or the related Subservicer, as the case may be,
shall be entitled to approve a request from a Mortgagor for a partial release of
the related Mortgaged Property, the granting of an easement thereon in favor of
another Person, any alteration or demolition of the related Mortgaged Property
(or with respect to a Cooperative Loan, the related Cooperative Apartment)
without any right of reimbursement or other similar matters if it has
determined, exercising its good faith business judgment in the same manner as it
would if it were the owner of the related Mortgage Loan, that the security for,
and the timely and full collectability of, such Mortgage Loan would not be
adversely affected thereby and that each REMIC created hereunder would continue
to qualify as a REMIC under the Code as a result
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thereof and that no tax on "prohibited transactions" or "contributions" after
the Startup Date would be imposed on any REMIC created hereunder as a result
thereof. Any fee collected by the Master Servicer or the related Subservicer for
processing such a request will be retained by the Master Servicer or such
Subservicer as additional servicing compensation.
(d) Subject to any other applicable terms and conditions of this Agreement,
the Master Servicer shall be entitled to approve an assignment in lieu of
satisfaction with respect to any Mortgage Loan, provided the obligee with
respect to such Mortgage Loan following such proposed assignment provides the
Master Servicer with a "Lender Certification for Assignment of Mortgage Loan" in
the form attached hereto as Exhibit N, in form and substance satisfactory to the
Master Servicer, providing the following: (i) that the Mortgage Loan is secured
by Mortgaged Property located in a jurisdiction in which an assignment in lieu
of satisfaction is required to preserve lien priority, minimize or avoid
mortgage recording taxes or otherwise comply with, or facilitate a refinancing
under, the laws of such jurisdiction; (ii) that the substance of the assignment
is, and is intended to be, a refinancing of such Mortgage Loan and that the form
of the transaction is solely to comply with, or facilitate the transaction
under, such local laws; (iii) that the Mortgage Loan following the proposed
assignment will have a rate of interest at least 0.25 percent below or above the
rate of interest on such Mortgage Loan prior to such proposed assignment; and
(iv) that such assignment is at the request of the borrower under the related
Mortgage Loan. Upon approval of an assignment in lieu of satisfaction with
respect to any Mortgage Loan, the Master Servicer shall receive cash in an
amount equal to the unpaid principal balance of and accrued interest on such
Mortgage Loan and the Master Servicer shall treat such amount as a Principal
Prepayment in Full with respect to such Mortgage Loan for all purposes hereof.
Section 3.14. Realization Upon Defaulted Mortgage Loans.
(a) The Master Servicer shall foreclose upon or otherwise comparably
convert (which may include an REO Acquisition) the ownership of properties
securing such of the Mortgage Loans as come into and continue in default and as
to which no satisfactory arrangements can be made for collection of delinquent
payments pursuant to Section 3.07. Alternatively, the Master Servicer may take
other actions in respect of a defaulted Mortgage Loan, which may include (i)
accepting a short sale (a payoff of the Mortgage Loan for an amount less than
the total amount contractually owed in order to facilitate a sale of the
Mortgaged Property by the Mortgagor) or permitting a short refinancing (a payoff
of the Mortgage Loan for an amount less than the total amount contractually owed
in order to facilitate refinancing transactions by the Mortgagor not involving a
sale of the Mortgaged Property), (ii) arranging for a repayment plan or (iii)
agreeing to a modification in accordance with Section 3.07. In connection with
such foreclosure or other conversion or action, the Master Servicer shall,
consistent with Section 3.11, follow such practices and procedures as it shall
deem necessary or advisable, as shall be normal and usual in its general
mortgage servicing activities and as shall be required or permitted by the
Program Guide; provided that the Master Servicer shall not be liable in any
respect hereunder if the Master Servicer is acting in connection with any such
foreclosure or other conversion or action in a manner that is consistent with
the provisions of this Agreement. The Master Servicer, however, shall not be
required to expend its own funds or incur other reimbursable charges in
connection with any foreclosure, or attempted foreclosure which is not
completed, or towards the correction of any default on a related senior mortgage
loan, or towards the restoration of any
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property unless it shall determine (i) that such restoration and/or foreclosure
will increase the proceeds of liquidation of the Mortgage Loan to Holders of
Certificates of one or more Classes after reimbursement to itself for such
expenses or charges and (ii) that such expenses and charges will be recoverable
to it through Liquidation Proceeds, Insurance Proceeds, or REO Proceeds
(respecting which it shall have priority for purposes of withdrawals from the
Custodial Account pursuant to Section 3.10, whether or not such expenses and
charges are actually recoverable from related Liquidation Proceeds, Insurance
Proceeds or REO Proceeds). In the event of such a determination by the Master
Servicer pursuant to this Section 3.14(a), the Master Servicer shall be entitled
to reimbursement of its funds so expended pursuant to Section 3.10. In addition,
the Master Servicer may pursue any remedies that may be available in connection
with a breach of a representation and warranty with respect to any such Mortgage
Loan in accordance with Sections 2.03 and 2.04. However, the Master Servicer is
not required to continue to pursue both foreclosure (or similar remedies) with
respect to the Mortgage Loans and remedies in connection with a breach of a
representation and warranty if the Master Servicer determines in its reasonable
discretion that one such remedy is more likely to result in a greater recovery
as to the Mortgage Loan. Upon the occurrence of a Cash Liquidation or REO
Disposition, following the deposit in the Custodial Account of all Insurance
Proceeds, Liquidation Proceeds and other payments and recoveries referred to in
the definition of "Cash Liquidation" or "REO Disposition," as applicable, upon
receipt by the Trustee of written notification of such deposit signed by a
Servicing Officer, the Trustee or 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 other unscheduled collections or the amount of any
Realized Loss, the Master Servicer may take into account minimal amounts of
additional receipts expected to be received or any estimated additional
liquidation expenses expected to be incurred in connection with the related
defaulted Mortgage Loan or REO Property.
(b) In the event that title to any Mortgaged Property is acquired by the
Trust Fund as an REO Property by foreclosure or by deed in lieu of foreclosure,
the deed or certificate of sale shall be issued to the Trustee or to its nominee
on behalf of Certificateholders. Notwithstanding any such acquisition of title
and cancellation of the related Mortgage Loan, such REO Property shall (except
as otherwise expressly provided herein) be considered to be an Outstanding
Mortgage Loan held in the Trust Fund until such time as the REO Property shall
be sold. Consistent with the foregoing for purposes of all calculations
hereunder so long as such REO Property shall be considered to be an Outstanding
Mortgage Loan it shall be assumed that, notwithstanding that the indebtedness
evidenced by the related Mortgage Note shall have been discharged, such Mortgage
Note and the related amortization schedule in effect at the time of any such
acquisition of title (after giving effect to any previous Curtailments and
before any
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adjustment thereto by reason of any bankruptcy or similar proceeding or any
moratorium or similar waiver or grace period) remain in effect.
(c) In the event that the Trust Fund acquires any REO Property as aforesaid
or otherwise in connection with a default or imminent default on a Mortgage
Loan, the Master Servicer on behalf of the Trust Fund shall dispose of such REO
Property within three full years after the taxable year of its acquisition by
the Trust Fund for purposes of Section 860G(a)(8) of the Code (or such shorter
period as may be necessary under applicable state (including any state in which
such property is located) law to maintain the status of each REMIC created
hereunder as a REMIC under applicable state law and avoid taxes resulting from
such property failing to be foreclosure property under applicable state law) or,
at the expense of the Trust Fund, request, more than 60 days before the day on
which such grace period would otherwise expire, an extension of such grace
period unless the Master Servicer obtains for the Trustee an Opinion of Counsel,
addressed to the Trustee and the Master Servicer, to the effect that the holding
by the Trust Fund of such REO Property subsequent to such period will not result
in the imposition of taxes on "prohibited transactions" as defined in Section
860F of the Code or cause any REMIC created hereunder to fail to qualify as a
REMIC (for federal (or any applicable State or local) income tax purposes) at
any time that any Certificates are outstanding, in which case the Trust Fund may
continue to hold such REO Property (subject to any conditions contained in such
Opinion of Counsel). The Master Servicer shall be entitled to be reimbursed from
the Custodial Account for any costs incurred in obtaining such Opinion of
Counsel, as provided in Section 3.10. Notwithstanding any other provision of
this Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or (ii) any subject REMIC created hereunder to
the imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Section 860G(c) of the Code,
unless the Master Servicer has agreed to indemnify and hold harmless the Trust
Fund with respect to the imposition of any such taxes.
(d) The proceeds of any Cash Liquidation, REO Disposition or purchase or
repurchase of any Mortgage Loan pursuant to the terms of this Agreement, as well
as any recovery (other than Subsequent Recoveries) resulting from a collection
of Liquidation Proceeds, Insurance Proceeds or REO Proceeds, will be applied in
the following order of priority: first, to reimburse the Master Servicer or the
related Subservicer in accordance with Section 3.10(a)(ii); second, to the
Certificateholders to the extent of accrued and unpaid interest on the Mortgage
Loan, and any related REO Imputed Interest, at the Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), to the Due
Date in the related Due Period prior to the Distribution Date on which such
amounts are to be distributed; third, to the Certificateholders as a recovery of
principal on the Mortgage Loan (or REO Property) (provided that if any such
Class of Certificates to which such Realized Loss was allocated is no longer
outstanding, such subsequent recovery shall be distributed to the persons who
were the Holders of such Class of Certificates when it was retired); fourth, to
all Servicing Fees and Subservicing Fees payable therefrom (and the Master
Servicer and the Subservicer shall have no claims for any deficiencies with
respect to such fees which result from the foregoing allocation); and fifth, to
Foreclosure Profits.
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(e) In the event of a default on a Mortgage Loan one or more of whose
obligors is not a United States Person, in connection with any foreclosure or
acquisition of a deed in lieu of foreclosure (together, "foreclosure") in
respect of such Mortgage Loan, the Master Servicer shall cause compliance with
the provisions of Treasury Regulation Section 1.1445-2(d)(3) (or any successor
thereto) necessary to assure that no withholding tax obligation arises with
respect to the proceeds of such foreclosure except to the extent, if any, that
proceeds of such foreclosure are required to be remitted to the obligors on such
Mortgage Loan.
Section 3.15. Trustee to Cooperate; Release of 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
shall immediately notify the Trustee (if it holds the related Mortgage File) or
the Custodian by a certification of a Servicing Officer (which certification
shall include a statement to the effect that all amounts received or to be
received in connection with such payment 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 H
requesting delivery to it of the Mortgage File. Upon receipt of such
certification and request, the Trustee shall promptly release, or cause the
Custodian to release, the related Mortgage File to the Master Servicer. The
Master Servicer is authorized to execute and deliver to the Mortgagor the
request for reconveyance, deed of reconveyance or release or satisfaction of
mortgage or such instrument releasing the lien of the Mortgage, together with
the Mortgage Note with, as appropriate, written evidence of cancellation thereon
and to cause the removal from the registration on the MERS(R) System of such
Mortgage and to execute and deliver, on behalf of the Trustee and the
Certificateholders or any of them, any and all instruments of satisfaction or
cancellation or of partial or full release, including any applicable UCC
termination statements. No expenses incurred in connection with any instrument
of satisfaction or deed of reconveyance shall be chargeable to the Custodial
Account or the Certificate Account.
(b) From time to time as is appropriate for the servicing or foreclosure of
any Mortgage Loan, the Master Servicer shall deliver to the Custodian, with a
copy to the Trustee, a certificate of a Servicing Officer substantially in one
of the forms attached as Exhibit H hereto, 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
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to the name and address of the Person to which such Mortgage File or such
document was delivered and the purpose or purposes of such delivery. In the
event of the liquidation of a Mortgage Loan, the Trustee shall deliver the
Request for Release with respect thereto to the Master Servicer upon the
Trustee's receipt of notification from the Master Servicer of the deposit of the
related Liquidation Proceeds in the Custodial Account.
(c) The Trustee or the Master Servicer on the Trustee's behalf shall
execute and deliver to the Master Servicer, if necessary, any court pleadings,
requests for trustee's sale or other documents necessary to the foreclosure or
trustee's sale in respect of a Mortgaged Property or to any legal action brought
to obtain judgment against any Mortgagor on the Mortgage Note or Mortgage or to
obtain a deficiency judgment, or to enforce any other remedies or rights
provided by the Mortgage Note or Mortgage or otherwise available at law or in
equity. Together with such documents or pleadings (if signed by the Trustee),
the Master Servicer shall deliver to the Trustee a certificate of a Servicing
Officer requesting that such pleadings or documents be executed by the Trustee
and certifying as to the reason such documents or pleadings are required and
that the execution and delivery thereof by the Trustee shall not invalidate any
insurance coverage under any Required Insurance Policy or invalidate or
otherwise affect the lien of the Mortgage, except for the termination of such a
lien upon completion of the foreclosure or trustee's sale.
Section 3.16. Servicing and Other Compensation; Eligible Master Servicing
Compensation.
(a) The Master Servicer, as compensation for its activities hereunder,
shall be entitled to receive on each Distribution Date the amounts provided for
by clauses (iii), (iv), (v) and (vi) of Section 3.10(a), subject to clause (e)
below. The amount of servicing compensation provided for in such clauses shall
be accounted for on a Mortgage Loan-by-Mortgage Loan basis. In the event that
Liquidation Proceeds, Insurance Proceeds and REO Proceeds (net of amounts
reimbursable therefrom pursuant to Section 3.10(a)(ii)) in respect of a Cash
Liquidation or REO Disposition exceed the unpaid principal balance of such
Mortgage Loan plus unpaid interest accrued thereon (including REO Imputed
Interest) at a per annum rate equal to the related Net Mortgage Rate (or the
Modified Net Mortgage Rate in the case of a Modified Mortgage Loan), the Master
Servicer shall be entitled to retain therefrom and to pay to itself and/or the
related Subservicer, any Foreclosure Profits and any Servicing Fee or
Subservicing Fee considered to be accrued but unpaid.
(b) Additional servicing compensation in the form of assumption fees, late
payment charges, investment income on amounts in the Custodial Account or the
Certificate Account or otherwise shall be retained by the Master Servicer or the
Subservicer to the extent provided herein, subject to clause (e) below.
Prepayment charges shall be deposited into the Certificate Account and shall be
paid on each Distribution Date to the holders of the Class SB Certificates.
(c) The Master Servicer shall be required to pay, or cause to be paid, all
expenses incurred by it in connection with its servicing activities hereunder
(including payment of premiums for the Primary Insurance Policies, if any, to
the extent such premiums are not required to be paid by the related Mortgagors,
and the fees and expenses of the Trustee and any
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Custodian) and shall not be entitled to reimbursement therefor except as
specifically provided in Sections 3.10 and 3.14.
(d) The Master Servicer's right to receive servicing compensation may not
be transferred in whole or in part except in connection with the transfer of all
of its responsibilities and obligations of the Master Servicer under this
Agreement.
(e) Notwithstanding clauses (a) and (b) above, the amount of servicing
compensation that the Master Servicer shall be entitled to receive for its
activities hereunder for the period ending on each Distribution Date shall be
reduced (but not below zero) by an amount equal to Eligible Master Servicing
Compensation (if any) for such Distribution Date. Such reduction shall be
applied during such period as follows: first, to any Servicing Fee or
Subservicing Fee to which the Master Servicer is entitled pursuant to Section
3.10(a)(iii); second, to any income or gain realized from any investment of
funds held in the Custodial Account or the Certificate Account to which the
Master Servicer is entitled pursuant to Sections 3.07(c) or 4.01(b),
respectively; and third, to any amounts of servicing compensation to which the
Master Servicer is entitled pursuant to Section 3.10(a)(v) or (vi). In making
such reduction, the Master Servicer shall not withdraw from the Custodial
Account any such amount representing all or a portion of the Servicing Fee to
which it is entitled pursuant to Section 3.10(a)(iii); (ii) shall not withdraw
from the Custodial Account or Certificate Account any such amount to which it is
entitled pursuant to Section 3.07(c) or 4.01(b) and (iii) shall not withdraw
from the Custodial Account any such amount of servicing compensation to which it
is entitled pursuant to Section 3.10(a)(v) or (vi).
On each Distribution Date, Eligible Master Servicing Compensation shall be
applied to cover Prepayment Interest Shortfalls for such Distribution Date.
Section 3.17. Reports to the Trustee and the Depositor.
Not later than fifteen days after it receives a written request from the
Trustee or the Depositor, the Master Servicer shall forward to the Trustee and
the Depositor a statement, certified by a Servicing Officer, setting forth the
status of the Custodial Account as of the close of business on the most recent
prior Distribution Date as it relates to the Mortgage Loans and showing, for the
period covered by such statement, the aggregate of deposits in or withdrawals
from the Custodial Account in respect of the Mortgage Loans for each category of
deposit specified in Section 3.07 and each category of withdrawal specified in
Section 3.10.
Section 3.18. Annual Statement as to Compliance and Servicing Assessment.
The Master Servicer shall deliver to the Depositor and the Trustee on or
before the earlier of (a) March 31 of each year or (b) with respect to any
calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the Depositor's annual report
on Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission, (i) a servicing assessment as described
in Section 4.03(f)(ii) and (ii) a servicer compliance statement signed by an
authorized officer of the
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Master Servicer, as described in Items 1122(a), 1122(b) and 1123 of Regulation
AB, to the effect that:
(i) A review of the Master Servicer's activities during the reporting
period and of its performance under this Agreement, has been made under
such officer's supervision.
(ii) To the best of such officer's knowledge, based on such review,
the Master Servicer has fulfilled all of its obligations under this
Agreement in all material respects throughout the reporting period or, if
there has been a failure to fulfill any such obligation in any material
respect, specifying each such failure known to such officer and the nature
and status thereof.
The Master Servicer shall use commercially reasonable efforts to obtain
from all other parties participating in the servicing function any additional
certifications required under Item 1123 of Regulation AB to the extent required
to be included in a Report on Form 10-K; provided, however, that a failure to
obtain such certifications shall not be a breach of the Master Servicer's duties
hereunder if any such party fails to deliver such a certification.
Section 3.19. Annual Independent Public Accountants' Servicing Report.
On or before the earlier of (a) March 31 of each year or (b) with respect
to any calendar year during which the Depositor's annual report on Form 10-K is
required to be filed in accordance with the Exchange Act and the rules and
regulations of the Commission, the date on which the annual report is required
to be filed in accordance with the Exchange Act and the rules and regulations of
the Commission, the Master Servicer at its expense shall cause a firm of
independent public accountants, which shall be members of the American Institute
of Certified Public Accountants, to furnish to the Depositor and the Trustee the
attestation required under Item 1122(b) of Regulation AB. In rendering such
statement, such firm may rely, as to matters relating to the direct servicing of
mortgage loans by Subservicers, upon comparable statements for examinations
conducted by independent public accountants substantially in accordance with
standards established by the American Institute of Certified Public Accountants
(rendered within one year of such statement) with respect to such Subservicers.
Section 3.20. Right of the Depositor in Respect of the Master Servicer.
The Master Servicer shall afford the Depositor and the Trustee, upon
reasonable notice, during normal business hours access to all records maintained
by the Master Servicer in respect of its rights and obligations hereunder and
access to officers of the Master Servicer responsible for such obligations. Upon
request, the Master Servicer shall furnish the Depositor and the Trustee with
its most recent financial statements and such other information as the Master
Servicer possesses regarding its business, affairs, property and condition,
financial or otherwise. The Master Servicer shall also cooperate with all
reasonable requests for information including, but not limited to, notices,
tapes and copies of files, regarding itself, the Mortgage Loans or the
Certificates from any Person or Persons identified by the Depositor or
Residential Funding. The Depositor may, but is not obligated to perform, or
cause a designee to perform, any defaulted obligation of the Master Servicer
hereunder or exercise the rights of the
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Master Servicer hereunder; provided that the Master Servicer shall not be
relieved of any of its obligations hereunder by virtue of such performance by
the Depositor or its designee. Neither the Depositor nor the Trustee shall have
the responsibility or liability for any action or failure to act by the Master
Servicer and is not obligated to supervise the performance of the Master
Servicer under this Agreement or otherwise.
Section 3.21. Advance Facility.
(a) The Master Servicer is hereby authorized to enter into a financing or
other facility (any such arrangement, an "Advance Facility") under which (1) the
Master Servicer sells, assigns or pledges to another Person (an "Advancing
Person") the Master Servicer's rights under this Agreement to be reimbursed for
any Advances or Servicing Advances and/or (2) an Advancing Person agrees to fund
some or all Advances and/or Servicing Advances required to be made by the Master
Servicer pursuant to this Agreement. No consent of the Depositor, the Trustee,
the Certificateholders or any other party shall be required before the Master
Servicer may enter into an Advance Facility. Notwithstanding the existence of
any Advance Facility under which an Advancing Person agrees to fund Advances
and/or Servicing Advances on the Master Servicer's behalf, the Master Servicer
shall remain obligated pursuant to this Agreement to make Advances and Servicing
Advances pursuant to and as required by this Agreement. If the Master Servicer
enters into an Advance Facility, and for so long as an Advancing Person remains
entitled to receive reimbursement for any Advances including Nonrecoverable
Advances ("Advance Reimbursement Amounts") and/or Servicing Advances including
Nonrecoverable Advances ("Servicing Advance Reimbursement Amounts" and together
with Advance Reimbursement Amounts, "Reimbursement Amounts") (in each case to
the extent such type of Reimbursement Amount is included in the Advance
Facility), as applicable, pursuant to this Agreement, then the Master Servicer
shall identify such Reimbursement Amounts consistent with the reimbursement
rights set forth in Section 3.10(a)(ii) and (vii) and remit such Reimbursement
Amounts in accordance with this Section 3.21 or otherwise in accordance with the
documentation establishing the Advance Facility to such Advancing Person or to a
trustee, agent or custodian (an "Advance Facility Trustee") designated by such
Advancing Person in an Advance Facility Notice described below in Section
3.21(b). Notwithstanding the foregoing, if so required pursuant to the terms of
the Advance Facility, the Master Servicer may direct, and if so directed in
writing the Trustee is hereby authorized to and shall pay to the Advance
Facility Trustee the Reimbursement Amounts identified pursuant to the preceding
sentence. An Advancing Person whose obligations hereunder are limited to the
funding of Advances and/or Servicing Advances shall not be required to meet the
qualifications of a Master Servicer or a Subservicer pursuant to Section 3.02(a)
or 6.02(c) hereof and shall not be deemed to be a Subservicer under this
Agreement. Notwithstanding anything to the contrary herein, in no event shall
Advance Reimbursement Amounts or Servicing Advance Reimbursement Amounts be
included in the Available Distribution Amount or distributed to
Certificateholders.
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(b) If the Master Servicer enters into an Advance Facility and makes the
election set forth in Section 3.21(a), the Master Servicer and the related
Advancing Person shall deliver to the Trustee a written notice and payment
instruction (an "Advance Facility Notice"), providing the Trustee with written
payment instructions as to where to remit Advance Reimbursement Amounts and/or
Servicing Advance Reimbursement Amounts (each to the extent such type of
Reimbursement Amount is included within the Advance Facility) on subsequent
Distribution Dates. The payment instruction shall require the applicable
Reimbursement Amounts to be distributed to the Advancing Person or to an Advance
Facility Trustee designated in the Advance Facility Notice. An Advance Facility
Notice may only be terminated by the joint written direction of the Master
Servicer and the related Advancing Person (and any related Advance Facility
Trustee).
(c) Reimbursement Amounts shall consist solely of amounts in respect of
Advances and/or Servicing Advances made with respect to the Mortgage Loans for
which the Master Servicer would be permitted to reimburse itself in accordance
with Section 3.10(a)(ii) and (vii) hereof, assuming the Master Servicer or the
Advancing Person had made the related Advance(s) and/or Servicing Advance(s).
Notwithstanding the foregoing, except with respect to reimbursement of
Nonrecoverable Advances as set forth in Section 3.10(c) of this Agreement, no
Person shall be entitled to reimbursement from funds held in the Collection
Account for future distribution to Certificateholders pursuant to this
Agreement. Neither the Depositor nor the Trustee shall have any duty or
liability with respect to the calculation of any Reimbursement Amount, nor shall
the Depositor or the Trustee have any responsibility to track or monitor the
administration of the Advance Facility and the Depositor shall not have any
responsibility to track, monitor or verify the payment of Reimbursement Amounts
to the related Advancing Person or Advance Facility Trustee. The Master Servicer
shall maintain and provide to any Successor Master Servicer (a "Successor Master
Servicer") a detailed accounting on a loan by-loan basis as to amounts advanced
by, sold, pledged or assigned to, and reimbursed to any Advancing Person. The
Successor Master Servicer shall be entitled to rely on any such information
provided by the Master Servicer and the Successor Master Servicer shall not be
liable for any errors in such information.
(d) Upon the direction of and at the expense of the Master Servicer, the
Trustee agrees to execute such acknowledgments, certificates, and other
documents provided by the Master Servicer and reasonably satisfactory to the
Trustee recognizing the interests of any Advancing Person or Advance Facility
Trustee in such Reimbursement Amounts as the Master Servicer may cause to be
made subject to Advance Facilities pursuant to this Section 3.21, and such other
documents in connection with such Advance Facility as may be reasonably
requested from time to time by any Advancing Person or Advance Facility Trustee
and reasonably satisfactory to the Trustee.
(e) Reimbursement Amounts collected with respect to each Mortgage Loan
shall be allocated to outstanding unreimbursed Advances or Servicing Advances
(as the case may be) made with respect to that Mortgage Loan on a "first-in,
first out" ("FIFO") basis, subject to the qualifications set forth below:
(i) Any Successor Master Servicer to Residential Funding and the
Advancing Person or Advance Facility Trustee shall be required to apply all
amounts
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available in accordance with this Section 3.21(e) to the reimbursement of
Advances and Servicing Advances in the manner provided for herein;
provided, however, that after the succession of a Successor Master
Servicer, (A) to the extent that any Advances or Servicing Advances with
respect to any particular Mortgage Loan are reimbursed from payments or
recoveries, if any, from the related Mortgagor, and Liquidation Proceeds or
Insurance Proceeds, if any, with respect to that Mortgage Loan,
reimbursement shall be made, first, to the Advancing Person or Advance
Facility Trustee in respect of Advances and/or Servicing Advances related
to that Mortgage Loan to the extent of the interest of the Advancing Person
or Advance Facility Trustee in such Advances and/or Servicing Advances,
second to the Master Servicer in respect of Advances and/or Servicing
Advances related to that Mortgage Loan in excess of those in which the
Advancing Person or Advance Facility Trustee Person has an interest, and
third, to the Successor Master Servicer in respect of any other Advances
and/or Servicing Advances related to that Mortgage Loan, from such sources
as and when collected, and (B) reimbursements of Advances and Servicing
Advances that are Nonrecoverable Advances shall be made pro rata to the
Advancing Person or Advance Facility Trustee, on the one hand, and any such
Successor Master Servicer, on the other hand, on the basis of the
respective aggregate outstanding unreimbursed Advances and Servicing
Advances that are Nonrecoverable Advances owed to the Advancing Person,
Advance Facility Trustee or Master Servicer pursuant to this Agreement, on
the one hand, and any such Successor Master Servicer, on the other hand,
and without regard to the date on which any such Advances or Servicing
Advances shall have been made. In the event that, as a result of the FIFO
allocation made pursuant to this Section 3.21(e), some or all of a
Reimbursement Amount paid to the Advancing Person or Advance Facility
Trustee relates to Advances or Servicing Advances that were made by a
Person other than Residential Funding or the Advancing Person or Advance
Facility Trustee, then the Advancing Person or Advance Facility Trustee
shall be required to remit any portion of such Reimbursement Amount to the
Person entitled to such portion of such Reimbursement Amount. Without
limiting the generality of the foregoing, Residential Funding shall remain
entitled to be reimbursed by the Advancing Person or Advance Facility
Trustee for all Advances and Servicing Advances funded by Residential
Funding to the extent the related Reimbursement Amount(s) have not been
assigned or pledged to an Advancing Person or Advance Facility Trustee. The
documentation establishing any Advance Facility shall require Residential
Funding to provide to the related Advancing Person or Advance Facility
Trustee loan by loan information with respect to each Reimbursement Amount
distributed to such Advancing Person or Advance Facility Trustee on each
date of remittance thereof to such Advancing Person or Advance Facility
Trustee, to enable the Advancing Person or Advance Facility Trustee to make
the FIFO allocation of each Reimbursement Amount with respect to each
Mortgage Loan.
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(ii) By way of illustration, and not by way of limiting the generality
of the foregoing, if the Master Servicer resigns or is terminated at a time
when the Master Servicer is a party to an Advance Facility, and is replaced
by a Successor Master Servicer, and the Successor Master Servicer directly
funds Advances or Servicing Advances with respect to a Mortgage Loan and
does not assign or pledge the related Reimbursement Amounts to the related
Advancing Person or Advance Facility Trustee, then all payments and
recoveries received from the related Mortgagor or received in the form of
Liquidation Proceeds with respect to such Mortgage Loan (including
Insurance Proceeds collected in connection with a liquidation of such
Mortgage Loan) will be allocated first to the Advancing Person or Advance
Facility Trustee until the related Reimbursement Amounts attributable to
such Mortgage Loan that are owed to the Master Servicer and the Advancing
Person, which were made prior to any Advances or Servicing Advances made by
the Successor Master Servicer, have been reimbursed in full, at which point
the Successor Master Servicer shall be entitled to retain all related
Reimbursement Amounts subsequently collected with respect to that Mortgage
Loan pursuant to Section 3.10 of this Agreement. To the extent that the
Advances or Servicing Advances are Nonrecoverable Advances to be reimbursed
on an aggregate basis pursuant to Section 3.10 of this Agreement, the
reimbursement paid in this manner will be made pro rata to the Advancing
Person or Advance Facility Trustee, on the one hand, and the Successor
Master Servicer, on the other hand, as described in clause (i)(B) above.
(f) The Master Servicer shall remain entitled to be reimbursed for all
Advances and Servicing Advances funded by the Master Servicer to the extent the
related rights to be reimbursed therefor have not been sold, assigned or pledged
to an Advancing Person.
(g) Any amendment to this Section 3.21 or to any other provision of this
Agreement that may be necessary or appropriate to effect the terms of an Advance
Facility as described generally in this Section 3.21, including amendments to
add provisions relating to a successor master servicer, may be entered into by
the Trustee, the Depositor and the Master Servicer without the consent of any
Certificateholder, with written confirmation from each Rating Agency that the
amendment will not result in the reduction of the ratings on any class of the
Certificates below the then current ratings on such Certificates, and delivery
of an Opinion of Counsel as required under Section 11.01(c) notwithstanding
anything to the contrary in Section 11.01 of or elsewhere in this Agreement.
(h) Any rights of set-off that the Trust Fund, the Trustee, the Depositor,
any Successor Master Servicer or any other Person might otherwise have against
the Master Servicer under this Agreement shall not attach to any rights to be
reimbursed for Advances or Servicing Advances that have been sold, transferred,
pledged, conveyed or assigned to any Advancing Person.
(i) At any time when an Advancing Person shall have ceased funding Advances
and/or Servicing Advances (as the case may be) and the Advancing Person or
related Advance Facility Trustee shall have received Reimbursement Amounts
sufficient in the aggregate to reimburse all Advances and/or Servicing Advances
(as the case may be) the right to reimbursement for which were assigned to the
Advancing Person, then upon the delivery of a written notice signed by the
Advancing Person and the Master Servicer or its successor or
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assign) to the Trustee terminating the Advance Facility Notice (the "Notice of
Facility Termination"), the Master Servicer or its Successor Master Servicer
shall again be entitled to withdraw and retain the related Reimbursement Amounts
from the Custodial Account pursuant to Section 3.10.
(j) After delivery of any Advance Facility Notice, and until any such
Advance Facility Notice has been terminated by a Notice of Facility Termination,
this Section 3.21 may not be amended or otherwise modified without the prior
written consent of the related Advancing Person.
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account.
(a) The Master Servicer acting as agent of the Trustee shall establish and
maintain a Certificate Account in which the Master Servicer shall deposit or
cause to be deposited on behalf of the Trustee on or before 2:00 P.M. New York
time on each Certificate Account Deposit Date by wire transfer of immediately
available funds an amount equal to the sum of (i) any Advance for the
immediately succeeding Distribution Date, (ii) any amount required to be paid
pursuant to Section 3.12(a), (iii) any amount required to be deposited in the
Certificate Account pursuant to Section 3.16(e), Section 4.07 or Section 4.08,
(iv) any amount required to be paid pursuant to Section 9.01, (v) any prepayment
charges on the Mortgage Loans received during the related Prepayment Period and
(vi) all other amounts constituting the Available Distribution Amount for the
immediately succeeding Distribution Date.
(b) On or prior to the Business Day immediately following each
Determination Date, the Master Servicer shall determine any amounts owed by the
Yield Maintenance Agreement Provider under the Yield Maintenance Agreement and
inform the Trustee in writing of the amount so calculated.
(c) The Trustee shall, upon written request from the Master Servicer,
invest or cause the institution maintaining the Certificate Account to invest
the funds in the Certificate Account in Permitted Investments designated in the
name of the Trustee for the benefit of the Certificateholders, which shall
mature not later than the Business Day next preceding the Distribution Date next
following the date of such investment (except that (i) if such Permitted
Investment is an obligation of the institution that maintains such account or a
fund for which such institution serves as custodian, then such Permitted
Investment may mature on such Distribution Date and (ii) any other investment
may mature on such Distribution Date if the Trustee shall advance funds on such
Distribution Date to the Certificate Account in the amount payable on such
investment on such Distribution Date, pending receipt thereof to the extent
necessary to make distributions on the Certificates) and shall not be sold or
disposed of prior to maturity. All income and gain realized from any such
investment shall be for the benefit of the Master Servicer and shall be subject
to its withdrawal or order from time to time. The amount of any losses incurred
in respect of any such investments shall be deposited in the Certificate Account
by the Master Servicer out of its own funds immediately as realized.
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Section 4.02. Distributions.
(a) On each Distribution Date, the Trustee (or the Paying Agent on behalf
of the Trustee) shall allocate and distribute the Available Distribution Amount,
if any, for such date to the interests issued in respect of REMIC I and REMIC II
as specified in this Section.
(b) (1) On each Distribution Date, the following amounts, in the following
order of priority, shall be distributed by REMIC I to REMIC II on account of the
REMIC I Regular Interests:
i. (A) to the Holder of the REMIC I Regular Interest LTX, in an
amount equal to the related Uncertificated Accrued Interest for
such Distribution Date computed at the applicable Uncertificated
REMIC I Pass-Through Rate, plus any amounts in respect thereof
remaining unpaid from previous Distribution Dates and (B) to the
extent of the Available Distribution Amount, to the Holders of
the REMIC I Regular Interests (other than the REMIC I Regular
Interest LTX), pro rata, in an amount equal to (1) the related
Uncertificated Accrued Interest for such Distribution Date, plus
(2) any amounts in respect thereof remaining unpaid from previous
Distribution Dates. Amounts payable as Uncertificated Accrued
Interest in respect of REMIC I Regular Interest ZZ shall be
reduced when the REMIC I Overcollateralization Amount is less
than the REMIC I Required Overcollateralization Amount, by the
lesser of (x) the amount of such difference and (y) the REMIC I
Regular Interest ZZ Maximum Interest Deferral Amount, and such
amount will be payable to the Holders of REMIC I Regular
Interests ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-1, M-2, M-3, M-4, M-5, M-6, M-7,
M-8 and M-9 in the same proportion as the Overcollateralization
Increase Amount is allocated to the corresponding Class of
Certificates, and the Uncertificated Principal Balance of the
REMIC I Regular Interest ZZ shall be increased by such amount;
and
ii. on each Distribution Date, to the Holders of REMIC I Regular
Interests, in an amount equal to the remainder of the Available
Distribution Amount after the distributions made pursuant to
clause (i) above, allocated as follows (except as provided
below): (A) to the Holders of the REMIC I Regular Interest AA,
98.00% of such remainder until the Uncertificated Principal
Balance of such REMIC I Regular Interest is reduced to zero; (B)
to the Holders of REMIC I Regular Interests ▇-▇, ▇-▇, ▇-▇, ▇-▇,
M-1, M-2, ▇-▇, ▇-▇, ▇-▇, ▇-▇, ▇-▇, M-8 and M-9, 1.00% of such
remainder in the same proportion as amounts are distributed in
respect of principal on the corresponding Class of Certificates;
(C) to the Holders of the REMIC I Regular Interest ZZ, 1.00% of
such remainder; and (D) any remaining amounts to the Holders of
the Class R-I Certificates; provided, however, that 98.00% and
2.00% of any principal payments that are attributable to an
Overcollateralization Reduction Amount shall be allocated to
Holders of the REMIC I Regular
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Interest AA and REMIC I Regular Interest ZZ, respectively; and
provided further, that any prepayment charges on deposit in the
Certificate Account attributable to prepayment charges received
on the Mortgage Loans during the related Prepayment Period shall
be deemed distributed to REMIC II as the holder of the REMIC I
Regular Interest AA.
(2) Notwithstanding the distributions described in this Section
4.02(b), distribution of funds from the Certificate Account shall be made
only in accordance with Section 4.02(c).
(c) On each Distribution Date (x) the Master Servicer on behalf of the
Trustee or (y) the Paying Agent appointed by the Trustee, shall distribute to
each Certificateholder of record on the next preceding Record Date (other than
as provided in Section 9.01 respecting the final distribution) either in
immediately available funds (by wire transfer or otherwise) to the account of
such Certificateholder at a bank or other entity having appropriate facilities
therefor, if such Certificateholder has so notified the Master Servicer or the
Paying Agent, as the case may be, or, if such Certificateholder has not so
notified the Master Servicer or the Paying Agent by the Record Date, by check
mailed to such Certificateholder at the address of such Holder appearing in the
Certificate Register such Certificateholder's share (which share with respect to
each Class of Certificates, shall be based on the aggregate of the Percentage
Interests represented by Certificates of the applicable Class held by such
Holder of the following amounts, in the following order of priority, subject to
the provisions of Section 4.02(d)), to the extent of the Available Distribution
Amount on deposit in the Certificate Account (with respect to clauses (i)
through (xi), and to the extent of the sum of the remaining Available
Distribution Amount and the Yield Maintenance Payments on deposit in the
Certificate Account with respect to clauses (xii) through (xxi) and, with
respect to clause (xxi)(B) below, to the extent of prepayment charges on deposit
in the Certificate Account) :
(i) to the Class A Certificateholders, the Class A Interest
Distribution Amount, with such amount allocated among the Class A
Certificateholders on a pro rata basis based on the Accrued Certificate
Interest on each such Class;
(ii) to the Class M-1 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-1 Interest Distribution Amount;
(iii) to the Class M-2 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-2 Interest Distribution Amount;
(iv) to the Class M-3 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-3 Interest Distribution Amount;
(v) to the Class M-4 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-4 Interest Distribution Amount;
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(vi) to the Class M-5 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-5 Interest Distribution Amount;
(vii) to the Class M-6 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-6 Interest Distribution Amount;
(viii) to the Class M-7 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-7 Interest Distribution Amount;
(ix) to the Class M-8 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-8 Interest Distribution Amount;
(x) to the Class M-9 Certificateholders from the amount, if any, of
the Available Distribution Amount remaining after the foregoing
distributions, the Class M-9 Interest Distribution Amount;
(xi) to the Class A Certificateholders and Class M Certificateholders,
from the amount, if any, of the Available Distribution Amount remaining
after the foregoing distributions, the Principal Distribution Amount (other
than the amounts set forth in clauses (b)(iv), (b)(v), and (b)(vi) of the
definition thereof), in the order of priority described in Section 4.02(d)
hereof, until the Certificate Principal Balances of the Class A
Certificates and Class M Certificates have been reduced to zero;
(xii) to the Class A Certificateholders and Class M
Certificateholders, from the amount, if any, of the Excess Cash Flow, an
amount equal to the principal portion of Realized Losses previously
allocated to reduce the Certificate Principal Balance of any Class of the
Class A Certificates and Class M Certificates and remaining unreimbursed,
but only to the extent of Subsequent Recoveries for that Distribution Date,
which amount shall be included in the Principal Distribution Amount and
paid in accordance with Section 4.02(d) hereof, until the Certificate
Principal Balances of the Class A Certificates and Class M Certificates
have been reduced to zero;
(xiii) to the Class A Certificateholders and Class M
Certificateholders, from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, an amount equal to the
principal portion of Realized Losses on the Mortgage Loans during the
immediately preceding Prepayment Period, which amount shall be included in
the Principal Distribution Amount and paid in accordance with Section
4.02(d) hereof, until the Certificate Principal Balances of the Class A
Certificates and Class M Certificates have been reduced to zero;
(xiv) to the Class A Certificateholders and Class M
Certificateholders, from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the Overcollateralization
Increase Amount for such Distribution Date, which amount shall be included
in the Principal Distribution Amount and paid in accordance with
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Section 4.02(d) hereof, until the Certificate Principal Balances of the
Class A Certificates and Class M Certificates have been reduced to zero;
(xv) to the Class A Certificateholders and Class M Certificateholders
from the amount, if any, of the Excess Cash Flow remaining after the
foregoing distributions, the amount of any Prepayment Interest Shortfalls
allocated thereto for such Distribution Date, on a pro rata basis based on
Accrued Certificate Interest otherwise due thereon, to the extent not
covered by Eligible Master Servicing Compensation on such Distribution
Date;
(xvi) to the Class A Certificateholders and Class M Certificateholders
from the amount, if any, of the Excess Cash Flow remaining after the
foregoing distributions, the amount of any Prepayment Interest Shortfalls
previously allocated thereto on any prior Distribution Date that remain
unreimbursed, together with interest thereon at the applicable Pass-Through
Rate, on a pro rata basis based on Prepayment Interest Shortfalls
previously allocated thereto that remain unreimbursed;
(xvii) from the amount, if any, of the Excess Cash Flow remaining
after the foregoing distributions, to pay the Class A Certificates, on a
pro rata basis, based on the amount of Class A Basis Risk Shortfall
Carry-Forward Amount previously allocated thereto that remain unreimbursed,
the amount of any Class A Basis Risk Shortfall Carry-Forward Amounts
remaining unpaid as of such Distribution Date, and then to the Class M
Certificates, in their order of their payment priority, the amount of any
Class M Basis Risk Shortfall Carry-Forward Amounts remaining unpaid as of
such Distribution Date;
(xviii) to the Class A Certificates and Class M Certificates on a pro
rata basis, based on the amount of Relief Act Shortfalls allocated thereto
on such Distribution Date, from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the amount of any Relief Act
Shortfalls allocated to those Certificates with respect to such
Distribution Date;
(xix) to the Class A Certificateholders and Class M
Certificateholders, from the amount, if any, of the Excess Cash Flow
remaining after the foregoing distributions, the principal portion of any
Realized Losses previously allocated to those Certificates and remaining
unreimbursed, which amount shall be allocated first, to the Class A
Certificateholders on a pro rata basis, based on their respective principal
portion of any Realized Losses previously allocated thereto that remain
unreimbursed, and then to the Class M Certificates, in their order of
payment priority;
(xx) to the Final Maturity Reserve Fund, from the amount, if any, of
Excess Cash Flow remaining after the foregoing distributions the
Supplemental Final Maturity Reserve Amount, if any, for that Distribution
Date;
(xxi) to the Class SB Certificates, (A) from the amount, if any, of
the Excess Cash Flow remaining after the foregoing distributions, the sum
of (I) Accrued Certificate Interest thereon, (II) the amount of any
Overcollateralization Reduction Amount for such
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Distribution Date and (III) for any Distribution Date after the Certificate
Principal Balance of each Class of Class A Certificates and Class M
Certificates has been reduced to zero, the Overcollateralization Amount,
and (B) from prepayment charges on deposit in the Certificate Account, any
prepayment charges received on the Mortgage Loans during the related
Prepayment Period; and
(xxii) to the Class R-II Certificateholders, the balance, if any, of
the Excess Cash Flow.
(d) On each Distribution Date, the Principal Distribution Amount will be
paid as follows:
(i) the Class A Principal Distribution Amount shall be distributed,
sequentially, as follows: (w) first, to the Class A-1 Certificates, until
the Certificate Principal Balance thereof has been reduced to zero, (x)
second, to the Class A-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero, and (y) third, to the Class A-3
Certificates, until the Certificate Principal Balance thereof has been
reduced to zero and (z) fourth, to the Class A-4 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero;
(ii) the Class M-1 Principal Distribution Amount shall be distributed
to the Class M-1 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(iii) the Class M-2 Principal Distribution Amount shall be distributed
to the Class M-2 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(iv) the Class M-3 Principal Distribution Amount shall be distributed
to the Class M-3 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(v) the Class M-4 Principal Distribution Amount shall be distributed
to the Class M-4 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(vi) the Class M-5 Principal Distribution Amount shall be distributed
to the Class M-5 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(vii) the Class M-6 Principal Distribution Amount shall be distributed
to the Class M-6 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero;
(viii) the Class M-7 Principal Distribution Amount shall be
distributed to the Class M-7 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
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(ix) the Class M-8 Principal Distribution Amount shall be distributed
to the Class M-8 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero; and
(x) the Class M-9 Principal Distribution Amount shall be distributed
to the Class M-9 Certificates, until the Certificate Principal Balance
thereof has been reduced to zero.
(e) Notwithstanding the foregoing clauses (c) and (d), upon the reduction
of the Certificate Principal Balance of a Class of Class A Certificates and
Class M Certificates to zero, such Class of Certificates will not be entitled to
further distributions pursuant to Section 4.02 (other than in respect of
Subsequent Recoveries).
(f) Notwithstanding the foregoing, on any Distribution Date, the amounts
allocated from Excess Cash Flow pursuant to clauses (c)(xiii) through (c)(xiv)
of this Section 4.02 on such Distribution Date shall be paid first from the
Available Distribution Amount for such Distribution Date and second from any
Yield Maintenance Payment for such Distribution Date.
(g) Any Prepayment Interest Shortfalls on the Mortgage Loans which are not
covered by Eligible Master Servicing Compensation as described in Section 3.16
and Relief Act Shortfalls on the Mortgage Loans will be allocated among the
Class A Certificates and Class M Certificates, pro rata in accordance with the
amount of Accrued Certificate Interest payable on such Distribution Date absent
such shortfalls. Any such uncovered Prepayment Interest Shortfalls will be paid
solely pursuant to Section 4.02(c)(xv) and (xvi) to the extent funds are
available therefor. Any such Relief Act Shortfalls will be paid solely pursuant
to Section 4.02(c)(xviii) to the extent funds are available therefor.
(h) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the Master Servicer shall deposit such funds into the
Custodial Account pursuant to Section 3.07(b)(iii).
(i) Each distribution with respect to a Book-Entry Certificate shall be
paid to the Depository, as Holder thereof, and the Depository shall be
responsible for crediting the amount of such distribution to the accounts of its
Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. None of the Trustee, the
Certificate Registrar, the Depositor or the Master Servicer shall have any
responsibility therefor except as otherwise provided by this Agreement or
applicable law.
(j) Except as otherwise provided in Section 9.01, if the Master Servicer
anticipates that a final distribution with respect to any Class of Certificates
will be made on the next Distribution Date, the Master Servicer shall, no later
than the Determination Date in the month of such final distribution, notify the
Trustee and the Trustee shall, no later than two (2) Business Days after such
Determination Date, mail on such date to each Holder of such Class of
Certificates a notice to the effect that: (i) the Trustee anticipates that the
final distribution with
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respect to such Class of Certificates will be made on such Distribution Date but
only upon presentation and surrender of such Certificates at the office of the
Trustee or as otherwise specified therein, and (ii) no interest shall accrue on
such Certificates from and after the end of the prior calendar month. In the
event that Certificateholders required to surrender their Certificates pursuant
to Section 9.01(c) do not surrender their Certificates for final cancellation,
the Trustee shall cause funds distributable with respect to such Certificates to
be held in the Certificate Account for the benefit of such Certificateholders as
provided in Section 9.01(d).
Section 4.03. Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting.
(a) Concurrently with each distribution charged to the Certificate Account
and with respect to each Distribution Date the Master Servicer shall forward to
the Trustee and the Trustee shall forward by mail or otherwise make available
electronically on its website (which may be obtained by any Certificateholder by
telephoning the Trustee at (▇▇▇) ▇▇▇-▇▇▇▇) to each Holder, and the Depositor a
statement setting forth the following information as to each Class of
Certificates, in each case to the extent applicable:
(i) the applicable Record Date, Determination Date, Distribution Date
and the date on which the Interest Accrual Period commenced;
(ii) the aggregate amount of payments received with respect to the
Mortgage Loans in the aggregate, including prepayment amounts;
(iii) the Servicing Fee and Subservicing Fee payable to the Master
Servicer and the Subservicer;
(iv) the amount of any other fees or expenses paid, and the identity
of the party receiving such fees or expenses;
(v) (A) the amount of such distribution to the Certificateholders of
such Class applied to reduce the Certificate Principal Balance thereof, and
(B) the aggregate amount included therein representing Principal
Prepayments;
(vi) the amount of such distribution to Holders of such Class of
Certificates allocable to interest, including amounts payable as excess
cash flow and the disposition of the excess cash flow;
(vii) if the distribution to the Holders of such Class of Certificates
is less than the full amount that would be distributable to such Holders if
there were sufficient funds available therefor, the amount of the
shortfall;
(viii) the aggregate Certificate Principal Balance of each Class of
Certificates, before and after giving effect to the amounts distributed on
such Distribution Date, separately identifying any reduction thereof due to
Realized Losses other than pursuant to an actual distribution of principal;
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(ix) the Certificate Principal Balance for each Class of Certificates
as of the Closing Date;
(x) the number and Stated Principal Balance of the Mortgage Loans in
the aggregate after giving effect to the distribution of principal on such
Distribution Date and the number of Mortgage Loans in the aggregate at the
beginning and end of the related Due Period;
(xi) on the basis of the most recent reports furnished to it by
Subservicers, (A) the number and Stated Principal Balance of the Mortgage
Loans in the aggregate that are Delinquent (1) 30-59 days, (2) 60-89 days
and (3) 90 or more days and the number and Stated Principal Balance of the
Mortgage Loans in the aggregate that are in foreclosure, (B) the number and
Stated Principal Balances of the Mortgage Loans in the aggregate that are
Reportable Modified Mortgage Loans that are in foreclosure and are REO
Property, indicating in each case capitalized Mortgage Loans, other
Servicing Modifications and totals, and (C) for all Reportable Modified
Mortgage Loans, the number and Stated Principal Balances of the Mortgage
Loans in the aggregate that have been liquidated, the subject of pay-offs
and that have been repurchased by the Master Servicer or Seller;
(xii) the amount, terms and general purpose of any Advance by the
Master Servicer pursuant to Section 4.04 and the amount of all Advances
that have been reimbursed during the related Due Period;
(xiii) any material modifications, extensions or waivers to the terms
of the Mortgage Loans in the aggregate during the Due Period or that have
cumulatively become material over time;
(xiv) any material breaches of Mortgage Loan representations or
warranties or covenants in the Agreement;
(xv) the number, aggregate principal balance and Stated Principal
Balance of any REO Properties;
(xvi) the aggregate Accrued Certificate Interest remaining unpaid, if
any, for each Class of Certificates, after giving effect to the
distribution made on such Distribution Date;
(xvii) the aggregate amount of Realized Losses with respect to the
Mortgage Loans in the aggregate for such Distribution Date and the
aggregate amount of Realized Losses with respect to the Mortgage Loans in
the aggregate incurred since the Cut-off Date;
(xviii) the Pass-Through Rate on each Class of Certificates and the
applicable Net WAC Cap Rate;
(xix) the weighted average of the Maximum Net Mortgage Rates with
respect to the Mortgage Loans in the aggregate;
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(xx) the Basis Risk Shortfall, Basis Risk Shortfall Carry-Forward
Amount and Prepayment Interest Shortfalls;
(xxi) the Overcollateralization Amount and the Required
Overcollateralization Amount following such Distribution Date;
(xxii) the number and Stated Principal Balances of the Mortgage Loans
in the aggregate repurchased under Section 4.07 or Section 4.08;
(xxiii) the aggregate amount of any recoveries on previously
foreclosed loans with respect to the Mortgage Loans in the aggregate from
Residential Funding;
(xxiv) the weighted average remaining term to maturity of the Mortgage
Loans in the aggregate after giving effect to the amounts distributed on
such Distribution Date;
(xxv) the weighted average Mortgage Rates of the Mortgage Loans in the
aggregate after giving effect to the amounts distributed on such
Distribution Date;
(xxvi) the amount if any, to be paid by a Derivative Counterparty
under a Derivative Contract and the amount, if any, to be paid to a
Derivative Counterparty part, under a Derivative Contract;
(xxvii) the amount of any Yield Maintenance Payments payable to the
Trustee on behalf of the Trust Fund and any Yield Maintenance Termination
Payment payable to the Trustee on behalf of the Trust Fund;
(xxviii) the Final Maturity Reserve Fund Addition, Final Maturity
Reserve Fund Shortfall, Supplemental Final Maturity Reserve Fund Amount and
the amount on deposit in the Final Maturity Reserve Fund for such
Distribution Date; and
(xxix) the occurrence of the Stepdown Date.
In the case of information furnished pursuant to clauses (i) and (ii)
above, the amounts shall be expressed as a dollar amount per Certificate with a
$1,000 denomination. In addition to the statement provided to the Trustee as set
forth in this Section 4.03(a), the Master Servicer shall provide to any manager
of a trust fund consisting of some or all of the Certificates, upon reasonable
request, such additional information as is reasonably obtainable by the Master
Servicer at no additional expense to the Master Servicer. Also, at the request
of a Rating Agency, the Master Servicer shall provide the information relating
to the Reportable Modified Mortgage Loans substantially in the form attached
hereto as Exhibit S to such Rating Agency within a reasonable period of time;
provided, however, that the Master Servicer shall not be required to provide
such information more than four times in a calendar year to any Rating Agency.
(b) Within a reasonable period of time after it receives a written request
from a Holder of a Certificate, other than a Class R Certificate, the Master
Servicer shall prepare, or cause to be prepared, and shall forward, or cause to
be forwarded, to each such requesting Person
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who at any time during the calendar year was the Holder of a Certificate, other
than a Class R Certificate, a statement containing the information set forth in
clauses (v) and (vi) referred to in subsection (a) above aggregated for such
calendar year or applicable portion thereof during which such Person was a
Certificateholder. Such obligation of the Master Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Master Servicer and Trustee pursuant to any
requirements of the Code.
(c) Within a reasonable period of time after it receives a written request
from any Holder of a Class R Certificate, the Master Servicer shall prepare, or
cause to be prepared, and shall forward, or cause to be forwarded, to each such
requesting Person who at any time during the calendar year was the Holder of a
Class R Certificate, a statement containing the applicable distribution
information provided pursuant to this Section 4.03 aggregated for such calendar
year or applicable portion thereof during which such Person was the Holder of a
Class R Certificate. Such obligation of the Master Servicer shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be provided by the Master Servicer pursuant to any requirements of the
Code.
(d) Upon the written request of any Certificateholder, the Master Servicer,
as soon as reasonably practicable, shall provide the requesting
Certificateholder with such information as is necessary and appropriate, in the
Master Servicer's sole discretion, for purposes of satisfying applicable
reporting requirements under Rule 144A.
(e) The Master Servicer shall, on behalf of the Depositor and in respect of
the Trust Fund, sign and cause to be filed with the Commission any periodic
reports required to be filed under the provisions of the Exchange Act, and the
rules and regulations of the Commission thereunder including, without
limitation, reports on Form 10-K, Form 10-D and Form 8-K. In connection with the
preparation and filing of such periodic reports, the Trustee shall timely
provide to the Master Servicer (I) a list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year, (II) copies of all
pleadings, other legal process and any other documents relating to any claims,
charges or complaints involving the Trustee, as trustee hereunder, or the Trust
Fund that are received by a Responsible Officer of the Trustee, (III) notice of
all matters that, to the actual knowledge of a Responsible Officer of the
Trustee, have been submitted to a vote of the Certificateholders, other than
those matters that have been submitted to a vote of the Certificateholders at
the request of the Depositor or the Master Servicer, and (IV) notice of any
failure of the Trustee to make any distribution to the Certificateholders as
required pursuant to this Agreement. Neither the Master Servicer nor the Trustee
shall have any liability with respect to the Master Servicer's failure to
properly prepare or file such periodic reports resulting from or relating to the
Master Servicer's inability or failure to obtain any information not resulting
from the Master Servicer's own negligence or willful misconduct.
(f) Any Form 10-K filed with the Commission in connection with this Section
4.03 shall include, with respect to the Certificates relating to such 10-K:
(i) A certification, signed by the senior officer in charge of the
servicing functions of the Master Servicer, in the form attached as Exhibit
R-1 hereto or such other form as may be required or permitted by the
Commission (the "Form 10-K
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Certification"), in compliance with Rules 13a-14 and 15d-14 under the
Exchange Act and any additional directives of the Commission.
(ii) A report regarding its assessment of compliance during the
preceding calendar year with all applicable servicing criteria set forth in
relevant Commission regulations with respect to mortgage-backed securities
transactions taken as a whole involving the Master Servicer that are backed
by the same types of assets as those backing the certificates, as well as
similar reports on assessment of compliance received from other parties
participating in the servicing function as required by relevant Commission
regulations, as described in Item 1122(a) of Regulation AB. The Master
Servicer shall obtain from all other parties participating in the servicing
function any required assessments.
(iii) With respect to each assessment report described immediately
above, a report by a registered public accounting firm that attests to, and
reports on, the assessment made by the asserting party, as set forth in
relevant Commission regulations, as described in Regulation 1122(b) of
Regulation AB and Section 3.19.
(iv) The servicer compliance certificate required to be delivered
pursuant Section 3.18.
(g) In connection with the Form 10-K Certification, the Trustee shall
provide the Master Servicer with a back-up certification substantially in the
form attached hereto as Exhibit R-2.
(h) This Section 4.03 may be amended in accordance with this Agreement
without the consent of the Certificateholders.
(i) The Trustee shall make available on the Trustee's internet website each
of the reports filed with the Commission by or on behalf of the Depositor under
the Exchange Act, upon delivery of such report to the Trustee.
Section 4.04. Distribution of Reports to the Trustee and the Depositor;
Advances by the Master Servicer.
(a) Prior to the close of business on the Business Day next succeeding each
Determination Date, the Master Servicer shall furnish a written statement (which
may be in a mutually agreeable electronic format) to the Trustee, any Paying
Agent and the Depositor (the information in such statement to be made available
to Certificateholders by the Master Servicer on request) (provided that the
Master Servicer shall use its best efforts to deliver such written statement not
later than 12:00 p.m. New York time on the second Business Day prior to the
Distribution Date) setting forth (i) the Available Distribution Amounts, (ii)
the amounts required to be withdrawn from the Custodial Account and deposited
into the Certificate Account on the immediately succeeding Certificate Account
Deposit Date pursuant to clause (iii) of Section 4.01(a), (iii) the amount of
Prepayment Interest Shortfalls, Class A Basis Risk Shortfall, Class M Basis Risk
Shortfall, Class A Basis Risk Shortfall Carry-Forward Amounts, and Class M Basis
Risk Shortfall Carry-Forward Amounts, (iv) the Yield Maintenance Payment, if
any, for such Distribution Date and (v) the amount payable by the Derivative
Counterparties to
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the Trustee under the Derivative Contracts as provided in Section 4.11. The
determination by the Master Servicer of such amounts shall, in the absence of
obvious error, be presumptively deemed to be correct for all purposes hereunder
and the Trustee shall be protected in relying upon the same without any
independent check or verification.
(b) On or before 2:00 P.M. New York time on each Certificate Account
Deposit Date, the Master Servicer shall either (i) remit to the Trustee for
deposit in the Certificate Account from its own funds, or funds received
therefor from the Subservicers, an amount equal to the Advances to be made by
the Master Servicer in respect of the related Distribution Date, which shall be
in an aggregate amount equal to the sum of (A) the aggregate amount of Monthly
Payments other than Balloon Payments (with each interest portion thereof
adjusted to a per annum rate equal to the Net Mortgage Rate), less the amount of
any related Servicing Modifications, Debt Service Reductions or reductions in
the amount of interest collectable from the Mortgagor pursuant to the Relief Act
or similar legislation or regulations then in effect, on the Outstanding
Mortgage Loans as of the related Due Date in the related Due Period, which
Monthly Payments were due during the related Due Period and not received as of
the close of business as of the related Determination Date; provided that no
Advance shall be made if it would be a Nonrecoverable Advance and (B) with
respect to each Balloon Loan delinquent in respect of its Balloon Payment as of
the close of business on the related Determination Date, an amount equal to the
assumed Monthly Payment (with each interest portion thereof adjusted to a per
annum rate equal to the Net Mortgage Rate) that would have been due on the
related Due Date based on the original amortization schedule for such Balloon
Loan until such Balloon Loan is finally liquidated, over any payments of
interest or principal (with each interest portion thereof adjusted to per annum
rate equal to the Net Mortgage Rate) received from the related Mortgagor as of
the close of business on the related Determination Date and allocable to the Due
Date during the related Due Period for each month until such Balloon Loan is
finally liquidated, (ii) withdraw from amounts on deposit in the Custodial
Account and deposit in the Certificate Account all or a portion of the Amount
Held for Future Distribution in discharge of any such Advance, or (iii) make
advances in the form of any combination of clauses (i) and (ii) aggregating the
amount of such Advance. Any portion of the Amount Held for Future Distribution
so used shall be replaced by the Master Servicer by deposit in the Certificate
Account on or before 11:00 A.M. New York time on any future Certificate Account
Deposit Date to the extent that funds attributable to the Mortgage Loans that
are available in the Custodial Account for deposit in the Certificate Account on
such Certificate Account Deposit Date shall be less than payments to
Certificateholders required to be made on the following Distribution Date. The
Master Servicer shall be entitled to use any Advance made by a Subservicer as
described in Section 3.07(b) that has been deposited in the Custodial Account on
or before such Distribution Date as part of the Advance made by the Master
Servicer pursuant to this Section 4.04. The determination by the Master Servicer
that it has made a Nonrecoverable Advance or that any proposed Advance, if made,
would constitute a Nonrecoverable Advance, shall be evidenced by a certificate
of a Servicing Officer delivered to the Depositor and the Trustee. In the event
that the Master Servicer determines as of the Business Day preceding any
Certificate Account Deposit Date that it will be unable to deposit in the
Certificate Account an amount equal to the Advance required to be made for the
immediately succeeding Distribution Date, it shall give notice to the Trustee of
its inability to advance (such notice may be given by telecopy), not later than
3:00 P.M., New York time, on such Business Day, specifying the portion of such
amount that it will be unable to deposit. Not later than 3:00 P.M., New York
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time, on the Certificate Account Deposit Date the Trustee shall, unless by 12:00
Noon, New York time, on such day the Trustee shall have been notified in writing
(by telecopy) that the Master Servicer shall have directly or indirectly
deposited in the Certificate Account such portion of the amount of the Advance
as to which the Master Servicer shall have given notice pursuant to the
preceding sentence, pursuant to Section 7.01, (a) terminate all of the rights
and obligations of the Master Servicer under this Agreement in accordance with
Section 7.01 and (b) assume the rights and obligations of the Master Servicer as
successor Master Servicer hereunder, including the obligation to deposit in the
Certificate Account an amount equal to the Advance for the immediately
succeeding Distribution Date. In connection with the preceding sentence, the
Trustee shall deposit all funds it receives pursuant to this Section 4.04(b)
into the Certificate Account.
Section 4.05. Allocation of Realized Losses.
(a) Prior to each Distribution Date, the Master Servicer shall determine
the total amount of Realized Losses, if any, that resulted from any Cash
Liquidation, Servicing Modifications, Debt Service Reduction, Deficient
Valuation or REO Disposition that occurred during the related Prepayment Period
or, in the case of a Servicing Modification that constitutes a reduction of the
interest rate on a Mortgage Loan, the amount of the reduction in the interest
portion of the Monthly Payment due in the month in which such Distribution Date
occurs. The amount of each Realized Loss shall be evidenced by an Officers'
Certificate.
(b) All Realized Losses on the Mortgage Loans, on any Distribution Date,
shall be allocated as follows:
first, to Excess Cash Flow as provided in clause (b)(v) of the
definition of "Principal Distribution Amount", to the extent of the
Excess Cash Flow for such Distribution Date;
second, in reduction of the Overcollateralization Amount, until such
amount has been reduced to zero;
third, to the Class M-9 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
fourth, to the Class M-8 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
fifth, to the Class M-7 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
sixth, to the Class M-6 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
seventh, to the Class M-5 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero;
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eighth, to the Class M-4 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
ninth, to the Class M-3 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
tenth, to the Class M-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero;
eleventh, to the Class M-1 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and
twelfth, to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates on a pro rata basis, until the Certificate Principal
Balances thereof have been reduced to zero.
(c) All allocations of a Realized Loss on a "pro rata basis" among two or
more specified Classes of Certificates means an allocation on a pro rata basis,
among the various Classes so specified, to each such Class of Certificates on
the basis of their then outstanding Certificate Principal Balances prior to
giving effect to distributions to be made on such Distribution Date in the case
of the principal portion of a Realized Loss or based on the Accrued Certificate
Interest thereon payable on such Distribution Date in the case of an interest
portion of a Realized Loss. Any allocation of the principal portion of Realized
Losses (other than Debt Service Reductions) to the Class A Certificates or Class
M Certificates shall be made by reducing the Certificate Principal Balance
thereof by the amount so allocated, which allocation shall be deemed to have
occurred on such Distribution Date; provided that no such reduction shall reduce
the Certificate Principal Balance of the Class A Certificates and the Class M
Certificates below the aggregate Stated Principal Balance of the Mortgage Loans,
as applicable. Allocations of the interest portions of Realized Losses (other
than any interest rate reduction resulting from a Servicing Modification) shall
be made by operation of the definition of "Accrued Certificate Interest" and by
operation of the provisions of Section 4.02(c). Allocations of the interest
portion of a Realized Loss resulting from an interest rate reduction in
connection with a Servicing Modification shall be made by operation of the
provisions of Section 4.02(c). All Realized Losses and all other losses
allocated to a Class of Certificates hereunder will be allocated among the
Certificates of such Class in proportion to the Percentage Interests evidenced
thereby.
(d) All Realized Losses on the Mortgage Loans shall be allocated on each
Distribution Date to the REMIC I Regular Interests, as follows: first, to
Uncertificated Accrued Interest payable to the REMIC I Regular Interests AA and
ZZ up to an aggregate amount equal to the excess of (a) the REMIC I Interest
Loss Allocation Amount over (b) Prepayment Interest Shortfalls (to the extent
not covered by Eligible Master Servicing Compensation) relating to the Mortgage
Loans for such Distribution Date, 98% and 2%, respectively; second, to the
Uncertificated Principal Balances of the REMIC I Regular Interests AA and ZZ up
to an aggregate amount equal to the REMIC I Principal Loss Allocation Amount,
98% and 2%, respectively; third, to the Uncertificated Principal Balances of
REMIC I Regular Interests AA, 98%, M-9, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular
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Interest M-9 has been reduced to zero; fourth, to the Uncertificated Principal
Balances of REMIC I Regular Interests AA, 98%, M-8, 1% and ZZ, 1%, until the
Uncertificated Principal Balance of REMIC I Regular Interest M-8 has been
reduced to zero; fifth, to the Uncertificated Principal Balances of REMIC I
Regular Interests AA, 98%, M-7, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-7 has been reduced to zero;
sixth, to the Uncertificated Principal Balances of REMIC I Regular Interests AA,
98%, M-6, 1% and ZZ, 1%, until the Uncertificated Principal Balance of REMIC I
Regular Interest M-6 has been reduced to zero; seventh, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-5, 1% and ZZ, 1%,
until the Uncertificated Principal Balance of REMIC I Regular Interest M-5 has
been reduced to zero; eighth, to the Uncertificated Principal Balances of REMIC
I Regular Interests AA, 98%, M-4, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-4 has been reduced to zero;
ninth, to the Uncertificated Principal Balances of REMIC I Regular Interests AA,
98%, M-3, 1% and ZZ, 1%, until the Uncertificated Principal Balance of REMIC I
Regular Interest M-3 has been reduced to zero; tenth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, M-2, 1% and ZZ, 1%,
until the Uncertificated Principal Balance of REMIC I Regular Interest M-2 has
been reduced to zero; eleventh, to the Uncertificated Principal Balances of
REMIC I Regular Interests AA, 98%, M-1, 1% and ZZ, 1%, until the Uncertificated
Principal Balance of REMIC I Regular Interest M-1 has been reduced to zero;
twelfth, to the Uncertificated Principal Balances of REMIC I Regular Interests
AA, 98%, A-4, 1%, and ZZ, 1%, until the Uncertificated Principal Balances of
REMIC I Regular Interest A-4 has been reduced to zero; thirteenth, to the
Uncertificated Principal Balances of REMIC I Regular Interests AA, 98%, A-3, 1%,
and ZZ, 1%, until the Uncertificated Principal Balances of REMIC I Regular
Interest A-3 has been reduced to zero; fourteenth, to the Uncertificated
Principal Balances of REMIC I Regular Interests AA, 98%, A-2, 1%, and ZZ, 1%,
until the Uncertificated Principal Balances of REMIC I Regular Interest A-2 has
been reduced to zero; and fifteenth, to the Uncertificated Principal Balances of
REMIC I Regular Interests AA, 98%, A-1, 1%, and ZZ, 1%, until the Uncertificated
Principal Balances of REMIC I Regular Interest A-1 has been reduced to zero.
(e) Realized Losses allocated to the Excess Cash Flow or the
Overcollateralization Amount pursuant to paragraphs (a), (b) or (c) of this
Section, the definition of Accrued Certificate Interest and the operation of
Section 4.02(c) shall be deemed allocated to the Class SB Certificates. Realized
Losses allocated to the Class SB Certificates shall, to the extent such Realized
Losses represent Realized Losses on an interest portion, be allocated to the
REMIC II Regular Interest SB-IO. Realized Losses allocated to the Excess Cash
Flow pursuant to paragraph (b) of this Section shall be deemed to reduce Accrued
Certificate Interest on the REMIC I Regular Interest SB-IO. Realized Losses
allocated to the Overcollateralization Amount pursuant to paragraph (b) of this
Section shall be deemed first to reduce the principal balance of the REMIC II
Regular Interest SB-PO until such principal balance shall have been reduced to
zero and thereafter to reduce accrued and unpaid interest on the REMIC II
Regular Interest SB-IO.
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged
Property.
The Master Servicer or the Subservicers shall file information returns with
respect to the receipt of mortgage interest received in a trade or business, the
reports of foreclosures and abandonments of any Mortgaged Property and the
informational returns relating to cancellation
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of indebtedness income with respect to any Mortgaged Property required by
Sections 6050H, 6050J and 6050P of the Code, respectively, and deliver to the
Trustee an Officers' Certificate on or before March 31 of each year, beginning
with the first March 31 that occurs at least six months after the Cut-Off Date,
stating that such reports have been filed. Such reports shall be in form and
substance sufficient to meet the reporting requirements imposed by such Sections
6050H, 6050J and 6050P of the Code.
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
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 such security and documents, free of any further obligation to
the Trustee or the Certificateholders with respect thereto.
Section 4.08. Limited Mortgage Loan Repurchase Right.
The Limited Repurchase Right Holder will have the irrevocable option at any
time to purchase any of the Mortgage Loans from the Trustee at the Purchase
Price, up to a maximum of five Mortgage Loans. In the event that this option is
exercised as to any five Mortgage Loans in the aggregate, this option will
thereupon terminate. If at any time the Limited Repurchase Right Holder makes a
payment to the Certificate Account covering the amount of the Purchase Price for
such a Mortgage Loan, and the Limited Repurchase Right Holder provides to the
Trustee a certification signed by a Servicing Officer stating that the amount of
such payment has been deposited in the Certificate Account, then the Trustee
shall execute the assignment of such Mortgage Loan at the request of the Limited
Repurchase Right Holder without recourse to the Limited Repurchase Right Holder
which shall succeed to all the Trustee's right, title and interest in and to
such Mortgage Loan, and all security and documents relative thereto. Such
assignment shall be an assignment outright and not for security. The Limited
Repurchase Right Holder will thereupon own such Mortgage, and all such security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto. Any tax on "prohibited transactions"
(as defined in Section 860F(a)(2) of the Code) imposed on any REMIC relating to
the exercise of the option provided in this Section 4.08 shall in no event be
payable by the Trustee.
Section 4.09. The Yield Maintenance Agreement.
(a) On the Closing Date, the Trustee shall, on behalf of the Trust Fund,
for the benefit of the Class A, Class M and Class SB Certificates, enter into
the Yield Maintenance Agreement.
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(b) The Trustee shall deposit or cause to be deposited any amount received
under the Yield Maintenance Agreement into the Certificate Account on the date
such amount is received from the Yield Maintenance Agreement Provider under the
Yield Maintenance Agreement (including Yield Maintenance Agreement Termination
Payments, if any). All Yield Maintenance Payments received under the Yield
Maintenance Agreement shall be distributed as part of Excess Cash Flow in
accordance with the priorities set forth in Section 4.02(c) hereof, whereas, all
Yield Maintenance Agreement Termination Payments received under the Yield
Maintenance Agreement shall be used as set forth in Section 4.09(e) hereof.
Neither the Yield Maintenance Agreement nor any Yield Maintenance Payments
(including Yield Maintenance Termination Payments) constitute a part of any
REMIC created hereunder and to the extent any Yield Maintenance Payments are
included as part of Excess Cash Flow they are so for definition purposes only.
(c) Subject to Sections 8.01 and 8.02 hereof, the Trustee agrees to comply
with the terms of the Yield Maintenance Agreement and to enforce the terms and
provisions thereof against the Yield Maintenance Agreement Provider at the
written direction of the Holders of Class A Certificates and Class M
Certificates entitled to at least 51% of the Voting Rights of such Classes of
Certificates, or if the Trustee does not receive such direction from such
Certificateholders, then at the written direction of Residential Funding.
(d) The Trustee and the Master Servicer shall treat the holders of each
Class of Certificates (other than the Class SB Certificates and Class R
Certificates) as having entered into a notional principal contract with the
holders of the Class SB Certificates. Pursuant to each such notional principal
contract, the holder of the Class SB Certificates shall be treated as having
agreed to pay the amounts set forth in Sections 4.02(c)(xiii) through (xix) to
the holders of the Certificates (other than the Class SB Certificates and Class
R Certificates) in accordance with the terms of this Agreement. Any payments to
the Certificates from amounts deemed received in respect of this notional
principal contract shall not be payments with respect to a "regular interest" in
a REMIC within the meaning of Code Section 860G(a)(1).
(e) In the event that the Yield Maintenance Agreement, or any replacement
thereof, terminates prior to the Distribution Date in February 2011, the Master
Servicer, but at no expense to the Master Servicer, on behalf of the Trustee, to
the extent that the termination value under such Yield Maintenance Agreement is
sufficient therefor and only to the extent of the Yield Maintenance Agreement
Termination Payment received from the Yield Maintenance Agreement Provider,
shall (i) cause a new yield maintenance provider to assume the obligations of
such terminated yield maintenance agreement provider or (ii) cause a new yield
maintenance agreement provider to enter into a new interest rate yield
maintenance agreement with the Trust Fund having substantially similar terms as
those set forth in the terminated Yield Maintenance Agreement. Any Yield
Maintenance Agreement Termination Payment having a termination value which is
not sufficient to comply with clauses (i) and (ii) of this Section 4.09(e) shall
be included in the definition of Yield Maintenance Payment herein and may be
distributed as Excess Cash Flow pursuant to Section 4.02(c) herein.
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Section 4.10. Final Maturity Reserve Trust
(a) On the Closing Date, there is hereby established a separate trust (the
"Final Maturity Reserve Trust") into which the Depositor shall deposit $1000.
The Final Maturity Reserve Trust shall be maintained by the Final Maturity
Reserve Trust Trustee, who, initially, shall be the Trustee. On the Closing
Date, the Final Maturity Reserve Trust Trustee shall establish and maintain in
its name, a separate non-interest bearing account for the benefit of the Holders
of the Class A Certificates, the Class M Certificates and the Class SB
Certificates (the "Final Maturity Reserve Fund"), into which the Depositor shall
initially deposit $1000. The Final Maturity Reserve Fund shall be an Eligible
Account, and funds on deposit therein shall be held separate and apart from, and
shall not be commingled with, any other moneys, including, without limitation,
other moneys of the Trustee or of the Final Maturity Reserve Trust Trustee held
pursuant to this Agreement.
(b) On each Distribution Date on and after the Distribution Date in July
2016 to and including the Distribution Date in June 2026, if the aggregate
Stated Principal Balance of the Mortgage Loans having 40-year original terms to
maturity at the end of the related Due Period is greater than the Final Maturity
Reserve Fund Schedule for that Distribution Date, the Final Maturity Reserve
Trust Trustee shall deposit the Final Maturity Reserve Fund Addition for that
Distribution Date in the Final Maturity Reserve Fund maintained by the Final
Maturity Reserve Trust Trustee. Beginning on the Distribution Date in July 2026
and on each Distribution Date up to the earlier of (i) the Final Scheduled
Distribution Date, and (ii) the termination of the trust, the Final Maturity
Reserve Trust Trustee shall deposit in the Final Maturity Reserve Fund, any
Supplemental Final Maturity Reserve Amount from Excess Cash Flow pursuant to
Section 4.02 (c)(xx). The Trustee and the Master Servicer shall treat the
holders of each Class of Certificates (other than the Class SB Certificates and
Class R Certificates) as having entered into a notional principal contract with
the holder of the Class SB Certificates. Pursuant to each such notional
principal contract, the holder of the Class SB Certificates shall be treated as
having agreed to pay to the holders of the Certificates (other than the Class SB
Certificates and Class R Certificates) on each Distribution Date on or after the
Distribution Date in July 2016 to and including the Distribution Date in June
2026, the excess, if any, of the amount received by the holder of the Class SB
Certificate on such Distribution Date in respect of its REMIC II Regular
Interest SB-X component over the Final Maturity Reserve Shortfall after that
Distribution Date. Any payments to the Certificates (other than the Class SB
Certificates and the Class R Certificates) from amounts deemed received in
respect of such notional principal contract shall not be payments with respect
to a "regular interest" in a REMIC within the meaning of Code Section
8606(a)(1).
(c) On the earlier of (x) the Final Scheduled Distribution Date and (y) the
termination of the trust (in each case, after giving effect to all other
distributions on that date), funds on deposit in the Final Maturity Reserve Fund
will be distributed in the following order of priority:
o first, to the Class A Certificates, pro rata, based on their
Certificate Principal Balances, an amount up to their Certificate
Principal Balances;
o second, to each class of the Class M Certificates, sequentially, in
order of their payment priority, an amount up to their Certificate
Principal Balances;
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o third, concurrently, to the Class A Certificates, up to the amount of
the related Accrued Certificate Interest for those Classes remaining
unpaid after giving effect to all other distributions, in each case
allocated among the Class A Certificates, pro rata, based on their
Accrued Certificate Interest;
o fourth, to the Class M Certificates, up to the amount of the related
Accrued Certificate Interest for such Classes remaining unpaid after
giving effect to all other distributions, allocated among the Class M
Certificates in order of their payment priority;
o fifth, to pay to the holders of the Class A Certificates, on a pro
rata basis, based on the amount of the Basis Risk Shortfall
Carry-Forward Amounts previously allocated thereto that remain
unreimbursed, an amount up to the applicable Basis Risk Shortfall
Carry-Forward Amounts, and then the Class M Certificates, in order of
their payment priority, an amount up to any Basis Risk Shortfall Carry
Forward Amounts remaining unpaid as of that Distribution Date;
o sixth, to pay to the holders of the Class A Certificates and Class M
Certificates, an amount up to any Relief Act Shortfalls allocated
thereto that remain unreimbursed, on a pro rata basis, based on the
amount of Relief Act Shortfalls previously allocated thereto;
o seventh, to pay to the holders of the Class A Certificates, on a pro
rata basis, based on the amount of Realized Losses previously
allocated thereto that remain unreimbursed, and then to the Class M
Certificates, in order of their payment priority, an amount up to the
principal portion of any Realized Losses previously allocated thereto
that remain unreimbursed; and
o eighth, to pay to the holders of the Class SB Certificates any balance
remaining.
(d) Funds in the Final Maturity Reserve Fund may be invested in Permitted
Investments. Any net investment earnings will be retained in the Final Maturity
Reserve Fund until withdrawn upon the earlier of (x) the Final Scheduled
Distribution Date and (y) the termination of the trust. Any losses incurred in
the Final Maturity Reserve Fund in respect of the investment will be charged
against amounts on deposit in the Final Maturity Reserve Fund (or the
investments) immediately as realized. The Final Maturity Reserve Trust Trustee,
on behalf of the Final Maturity Reserve Trust, will not be held liable for the
amount of any loss incurred in respect of any investment or lack of investment
of funds held in the Final Maturity Reserve Fund and made in accordance with
this Agreement. Amounts on Deposit in the Final Maturity Reserve Fund will
constitute as asset of the Final Maturity Reserve Trust but will not be an asset
of any REMIC. The Class SB Certificates shall evidence ownership of the Final
Maturity Reserve Trust and funds in the Final Maturity Reserve Fund for federal
income tax purposes and such trust and funds in the Final Maturity Reserve Fund
shall not be an asset of any REMIC.
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(e) For federal income tax purposes, any Certificateholder that receives a
principal payment from the Final Maturity Reserve Trust shall be treated as
selling a portion of its Certificate to the Holder of the Class SB Certificates
and as having received the amount of the principal payment from the Holder of
the Class SB Certificates as the proceeds of the sale. The portion of the
Certificate that is treated as having been sold shall equal the amount of the
corresponding reduction in the Certificate Principal Balance of such
Certificate. Principal payments received from the Final Maturity Reserve Trust
shall not be treated as distributions from any REMIC created hereby. All
principal distributions from the Final Maturity Reserve Trust shall be accounted
for hereunder in accordance with this Section 4.10(d).
Section 4.11. Derivative Contracts.
(a) The Trustee shall, at the written direction of the Master Servicer, on
behalf of the Trust Fund, enter into Derivative Contracts, solely for the
benefit of the Class SB Certificates. Any such Derivative Contract shall
constitute a fully prepaid agreement. The Master Servicer shall determine, in
its sole discretion, whether any Derivative Contract conforms to the
requirements of clauses (b) and (c) of this Section 4.11. Any acquisition of a
Derivative Contract shall be accompanied by an appropriate amendment to this
Agreement, including an Opinion of Counsel, as provided in Section 11.01, and
either (i) an Opinion of Counsel to the effect that the existence of the
Derivative Contract will not adversely affect the availability of the exemptive
relief afforded under ERISA by U.S. Department of Labor Prohibited Transaction
Exemption ("PTE") 94-29, as most recently amended, 67 Fed. Reg. 54487 (Aug. 22,
2002), or other applicable prohibited transaction exemption to the Holders of
the Class A-1, Class A-2, Class A-3 or Class A-4 Certificates rated at least
"AA-" (or its equivalent) by Standard & Poor's or Moody's at the time of
purchase, as of the date the Derivative Contract is acquired by the Trustee; or
(ii) the consent of each holder of a Class A-1, Class A-2, Class A-3 or Class
A-4 Certificate to the acquisition of such Derivative Contract. All collections,
proceeds and other amounts in respect of the Derivative Contracts payable by the
Derivative Counterparty shall be distributed to the Class SB Certificates on the
Distribution Date following receipt thereof by the Trustee on behalf of the
Trust Fund. In no event shall such an instrument constitute a part of any REMIC
created hereunder. In addition, in the event any such instrument is deposited,
the Trust Fund shall be deemed to be divided into two separate and discrete
sub-Trusts. The assets of one such sub-Trust shall consist of all the assets of
the Trust other than such instrument and the assets of the other sub-Trust shall
consist solely of such instrument.
(b) Any Derivative Contract that provides for any payment obligation on the
part of the Trust Fund must (i) be without recourse to the assets of the Trust
Fund, (ii) contain a non-petition covenant provision from the Derivative
Counterparty, (iii) limit payment dates thereunder to Distribution Dates and
(iv) contain a provision limiting any cash payments due to the Derivative
Counterparty on any day under such Derivative Contract solely to funds available
therefor in the Certificate Account available to make payments to the Holders of
the Class SB Certificates on such Distribution Date.
(c) Each Derivative Contract must (i) provide for the direct payment of any
amounts by the Derivative Counterparty thereunder to the Certificate Account at
least one Business Day prior to the related Distribution Date, (ii) contain an
assignment of all of the Trust Fund's rights (but none of its obligations) under
such Derivative Contract to the Trustee on behalf the Class SB
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Certificateholders and shall include an express consent to the Derivative
Counterparty to such assignment, (iii) provide that in the event of the
occurrence of an Event of Default, such Derivative Contract shall terminate upon
the direction of a majority Percentage Interest of the Class SB Certificates,
and (iv) prohibit the Derivative Counterparty from "setting-off' or "netting"
other obligations of the Trust Fund and its Affiliates against such Derivative
Counterparty's payment obligations thereunder.
Section 4.12. Tax Treatment of Yield Maintenance Payments.
For federal income tax purposes, each holder of a Class A, Class M or Class
SB Certificate is deemed to own an undivided beneficial ownership interest in a
REMIC regular interest and the right to receive payments received by the
Trustee, on behalf of the Trust Fund, pursuant to the Yield Maintenance
Agreement in respect of the amounts set forth in Section 4.09(b) which right to
receive such payments shall not be attributable to any asset of or amount owed
by any REMIC created hereunder.
ARTICLE V
THE CERTIFICATES
Section 5.01. The Certificates.
(a) The Class A, Class M, Class SB and Class R Certificates shall be
substantially in the forms set forth in Exhibits A, B, D and E, respectively,
and shall, on original issue, be executed and delivered by the Trustee to the
Certificate Registrar for authentication and delivery to or upon the order of
the Depositor upon receipt by the Trustee or one or more Custodians of the
documents specified in Section 2.01. The Class A, Class M-1, Class M-2 and Class
M-3 Certificates shall be issuable in minimum dollar denominations of $100,000
and integral multiples of $1 in excess thereof. The Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class
M-6, Class M-7, Class M-8 and Class M-9 Certificates shall be issuable in
minimum dollar denominations of $250,000 and integral multiples of $1 in excess
thereof. The Class SB Certificates shall be issuable in registered, certificated
form in minimum percentage interests of 5.00% and integral multiples of 0.01% in
excess thereof. Each Class of Class R Certificates shall be issued in
registered, certificated form in minimum percentage interests of 20.00% and
integral multiples of 0.01% in excess thereof; provided, however, that one Class
R Certificate of each Class will be issuable to the REMIC Administrator as "tax
matters person" pursuant to Section 10.01(c) in a minimum denomination
representing a Percentage Interest of not less than 0.01%. The Certificates
shall be executed by manual or facsimile signature on behalf of an authorized
officer of the Trustee. Certificates bearing the manual or facsimile signatures
of individuals who were at any time the proper officers of the Trustee shall
bind the Trustee, notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and delivery of such
Certificate or did not hold such offices at the date of such Certificates. No
Certificate shall be entitled to any benefit under this Agreement, or be valid
for any purpose, unless there appears on such Certificate a certificate of
authentication substantially in the form provided for herein executed by the
Certificate Registrar by manual signature, and such certificate upon any
Certificate shall be conclusive evidence, and the only evidence, that such
Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication.
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(b) The Class A Certificates and Class M Certificates shall initially be
issued as one or more Certificates registered in the name of the Depository or
its nominee and, except as provided below, registration of such Certificates may
not be transferred by the Trustee except to another Depository that agrees to
hold such Certificates for the respective Certificate Owners with Ownership
Interests therein. The Certificate Owners shall hold their respective Ownership
Interests in and to each such Class A and Class M Certificate through the
book-entry facilities of the Depository and, except as provided below, shall not
be entitled to Definitive Certificates in respect of such Ownership Interests.
All transfers by Certificate Owners of their respective Ownership Interests in
the Book-Entry Certificates shall be made in accordance with the procedures
established by the Depository Participant or brokerage firm representing such
Certificate Owner. Each Depository Participant shall transfer the Ownership
Interests only in the Book-Entry Certificates of Certificate Owners it
represents or of brokerage firms for which it acts as agent in accordance with
the Depository's normal procedures.
The Trustee, the Master Servicer and the Depositor may for all purposes
(including the making of payments due on the respective Classes of Book-Entry
Certificates) deal with the Depository as the authorized representative of the
Certificate Owners with respect to the respective Classes of Book-Entry
Certificates for the purposes of exercising the rights of Certificateholders
hereunder. The rights of Certificate Owners with respect to the respective
Classes of Book-Entry Certificates shall be limited to those established by law
and agreements between such Certificate Owners and the Depository Participants
and brokerage firms representing such Certificate Owners. Multiple requests and
directions from, and votes of, the Depository as Holder of any Class of
Book-Entry Certificates with respect to any particular matter shall not be
deemed inconsistent if they are made with respect to different Certificate
Owners. The Trustee may establish a reasonable record date in connection with
solicitations of consents from or voting by Certificateholders and shall give
notice to the Depository of such record date.
In addition, if an Event of Default has occurred and is continuing, each
Certificate Owner materially adversely affected thereby may at its option
request a Definitive Certificate evidencing such Certificate Owner's Percentage
Interest in the related Class of Certificates. In order to make such request,
such Certificate Owner shall, subject to the rules and procedures of the
Depository, provide the Depository or the related Depository Participant with
directions for the Trustee to exchange or cause the exchange of the Certificate
Owner's interest in such Class of Certificates for an equivalent Percentage
Interest in fully registered definitive form. Upon receipt by the Trustee of
instruction from the Depository directing the Trustee to effect such exchange
(such instructions to contain information regarding the Class of Certificates
and the Certificate Principal Balance being exchanged, the Depository
Participant account to be debited with the decrease, the registered holder of
and delivery instructions for the Definitive Certificates and any other
information reasonably required by the Trustee), (i) the Trustee shall instruct
the Depository to reduce the related Depository Participant's account by the
aggregate Certificate Principal Balance of the Definitive Certificates, (ii) the
Trustee shall execute, authenticate and deliver, in accordance with the
registration and delivery instructions provided by the Depository, a Definitive
Certificate evidencing such Certificate Owner's Percentage Interest in such
Class of Certificates and (iii) the Trustee shall execute and authenticate a new
Book-Entry Certificate reflecting the reduction in the aggregate Certificate
Principal Balance of such Class of Certificates by the amount of the Definitive
Certificates.
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If (i)(A) the Depositor advises the Trustee in writing that the Depository
is no longer willing or able to properly discharge its responsibilities as
Depository and (B) the Depositor is unable to locate a qualified successor or
(ii) the Depositor notifies the Depository of its intent to terminate the
book-entry system and, upon receipt of notice of such intent from the
Depository, the Depository Participants holding beneficial interest in the
Book-Entry Certificates agree to initiate such termination, the Trustee shall
notify all Certificate Owners, through the Depository, of the occurrence of any
such event and of the availability of Definitive Certificates to Certificate
Owners requesting the same. Upon surrender to the Trustee of the Book-Entry
Certificates by the Depository, accompanied by registration instructions from
the Depository for registration of transfer, the Trustee shall issue the
Definitive Certificates. Neither the Depositor, the Master Servicer nor the
Trustee shall be liable for any actions taken by the Depository or its nominee,
including, without limitation, any delay in delivery of any instruction required
under this section and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates, the
Trustee and the Master Servicer shall recognize the Holders of the Definitive
Certificates as Certificateholders hereunder.
(c) Each of the Certificates is intended to be a "security" governed by
Article 8 of the Uniform Commercial Code as in effect in the State of New York
and any other applicable jurisdiction, to the extent that any of such laws may
be applicable.
Section 5.02. Registration of Transfer and Exchange of Certificates.
(a) The Trustee shall cause to be kept at one of the offices or agencies to
be appointed by the Trustee, in accordance with the provisions of Section 8.12,
a Certificate Register in which, subject to such reasonable regulations as it
may prescribe, the Trustee shall provide for the registration of Certificates
and of transfers and exchanges of Certificates as herein provided. The Trustee
is initially appointed Certificate Registrar for the purpose of registering
Certificates and transfers and exchanges of Certificates as herein provided. The
Certificate Registrar, or the Trustee, shall provide the Master Servicer with a
certified list of Certificateholders as of each Record Date prior to the related
Determination Date.
(b) Upon surrender for registration of transfer of any Certificate at any
office or agency of the Trustee maintained for such purpose pursuant to Section
8.12 and, in the case of any Class SB or Class R Certificate, upon satisfaction
of the conditions set forth below, the Trustee shall execute and the Certificate
Registrar shall authenticate and deliver, in the name of the designated
Transferee or Transferees, one or more new Certificates of a like Class and
aggregate Percentage Interest.
(c) At the option of the Certificateholders, Certificates may be exchanged
for other Certificates of authorized denominations of a like Class and aggregate
Percentage Interest, upon surrender of the Certificates to be exchanged at any
such office or agency. Whenever any Certificates are so surrendered for exchange
the Trustee shall execute and the Certificate Registrar shall authenticate and
deliver the Certificates of such Class which the Certificateholder making the
exchange is entitled to receive. Every Certificate presented or surrendered for
transfer or exchange shall (if so required by the Trustee or the Certificate
Registrar) be duly endorsed by, or be accompanied by a written instrument of
transfer in form satisfactory to the
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Trustee and the Certificate Registrar duly executed by, the Holder thereof or
his attorney duly authorized in writing.
(d) No transfer, sale, pledge or other disposition of a Class SB or Class R
Certificate shall be made unless such transfer, sale, pledge or other
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with said Act and laws. Except as otherwise
provided in this Section 5.02(d), in the event that a transfer of a Class SB or
Class R Certificate is to be made, (i) unless the Depositor directs the Trustee
otherwise, the Trustee shall require a written Opinion of Counsel addressed to
and acceptable to and in form and substance satisfactory to the Trustee and the
Depositor that such transfer may be made pursuant to an exemption, describing
the applicable exemption and the basis therefor, from said Act and laws or is
being made pursuant to said Act and laws, which Opinion of Counsel shall not be
an expense of the Trustee, the Trust Fund, the Depositor or the Master Servicer,
and (ii) the Trustee shall require the Transferee to execute a representation
letter, substantially in the form of Exhibit J hereto, and the Trustee shall
require the transferor to execute a representation letter, substantially in the
form of Exhibit K hereto, each acceptable to and in form and substance
satisfactory to the Depositor and the Trustee certifying to the Depositor and
the Trustee the facts surrounding such transfer, which representation letters
shall not be an expense of the Trustee, the Trust Fund, the Depositor or the
Master Servicer. In lieu of the requirements set forth in the preceding
sentence, transfers of Class SB or Class R Certificates may be made in
accordance with this Section 5.02(d) if the prospective Transferee of such a
Certificate provides the Trustee and the Master Servicer with an investment
letter substantially in the form of Exhibit O attached hereto, which investment
letter shall not be an expense of the Trustee, the Depositor, or the Master
Servicer, and which investment letter states that, among other things, such
Transferee (i) is a "qualified institutional buyer" as defined under Rule 144A,
acting for its own account or the accounts of other "qualified institutional
buyers" as defined under Rule 144A, and (ii) is aware that the proposed
transferor intends to rely on the exemption from registration requirements under
the Securities Act provided by Rule 144A. The Holder of a Class SB or Class R
Certificate desiring to effect any transfer, sale, pledge or other disposition
shall, and does hereby agree to, indemnify the Trustee, the Depositor, the
Master Servicer and the Certificate Registrar against any liability that may
result if the transfer, sale, pledge or other disposition is not so exempt or is
not made in accordance with such federal and state laws and this Agreement.
(e) (i) In the case of any Class A Certificate rated at least "AA-" (or its
equivalent) by Standard & Poor's or Moody's at the time of purchase, any
purchaser and transferee that is an employee benefit plan or other plan subject
to the prohibited transaction provisions of ERISA or Section 4975 of the Code
(each, a "Plan"), or any Person (including, without limitation, an insurance
company investing its general accounts, an investment manager, a named fiduciary
or a trustee of any Plan) who is using "plan assets," within the meaning of the
U.S. Department of Labor regulation promulgated at 29 C.F.R. ss.2510.3-101, of
any Plan (each, a "Plan Investor") to effect such acquisition will be required
(or deemed, as applicable) to represent and warrant that its acquisition and
holding of such Class A Certificate and any rights with respect to the Final
Maturity Reserve Fund are eligible for exemptive relief available under
Prohibited Transaction Class Exemption ("PTCE") 84-14, regarding transactions
effected by "qualified professional asset managers"; ▇▇▇▇ ▇▇-▇, regarding
investments by insurance company pooled separate accounts; PTCE 91-38, regarding
investments by bank collective
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investment funds; PTCE 95-60, regarding investments by insurance company general
accounts; or PTCE 96-23, regarding transactions effected by "in-house asset
managers."
(ii) In the case of any Class A Certificate not rated at least "AA-"
(or its equivalent) by Standard & Poor's or Moody's at the time of purchase (a
"Restricted Class A Certificate"), Class M Certificate, Class SB Certificate or
Class R Certificate presented for registration in the name of any Person, either
(A) the Trustee shall require an Opinion of Counsel acceptable to and in form
and substance satisfactory to the Trustee, the Depositor and the Master Servicer
to the effect that the purchase and holding of such Restricted Class A, Class M,
Class SB or Class R Certificate is permissible under applicable law, will not
constitute or result in any non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code (or comparable provisions of any subsequent
enactments), and will not subject the Trustee, the Depositor or the Master
Servicer to any obligation or liability (including obligations or liabilities
under ERISA or Section 4975 of the Code) in addition to those undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Trustee, the
Depositor or the Master Servicer, or (B) the prospective Transferee shall be
required to provide the Trustee, the Depositor and the Master Servicer with a
certification to the effect set forth in Exhibit Q (with respect to a Restricted
Class A Certificate or a Class M Certificate) (which certification shall be
deemed to have been given by a Restricted Class A Certificateholder or a Class M
Certificateholder who acquires a Book-Entry Certificate), Exhibit J (with
respect to a Class SB Certificate) or in paragraph fifteen of Exhibit I-1 (with
respect to a Class R Certificate), which the Trustee may rely upon without
further inquiry or investigation, or such other certifications as the Trustee
may deem desirable or necessary in order to establish that such Transferee or
the Person in whose name such registration is requested either (a) is not a Plan
or a Plan Investor or (b) in the case of a Restricted Class A Certificate or a
Class M Certificate, the following conditions are satisfied: (i) such transferee
is an insurance company, (ii) the source of funds used to purchase or hold such
Certificate (or any interest therein) is an "insurance company general account"
(as defined in 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").
(iii) Any Transferee of a Restricted Class A Certificate or a Class M
Certificate that does not deliver the certification referred to in clause (ii)
above will be deemed to have represented by virtue of its purchase or holding of
such Certificate (or any interest therein) that either (a) such Transferee is
not a Plan or a Plan Investor or (b) such Transferee is a Complying Insurance
Company.
(A) If any Restricted Class A or Class M Certificate (or any
interest therein) is acquired or held by any Person that does not
satisfy the conditions described in paragraph (iii) above, then the
last preceding Transferee that either (x) is not a Plan or a Plan
Investor, or (y) is a Complying Insurance Company shall be restored,
to the extent permitted by law, to all rights and obligations as
Certificate Owner thereof retroactive to the date of such Transfer of
such Certificate. The Trustee shall be under no liability to any
Person for making any payments due on such Certificate to such
preceding Transferee.
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(B) Any purported Certificate Owner whose acquisition or holding
of any Restricted Class A or Class M Certificate (or any interest
therein) was effected in violation of the restrictions in this Section
5.02(e) shall indemnify and hold harmless the Depositor, the Trustee,
the Master Servicer, any Subservicer, any underwriter and the Trust
Fund from and against any and all liabilities, claims, costs or
expenses incurred by such parties as a result of such acquisition or
holding.
(f) (i) Each Person who has or who acquires any Ownership Interest in a
Class R Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably authorized the Trustee or its designee under clause (iii)(A)
below to deliver payments to a Person other than such Person and to negotiate
the terms of any mandatory sale under clause (iii)(B) below and to execute all
instruments of transfer and to do all other things necessary in connection with
any such sale. The rights of each Person acquiring any Ownership Interest in a
Class R Certificate are expressly subject to the following provisions:
(A) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall be a Permitted Transferee and shall promptly
notify the Trustee of any change or impending change in its status as
a Permitted Transferee.
(B) In connection with any proposed Transfer of any Ownership
Interest in a Class R Certificate, the Trustee shall require delivery
to it, and shall not register the Transfer of any Class R Certificate
until its receipt of,
(I) an affidavit and agreement (a "Transfer Affidavit and
Agreement," in the form attached hereto as Exhibit I-1) from the
proposed Transferee, in form and substance satisfactory to the
Master Servicer, representing and warranting, among other things,
that it is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Class R Certificate that is the subject
of the proposed Transfer as a nominee, trustee or agent for any
Person who is not a Permitted Transferee, that for so long as it
retains its Ownership Interest in a Class R Certificate, it will
endeavor to remain a Permitted Transferee, and that it has
reviewed the provisions of this Section 5.02(f) and agrees to be
bound by them, and
(II) a certificate, in the form attached hereto as Exhibit
I-2, from the Holder wishing to transfer the Class R Certificate,
in form and substance satisfactory to the Master Servicer,
representing and warranting, among other things, that no purpose
of the proposed Transfer is to impede the assessment or
collection of tax.
(C) Notwithstanding the delivery of a Transfer Affidavit and
Agreement by a proposed Transferee under clause (B) above, if a
Responsible Officer of the Trustee who is assigned to this Agreement
has actual knowledge that the proposed Transferee is not a Permitted
Transferee, no Transfer of an
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Ownership Interest in a Class R Certificate to such proposed
Transferee shall be effected.
(D) Each Person holding or acquiring any Ownership Interest in a
Class R Certificate shall agree (x) to require a Transfer Affidavit
and Agreement from any other Person to whom such Person attempts to
transfer its Ownership Interest in a Class R Certificate and (y) not
to transfer its Ownership Interest unless it provides a certificate to
the Trustee in the form attached hereto as Exhibit I-2.
(E) Each Person holding or acquiring an Ownership Interest in a
Class R Certificate, by purchasing an Ownership Interest in such
Certificate, agrees to give the Trustee written notice that it is a
"pass-through interest holder" within the meaning of Temporary
Treasury Regulations Section 1.67-3T(a)(2)(i)(A) immediately upon
acquiring an Ownership Interest in a Class R Certificate, if it is, or
is holding an Ownership Interest in a Class R Certificate on behalf
of, a "pass-through interest holder."
(ii) The Trustee shall register the Transfer of any Class R
Certificate only if it shall have received the Transfer Affidavit and
Agreement, a certificate of the Holder requesting such transfer in the form
attached hereto as Exhibit I-2 and all of such other documents as shall
have been reasonably required by the Trustee as a condition to such
registration. Transfers of the Class R Certificates to Non-United States
Persons and Disqualified Organizations (as defined in Section 860E(e)(5) of
the Code) are prohibited.
(A) If any Disqualified Organization shall become a holder of a
Class R Certificate, then the last preceding Permitted Transferee
shall be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration
of such Transfer of such Class R Certificate. If a Non-United States
Person shall become a holder of a Class R Certificate, then the last
preceding United States Person shall be restored, to the extent
permitted by law, to all rights and obligations as Holder thereof
retroactive to the date of registration of such Transfer of such Class
R Certificate. If a transfer of a Class R Certificate is disregarded
pursuant to the provisions of Treasury Regulations Section 1.860E-1 or
Section 1.860G-3, then the last preceding Permitted Transferee shall
be restored, to the extent permitted by law, to all rights and
obligations as Holder thereof retroactive to the date of registration
of such Transfer of such Class R Certificate. The Trustee shall be
under no liability to any Person for any registration of Transfer of a
Class R Certificate that is in fact not permitted by this Section
5.02(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 (ii)(A)
above shall be invalid, illegal or
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unenforceable, then the Master Servicer shall have the right, without
notice to the holder or any prior holder of such Class R Certificate,
to sell such Class R Certificate to a purchaser selected by the Master
Servicer on such terms as the Master Servicer may choose. Such
purported Transferee shall promptly endorse and deliver each Class R
Certificate in accordance with the instructions of the Master
Servicer. Such purchaser may be the Master Servicer itself or any
Affiliate of the Master Servicer. The proceeds of such sale, net of
the commissions (which may include commissions payable to the Master
Servicer or its Affiliates), expenses and taxes due, if any, will be
remitted by the Master Servicer to such purported Transferee. The
terms and conditions of any sale under this clause (iii)(B) shall be
determined in the sole discretion of the Master Servicer, and the
Master Servicer shall not be liable to any Person having an Ownership
Interest in a Class R Certificate as a result of its exercise of such
discretion.
(iii) The Master Servicer, on behalf of the Trustee, shall make
available, upon written request from the Trustee, all information
necessary to compute any tax imposed
(A) as a result of the Transfer of an Ownership Interest in
a Class R Certificate to any Person who is a Disqualified
Organization, including the information regarding "excess
inclusions" of such Class R Certificates required to be provided
to the Internal Revenue Service and certain Persons as described
in Treasury Regulations Sections 1.860D-1(b)(5) and
1.860E-2(a)(5), and
(B) as a result of any regulated investment company, real
estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that
holds an Ownership Interest in a Class R Certificate having as
among its record holders at any time any Person who is a
Disqualified Organization. Reasonable compensation for providing
such information may be required by the Master Servicer from such
Person.
(iv) The provisions of this Section 5.02(f) set forth prior to
this clause (iv) may be modified, added to or eliminated, provided
that there shall have been delivered to the Trustee the following:
(A) Written notification from each Rating Agency to the
effect that the modification, addition to or elimination of such
provisions will not cause such Rating Agency to downgrade its
then-current ratings, if any, of the Class A Certificates and
Class M Certificates below the lower of the then-current rating
or the rating assigned to such Certificates as of the Closing
Date by such Rating Agency; and
(B) a certificate of the Master Servicer stating that the
Master Servicer has received an Opinion of Counsel, in form and
substance satisfactory to the Master Servicer, to the effect that
such modification, addition to or absence of such provisions will
not cause any REMIC created hereunder to cease to qualify
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as a REMIC and will not cause (x) any REMIC created hereunder to
be subject to an entity-level tax caused by the Transfer of any
Class R Certificate to a Person that is a Disqualified
Organization or (y) a Certificateholder or another Person to be
subject to a REMIC-related tax caused by the Transfer of a Class
R Certificate to a Person that is not a Permitted Transferee.
(g) No service charge shall be made for any transfer or exchange of
Certificates of any Class, but the Trustee may require payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates.
(h) All Certificates surrendered for transfer and exchange shall be
destroyed by the Certificate Registrar.
Section 5.03. Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate
Registrar, or the Trustee and the Certificate Registrar receive evidence to
their satisfaction of the destruction, loss or theft of any Certificate, and
(ii) there is delivered to the Trustee and the Certificate Registrar such
security or indemnity as may be required by them to save each of them harmless,
then, in the absence of notice to the Trustee or the Certificate Registrar that
such Certificate has been acquired by a bona fide purchaser, the Trustee shall
execute and the Certificate Registrar shall authenticate and deliver, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Certificate, a new Certificate of like tenor, Class and Percentage Interest but
bearing a number not contemporaneously outstanding. Upon the issuance of any new
Certificate under this Section, the Trustee may require the payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
relation thereto and any other expenses (including the fees and expenses of the
Trustee and the Certificate Registrar) connected therewith. Any duplicate
Certificate issued pursuant to this Section shall constitute complete and
indefeasible evidence of ownership in the Trust Fund, as if originally issued,
whether or not the lost, stolen or destroyed Certificate shall be found at any
time.
Section 5.04. Persons Deemed Owners.
Prior to due presentation of a Certificate for registration of transfer,
the Depositor, the Master Servicer, the Trustee, the Certificate Registrar and
any agent of the Depositor, the Master Servicer, the Trustee or the Certificate
Registrar may treat the Person in whose name any Certificate is registered as
the owner of such Certificate for the purpose of receiving distributions
pursuant to Section 4.02 and for all other purposes whatsoever, except as and to
the extent provided in the definition of "Certificateholder" and neither the
Depositor, the Master Servicer, the Trustee, the Certificate Registrar nor any
agent of the Depositor, the Master Servicer, the Trustee or the Certificate
Registrar shall be affected by notice to the contrary except as provided in
Section 5.02(f).
Section 5.05. Appointment of Paying Agent.
The Trustee may appoint a Paying Agent for the purpose of making
distributions to Certificateholders pursuant to Section 4.02. In the event of
any such appointment, on or prior to
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each Distribution Date the Master Servicer on behalf of the Trustee shall
deposit or cause to be deposited with the Paying Agent a sum sufficient to make
the payments to Certificateholders in the amounts and in the manner provided for
in Section 4.02, such sum to be held in trust for the benefit of
Certificateholders. The Trustee shall cause each Paying Agent to execute and
deliver to the Trustee an instrument in which such Paying Agent shall agree with
the Trustee that such Paying Agent will hold all sums held by it for the payment
to Certificateholders in trust for the benefit of the Certificateholders
entitled thereto until such sums shall be paid to such Certificateholders. Any
sums so held by such Paying Agent shall be held only in Eligible Accounts to the
extent such sums are not distributed to the Certificateholders on the date of
receipt by such Paying Agent.
ARTICLE VI
THE DEPOSITOR AND THE MASTER SERVICER
Section 6.01. Respective Liabilities of the Depositor and the Master
Servicer.
The Depositor and the Master Servicer shall each be liable in accordance
herewith only to the extent of the obligations specifically and respectively
imposed upon and undertaken by the Depositor and the Master Servicer herein. By
way of illustration and not limitation, the Depositor is not liable for the
servicing and administration of the Mortgage Loans, nor is it obligated by
Section 7.01 or 10.01 to assume any obligations of the Master Servicer or to
appoint a designee to assume such obligations, nor is it liable for any other
obligation hereunder that it may, but is not obligated to, assume unless it
elects to assume such obligation in accordance herewith.
Section 6.02. Merger or Consolidation of the Depositor or the Master
Servicer; Assignment of Rights and Delegation of Duties by
Master Servicer.
(a) The Depositor and the Master Servicer shall each keep in full effect
its existence, rights and franchises as a corporation under the laws of the
state of its incorporation, and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Mortgage Loans
and to perform its respective duties under this Agreement.
(b) Any Person into which the Depositor or the Master Servicer may be
merged or consolidated, or any corporation resulting from any merger or
consolidation to which the Depositor or the Master Servicer shall be a party, or
any Person succeeding to the business of the Depositor or the Master Servicer,
shall be the successor of the Depositor or the Master Servicer, as the case may
be, hereunder, without the execution or filing of any paper or any further act
on the part of any of the parties hereto, anything herein to the contrary
notwithstanding; provided, however, that the successor or surviving Person to
the Master Servicer shall be qualified to service mortgage loans on behalf of
▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac; and provided further that each Rating Agency's
ratings, if any, of the Class A Certificates and Class M Certificates in effect
immediately prior to such merger or consolidation will not be qualified, reduced
or withdrawn as a result thereof (as evidenced by a letter to such effect from
each Rating Agency).
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(c) Notwithstanding anything else in this Section 6.02 and Section 6.04 to
the contrary, the Master Servicer may assign its rights and delegate its duties
and obligations under this Agreement; provided that the Person accepting such
assignment or delegation shall be a Person which is qualified to service
mortgage loans on behalf of ▇▇▇▇▇▇ Mae or ▇▇▇▇▇▇▇ Mac, is reasonably
satisfactory to the Trustee and the Depositor, is willing to service the
Mortgage Loans and executes and delivers to the Depositor and the Trustee an
agreement, in form and substance reasonably satisfactory to the Depositor and
the Trustee, which contains an assumption by such Person of the due and punctual
performance and observance of each covenant and condition to be performed or
observed by the Master Servicer under this Agreement; provided further that each
Rating Agency's rating of the Classes of Certificates that have been rated in
effect 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.
(d) The conversion of the Depositor's or the Master Servicer's
organizational structure from a Delaware corporation to a limited liability
company shall not require the consent of any party or notice to any party and
shall not in any way affect the rights or obligations of the Depositor or the
Master Servicer hereunder.
Section 6.03. Limitation on Liability of the Depositor, the Master Servicer
and Others.
None of the Depositor, the Master Servicer or any of the directors,
officers, employees or agents of the Depositor or the Master Servicer shall be
under any liability to the Trust Fund or the Certificateholders for any action
taken or for refraining from the taking of any action in good faith pursuant to
this Agreement, or for errors in judgment; provided, however, that this
provision shall not protect the Depositor, the Master Servicer or any such
Person against any breach of warranties or representations made herein or any
liability which would otherwise be imposed by reason of willful misfeasance, bad
faith or gross negligence in the performance of duties or by reason of reckless
disregard of obligations and duties hereunder. The Depositor, the Master
Servicer and any director, officer, employee or agent of the Depositor or the
Master Servicer may rely in good faith on any document of any kind prima facie
properly executed and submitted by any Person respecting any matters arising
hereunder. The Depositor, the Master Servicer and any director, officer,
employee or agent of the Depositor or the Master Servicer shall be indemnified
by the Trust Fund and held harmless against any loss, liability or expense
incurred in connection with any legal action relating to this Agreement or the
Certificates, other than any loss, liability or expense related to any specific
Mortgage Loan or Mortgage Loans (except as any such loss, liability or expense
shall be otherwise reimbursable pursuant to this Agreement) and any loss,
liability or expense incurred by reason of willful misfeasance, bad faith or
gross negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. Neither the Depositor nor the
Master Servicer shall be under any obligation to appear in, prosecute or defend
any legal or administrative action, proceeding, hearing or examination that is
not incidental to its respective
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duties under this Agreement and which in its opinion may involve it in any
expense or liability; provided, however, that the Depositor or the Master
Servicer may in its discretion undertake any such action, proceeding, hearing or
examination that it may deem necessary or desirable in respect to this Agreement
and the rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the legal expenses and costs of
such action, proceeding, hearing or examination and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the Master Servicer shall be entitled to be reimbursed therefor
out of amounts attributable to the Mortgage Loans on deposit in the Custodial
Account as provided by Section 3.10 and, on the Distribution Date(s) following
such reimbursement, the aggregate of such expenses and costs shall be allocated
in reduction of the Accrued Certificate Interest on each Class entitled thereto
in the same manner as if such expenses and costs constituted a Prepayment
Interest Shortfall.
Section 6.04. Depositor and Master Servicer Not to Resign.
Subject to the provisions of Section 6.02, neither the Depositor nor the
Master Servicer shall resign from its respective obligations and duties hereby
imposed on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination permitting the
resignation of the Depositor or the Master Servicer shall be evidenced by an
Opinion of Counsel (at the expense of the resigning party) to such effect
delivered to the Trustee. No such resignation by the Master Servicer shall
become effective until the Trustee or a successor servicer shall have assumed
the Master Servicer's responsibilities and obligations in accordance with
Section 7.02.
ARTICLE VII
DEFAULT
Section 7.01. Events of Default.
Event of Default, wherever used herein, means any one of the following
events (whatever reason for such Event of Default and whether it shall be
voluntary or involuntary or be effected by operation of law or pursuant to any
judgment, decree or order of any court or any order, rule or regulation of any
administrative or governmental body):
(i) the Master Servicer shall fail to distribute or cause to be
distributed to Holders of Certificates of any Class any distribution
required to be made under the terms of the Certificates of such Class and
this Agreement and, in either case, such failure shall continue unremedied
for a period of 5 days after the date upon which written notice of such
failure, requiring such failure to be remedied, shall have been given to
the Master Servicer by the Trustee or the Depositor or to the Master
Servicer, the Depositor and the Trustee by the Holders of Certificates of
such Class evidencing Percentage Interests aggregating not less than 25%;
or
(ii) the Master Servicer shall fail to observe or perform in any
material respect any other of the covenants or agreements on the part of
the Master Servicer contained in the Certificates of any Class or in this
Agreement and such failure shall continue unremedied for a period of 30
days (except that such number of days shall be 15
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in the case of a failure to pay the premium for any Required Insurance
Policy) after the date on which written notice of such failure, requiring
the same to be remedied, shall have been given to the Master Servicer by
the Trustee or the Depositor, or to the Master Servicer, the Depositor and
the Trustee by the Holders of Certificates of any Class evidencing, as to
such Class, Percentage Interests aggregating not less than 25%; or
(iii) a decree or order of a court or agency or supervisory authority
having jurisdiction in the premises in an involuntary case under any
present or future federal or state bankruptcy, insolvency or similar law or
appointing a conservator or receiver or liquidator in any insolvency,
readjustment of debt, marshalling of assets and liabilities or similar
proceedings, or for the winding-up or liquidation of its affairs, shall
have been entered against the Master Servicer and such decree or order
shall have remained in force undischarged or unstayed for a period of 60
days; or
(iv) the Master Servicer shall consent to the appointment of a
conservator or receiver or liquidator in any insolvency, readjustment of
debt, marshalling of assets and liabilities, or similar proceedings of, or
relating to, the Master Servicer or of, or relating to, all or
substantially all of the property of the Master Servicer; or
(v) the Master Servicer shall admit in writing its inability to pay
its debts generally as they become due, file a petition to take advantage
of, or commence a voluntary case under, any applicable insolvency or
reorganization statute, make an assignment for the benefit of its
creditors, or voluntarily suspend payment of its obligations; or
(vi) the Master Servicer shall notify the Trustee pursuant to Section
4.04(b) that it is unable to deposit in the Certificate Account an amount
equal to the Advance.
If an Event of Default described in clauses (i)-(v) of this Section shall
occur, then, and in each and every such case, so long as such Event of Default
shall not have been remedied, either the Depositor or the Trustee shall at the
direction of Holders of Certificates entitled to at least 51% of the Voting
Rights, by notice in writing to the Master Servicer (and to the Depositor if
given by the Trustee or to the Trustee if given by the Depositor), terminate all
of the rights and obligations of the Master Servicer under this Agreement and in
and to the Mortgage Loans and the proceeds thereof, other than its rights as a
Certificateholder hereunder; provided, however, that a successor to the Master
Servicer is appointed pursuant to Section 7.02 and such successor Master
Servicer shall have accepted the duties of Master Servicer effective upon the
resignation of the Master Servicer. If an Event of Default described in clause
(vi) hereof shall occur, the Trustee shall, by notice to the Master Servicer and
the Depositor, immediately terminate all of the rights and obligations of the
Master Servicer under this Agreement and in and to the Mortgage Loans and the
proceeds thereof, other than its rights as a Certificateholder hereunder as
provided in Section 4.04(b). On or after the receipt by the Master Servicer of
such written notice, all authority and power of the Master Servicer under this
Agreement, whether with respect to the Certificates (other than as a Holder
thereof) or the Mortgage Loans or otherwise, shall subject to Section 7.02 pass
to and be vested in the Trustee or the Trustee's designee appointed pursuant to
Section 7.02; and, without limitation, the Trustee is hereby authorized and
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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 Depositor shall deliver to
the Trustee as successor Master Servicer a copy of the Program Guide.
Section 7.02. Trustee or Depositor to Act; Appointment of Successor.
(a) On and after the time the Master Servicer receives a notice of
termination pursuant to Section 7.01 or resigns in accordance with Section 6.04,
the Trustee or, upon notice to the Depositor and with the Depositor's consent
(which shall not be unreasonably withheld) a designee (which meets the standards
set forth below) of the Trustee, shall be the successor in all respects to the
Master Servicer in its capacity as servicer under this Agreement and the
transactions set forth or provided for herein and shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Master
Servicer (except for the responsibilities, duties and liabilities contained in
Sections 2.02 and 2.03(a), excluding the duty to notify related Subservicers as
set forth in such Sections, and its obligations to deposit amounts in respect of
losses incurred prior to such notice or termination on the investment of funds
in the Custodial Account or the Certificate Account pursuant to Sections 3.07(c)
and 4.01(c) by the terms and provisions hereof); provided, however, that any
failure to perform such duties or responsibilities caused by the preceding
Master Servicer's failure to provide information required by Section 4.04 shall
not be considered a default by the Trustee hereunder as successor Master
Servicer. As compensation therefor, the Trustee as successor Master Servicer
shall be entitled to all funds relating to the Mortgage Loans which the Master
Servicer would have been entitled to charge to the Custodial Account or the
Certificate Account if the Master Servicer had continued to act hereunder and,
in addition, shall be entitled to the income from any Permitted Investments made
with amounts attributable to the Mortgage Loans held in the Custodial Account or
the Certificate Account. If the Trustee has become the successor to the Master
Servicer in accordance with Section 6.04 or Section 7.01, then notwithstanding
the above, the Trustee may, if it shall be unwilling to so act, or shall, if it
is unable to so act, appoint, or petition a court of competent jurisdiction to
appoint, any established housing and home
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finance institution, which is also a ▇▇▇▇▇▇ ▇▇▇ or ▇▇▇▇▇▇▇ Mac-approved mortgage
servicing institution, having a net worth of not less than $10,000,000 as the
successor to the Master Servicer hereunder in the assumption of all or any part
of the responsibilities, duties or liabilities of the Master Servicer hereunder.
Pending appointment of a successor to the Master Servicer hereunder, the Trustee
shall become successor to the Master Servicer and shall act in such capacity as
hereinabove provided. In connection with such appointment and assumption, the
Trustee may make such arrangements for the compensation of such successor out of
payments on Mortgage Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
initial Master Servicer hereunder. The Depositor, the Trustee, the Custodian and
such successor shall take such action, consistent with this Agreement, as shall
be necessary to effectuate any such succession. The Servicing Fee for any
successor Master Servicer appointed pursuant to this Section 7.02 will be
lowered with respect to those Mortgage Loans, if any, where the Subservicing Fee
accrues at a rate of less than 0.50% per annum in the event that the successor
Master Servicer is not servicing such Mortgage Loans directly and it is
necessary to raise the related Subservicing Fee to a rate of 0.50% per annum in
order to hire a Subservicer with respect to such Mortgage Loans. The Master
Servicer shall pay the reasonable expenses of the Trustee in connection with any
servicing transfer hereunder.
(b) In connection with the termination or resignation of the Master
Servicer hereunder, either (i) the successor Master Servicer, including the
Trustee if the Trustee is acting as successor Master Servicer, shall represent
and warrant that it is a member of MERS in good standing and shall agree to
comply in all material respects with the rules and procedures of MERS in
connection with the servicing of the Mortgage Loans that are registered with
MERS, in which case the predecessor Master Servicer shall cooperate with the
successor Master Servicer in causing MERS to revise its records to reflect the
transfer of servicing to the successor Master Servicer as necessary under MERS'
rules and regulations, or (ii) the predecessor Master Servicer shall cooperate
with the successor Master Servicer in causing MERS to execute and deliver an
assignment of Mortgage in recordable form to transfer the Mortgage from MERS to
the Trustee and to execute and deliver such other notices, documents and other
instruments as may be necessary or desirable to effect a transfer of such
Mortgage Loan or servicing of such Mortgage Loan on the MERS(R) System to the
successor Master Servicer. The predecessor Master Servicer shall file or cause
to be filed any such assignment in the appropriate recording office. The
predecessor Master Servicer shall bear any and all fees of MERS, costs of
preparing any assignments of Mortgage, and fees and costs of filing any
assignments of Mortgage that may be required under this subsection (b). The
Successor Master Servicer shall cause such assignment to be delivered to the
Trustee or the Custodian promptly upon receipt of the original with evidence of
recording thereon or a copy certified by the public recording office in which
such assignment was recorded.
Section 7.03. Notification to Certificateholders.
(a) Upon any such termination or appointment of a successor to the Master
Servicer, the Trustee shall give prompt written notice thereof to the
Certificateholders at their respective addresses appearing in the Certificate
Register.
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(b) Within 60 days after the occurrence of any Event of Default, the
Trustee shall transmit by mail to all Holders of Certificates notice of each
such Event of Default hereunder known to the Trustee, unless such Event of
Default shall have been cured or waived as provided in Section 7.04 hereof.
Section 7.04. Waiver of Events of Default.
The Holders representing at least 66% of the Voting Rights of Certificates
affected by a default or Event of Default hereunder may waive any default or
Event of Default; provided, however, that (a) a default or Event of Default
under clause (i) of Section 7.01 may be waived only by all of the Holders of
Certificates affected by such default or Event of Default and (b) no waiver
pursuant to this Section 7.04 shall affect the Holders of Certificates in the
manner set forth in Section 11.01(b)(i), (ii) or (iii). Upon any such waiver of
a default or Event of Default by the Holders representing the requisite
percentage of Voting Rights of Certificates affected by such default or Event of
Default, such default or Event of Default shall cease to exist and shall be
deemed to have been remedied for every purpose hereunder. No such waiver shall
extend to any subsequent or other default or Event of Default or impair any
right consequent thereon except to the extent expressly so waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01. Duties of Trustee.
(a) The Trustee, prior to the occurrence of an Event of Default and after
the curing of all Events of Default which may have occurred, undertakes to
perform such duties and only such duties as are specifically set forth in this
Agreement. In case an Event of Default has occurred (which has not been cured or
waived), the Trustee shall exercise such of the rights and powers vested in it
by this Agreement, and use the same degree of care and skill in their exercise
as a prudent investor would exercise or use under the circumstances in the
conduct of such investor's own affairs.
(b) The Trustee, upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee which are specifically required to be furnished pursuant to any
provision of this Agreement, shall examine them to determine whether they
conform to the requirements of this Agreement. The Trustee shall notify the
Certificateholders of any such documents which do not materially conform to the
requirements of this Agreement in the event that the Trustee, after so
requesting, does not receive satisfactorily corrected documents in a timely
fashion. The Trustee shall forward or cause to be forwarded in a timely fashion
the notices, reports and statements required to be forwarded by the Trustee
pursuant to Sections 4.03, 7.03, and 10.01. The Trustee shall furnish in a
timely fashion to the Master Servicer such information as the Master Servicer
may reasonably request from time to time for the Master Servicer to fulfill its
duties as set forth in this Agreement. The Trustee covenants and agrees that it
shall perform its obligations hereunder in a manner so as to maintain the status
of each REMIC created hereunder as a REMIC under the REMIC Provisions (subject
to Section 10.01(f)) and to prevent the imposition of any federal, state or
local income, prohibited transaction (except as provided in Section 2.04
herein), contribution or other tax on
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the Trust Fund to the extent that maintaining such status and avoiding such
taxes are reasonably within the control of the Trustee and are reasonably within
the scope of its duties under this Agreement.
(c) No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct; provided, however, that:
(i) Prior to the occurrence of an Event of Default, and after the
curing or waiver of all such Events of Default which may have occurred, the
duties and obligations of the Trustee shall be determined solely by the
express provisions of this Agreement, the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Agreement, no implied covenants or
obligations shall be read into this Agreement against the Trustee and, in
the absence of bad faith on the part of the Trustee, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed therein, upon any certificates or opinions furnished
to the Trustee by the Depositor or the Master Servicer and which on their
face, do not contradict the requirements of this Agreement;
(ii) The Trustee shall not be personally liable for an error of
judgment made in good faith by a Responsible Officer or Responsible
Officers of the Trustee, unless it shall be proved that the Trustee was
negligent in ascertaining the pertinent facts;
(iii) The Trustee shall not be personally liable with respect to any
action taken, suffered or omitted to be taken by it in good faith in
accordance with the direction of the Certificateholders holding
Certificates which evidence, Percentage Interests aggregating not less than
25% of the affected Classes as to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or exercising any
trust or power conferred upon the Trustee, under this Agreement;
(iv) The Trustee shall not be charged with knowledge of any default
(other than a default in payment to the Trustee) specified in clauses (i)
and (ii) of Section 7.01 or an Event of Default under clauses (iii), (iv)
and (v) of Section 7.01 unless a Responsible Officer of the Trustee
assigned to and working in the Corporate Trust Office obtains actual
knowledge of such failure or event or the Trustee receives written notice
of such failure or event at its Corporate Trust Office from the Master
Servicer, the Depositor or any Certificateholder; and
(v) Except to the extent provided in Section 7.02, no provision in
this Agreement shall require the Trustee to expend or risk its own funds
(including, without limitation, the making of any Advance) or otherwise
incur any personal financial liability in the performance of any of its
duties as Trustee hereunder, or in the exercise of any of its rights or
powers, if the Trustee shall have reasonable grounds for believing that
repayment of funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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(d) The Trustee shall timely pay, from its own funds, the amount of any and
all federal, state and local taxes imposed on the Trust Fund or its assets or
transactions including, without limitation, (A) "prohibited transaction" penalty
taxes as defined in Section 860F of the Code, if, when and as the same shall be
due and payable, (B) any tax on contributions to a REMIC after the Closing Date
imposed by Section 860G(d) of the Code and (C) any tax on "net income from
foreclosure property" as defined in Section 860G(c) of the Code, but only if
such taxes arise out of a breach by the Trustee of its obligations hereunder,
which breach constitutes negligence or willful misconduct of the Trustee.
Section 8.02. Certain Matters Affecting the Trustee.
(a) Except as otherwise provided in Section 8.01:
(i) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officers' Certificate,
certificate of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper or document believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) The Trustee may consult with counsel and any Opinion of Counsel
shall be full and complete authorization and protection in respect of any
action taken or suffered or omitted by it hereunder in good faith and in
accordance with such Opinion of Counsel;
(iii) The Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Agreement or to institute, conduct or
defend any litigation hereunder or in relation hereto at the request, order
or direction of any of the Certificateholders, pursuant to the provisions
of this Agreement or the Yield Maintenance Agreement, unless such
Certificateholders shall have offered to the Trustee reasonable security or
indemnity against the costs, expenses and liabilities which may be incurred
therein or thereby; nothing contained herein shall, however, relieve the
Trustee of the obligation, upon the occurrence of an Event of Default
(which has not been cured), to exercise such of the rights and powers
vested in it by this Agreement, and to use the same degree of care and
skill in their exercise as a prudent investor would exercise or use under
the circumstances in the conduct of such investor's own affairs;
(iv) The Trustee shall not be personally liable for any action taken,
suffered or omitted by it in good faith and believed by it to be authorized
or within the discretion or rights or powers conferred upon it by this
Agreement;
(v) Prior to the occurrence of an Event of Default hereunder and after
the curing of all Events of Default which may have occurred, the Trustee
shall not be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion,
report, notice, request, consent, order, approval, bond or other paper or
document, unless requested in writing to do so by the Holders of
Certificates of any Class evidencing, as to such Class, Percentage
Interests, aggregating not less than 50%; provided, however, that if the
payment within a reasonable time to the
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Trustee of the costs, expenses or liabilities likely to be incurred by it
in the making of such investigation is, in the opinion of the Trustee, not
reasonably assured to the Trustee by the security afforded to it by the
terms of this Agreement, the Trustee may require reasonable indemnity
against such expense or liability as a condition to so proceeding. The
reasonable expense of every such examination shall be paid by the Master
Servicer, if an Event of Default shall have occurred and is continuing, and
otherwise by the Certificateholder requesting the investigation;
(vi) The Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys provided that the Trustee shall remain liable for any acts of
such agents or attorneys; and
(vii) To the extent authorized under the Code and the regulations
promulgated thereunder, each Holder of a Class R Certificate hereby
irrevocably appoints and authorizes the Trustee to be its attorney-in-fact
for purposes of signing any Tax Returns required to be filed on behalf of
the Trust Fund. The Trustee shall sign on behalf of the Trust Fund and
deliver to the Master Servicer in a timely manner any Tax Returns prepared
by or on behalf of the Master Servicer that the Trustee is required to sign
as determined by the Master Servicer pursuant to applicable federal, state
or local tax laws, provided that the Master Servicer shall indemnify the
Trustee for signing any such Tax Returns that contain errors or omissions.
(b) Following the issuance of the Certificates (and except as provided for
in Section 2.04), the Trustee shall not accept any contribution of assets to the
Trust Fund unless subject to Section 10.01(f)) it shall have obtained or been
furnished with an Opinion of Counsel to the effect that such contribution will
not (i) cause any REMIC created hereunder to fail to qualify as a REMIC at any
time that any Certificates are outstanding or (ii) cause the Trust Fund to be
subject to any federal tax as a result of such contribution (including the
imposition of any federal tax on "prohibited transactions" imposed under Section
860F(a) of the Code).
[(c) the Final Maturity Reserve Trust Trustee shall be entitled to the same
rights, protections, immunities and indemnities afforded to the Trustee
hereunder.]
Section 8.03. Trustee Not Liable for Certificates or Mortgage Loans.
The recitals contained herein and in the Certificates (other than the
execution of the Certificates and relating to the acceptance and receipt of the
Mortgage Loans) shall be taken as the statements of the Depositor or the Master
Servicer as the case may be, and the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates (except that the
Certificates shall be duly and validly executed and authenticated by it as
Certificate Registrar) or of any Mortgage Loan or related document, or of MERS
or the MERS(R) System. Except as otherwise provided herein, the Trustee shall
not be accountable for the use or application by the Depositor or the Master
Servicer of any of the Certificates or of the proceeds of such Certificates, or
for the use or application of any funds paid to the Depositor or the Master
Servicer in respect of the Mortgage Loans or deposited in or withdrawn from the
Custodial Account or the Certificate Account by the Depositor or the Master
Servicer.
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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 shall pay
or reimburse the Trustee and any co-trustee upon request for all reasonable
expenses, disbursements and advances incurred or made by the Trustee or any
co-trustee in accordance with any of the provisions of this Agreement (including
the reasonable compensation and the expenses and disbursements of its counsel
and of all persons not regularly in its employ, and the expenses incurred by the
Trustee or any co-trustee in connection with the appointment of an office or
agency pursuant to Section 8.12) except any such expense, disbursement or
advance as may arise from its negligence or bad faith.
(b) The Master Servicer agrees to indemnify the Trustee for, and to hold
the Trustee harmless against, any loss, liability or expense incurred without
negligence or willful misconduct on its part, arising out of, or in connection
with, the acceptance and administration of the Trust Fund, including its
obligation to execute the DTC Letter in its individual capacity, 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 or the Yield Maintenance Agreement, and
the Master Servicer further agrees to indemnify the Trustee for, and to hold the
Trustee harmless against, any loss, liability or expense arising out of, or in
connection with, the provisions set forth in the second paragraph of Section
2.01(a) hereof, including, without limitation, all costs, liabilities and
expenses (including reasonable legal fees and expenses) of investigating and
defending itself against any claim, action or proceeding, pending or threatened,
relating to the provisions of such paragraph, provided that:
(i) with respect to any such claim, the Trustee shall have given the
Master Servicer written notice thereof promptly after the Trustee shall
have actual knowledge thereof;
(ii) while maintaining control over its own defense, the Trustee shall
cooperate and consult fully with the Master Servicer in preparing such
defense; and
(iii) notwithstanding anything in this Agreement to the contrary, the
Master Servicer shall not be liable for settlement of any claim by the
Trustee entered into without the prior consent of the Master Servicer which
consent shall not be unreasonably withheld. No termination of this
Agreement shall affect the obligations created by this Section 8.05(b) of
the Master Servicer to indemnify the Trustee under the conditions and
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to the extent set forth herein. Notwithstanding the foregoing, the
indemnification provided by the Master Servicer in this Section 8.05(b)
shall not pertain to any loss, liability or expense of the Trustee,
including the costs and expenses of defending itself against any claim,
incurred in connection with any actions taken by the Trustee at the
direction of Certificateholders pursuant to the terms of this Agreement.
Section 8.06. Eligibility Requirements for Trustee.
The Trustee hereunder shall at all times be a national banking association
or a New York banking corporation having its principal office in a state and
city acceptable to the Depositor and organized and doing business under the laws
of such state or the United States of America, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 and subject to supervision or examination by federal or state
authority. If such corporation or national banking association publishes reports
of condition at least annually, pursuant to law or to the requirements of the
aforesaid supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation shall be deemed to
be its combined capital and surplus as set forth in its most recent report of
condition so published. In case at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, the Trustee shall
resign immediately in the manner and with the effect specified in Section 8.07.
Section 8.07. Resignation and Removal of the Trustee.
(a) The Trustee may at any time resign and be discharged from the trusts
hereby created by giving written notice thereof to the Depositor and the Master
Servicer. Upon receiving such notice of resignation, the Depositor shall
promptly appoint a successor trustee by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation then the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor trustee.
(b) If at any time the Trustee shall cease to be eligible in accordance
with the provisions of Section 8.06 and shall fail to resign after written
request therefor by the Depositor, or if at any time the Trustee shall become
incapable of acting, or shall be adjudged bankrupt or insolvent, or a receiver
of the Trustee or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or affairs for
the purpose of rehabilitation, conservation or liquidation, then the Depositor
may remove the Trustee and appoint a successor trustee by written instrument, in
duplicate, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee. In addition, in the event that
the Depositor determines that the Trustee has failed (i) to distribute or cause
to be distributed to Certificateholders any amount required to be distributed
hereunder, if such amount is held by the Trustee or its Paying Agent (other than
the Master Servicer or the Depositor) for distribution or (ii) to otherwise
observe or perform in any material respect any of its covenants, agreements or
obligations hereunder, and such failure shall continue unremedied for a period
of 5 days (in respect of clause (i) above) or 30 days (in respect of clause (ii)
above other than any failure to comply with the provisions of Article XII, in
which case no notice or grace period shall
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be applicable) after the date on which written notice of such failure, requiring
that the same be remedied, shall have been given to the Trustee by the
Depositor, then the Depositor may remove the Trustee and appoint a successor
trustee by written instrument delivered as provided in the preceding sentence.
In connection with the appointment of a successor trustee pursuant to the
preceding sentence, the Depositor shall, on or before the date on which any such
appointment becomes effective, obtain from each Rating Agency written
confirmation that the appointment of any such successor trustee will not result
in the reduction of the ratings on any Class of the Certificates below the
lesser of the then current or original ratings on such Certificates.
(c) The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Trustee and appoint a successor trustee by
written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which instruments
shall be delivered to the Depositor, one complete set to the Trustee so removed
and one complete set to the successor so appointed.
(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective upon acceptance of appointment by the successor trustee as provided in
Section 8.08.
Section 8.08. Successor Trustee.
(a) Any successor trustee appointed as provided in this Section 8.08 shall
execute, acknowledge and deliver to the Depositor and to its predecessor trustee
an instrument accepting such appointment hereunder, and thereupon the
resignation or removal of the predecessor trustee shall become effective and
such successor trustee shall become effective and such successor trustee,
without any further act, deed or conveyance, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor hereunder, with
the like effect as if originally named as trustee herein. The predecessor
trustee shall deliver to the successor trustee all Mortgage Files and related
documents and statements held by it hereunder (other than any Mortgage Files at
the time held by a Custodian, which shall become the agent of any successor
trustee hereunder), and the Depositor, the Master Servicer and the predecessor
trustee shall execute and deliver such instruments and do such other things as
may reasonably be required for more fully and certainly vesting and confirming
in the successor trustee all such rights, powers, duties and obligations.
(b) No successor trustee shall accept appointment as provided in this
Section unless (a) at the time of such acceptance such successor trustee shall
be eligible under the provisions of Section 8.06 and (b) such appointment of
such successor trustee will not result in the reduction of the ratings on any
class of the Certificates below the then-current ratings on such Certificates,
as evidenced by a letter from each Rating Agency to such effect.
(c) Upon acceptance of appointment by a successor trustee as provided in
this Section, the Depositor shall mail notice of the succession of such trustee
hereunder to all Holders of Certificates at their addresses as shown in the
Certificate Register. If the Depositor fails to mail such notice within 10 days
after acceptance of appointment by the successor trustee, the successor trustee
shall cause such notice to be mailed at the expense of the Depositor.
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(d) It is acknowledged and agreed that the Person serving as Trustee
hereunder shall also serve as Final Maturity Reserve Trust Trustee. If the
Trustee resigns or is removed as Trustee hereunder, the Trustee shall also cease
to be the Final Maturity Reserve Trust Trustee. Any person appointed as
successor trustee hereunder shall also be required to serve as successor final
maturity reserve trust trustee.
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.
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(c) Any notice, request or other writing given to the Trustee shall be
deemed to have been given to each of the then separate trustees and co-trustees,
as effectively as if given to each of them. Every instrument appointing any
separate trustee or co-trustee shall refer to this Agreement and the conditions
of this Article VIII. Each separate trustee and co-trustee, upon its acceptance
of the trusts conferred, shall be vested with the estates or property specified
in its instrument of appointment, either jointly with the Trustee or separately,
as may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
(d) Any separate trustee or co-trustee may, at any time, constitute the
Trustee, its agent or attorney-in-fact, with full power and authority, to the
extent not prohibited by law, to do any lawful act under or in respect of this
Agreement on its behalf and in its name. If any separate trustee or co-trustee
shall die, become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee.
Section 8.11. Appointment of Custodians.
The Trustee may, with the consent of the Master Servicer and the Depositor,
or shall, at the direction of the Master Servicer and the Depositor, appoint one
or more Custodians who are not Affiliates of the Depositor or the Master
Servicer to hold all or a portion of the Mortgage Files as agent for the
Trustee, by entering into a Custodial Agreement. The Trustee is hereby directed
to enter into a Custodial Agreement with ▇▇▇▇▇ Fargo Bank, N.A. Subject to
Article VIII, the Trustee agrees to comply with the terms of each Custodial
Agreement and to enforce the terms and provisions thereof against the Custodian
for the benefit of the Certificateholders. Each Custodian shall be a depository
institution subject to supervision by federal or state authority, shall have a
combined capital and surplus of at least $15,000,000 and shall be qualified to
do business in the jurisdiction in which it holds any Mortgage File. Each
Custodial Agreement may be amended only as provided in Section 11.01. The
Trustee shall notify the Certificateholders of the appointment of any Custodian
(other than the Custodian appointed as of the Closing Date) pursuant to this
Section 8.11.
Section 8.12. Appointment of Office or Agency
The Trustee will maintain an office or agency in the City of New York, New
York where Certificates may be surrendered for registration of transfer or
exchange. The Trustee initially designates its offices located at the Corporate
Trust Office for the purpose of keeping the Certificate Register. The Trustee
will maintain an office at the address stated in Section 11.05(c) hereof where
notices and demands to or upon the Trustee in respect of this Agreement may be
served.
Section 8.13. DTC Letter of Representations.
The Trustee is hereby authorized and directed to, and agrees that it shall,
enter into the DTC Letter on behalf of the Trust Fund and in its individual
capacity as agent thereunder.
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Section 8.14. Yield Maintenance Agreement.
The Trustee is hereby authorized and directed to, and agrees that it shall,
enter into the Yield Maintenance Agreement on behalf of the Trust Fund.
ARTICLE IX
TERMINATION
Section 9.01. Termination Upon Purchase by Residential Funding or
Liquidation of All Mortgage Loans.
(a) Subject to Section 9.02, the respective obligations and
responsibilities of the Depositor, the Master Servicer and the Trustee created
hereby in respect of the Certificates (other than the obligation of the Trustee
to make certain payments after the Final Distribution Date to Certificateholders
and the obligation of the Depositor to send certain notices as hereinafter set
forth) shall terminate upon the last action required to be taken by the Trustee
on the Final Distribution Date pursuant to this Article IX following the earlier
of:
(i) the later of the final payment or other liquidation (or any
Advance with respect thereto) of the last Mortgage Loan remaining in the
Trust Fund or the disposition of all property acquired upon foreclosure or
deed in lieu of foreclosure of any Mortgage Loan, or
(ii) the purchase by the Master Servicer or its designee of all
Mortgage Loans and all property acquired in respect of any Mortgage Loan
remaining in the Trust Fund, at a price equal to 100% of the unpaid
principal balance of each Mortgage Loan (or, if less than such unpaid
principal balance, the fair market value of the related underlying property
of such Mortgage Loan with respect to Mortgage Loans as to which title has
been acquired if such fair market value is less than such unpaid principal
balance) (net of unreimbursed Advances attributable to principal) on the
day of repurchase, plus unpaid accrued interest thereon at the Mortgage
Rate (or Modified Net Mortgage Rate in the case of any Modified Mortgage
Loan) from the Due Date to which interest was last paid by the Mortgagor
to, but not including, the first day of the month in which such repurchase
price is distributed plus the amount of any accrued and unpaid Servicing
Fees, unreimbursed advances and Servicing Advances, in each case through
the date of such option; provided, however, that in no event shall the
trust created hereby continue beyond the earlier of (i) the Maturity Date
or (ii) the expiration of 21 years from the death of the last survivor of
the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late ambassador of the United
States to the Court of St. ▇▇▇▇▇, living on the date hereof; and provided
further, that the purchase price set forth above shall be increased as is
necessary, as determined by the Master Servicer, to avoid disqualification
of any REMIC created hereunder as a REMIC. The purchase price paid by the
Master Servicer or its designee shall also include any amounts owed by the
Master Servicer or its designee pursuant to the last paragraph of Section 4
of the Assignment Agreement in respect of any liability, penalty or expense
that resulted from a breach of the representation and warranty set forth in
clause (bb) of such Section, that remain unpaid on the date of such
purchase.
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The right of the Master Servicer or its designee to purchase all the assets
of the Trust Fund relating to the Mortgage Loans, pursuant to clause (ii) above
is conditioned upon the date of such purchase occurring on or after the Optional
Termination Date. If such right is exercised by the Master Servicer or its
designee, the Master Servicer shall be entitled to reimbursement for the full
amount of any unreimbursed Advances theretofore made by it with respect to the
Mortgage Loans being purchased, pursuant to Section 3.10. In addition, the
Master Servicer shall provide to the Trustee the certification required by
Section 3.15 and the Trustee and any Custodian shall, promptly following payment
of the purchase price, release to the Master Servicer or its designee the
Mortgage Files pertaining to the Mortgage Loans being purchased.
In addition, on any Distribution Date on or after the Optional Termination
Date, the Master Servicer or its designee shall have the right, at its option or
at the option of its designee, respectively, to purchase all of the Certificates
in whole, but not in part, at a price equal to the aggregate outstanding
Certificate Principal Balance of the Certificates, plus one month's Accrued
Certificate Interest on the Certificates, any previously unpaid Accrued
Certificate Interest, and any unpaid Prepayment Interest Shortfalls previously
allocated thereto.
(b) The Master Servicer shall give the Trustee not less than 40 days' prior
notice of the Distribution Date on which the Master Servicer anticipates that
the final distribution will be made to Certificateholders (whether as a result
of the exercise by the Master Servicer or its designee of its right to purchase
the assets of the Trust Fund or otherwise). Notice of any termination,
specifying the anticipated Final Distribution Date (which shall be a date that
would otherwise be a Distribution Date) upon which the Certificateholders may
surrender their Certificates to the Trustee for payment of the final
distribution and cancellation, shall be given promptly by the Master Servicer
(if the Master Servicer or its designee is exercising its right to purchase the
assets of the Trust Fund), or by the Trustee (in any other case) by letter to
Certificateholders mailed not earlier than the 15th day and not later than the
25th day of the month next preceding the month of such final distribution
specifying:
(i) the anticipated Final Distribution Date upon which final payment
of the Certificates is anticipated to be made upon presentation and
surrender of Certificates at the office or agency of the Trustee therein
designated,
(ii) the amount of any such final payment, if known, and
(iii) that the Record Date otherwise applicable to such Distribution
Date is not applicable, and that payment will be made only upon
presentation and surrender of the Certificates at the office or agency of
the Trustee therein specified.
If the Master Servicer or the Trustee is obligated to give notice to
Certificateholders as aforesaid, it shall give such notice to the Certificate
Registrar at the time such notice is given to Certificateholders. In the event
such notice is given by the Master Servicer, the Master Servicer or its designee
shall deposit in the Custodial Account before the Final Distribution Date in
immediately available funds an amount equal to the purchase price for the assets
of the Trust Fund computed as above provided. The Master Servicer shall provide
to the Trustee written notification of any change to the anticipated Final
Distribution Date as soon as
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practicable. If the Trust Fund is not terminated on the anticipated Final
Distribution Date, for any reason, the Trustee shall promptly mail notice
thereof to each affected Certificateholder.
(c) Upon presentation and surrender of the Class A Certificates, Class M
Certificates and Class SB Certificates by the Certificateholders thereof, the
Trustee shall distribute to such Certificateholders (A) the amount otherwise
distributable on such Distribution Date, if not in connection with the Master
Servicer's election to repurchase the Mortgage Loans or the outstanding Class A
Certificates, Class M Certificates and Class SB Certificates, or (B) if the
Master Servicer elected to so repurchase the Mortgage Loans or the outstanding
Class A Certificates, Class M Certificates and Class SB Certificates, an amount
equal to the price paid pursuant to Section 9.01(a) as follows:
(i) first, payment of any accrued and unpaid Servicing Fees,
unreimbursed advances and Servicing Advances, in each case through the date
of such option, to the Master Servicer
(ii) second, with respect to the Class A Certificates, pari passu, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest,
(iii) third, with respect to the Class M-1 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest,
(iv) fourth, with respect to the Class M-2 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest,
(v) fifth, with respect to the Class M-3 Certificates, the outstanding
Certificate Principal Balance thereof, plus Accrued Certificate Interest
thereon for the related Interest Accrual Period and any previously unpaid
Accrued Certificate Interest,
(vi) sixth, with respect to the Class M-4 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest,
(vii) seventh, with respect to the Class M-5 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest,
(viii) eighth, with respect to the Class M-6 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest,
(ix) ninth, with respect to the Class M-7 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest,
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(x) tenth, with respect to the Class M-8 Certificates, the outstanding
Certificate Principal Balance thereof, plus Accrued Certificate Interest
thereon for the related Interest Accrual Period and any previously unpaid
Accrued Certificate Interest,
(xi) eleventh, with respect to the Class M-9 Certificates, the
outstanding Certificate Principal Balance thereof, plus Accrued Certificate
Interest thereon for the related Interest Accrual Period and any previously
unpaid Accrued Certificate Interest,
(xii) twelfth, to the Class A Certificates and Class M Certificates,
the amount of any Prepayment Interest Shortfalls allocated thereto for such
Distribution Date or remaining unpaid from prior Distribution Dates and
accrued interest thereon at the applicable Pass-Through Rate, on a pro rata
basis based on Prepayment Interest Shortfalls allocated thereto for such
Distribution Date or remaining unpaid from prior Distribution Dates, and
(xiii) thirteenth, to the Class SB Certificates.
(d) In the event that any Certificateholders shall not surrender their
Certificates for final payment and cancellation on or before the Final
Distribution Date, the Trustee shall on such date cause all funds in the
Certificate Account not distributed in final distribution to Certificateholders
to be withdrawn therefrom and credited to the remaining Certificateholders by
depositing such funds in a separate escrow account for the benefit of such
Certificateholders, and the Master Servicer (if the Master Servicer or its
designee exercised its right to purchase the Mortgage Loans), or the Trustee (in
any other case) shall give a second written notice to the remaining
Certificateholders to surrender their Certificates for cancellation and receive
the final distribution with respect thereto. If within six months after the
second notice any Certificate shall not have been surrendered for cancellation,
the Trustee shall take appropriate steps as directed by the Master Servicer to
contact the remaining Certificateholders concerning surrender of their
Certificates. The costs and expenses of maintaining the Escrow Account and of
contacting Certificateholders shall be paid out of the assets which remain in
the Escrow Account. If within nine months after the second notice any
Certificates shall not have been surrendered for cancellation, the Trustee shall
pay to the Master Servicer all amounts distributable to the holders thereof and
the Master Servicer shall thereafter hold such amounts until distributed to such
holders. No interest shall accrue or be payable to any Certificateholder on any
amount held in the Escrow Account or by the Master Servicer as a result of such
Certificateholder's failure to surrender its Certificate(s) for final payment
thereof in accordance with this Section 9.01 and the Certificateholders shall
look only to the Master Servicer for such payment.
(e) All rights of the Master Servicer or its designee to purchase the
assets of the Trust Fund, or to purchase specified classes of Certificates, as
set forth in Section 9.01(a) are referred to in this Agreement as the "Call
Rights". Notwithstanding any other provision of this Agreement, the Master
Servicer or its designee shall have the right to sell, transfer, pledge or
otherwise assign the Call Rights at any time to any Person. Upon written notice
by the Master Servicer or its designee to the Trustee and the Master Servicer of
any such assignment of the Call Rights to any assignee, the Trustee and the
Master Servicer shall be obligated to recognize such assignee as the holder of
the Call Rights. Such entity, if not the Master Servicer or its designee or an
affiliate, shall be deemed to represent, at the time of such sale, transfer,
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pledge or other assignment, that one of the following will be, and at the time
the Call Right is exercised is, true and correct: (i) the exercise of such Call
Right shall not result in a non-exempt prohibited transaction under section 406
of ERISA or section 4975 of the Code (including by reason of U.S. Department of
Labor ("DOL") Prohibited Transaction Class Exemption ("PTCE") 75-1 (Part I),
84-14, 90-1, 91-38, 95-60 or 96-23 or other applicable exemption) or (ii) such
entity is (A) not a party in interest under section 3(14) of ERISA or a
disqualified person under section 4975(e)(2) of the Code with respect to any
employee benefit plan subject to section 3(3) of ERISA or any plan subject to
section 4975 of the Code (other than an employee benefit plan or plan sponsored
or maintained by the entity, provided that no assets of such employee benefit
plan or plan are invested or deemed to be invested in the Certificates) and (B)
not a "benefit plan investor" as described in DOL regulation section
2510.3-101(f)(2). If any such assignee of the Call Right is unable to exercise
such Call Right by reason of the preceding sentence, then the Call Right shall
revert to the immediately preceding assignor of such Call Right subject to the
rights of any secured party therein.
Section 9.02. Additional Termination Requirements.
(a) Each of REMIC I and REMIC II as the case may be, shall be terminated in
accordance with the following additional requirements, unless the Trustee and
the Master Servicer have received an Opinion of Counsel (which Opinion of
Counsel shall not be an expense of the Trustee) to the effect that the failure
of any REMIC created hereunder, as the case may be, to comply with the
requirements of this Section 9.02 will not (i) result in the imposition on the
Trust Fund of taxes on "prohibited transactions," as described in Section 860F
of the Code, or (ii) cause any REMIC created hereunder to fail to qualify as a
REMIC at any time that any Certificate is outstanding:
(i) The Master Servicer shall establish a 90-day liquidation period
for each of REMIC I and REMIC II, and specify the first day of such period
in a statement attached to the Trust Fund's final Tax Return pursuant to
Treasury regulations Section 1.860F-1. The Master Servicer also shall
satisfy all of the requirements of a qualified liquidation for each of
REMIC I and REMIC II under Section 860F of the Code and the regulations
thereunder;
(ii) The Master Servicer shall notify the Trustee at the commencement
of such 90-day liquidation period and, at or prior to the time of making of
the final payment on the Certificates, the Trustee shall sell or otherwise
dispose of all of the remaining assets of the Trust Fund in accordance with
the terms hereof; and
(iii) If the Master Servicer is exercising its right to purchase the
assets of the Trust Fund, the Master Servicer shall, during the 90-day
liquidation period and at or prior to the Final Distribution Date, purchase
all of the assets of the Trust Fund for cash.
(b) Each Holder of a Certificate and the Trustee hereby irrevocably
approves and appoints the Master Servicer as its attorney-in-fact to adopt a
plan of complete liquidation for each of REMIC I and REMIC II at the expense of
the Trust Fund in accordance with the terms and conditions of this Agreement.
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Section 9.03. Termination of the Final Maturity Reserve Trust.
The obligations of the Depositor, the Trustee and the Final Maturity
Reserve Trust Trustee created hereby with respect to the Final Maturity Reserve
Trust shall terminate upon the earlier of:
(a) the Distribution Date in July 2036; and
(b) the termination of this Agreement pursuant to Section 9.01.
ARTICLE X
REMIC PROVISIONS
Section 10.01. REMIC Administration.
(a) The REMIC Administrator shall make an election to treat each of REMIC I
and REMIC II as a REMIC under the Code and, if necessary, under applicable state
law. Such election will be made on Form 1066 or other appropriate federal tax or
information return (including Form 8811) or any appropriate state return for the
taxable year ending on the last day of the calendar year in which the
Certificates are issued. The REMIC I Regular Interests shall be designated as
the "regular interests" and the Class R-I Certificates shall be designated as
the sole class of "residual interests" in REMIC I. The REMIC II Regular
Interests shall be designated as the "regular interests" and the Class R-II
Certificates shall be designated as the sole class of "residual interests" in
REMIC II. The REMIC Administrator and the Trustee shall not permit the creation
of any "interests" (within the meaning of Section 860G of the Code) in REMIC I
and REMIC II other than the REMIC I Regular Interests, the REMIC II Regular
Interests and the Certificates.
(b) The Closing Date is hereby designated as the "startup day" of each of
REMIC within the meaning of Section 860G(a)(9) of the Code.
(c) The REMIC Administrator shall hold a Class R Certificate in each REMIC
representing a 0.01% Percentage Interest of the Class R Certificates in each
REMIC and shall be designated as the "tax matters person" with respect to each
of REMIC I and REMIC II in the manner provided under Treasury regulations
section 1.860F-4(d) and Treasury regulations section 301.6231(a)(7)-1. The REMIC
Administrator, as tax matters person, shall (i) act on behalf of each of REMIC I
and REMIC II in relation to any tax matter or controversy involving the Trust
Fund and (ii) represent the Trust Fund in any administrative or judicial
proceeding relating to an examination or audit by any governmental taxing
authority with respect thereto. The legal expenses, including without limitation
attorneys' or accountants' fees, and costs of any such proceeding and any
liability resulting therefrom shall be expenses of the Trust Fund and the REMIC
Administrator shall be entitled to reimbursement therefor out of amounts
attributable to the Mortgage Loans on deposit in the Custodial Account as
provided by Section 3.10 unless such legal expenses and costs are incurred by
reason of the REMIC Administrator's willful misfeasance, bad faith or gross
negligence. If the REMIC Administrator is no longer the Master Servicer
hereunder, at its option the REMIC Administrator may continue its duties as
REMIC Administrator and shall be paid reasonable compensation not to exceed
$3,000 per year by any successor Master Servicer hereunder for so acting as the
REMIC ▇▇▇▇▇▇▇▇▇▇▇▇▇.
▇▇▇
(▇) The REMIC Administrator shall prepare or cause to be prepared all of
the Tax Returns that it determines are required with respect to the REMICs
created hereunder and deliver such Tax Returns in a timely manner to the Trustee
and the Trustee shall sign and file such Tax Returns in a timely manner. The
expenses of preparing such returns shall be borne by the REMIC Administrator
without any right of reimbursement therefor. The REMIC Administrator agrees to
indemnify and hold harmless the Trustee with respect to any tax or liability
arising from the Trustee's signing of Tax Returns that contain errors or
omissions. The Trustee and Master Servicer shall promptly provide the REMIC
Administrator with such information as the REMIC Administrator may from time to
time request for the purpose of enabling the REMIC Administrator to prepare Tax
Returns.
(e) The REMIC Administrator shall provide (i) to any Transferor of a Class
R Certificate such information as is necessary for the application of any tax
relating to the transfer of a Class R Certificate to any Person who is not a
Permitted Transferee, (ii) to the Trustee and the Trustee shall forward to the
Certificateholders such information or reports as are required by the Code or
the REMIC Provisions including reports relating to interest, original issue
discount, if any, and market discount or premium (using the Prepayment
Assumption) and (iii) to the Internal Revenue Service the name, title, address
and telephone number of the person who will serve as the representative of each
REMIC created hereunder.
(f) The Master Servicer and the REMIC Administrator shall take such actions
and shall cause each REMIC created hereunder to take such actions as are
reasonably within the Master Servicer's or the REMIC Administrator's control and
the scope of its duties more specifically set forth herein as shall be necessary
or desirable to maintain the status thereof as a REMIC under the REMIC
Provisions (and the Trustee shall assist the Master Servicer and the REMIC
Administrator, to the extent reasonably requested by the Master Servicer and the
REMIC Administrator to do so). In performing their duties as more specifically
set forth herein, the Master Servicer and the REMIC Administrator shall not
knowingly or intentionally take any action, cause the Trust Fund to take any
action or fail to take (or fail to cause to be taken) any action reasonably
within their respective control and the scope of duties more specifically set
forth herein, that, under the REMIC Provisions, if taken or not taken, as the
case may be, could (i) endanger the status of any REMIC created hereunder as a
REMIC or (ii) with the exception of actions taken in connection with Section
4.08 hereof, resulting in the imposition of a tax upon any REMIC created
hereunder (including but not limited to the tax on prohibited transactions as
defined in Section 860F(a)(2) of the Code (except as provided in Section 2.04)
and the tax on contributions to a REMIC set forth in Section 860G(d) of the
Code) (either such event, in the absence of an Opinion of Counsel or the
indemnification referred to in this sentence, an "Adverse REMIC Event") unless
the Master Servicer or the REMIC Administrator, as applicable, has received an
Opinion of Counsel (at the expense of the party seeking to take such action or,
if such party fails to pay such expense, and the Master Servicer or the REMIC
Administrator, as applicable, determines that taking such action is in the best
interest of the Trust Fund and the Certificateholders, at the expense of the
Trust Fund, but in no event at the expense of the Master Servicer, the REMIC
Administrator or the Trustee) to the effect that the contemplated action will
not, with respect to the Trust Fund created hereunder, endanger such status or,
unless the Master Servicer or the REMIC Administrator or both, as applicable,
determine in its or their sole discretion to indemnify the Trust Fund against
the imposition of such a tax, result in the imposition of such a tax. Wherever
in this Agreement a contemplated
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action may not be taken because the timing of such action might result in the
imposition of a tax on the Trust Fund, or may only be taken pursuant to an
Opinion of Counsel that such action would not impose a tax on the Trust Fund,
such action may nonetheless be taken provided that the indemnity given in the
preceding sentence with respect to any taxes that might be imposed on the Trust
Fund has been given and that all other preconditions to the taking of such
action have been satisfied. The Trustee shall not take or fail to take any
action (whether or not authorized hereunder) as to which the Master Servicer or
the REMIC Administrator, as applicable, has advised it in writing that it has
received an Opinion of Counsel to the effect that an Adverse REMIC Event could
occur with respect to such action or inaction, as the case may be. In addition,
prior to taking any action with respect to the Trust Fund or its assets, or
causing the Trust Fund to take any action, which is not expressly permitted
under the terms of this Agreement, the Trustee shall consult with the Master
Servicer or the REMIC Administrator, as applicable, or its designee, in writing,
with respect to whether such action could cause an Adverse REMIC Event to occur
with respect to the Trust Fund and the Trustee shall not take any such action or
cause the Trust Fund to take any such action as to which the Master Servicer or
the REMIC Administrator, as applicable, has advised it in writing that an
Adverse REMIC Event could occur. The Master Servicer or the REMIC Administrator,
as applicable, may consult with counsel to make such written advice, and the
cost of same shall be borne by the party seeking to take the action not
expressly permitted by this Agreement, but in no event at the expense of the
Master Servicer or the REMIC Administrator. At all times as may be required by
the Code, the Master Servicer or the REMIC Administrator, as applicable, will to
the extent within its control and the scope of its duties more specifically set
forth herein, maintain substantially all of the assets of the REMIC as
"qualified mortgages" as defined in Section 860G(a)(3) of the Code and
"permitted investments" as defined in Section 860G(a)(5) of the Code.
(g) In the event that any tax is imposed on "prohibited transactions" of
any REMIC created hereunder as defined in Section 860F(a)(2) of the Code, on
"net income from foreclosure property" of any REMIC as defined in Section
860G(c) of the Code, on any contributions to any REMIC after the Startup Date
therefor pursuant to Section 860G(d) of the Code, or any other tax imposed by
the Code or any applicable provisions of state or local tax laws, such tax shall
be charged (i) to the Master Servicer, if such tax arises out of or results from
a breach by the Master Servicer in its role as Master Servicer or REMIC
Administrator of any of its obligations under this Agreement or the Master
Servicer has in its sole discretion determined to indemnify the Trust Fund
against such tax, (ii) to the Trustee, if such tax arises out of or results from
a breach by the Trustee of any of its obligations under this Article X, or (iii)
otherwise against amounts on deposit in the Custodial Account as provided by
Section 3.10 and on the Distribution Date(s) following such reimbursement the
aggregate of such taxes shall be allocated in reduction of the Accrued
Certificate Interest on each Class entitled thereto in the same manner as if
such taxes constituted a Prepayment Interest Shortfall.
(h) The Trustee and the Master Servicer shall, for federal income tax
purposes, maintain books and records with respect to each REMIC on a calendar
year and on an accrual basis or as otherwise may be required by the REMIC
Provisions.
(i) Following the Startup Date, neither the Master Servicer nor the Trustee
shall accept any contributions of assets to any REMIC unless (subject to Section
10.01(f)) the Master Servicer and the Trustee shall have received an Opinion of
Counsel (at the expense of the
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party seeking to make such contribution) to the effect that the inclusion of
such assets in any REMIC will not cause any REMIC created hereunder to fail to
qualify as a REMIC at any time that any Certificates are outstanding or subject
any such REMIC to any tax under the REMIC Provisions or other applicable
provisions of federal, state and local law or ordinances.
(j) Neither the Master Servicer nor the Trustee shall (subject to Section
10.01(f)) enter into any arrangement by which any REMIC created hereunder will
receive a fee or other compensation for services nor permit any REMIC created
hereunder to receive any income from assets other than "qualified mortgages" as
defined in Section 860G(a)(3) of the Code or "permitted investments" as defined
in Section 860G(a)(5) of the Code.
(k) Solely for the purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
Regulations, the "latest possible maturity date" by which the principal balance
of each regular interest in each REMIC would be reduced to zero is the
Distribution Date in March 2036, which is the Distribution Date in the month
following the last scheduled payment on any Mortgage Loan.
(l) Within 30 days after the Closing Date, the REMIC Administrator shall
prepare and file with the Internal Revenue Service Form 8811, "Information
Return for Real Estate Mortgage Investment Conduits (REMIC) and Issuers of
Collateralized Debt Obligations" for the Trust Fund.
(m) Neither the Trustee nor the Master Servicer shall sell, dispose of or
substitute for any of the Mortgage Loans (except in connection with (i) the
default, imminent default or foreclosure of a Mortgage Loan, including but not
limited to, the acquisition or sale of a Mortgaged Property acquired by any
REMIC pursuant to Article IX of this Agreement or (ii) a purchase of Mortgage
Loans pursuant to Article II or III of this Agreement) or acquire any assets for
any REMIC or sell or dispose of any investments in the Custodial Account or the
Certificate Account for gain, or accept any contributions to any REMIC after the
Closing Date unless it has received an Opinion of Counsel that such sale,
disposition, substitution or acquisition will not (a) affect adversely the
status of any REMIC created hereunder as a REMIC or (b) unless the Master
Servicer has determined in its sole discretion to indemnify the Trust Fund
against such tax, cause any REMIC to be subject to a tax on "prohibited
transactions" or "contributions" pursuant to the REMIC Provisions.
Section 10.02. Master Servicer, REMIC Administrator and Trustee
Indemnification.
(a) The Trustee agrees to indemnify the Trust Fund, the Depositor, the
REMIC Administrator and the Master Servicer for any taxes and costs including,
without limitation, any reasonable attorneys' fees imposed on or incurred by the
Trust Fund, the Depositor or the Master Servicer, as a result of a breach of the
Trustee's covenants set forth in Article VIII or this Article X. In the event
that Residential Funding is no longer the Master Servicer, the Trustee shall
indemnify Residential Funding for any taxes and costs including, without
limitation, any reasonable attorneys' fees imposed on or incurred by Residential
Funding as a result of a breach of the Trustee's covenants set forth in Article
VIII or this Article X.
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(b) The REMIC Administrator agrees to indemnify the Trust Fund, the
Depositor, the Master Servicer and the Trustee for any taxes and costs
(including, without limitation, any reasonable attorneys' fees) imposed on or
incurred by the Trust Fund, the Depositor, the Master Servicer or the Trustee,
as a result of a breach of the REMIC Administrator's covenants set forth in this
Article X with respect to compliance with the REMIC Provisions, including
without limitation, any penalties arising from the Trustee's execution of Tax
Returns prepared by the REMIC Administrator that contain errors or omissions;
provided, however, that such liability will not be imposed to the extent such
breach is a result of an error or omission in information provided to the REMIC
Administrator by the Master Servicer in which case Section 10.02(c) will apply.
(c) The Master Servicer agrees to indemnify the Trust Fund, the Depositor,
the REMIC Administrator and the Trustee for any taxes and costs (including,
without limitation, any reasonable attorneys' fees) imposed on or incurred by
the Trust Fund, the Depositor, the REMIC Administrator or the Trustee, as a
result of a breach of the Master Servicer's covenants set forth in this Article
X or in Article III with respect to compliance with the REMIC Provisions,
including without limitation, any penalties arising from the Trustee's execution
of Tax Returns prepared by the Master Servicer that contain errors or omissions.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01. Amendment.
(a) This Agreement or any Custodial Agreement may be amended from time to
time by the Depositor, the Master Servicer and the Trustee, without the consent
of any of the Certificateholders:
(i) to cure any ambiguity,
(ii) to correct or supplement any provisions herein or therein, which
may be inconsistent with any other provisions herein or therein or to
correct any error,
(iii) to modify, eliminate or add to any of its provisions to such
extent as shall be necessary or desirable to maintain the qualification of
any REMIC created hereunder as a REMIC at all times that any Certificate is
outstanding or to avoid or minimize the risk of the imposition of any tax
on the Trust Fund pursuant to the Code that would be a claim against the
Trust Fund, provided that the Trustee has received an Opinion of Counsel to
the effect that (A) such action is necessary or desirable to maintain such
qualification or to avoid or minimize the risk of the imposition of any
such tax and (B) such action will not adversely affect in any material
respect the interests of any Certificateholder,
(iv) to change the timing and/or nature of deposits into the Custodial
Account or the Certificate Account or to change the name in which the
Custodial Account is maintained, provided that (A) the Certificate Account
Deposit Date shall in no event be later than the related Distribution Date,
(B) such change shall not, as evidenced by an Opinion of Counsel, adversely
affect in any material respect the interests of any
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Certificateholder and (C) such change shall not result in a reduction of
the rating assigned to any Class of Certificates below the then-current
rating assigned to such Certificates, as evidenced by a letter from each
Rating Agency to such effect,
(v) to modify, eliminate or add to the provisions of Section 5.02(f)
or any other provision hereof restricting transfer of the Class R
Certificates by virtue of their being the "residual interests" in the Trust
Fund provided that (A) such change shall not result in reduction of the
rating assigned to any such Class of Certificates below the lower of the
then-current rating or the rating assigned to such Certificates as of the
Closing Date, as evidenced by a letter from each Rating Agency to such
effect, and (B) such change shall not, as evidenced by an Opinion of
Counsel (at the expense of the party seeking so to modify, eliminate or add
such provisions), cause the Trust Fund or any of the Certificateholders
(other than the transferor) to be subject to a federal tax caused by a
transfer to a Person that is not a Permitted Transferee, or
(vi) to make any other provisions with respect to matters or questions
arising under this Agreement or such Custodial Agreement which shall not be
materially inconsistent with the provisions of this Agreement, provided
that such action shall not, as evidenced by an Opinion of Counsel,
adversely affect in any material respect the interests of any
Certificateholder.
(b) This Agreement or any Custodial Agreement may also be amended from time
to time by the Depositor, the Master Servicer, the Trustee and the Holders of
Certificates evidencing in the aggregate not less than 66% of the Percentage
Interests of each Class of Certificates with a Certificate Principal Balance
greater than zero affected thereby for the purpose of adding any provisions to
or changing in any manner or eliminating any of the provisions of this Agreement
or such Custodial Agreement or of modifying in any manner the rights of the
Holders of Certificates of such Class; provided, however, that no such amendment
shall:
(i) reduce in any manner the amount of, or delay the timing of,
payments which are required to be distributed on any Certificate without
the consent of the Holder of such Certificate,
(ii) adversely affect in any material respect the interest of the
Holders of Certificates of any Class in a manner other than as described in
clause (i) hereof without the consent of Holders of Certificates of such
Class evidencing, as to such Class, Percentage Interests aggregating not
less than 66%, or
(iii) reduce the aforesaid percentage of Certificates of any Class the
Holders of which are required to consent to any such amendment, in any such
case without the consent of the Holders of all Certificates of such Class
then outstanding.
(c) Notwithstanding any contrary provision of this Agreement, the Trustee
shall not consent to any amendment to this Agreement unless it shall have first
received an Opinion of Counsel (at the expense of the party seeking such
amendment) to the effect that such amendment is permitted under this Agreement
and that such amendment or the exercise of any power granted
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to the Master Servicer, the Depositor or the Trustee in accordance with such
amendment will not result in the imposition of a federal tax on the Trust Fund
or cause any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificate is outstanding. The Trustee may but shall not be obligated
to enter into any amendment pursuant to this Section that affects its rights,
duties and immunities and this Agreement or otherwise; provided however, such
consent shall not be unreasonably withheld.
(d) Promptly after the execution of any such amendment the Trustee shall
furnish written notification of the substance of such amendment to each
Certificateholder. It shall not be necessary for the consent of
Certificateholders under this Section 11.01 to approve the particular form of
any proposed amendment, but it shall be sufficient if such consent shall approve
the substance thereof. The manner of obtaining such consents and of evidencing
the authorization of the execution thereof by Certificateholders shall be
subject to such reasonable regulations as the Trustee may prescribe.
(e) The Depositor shall have the option, in its sole discretion, to obtain
and deliver to the Trustee any corporate guaranty, payment obligation,
irrevocable letter of credit, surety bond, insurance policy or similar
instrument or a reserve fund, or any combination of the foregoing, for the
purpose of protecting the Holders of the Class R Certificates against any or all
Realized Losses or other shortfalls. Any such instrument or fund shall be held
by the Trustee for the benefit of the Class R Certificateholders, but shall not
be and shall not be deemed to be under any circumstances included in any REMIC.
To the extent that any such instrument or fund constitutes a reserve fund for
federal income tax purposes, (i) any reserve fund so established shall be an
outside reserve fund and not an asset of such REMIC, (ii) any such reserve fund
shall be owned by the Depositor, and (iii) amounts transferred by such REMIC to
any such reserve fund shall be treated as amounts distributed by such REMIC to
the Depositor or any successor, all within the meaning of Treasury regulations
Section 1.860G-2(h). In connection with the provision of any such instrument or
fund, this Agreement and any provision hereof may be modified, added to, deleted
or otherwise amended in any manner that is related or incidental to such
instrument or fund or the establishment or administration thereof, such
amendment to be made by written instrument executed or consented to by the
Depositor and such related insurer but without the consent of any
Certificateholder and without the consent of the Master Servicer or the Trustee
being required unless any such amendment would impose any additional obligation
on, or otherwise adversely affect the interests of the Certificateholders, the
Master Servicer or the Trustee, as applicable; provided that the Depositor
obtains an Opinion of Counsel (which need not be an opinion of Independent
counsel) to the effect that any such amendment will not cause (a) any federal
tax to be imposed on the Trust Fund, including without limitation, any federal
tax imposed on "prohibited transactions" under Section 860F(a)(1) of the Code or
on "contributions after the startup date" under Section 860G(d)(1) of the Code
and (b) any REMIC created hereunder to fail to qualify as a REMIC at any time
that any Certificate is outstanding. In the event that the Depositor elects to
provide such coverage in the form of a limited guaranty provided by General
Motors Acceptance Corporation, the Depositor may elect that the text of such
amendment to this Agreement shall be substantially in the form attached hereto
as Exhibit L (in which case Residential Funding's Subordinate Certificate Loss
Obligation as described in such exhibit shall be established by Residential
Funding's consent to such amendment) and that the limited guaranty shall be
executed in the form attached hereto as Exhibit M, with such changes as the
Depositor shall deem to be appropriate; it being understood
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that the Trustee has reviewed and approved the content of such forms and that
the Trustee's consent or approval to the use thereof is not required.
(f) In addition to the foregoing, any amendment of Section 4.08 of this
Agreement shall require the consent of the Limited Repurchase Right Holder as
third-party beneficiary.
Section 11.02. Recordation of Agreement; Counterparts.
(a) To the extent permitted by applicable law, this Agreement is subject to
recordation in all appropriate public offices for real property records in all
the counties or other comparable jurisdictions in which any or all of the
properties subject to the Mortgages are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
Master Servicer and at its expense on direction by the Trustee (pursuant to the
request of the Holders of Certificates entitled to at least 25% of the Voting
Rights), but only upon direction accompanied by an Opinion of Counsel to the
effect that such recordation materially and beneficially affects the interests
of the Certificateholders.
(b) For the purpose of facilitating the recordation of this Agreement as
herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall constitute but one and
the same instrument.
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
147
action, suit or proceeding it being understood and intended, and being expressly
covenanted by each Certificateholder with every other Certificateholder and the
Trustee, that no one or more Holders of Certificates of any Class shall have any
right in any manner whatever by virtue of any provision of this Agreement to
affect, disturb or prejudice the rights of the Holders of any other of such
Certificates of such Class or any other Class, or to obtain or seek to obtain
priority over or preference to any other such Holder, or to enforce any right
under this Agreement, except in the manner herein provided and for the common
benefit of Certificateholders of such Class or all Classes, as the case may be.
For the protection and enforcement of the provisions of this Section 11.03, each
and every Certificateholder and the Trustee shall be entitled to such relief as
can be given either at law or in equity.
Section 11.04. Governing Law.
This agreement and the Certificates shall be governed by and construed in
accordance with the laws of the State of New York and the obligations, rights
and remedies of the parties hereunder shall be determined in accordance with
such laws, without regard to the conflict of laws principles thereof, other than
Sections 5-1401 and 5-1402 of the New York General Obligations Law.
Section 11.05. Notices.
All demands and notices hereunder shall be in writing and shall be deemed
to have been duly given if personally delivered at or mailed by registered mail,
postage prepaid (except for notices to the Trustee which shall be deemed to have
been duly given only when received), to (a) in the case of the Depositor, ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention:
President (RAMP), or such other address as may hereafter be furnished to the
Master Servicer and the Trustee in writing by the Depositor; (b) in the case of
the Master Servicer, ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
Attention: Bond Administration or such other address as may be hereafter
furnished to the Depositor and the Trustee by the Master Servicer in writing;
(c) in the case of the Trustee, ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇,
Attention: Worldwide Securities Services/Structured Finance Services, RAMP
2006-RS4 or such other address as may hereafter be furnished to the Depositor
and the Master Servicer in writing by the Trustee; (d) in the case of Moody's,
▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ABS Monitoring Department
or such other address as may be hereafter furnished to the Depositor, the
Trustee and the Master Servicer by Moody's and (e) in the case of Standard &
Poor's, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention; Mortgage
Surveillance. Any notice required or permitted to be mailed to a
Certificateholder shall be given by first class mail, postage prepaid, at the
address of such holder as shown in the Certificate Register. Any notice so
mailed within the time prescribed in this Agreement shall be conclusively
presumed to have been duly given, whether or not the Certificateholder receives
such notice.
Section 11.06. Notices to Rating Agencies.
The Depositor, the Master Servicer or the Trustee, as applicable, (a) shall
notify each Rating Agency at such time as it is otherwise required pursuant to
this Agreement to give notice of the occurrence of, any of the events described
in clause (a), (b), (c), (d), (g), (h), (i) or
148
(j) below, (b) shall notify the Subservicer at such time as it is otherwise
required pursuant to this Agreement to give notice of the occurrence of any of
the events described in clause (a), (b), (c)(1), (g)(1) or (i) below, or (c)
provide a copy to each Rating Agency at such time as otherwise required to be
delivered pursuant to this Agreement of any of the statements described in
clauses (e) and (f) below:
(a) a material change or amendment to this Agreement,
(b) the occurrence of an Event of Default,
(c) (1) the termination or appointment of a successor Master Servicer or
(2) the termination or appointment of a successor Trustee or a change in the
majority ownership of the Trustee,
(d) the filing of any claim under the Master Servicer's blanket fidelity
bond and the errors and omissions insurance policy required by Section 3.12 or
the cancellation or modification of coverage under 152 any such instrument,
(e) the statement required to be delivered to the Holders of each Class of
Certificates pursuant to Section 4.03,
(f) the statements required to be delivered pursuant to Sections 3.18 and
3.19,
(g) (1) a change in the location of the Custodial Account or (2) a change
in the location of the Certificate Account,
(h) the occurrence of any monthly cash flow shortfall to the Holders of any
Class of Certificates resulting from the failure by the Master Servicer to make
an Advance pursuant to Section 4.04,
(i) the occurrence of the Final Distribution Date and
(j) the repurchase of or substitution for any Mortgage Loan,
provided, however, that with respect to notice of the occurrence of the events
described in clauses (d), (g) or (h) above, the Master Servicer shall provide
prompt written notice to each Rating Agency and the Subservicer of any such
event known to the Master Servicer.
Section 11.07. Severability of Provisions.
If any one or more of the covenants, agreements, provisions or terms of
this Agreement shall be for any reason whatsoever held invalid, then such
covenants, agreements, provisions or terms shall be deemed severable from the
remaining covenants, agreements, provisions or terms of this Agreement and shall
in no way affect the validity or enforceability of the other provisions of this
Agreement or of the Certificates or the rights of the Holders thereof.
Section 11.08. Supplemental Provisions for Resecuritization.
149
(a) This Agreement may be supplemented by means of the addition of a
separate Article hereto (a "Supplemental Article") for the purpose of
resecuritizing any of the Certificates issued hereunder, under the following
circumstances. With respect to any Class or Classes of Certificates issued
hereunder, or any portion of any such Class, as to which the Depositor or any of
its Affiliates (or any designee thereof) is the registered Holder (the
"Resecuritized Certificates"), the Depositor may deposit such Resecuritized
Certificates into a new REMIC, grantor trust or custodial arrangement (a
"Restructuring Vehicle") to be held by the Trustee pursuant to a Supplemental
Article. The instrument adopting such Supplemental Article shall be executed by
the Depositor, the Master Servicer and the Trustee; provided, that neither the
Master Servicer nor the Trustee shall withhold their consent thereto if their
respective interests would not be materially adversely affected thereby. To the
extent that the terms of the Supplemental Article do not in any way affect any
provisions of this Agreement as to any of the Certificates initially issued
hereunder, the adoption of the Supplemental Article shall not constitute an
"amendment" of this Agreement. Each Supplemental Article shall set forth all
necessary provisions relating to the holding of the Resecuritized Certificates
by the Trustee, the establishment of the Restructuring Vehicle, the issuing of
various classes of new certificates by the Restructuring Vehicle and the
distributions to be made thereon, and any other provisions necessary to the
purposes thereof. In connection with each Supplemental Article, the Depositor
shall deliver to the Trustee an Opinion of Counsel to the effect that (i) the
Restructuring Vehicle will qualify as a REMIC, grantor trust or other entity not
subject to taxation for federal income tax purposes and (ii) the adoption of the
Supplemental Article will not endanger the status of any REMIC created hereunder
as a REMIC or result in the imposition of a tax upon the Trust Fund (including
but not limited to the tax on prohibited transaction as defined in Section
860F(a)(2) of the Code and the tax on contributions to a REMIC as set forth in
Section 860G(d) of the Code.
Section 11.09. [Reserved].
Section 11.10. Third Party Beneficiaries.
The Limited Repurchase Right Holder is an express third-party beneficiary
of Section 4.08 of this Agreement, and shall have the right to enforce the
related provisions of Section 4.08 of this Agreement as if it were a party
hereto.
ARTICLE XII
COMPLIANCE WITH REGULATION AB
Section 12.01. Intent of Parties; Reasonableness.
The Depositor, the Trustee and the Master Servicer acknowledge and agree
that the purpose of this Article XII is to facilitate compliance by the
Depositor with the provisions of Regulation AB and related rules and regulations
of the Commission. The Depositor shall not exercise its right to request
delivery of information or other performance under these provisions other than
in good faith, or for purposes other than compliance with the Securities Act,
the Exchange Act and the rules and regulations of the Commission under the
Securities Act and the Exchange Act. Each of the Master Servicer and the Trustee
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
150
securities markets, advice of counsel, or otherwise, and agrees to comply with
reasonable requests made by the Depositor in good faith for delivery of
information under these provisions on the basis of evolving interpretations of
Regulation AB. Each of the Master Servicer and the Trustee shall cooperate
reasonably with the Depositor to deliver to the Depositor (including any of its
assignees or designees), any and all disclosure, statements, reports,
certifications, records and any other information necessary in the reasonable,
good faith determination of the Depositor to permit the Depositor to comply with
the provisions of Regulation AB.
Section 12.02. Additional Representations and Warranties of the Trustee.
(a) The Trustee shall be deemed to represent to the Depositor as of the
date hereof and on each date on which information is provided to the Depositor
under Sections 12.01, 12.02(b) or 12.03 that, except as disclosed in writing to
the Depositor prior to such date: (i) it is not aware and has not received
notice that any default, early amortization or other performance triggering
event has occurred as to any other Securitization Transaction due to any default
of the Trustee; (ii) there are no relationships or transactions (as described in
Item 1119(b) of Regulation AB) relating to the Trustee with respect to the
Depositor or any sponsor, issuing entity, servicer, trustee, originator,
significant obligor, enhancement or support provider or other material
transaction party (as each of such terms are used in Regulation AB) relating to
the Securitization Transaction contemplated by the Agreement, as identified by
the Depositor to the Trustee in writing as of the Closing Date (each, a
"Transaction Party") that are outside the ordinary course of business or on
terms other than would be obtained in an arm's length transaction with an
unrelated third party, apart from the Securitization Transaction, and that are
material to the investors' understanding of the Certificates; and (iii) the
Trustee is not an affiliate of any Transaction Party (as contemplated by Item
1119(a) of Regulation AB). The Depositor shall notify the Trustee of any change
in the identity of a Transaction Party after the Closing Date.
(b) If so requested by the Depositor on any date following the Closing
Date, the Trustee shall, within five Business Days following such request,
confirm in writing the accuracy of the representations and warranties set forth
in paragraph (a) of this Section or, if any such representation and warranty is
not accurate as of the date of such confirmation, provide the pertinent facts,
in writing, to the Depositor. Any such request from the Depositor shall not be
given more than once each calendar quarter, unless the Depositor shall have a
reasonable basis for a determination that any of the representations and
warranties may not be accurate.
Section 12.03. Information to be Provided by the Trustee.
For so long as the Depositor is subject to Exchange Act reporting
requirements with respect to the Trust Fund, for the purpose of satisfying the
Depositor's reporting obligation under the Exchange Act with respect to any
class of Certificates, the Trustee shall provide to the Depositor a written
description of (a) any litigation or governmental proceedings pending against
the Trustee as of the last day of each calendar month that would be material to
Certificateholders, and (b) any affiliations or relationships (as described in
Item 1119 of Regulation AB) that develop following the Closing Date between the
Trustee and any Transaction Party of the type described in Section 12.02(a)(ii)
or 12.02(a)(iii) as of the last day of each calendar year. Any descriptions
required with respect to legal proceedings, as well as updates to previously
provided descriptions, under this Section 12.03 shall be given no later than
five Business Days prior to the
151
Determination Date following the month in which the relevant event occurs, and
any notices and descriptions required with respect to affiliations, as well as
updates to previously provided descriptions, under this Section 12.03 shall be
given no later than January 31 of the calendar year following the year in which
the relevant event occurs. As of the related Distribution Date with respect to
each Report on Form 10-D with respect to the Certificates filed by or on behalf
of the Depositor, and as of March 15 preceding the date each Report on Form 10-K
with respect to the Certificates is filed, the Trustee will be deemed to
represent that any information previously provided by the Trustee under this
Article XII is materially correct and does not have any material omissions
unless the Trustee has provided an update to such information. The Depositor
will allow the Trustee to review any disclosure relating to material litigation
against the Trustee prior to filing such disclosure with the Commission to the
extent the Depositor changes the information provided by the Trustee.
Section 12.04. Report on Assessment of Compliance and Attestation.
On or before March 15 of each calendar year, for so long as the Depositor
is subject to Exchange Act reporting requirements with respect to the Trust
Fund, the Trustee shall:
(a) deliver to the Depositor a report (in form and substance reasonably
satisfactory to the Depositor) regarding the Trustee's assessment of compliance
with the Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be signed by an authorized officer of the
Trustee, and shall address each of the Servicing Criteria specified on Exhibit V
hereto; and
(b) deliver to the Depositor a report of a registered public accounting
firm satisfying the requirements of Rule 2-01 of Regulation S-X under the
Securities Act and the Exchange Act that attests to, and reports on, the
assessment of compliance made by the Trustee and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act.
Section 12.05. Indemnification; Remedies.
(a) The Trustee shall indemnify the Depositor, each affiliate of the
Depositor, the Master Servicer and each affiliate of the Master Servicer, and
the respective present and former directors, officers, employees and agents of
each of the foregoing, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon:
(i) (A) any untrue statement of a material fact contained or alleged
to be contained in any information, report, certification or other material
provided under this Article XII (other than the attestation delivered under
Section 12.04(b)) by the Trustee (collectively, the "Trustee Information"),
or (B) the omission or alleged omission to state in the Trustee Information
a material fact required to be stated in the Trustee Information or
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or
152
(ii) any failure by the Trustee to deliver any information, report,
certification, or other material when and as required under this Article
XII, other than a failure by the Trustee to deliver an accountants'
attestation under Section 12.04(b);
provided, however, that in no event will the Trustee be liable for any
consequential, indirect or punitive damages pursuant to this Section 12.05(a),
even if advised of the possibility of such damages.
(b) In the case of any failure of performance described in clause (ii) of
Section 12.05(a), the Trustee shall (i) promptly reimburse the Depositor for all
costs reasonably incurred by the Depositor in order to obtain the information,
report, certification, accountants' attestation or other material not delivered
as required by the Trustee and (ii) cooperate with the Depositor to mitigate any
damages that may result from such failure.
(c) The Depositor and the Master Servicer shall indemnify the Trustee, each
affiliate of the Trustee or each Person who controls the Trustee (within the
meaning of Section 15 of the Securities Act and Section 20 of the Exchange Act);
and the respective present and former directors, officers, employees and agents
of the Trustee, and shall hold each of them harmless from and against any
losses, damages, penalties, fines, forfeitures, legal fees and expenses and
related costs, judgments, and any other costs, fees and expenses that any of
them may sustain arising out of or based upon (i) any untrue statement of a
material fact contained or alleged to be contained in any information provided
under this Agreement by or on behalf of the Depositor or Master Servicer for
inclusion in any report filed with Commission under the Exchange Act
(collectively, the "RFC Information"), or (ii) the omission or alleged omission
to state in the RFC Information a material fact required to be stated in the RFC
Information or necessary in order to make the statements therein, in the light
of the circumstances under which they were made, not misleading; provided,
however, that in no event will the Depositor or the Master Servicer be liable
for any consequential, indirect or punitive damages pursuant to this Section
12.05(c), even if advised of the possibility of such damages.
[SIGNATURE PAGES FOLLOW]
153
IN WITNESS WHEREOF, the Depositor, the Master Servicer and the Trustee have
caused their names to be signed hereto by their respective officers thereunto
duly authorized and their respective seals, duly attested, to be hereunto
affixed, all as of the day and year first above written.
[Seal] RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attest: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ --------------------------------
Name: ▇▇▇ ▇▇▇▇▇▇▇▇ Title: Vice President
Title: Vice President
[Seal] RESIDENTIAL FUNDING CORPORATION
Attest: /s/▇▇▇▇▇▇ ▇▇▇▇▇▇ By: /s/ ▇▇▇ ▇▇▇▇▇▇▇▇
------------------------------ --------------------------------
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇ Name: ▇▇▇ ▇▇▇▇▇▇▇▇
Title: Associate Title: Associate
[Seal] JPMORGAN CHASE BANK,
N.A. as Trustee
Attest: /s/T ▇▇▇▇ ▇▇▇▇▇▇▇ By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------ --------------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇▇ Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇
Title: Vice President Title: Assistant Vice President
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 28th day of June, 2006 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be a Vice President of
Residential Asset Mortgage Products, Inc., one of the corporations that executed
the within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/ ▇▇▇ ▇▇▇ ▇▇▇▇▇
-----------------------------
Notary Public
[Notarial Seal]
STATE OF MINNESOTA )
) ss.:
COUNTY OF HENNEPIN )
On the 28th day of June, 2006 before me, a notary public in and for said
State, personally appeared ▇▇▇ ▇▇▇▇▇▇▇▇, known to me to be an Associate of
Residential Funding Corporation, one of the corporations that executed the
within instrument, and also known to me to be the person who executed it on
behalf of said corporation, and acknowledged to me that such corporation
executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
/s/ ▇▇▇ ▇▇▇ ▇▇▇▇▇
-------------------------
Notary Public
[Notarial Seal]
STATE OF TEXAS )
) ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the 16th day of June, 2006 before me, a notary public in and for said
State, personally appeared ▇▇▇▇▇▇ ▇▇▇▇▇▇, known to me to be a Assistant Vice
President of JPMorgan Chase Bank, N.A., a national banking association, that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association and acknowledged to
me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
/s/ ▇▇▇▇ ▇▇▇ Yeuny
-------------------------
Notary Public
[Notarial Seal]
EXHIBIT A
FORM OF CLASS [A-__] CERTIFICATE
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") COUPLED WITH THE RIGHT TO RECEIVE PAYMENTS UNDER
THE YIELD MAINTENANCE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
ANY TRANSFEREE OF A CLASS A CERTIFICATE RATED AT LEAST "AA-" (OR ITS EQUIVALENT)
BY STANDARD & POOR'S OR ▇▇▇▇▇'▇ AT THE TIME OF PURCHASE THAT IS AN EMPLOYEE
BENEFIT PLAN OR OTHER PLAN SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF
THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR
SECTION 4975 OF THE CODE (EACH, A "PLAN"), OR ANY PERSON (INCLUDING, WITHOUT
LIMITATION, AN INVESTMENT MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY PLAN)
WHO IS USING "PLAN ASSETS," WITHIN THE MEANING OF THE U.S. DEPARTMENT OF LABOR
REGULATION PROMULGATED AT 29 C.F.R. ss.2510.3-101, OF ANY PLAN (EACH, A "PLAN
INVESTOR") TO EFFECT SUCH ACQUISITION WILL BE REQUIRED (OR DEEMED, AS
APPLICABLE) TO REPRESENT AND WARRANT THAT ITS ACQUISITION AND HOLDING OF SUCH
CLASS A CERTIFICATE AND ANY RIGHTS WITH RESPECT TO THE FINAL MATURITY RESERVE
FUND ARE ELIGIBLE FOR EXEMPTIVE RELIEF AVAILABLE UNDER PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 84-14, REGARDING TRANSACTIONS EFFECTED BY "QUALIFIED
PROFESSIONAL ASSET MANAGERS"; PTCE 90-1, REGARDING INVESTMENTS BY INSURANCE
COMPANY POOLED SEPARATE ACCOUNTS; PTCE 91-38, REGARDING INVESTMENTS BY BANK
COLLECTIVE INVESTMENT FUNDS; PTCE 95-60, REGARDING INVESTMENTS BY INSURANCE
COMPANY GENERAL ACCOUNTS; OR PTCE 96-23, REGARDING TRANSACTIONS EFFECTED BY
"IN-HOUSE ASSET MANAGERS."
ANY TRANSFEREE OF A CLASS A CERTIFICATE NOT RATED AT LEAST "AA-" (OR ITS
EQUIVALENT) BY STANDARD & POOR'S OR ▇▇▇▇▇'▇ AT THE TIME OF PURCHASE (A
"RESTRICTED CLASS A CERTIFICATE") WILL BE DEEMED TO HAVE REPRESENTED BY VIRTUE
OF ITS PURCHASE OR HOLDING OF SUCH CERTIFICATE
A-1
(OR ANY INTEREST HEREIN) THAT EITHER (A) SUCH TRANSFEREE IS NOT A PLAN OR A PLAN
INVESTOR, OR (B)(I) THE TRANSFEREE IS AN INSURANCE COMPANY, (II) THE SOURCE OF
FUNDS USED TO PURCHASE OR HOLD THE CERTIFICATE (OR ANY INTEREST HEREIN) IS AN
"INSURANCE COMPANY GENERAL ACCOUNT" (AS DEFINED IN 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").
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 (A) IS NOT A PLAN OR A PLAN INVESTOR, OR (B) IS A COMPLYING
INSURANCE COMPANY SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL
RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF
SUCH TRANSFER OF THIS CERTIFICATE. THE TRUSTEE SHALL BE UNDER NO LIABILITY TO
ANY PERSON FOR MAKING ANY PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING
TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR ANY INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN
SECTION 5.02(e) OF THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD
HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER, ANY
UNDERWRITER AND THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS,
COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR
HOLDING.
Class [A-__] Senior Certificate No. __
Date of Pooling and Servicing [Adjustable] [Variable] Pass-Through Rate
Agreement and Cut-off Date:
June 1, 2006 Percentage Interest: ___%
First Distribution Date: Aggregate Initial Certificate Principal
July 25, 2006 Balance of the Class [A-__]
Certificates: $___________
Master Servicer:
Residential Funding Corporation
Final Scheduled Distribution Date: Initial Certificate Principal
_________ __, 20__ Balance of this Class [A-__] Certificate:
$-----------
Maturity Date: CUSIP ________
_________ __, 20__
A-2
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-RS4
evidencing a percentage interest in the
distributions allocable to the Class [A-__]
Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional
one- to four-family fixed and adjustable interest
rate first lien mortgage loans sold by
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or 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 Asset Mortgage Products, Inc., the
Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Depositor, 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 in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional
one- to four-family fixed and adjustable interest rate first lien mortgage loans
(the "Mortgage Loans"), sold by Residential Asset Mortgage Products, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Depositor, the Master Servicer and JPMorgan Chase Bank, N.A., as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount of interest and principal, if any, required to be distributed to
Holders of Class [A-__] Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the
A-3
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of, this Certificate at the office or agency
appointed by the Trustee for that purpose in the City and State of New York. The
Initial Certificate Principal Balance of this Certificate is set forth above.
The Certificate Principal Balance hereof will be reduced to the extent of
distributions allocable to principal and any Realized Losses allocable hereto.
As described above, any transferee of a Class A Certificate rated at least
"AA-" (or its equivalent) by Standard & Poor's or ▇▇▇▇▇'▇ at the time of
purchase that is a Plan or a Plan Investor will be required (or deemed, as
applicable) to represent and warrant that its acquisition and holding of such
Class A Certificate and any rights with respect to the Final Maturity Reserve
Fund are eligible for exemptive relief available under PTCE 84-14, regarding
transactions effected by "qualified professional asset managers"; ▇▇▇▇ ▇▇-▇,
regarding investments by insurance company pooled separate accounts; PTCE 91-38,
regarding investments by bank collective investment funds; PTCE 95-60, regarding
investments by insurance company general accounts; or PTCE 96-23, regarding
transactions effected by "in-house asset managers."
As described above, any transferee of a Restricted Class A Certificate will
be deemed to have represented by virtue of its purchase or holding of such
Certificate (or any interest herein) that either (a) such transferee is not a
Plan or a Plan Investor, or (b) the transferee is a Complying Insurance Company.
In addition, any purported Certificate Owner whose acquisition or holding of
this Certificate (or any interest herein) was effected in violation of the
restrictions in Section 5.02(e) of the Agreement shall indemnify and hold
harmless the Depositor, the Trustee, the Master Servicer, any Subservicer, any
underwriter and the Trust Fund from and against any and all liabilities, claims,
costs or expenses incurred by such parties as a result of such acquisition or
holding.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
A-4
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee 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 there upon one or more new Certificates
of authorized denominations evidencing the same Class and aggregate Percentage
Interest will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee, and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject
A-5
thereto or the disposition of all property acquired upon foreclosure or deed in
lieu of foreclosure of any Mortgage Loan, and (ii) the purchase by Residential
Funding Corporation or its designee from the Trust Fund of all remaining
Mortgage Loans and all property acquired in respect of such Mortgage Loans,
thereby effecting early retirement of the related Certificates. The Agreement
permits, but does not require, Residential Funding Corporation or its designee
(i) to purchase, at a price determined as provided in the Agreement, all
remaining Mortgage Loans and all property acquired in respect of any Mortgage
Loan or (ii) subject to the terms of the Agreement, to purchase in whole, but
not in part, all of the Class A and Class M Certificates from the Holders
thereof, provided, that any such option may only be exercised if the aggregate
Stated Principal Balance of the Mortgage Loans, as of the Distribution Date upon
which the proceeds of any such purchase are distributed is less than ten percent
of the Cut-off Date Principal Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
A-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
JPMORGAN CHASE BANK, N.A.,
as Trustee
By:
---------------------------------------
Authorized Signatory
Dated:
-----------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Class A Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.,
as Certificate Registrar
By:
---------------------------------------
Authorized Signatory
A-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
------------------------- -------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to: ________________________________
________________________________________________________________________________
_______________________________________________________________________________.
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
A-8
EXHIBIT B
FORM OF CLASS [M-_] CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [A-__][M-_]
CERTIFICATES, AS DESCRIBED IN THE AGREEMENT (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") COUPLED WITH THE RIGHT TO RECEIVE PAYMENTS UNDER
THE YIELD MAINTENANCE AGREEMENT.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER OR ITS AGENT
FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY CERTIFICATE ISSUED
IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
ANY TRANSFEREE OF A CLASS M CERTIFICATE WILL BE DEEMED TO HAVE REPRESENTED BY
VIRTUE OF ITS PURCHASE OR HOLDING OF SUCH CERTIFICATE (OR ANY INTEREST HEREIN)
THAT EITHER (A) SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN OR OTHER PLAN
SUBJECT TO THE PROHIBITED TRANSACTION PROVISIONS OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR SECTION 4975 OF THE CODE
(EACH, A "PLAN"), OR ANY PERSON (INCLUDING, WITHOUT LIMITATION, AN INVESTMENT
MANAGER, A NAMED FIDUCIARY OR A TRUSTEE OF ANY PLAN) WHO IS USING "PLAN ASSETS,"
WITHIN THE MEANING OF THE U.S. DEPARTMENT OF LABOR REGULATION PROMULGATED AT 29
C.F.R. ss. 2510.3-101, OF ANY PLAN (EACH, A "PLAN INVESTOR") TO EFFECT SUCH
ACQUISITION, OR (B)(I) THE TRANSFEREE IS AN INSURANCE COMPANY, (II) THE SOURCE
OF FUNDS USED TO PURCHASE OR HOLD THE CERTIFICATE (OR ANY INTEREST HEREIN) IS AN
"INSURANCE COMPANY GENERAL ACCOUNT" (AS DEFINED IN U.S. DEPARTMENT OF LABOR
PROHIBITED TRANSACTION CLASS EXEMPTION ("PTCE") 95-60), AND (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").
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 (A) IS NOT A PLAN OR A PLAN INVESTOR, OR (B) IS A COMPLYING
INSURANCE COMPANY SHALL BE RESTORED, TO THE EXTENT PERMITTED BY LAW, TO ALL
RIGHTS AND OBLIGATIONS AS CERTIFICATE OWNER THEREOF RETROACTIVE TO THE DATE OF
SUCH TRANSFER OF THIS CERTIFICATE. THE TRUSTEE SHALL BE UNDER NO LIABILITY TO
ANY PERSON FOR MAKING ANY PAYMENTS DUE ON THIS CERTIFICATE TO SUCH PRECEDING
TRANSFEREE.
ANY PURPORTED CERTIFICATE OWNER WHOSE ACQUISITION OR HOLDING OF THIS CERTIFICATE
(OR ANY INTEREST HEREIN) WAS EFFECTED IN VIOLATION OF THE RESTRICTIONS IN
SECTION 5.02(e) OF THE POOLING AND SERVICING AGREEMENT SHALL INDEMNIFY AND HOLD
HARMLESS THE DEPOSITOR, THE TRUSTEE, THE MASTER SERVICER, ANY SUBSERVICER, ANY
UNDERWRITER AND THE TRUST FUND FROM AND AGAINST ANY AND ALL LIABILITIES, CLAIMS,
COSTS OR EXPENSES INCURRED BY SUCH PARTIES AS A RESULT OF SUCH ACQUISITION OR
HOLDING.
Class M-__Mezzanine Certificate No. 1
Date of Pooling and Servicing Adjustable Pass-Through Rate
Agreement and Cut-off Date:
June 1, 2006 Percentage Interest: ___%
First Distribution Date: Aggregate Initial Certificate Principal
July 25, 2006 Balance of the Class M-__
Certificates: $___________
Master Servicer:
Residential Funding Corporation
Final Scheduled Distribution Date: Initial Certificate Principal
_________ __, 20__ Balance of this Class M-__ Certificate:
$______________
Maturity Date: CUSIP ________
_________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-RS4
evidencing a percentage interest in the
distributions allocable to the Class M-_
Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional
one- to four-family fixed and adjustable interest
rate, first lien mortgage loans sold by
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.
B-2
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or 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 Asset Mortgage Products, Inc., the
Master Servicer, the Trustee or GMAC Mortgage Group, Inc. or any of their
affiliates. None of the Depositor, 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 in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional
one- to four-family fixed and adjustable interest rate, first lien mortgage
loans (the "Mortgage Loans"), sold by Residential Asset Mortgage Products, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Depositor, the Master Servicer and JPMorgan Chase Bank, N.A., as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the Business Day prior to such Distribution Date (the
"Record Date"), from the related Available Distribution Amount in an amount
equal to the product of the Percentage Interest evidenced by this Certificate
and the amount of interest and principal, if any, required to be distributed to
Holders of Class 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.
B-3
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
any interest herein) that either (a) such transferee is not a Plan or a Plan
Investor, or (b) the transferee is a Complying Insurance Company. In addition,
any purported Certificate Owner whose acquisition or holding of this Certificate
(or any interest herein) was effected in violation of the restrictions in
Section 5.02(e) of the Agreement shall indemnify and hold harmless the
Depositor, the Trustee, the Master Servicer, any Subservicer, any underwriter
and the Trust Fund from and against any and all liabilities, claims, costs or
expenses incurred by such parties as a result of such acquisition or holding.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the Master
Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in the City and State of 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
B-4
evidencing the same Class and aggregate Percentage Interest will be issued to
the designated transferee or transferees.
The Certificates are issuable only as registered Certificates without
coupons in Classes and in denominations specified in the Agreement. As provided
in the Agreement and subject to certain limitations therein set forth,
Certificates are exchangeable for new Certificates of authorized denominations
evidencing the same Class and aggregate Percentage Interest, as requested by the
Holder surrendering the same.
No service charge will be made for any such registration of transfer or
exchange, but the Trustee may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith.
The Depositor, the Master Servicer, the Trustee and the Certificate
Registrar and any agent of the Depositor, the Master Servicer, the Trustee or
the Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by Residential Funding
Corporation or its designee from the Trust Fund of all remaining Mortgage Loans
and all property acquired in respect of such Mortgage Loans, thereby effecting
early retirement of the related Certificates. The Agreement permits, but does
not require, Residential Funding Corporation or its designee (i) to purchase, at
a price determined as provided in the Agreement, all remaining Mortgage Loans
and all property acquired in respect of any Mortgage Loan or (ii) subject to the
terms of the Agreement, to purchase in whole, but not in part, all of the Class
A and Class M Certificates from the Holders thereof, provided, that any such
option may only be exercised if the aggregate Stated Principal Balance of the
Mortgage Loans, as of the Distribution Date upon which the proceeds of any such
purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
B-5
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
JPMORGAN CHASE BANK, N.A.,
as Trustee
By:
------------------------------------
Authorized Signatory
Dated:
-----------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Class M Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.,
as Certificate Registrar
By:
------------------------------------
Authorized Signatory
B-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) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Dated:
------------------ ----------------------------------------
Signature by or on behalf of assignor
----------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to: ________________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
B-7
EXHIBIT C
[RESERVED]
C-1
EXHIBIT D
FORM OF CLASS SB CERTIFICATE
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE CLASS [A-__][M-_]
CERTIFICATES AS DESCRIBED IN THE AGREEMENT (AS DEFINED HEREIN).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "REGULAR
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED ("THE CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT (THE
"AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER
SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE
AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER TO THE EFFECT
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF 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
DEPOSITOR OR THE MASTER SERVICER TO ANY OBLIGATION OR LIABILITY (INCLUDING
OBLIGATIONS AND LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION
TO THOSE UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN
EXPENSE OF THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER.
D-1
Certificate No. __ Variable Pass-Through Rate
Class SB Subordinate
Date of Pooling and Servicing Percentage Interest: ___%
and Cut-off Date:
June 1, 2006
First Distribution Date: Aggregate Initial Certificate Principal
July 25, 2006 Balance of the Class SB Certificates:
$_________________s
Master Servicer: Initial Certificate Principal Balance
Residential Funding Corporation of this Certificate: $________
Final Scheduled Distribution Date: CUSIP: ________
_________ __, 20__
Maturity Date:
_________ __, 20__
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-RS4
evidencing a percentage interest in the
distributions allocable to the Class SB
Certificates with respect to a Trust Fund
consisting primarily of a pool of conventional
one- to four-family fixed and adjustable interest
rate first lien mortgage loans sold by
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund, and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or any of
their affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by
Residential Asset Mortgage Products, Inc., the Master Servicer, the Trustee or
any of their affiliates. None of the Depositor, the Master Servicer or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
D-2
This certifies that ________ is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of an interest in a pool of conventional
one- to four-family fixed and adjustable interest rate first lien mortgage loans
(the "Mortgage Loans"), sold by Residential Asset Mortgage Products, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement") among
the Depositor, the Master Servicer and JPMorgan Chase Bank, N.A., as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof, assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month next preceding the month
in which the related Distribution Date occurs (the "Record Date"), from the
related Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class SB
Certificates on such Distribution Date.
Distributions on this Certificate will be made either by the Master
Servicer acting on behalf of the Trustee or by a Paying Agent appointed by the
Trustee in immediately available funds (by wire transfer or otherwise) for the
account of the Person entitled thereto if such Person shall have so notified the
Master Servicer or such Paying Agent, or by check mailed to the address of the
Person entitled thereto, as such name and address shall appear on the
Certificate Register.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Notional
Amount of this Class SB Certificate as of any date of determination will be
calculated as described in the Agreement. The Notional Amount hereof will be
reduced by interest shortfalls on the Mortgage Loans including any Prepayment
Interest Shortfalls not covered by Compensating Interest or related Excess Cash
Flow, and the interest portion of any Realized Losses incurred in respect
thereof. This Class SB Certificate will accrue interest at the Pass-Through Rate
on the Notional Amount as indicated in the definition of Accrued Certificate
Interest in the Agreement. This Class SB Certificate will not accrue interest on
its Certificate Principal Balance.
D-3
No transfer of this Class SB Certificate will be made unless such transfer
is exempt from the registration requirements of the Securities Act of 1933, as
amended, and any applicable state securities laws or is made in accordance with
said Act and laws. In the event that such a transfer is to be made, (i) the
Trustee or the Depositor may require an opinion of counsel acceptable to and in
form and substance satisfactory to the Trustee and the Depositor that such
transfer is exempt (describing the applicable exemption and the basis therefor)
from or is being made pursuant to the registration requirements of the
Securities Act of 1933, as amended, and of any applicable statute of any state
and (ii) the transferee shall execute an investment letter in the form described
by the Agreement. The Holder hereof desiring to effect such transfer shall, and
does hereby agree to, indemnify the Trustee, the Depositor, the Master Servicer
and the Certificate Registrar acting on behalf of the Trustee against any
liability that may result if the transfer is not so exempt or is not made in
accordance with such Federal and state laws.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of the Agreement stating that the transferee is not an employee benefit
or other plan subject to the prohibited transaction provisions of ERISA or
Section 4975 of the Code (each, a "Plan"), or any Person (including, without
limitation, an insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any Plan) who is using "plan assets,"
within the meaning of the U.S. Department of Labor regulation promulgated at 29
C.F.R. ss. 2510.3-101, of any Plan (each, a "Plan Investor") to effect such
acquisition, or (b) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Depositor and the Master Servicer to
the effect that the purchase and holding of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which opinion of counsel shall
not be an expense of the Trustee, the Depositor or the Master Servicer.
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
D-4
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee 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 Depositor, the Master Servicer, the Trustee, the Certificate Registrar
and any agent of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
D-5
The obligations created by the Agreement in respect of the Certificates and
the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by Residential Funding
Corporation or its designee from the Trust Fund of all remaining Mortgage Loans
and all property acquired in respect of such Mortgage Loans, thereby effecting
early retirement of the related Certificates. The Agreement permits, but does
not require, Residential Funding Corporation or its designee (i) to purchase, at
a price determined as provided in the Agreement, all remaining Mortgage Loans
and all property acquired in respect of any Mortgage Loan or (ii) subject to the
terms of the Agreement, to purchase in whole, but not in part, all of the Class
A and Class M Certificates from the Holders thereof, provided, that any such
option may only be exercised if the aggregate Stated Principal Balance of the
Mortgage Loans, as of the Distribution Date upon which the proceeds of any such
purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
D-6
IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
JPMORGAN CHASE BANK, N.A.,
as Trustee
By:
-------------------------------------
Authorized Signatory
Dated:
-----------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Class SB Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.,
as Certificate Registrar
By:
-------------------------------------
Authorized Signatory
D-7
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
----------------------- -------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to: ________________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
D-8
EXHIBIT E
FORM OF CLASS R-__ CERTIFICATE
THE CLASS R-__ CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS CONSTITUTING THE
AVAILABLE DISTRIBUTION AMOUNT UNTIL SUCH TIME AS DESCRIBED IN THE POOLING AND
SERVICING AGREEMENT REFERRED TO HEREIN (THE "AGREEMENT").
THIS CERTIFICATE MAY NOT BE HELD BY OR TRANSFERRED TO A NON-UNITED STATES PERSON
OR A DISQUALIFIED ORGANIZATION (AS DEFINED BELOW).
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT" AS THOSE TERMS ARE
DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE").
THIS CERTIFICATE HAS NOT BEEN AND WILL NOT BE REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED, OR THE SECURITIES LAWS OF ANY STATE AND MAY NOT BE
RESOLD OR TRANSFERRED UNLESS IT IS REGISTERED PURSUANT TO SUCH ACT AND LAWS OR
IS SOLD OR TRANSFERRED IN TRANSACTIONS WHICH ARE EXEMPT FROM REGISTRATION UNDER
SUCH ACT AND UNDER APPLICABLE STATE LAW AND IS TRANSFERRED IN ACCORDANCE WITH
THE PROVISIONS OF SECTION 5.02 OF THE POOLING AND SERVICING AGREEMENT (THE
"AGREEMENT").
NO TRANSFER OF THIS CERTIFICATE (OR ANY INTEREST HEREIN) MAY BE MADE TO ANY
PERSON, UNLESS THE TRANSFEREE PROVIDES THE TRUSTEE, THE DEPOSITOR AND THE MASTER
SERVICER WITH EITHER (A) A CERTIFICATION PURSUANT TO SECTION 5.02(e) OF THE
AGREEMENT OR (B) AN OPINION OF COUNSEL ACCEPTABLE TO AND IN FORM AND SUBSTANCE
SATISFACTORY TO THE TRUSTEE, THE DEPOSITOR AND THE MASTER SERVICER TO THE EFFECT
THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE IS PERMISSIBLE UNDER
APPLICABLE LAW, WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION UNDER SECTION 406 OF 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 DEPOSITOR OR
THE MASTER SERVICER TO ANY OBLIGATION OR LIABILITY (INCLUDING OBLIGATIONS AND
LIABILITIES UNDER ERISA OR SECTION 4975 OF THE CODE) IN ADDITION TO THOSE
UNDERTAKEN IN THE AGREEMENT, WHICH OPINION OF COUNSEL SHALL NOT BE AN EXPENSE OF
THE TRUSTEE, THE DEPOSITOR OR THE MASTER SERVICER.
E-1
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CERTIFICATE MAY BE MADE ONLY
IF THE PROPOSED TRANSFEREE PROVIDES A TRANSFER AFFIDAVIT TO THE MASTER SERVICER
AND THE TRUSTEE THAT (1) SUCH TRANSFEREE IS NOT (A) THE UNITED STATES, ANY STATE
OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN GOVERNMENT, ANY INTERNATIONAL
ORGANIZATION, OR ANY AGENCY OR INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY
ORGANIZATION (OTHER THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE)
WHICH IS EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE, (C) ANY
ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE, (ANY SUCH PERSON
DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C) BEING HEREIN REFERRED TO AS A
"DISQUALIFIED ORGANIZATION") OR (D) AN AGENT OF A DISQUALIFIED ORGANIZATION, (2)
NO PURPOSE OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX AND
(3) SUCH TRANSFEREE SATISFIES
CERTAIN ADDITIONAL CONDITIONS RELATING TO THE FINANCIAL CONDITION OF THE
PROPOSED TRANSFEREE. NOTWITHSTANDING THE REGISTRATION IN THE CERTIFICATE
REGISTER OR ANY TRANSFER, SALE OR OTHER DISPOSITION OF THIS CERTIFICATE TO A
DISQUALIFIED ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT WHATSOEVER AND
SUCH PERSON SHALL NOT BE DEEMED TO BE A CERTIFICATEHOLDER FOR ANY PURPOSE
HEREUNDER, INCLUDING, BUT NOT LIMITED TO, THE RECEIPT OF DISTRIBUTIONS ON THIS
CERTIFICATE. EACH HOLDER OF THIS CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE
SHALL BE DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH.
Class R-__ Certificate No. __
Date of Pooling and Servicing Percentage Interest: __%
Agreement and Cut-off Date:
June 1, 2006
First Distribution Date: Initial Certificate Principal
July 25, 2006 Balance of this Certificate: $______
Master Servicer:
Residential Funding Corporation
E-2
MORTGAGE ASSET-BACKED PASS-THROUGH CERTIFICATES
SERIES 2006-RS4
evidencing a percentage interest in any
distributions allocable to the Class R-__
Certificates with respect to the Trust Fund
consisting primarily of a pool of conventional
one- to four-family fixed and adjustable interest
rate first lien mortgage loans sold by
RESIDENTIAL ASSET MORTGAGE. PRODUCTS, INC.
This Certificate is payable solely from the assets of the Trust Fund and
does not represent an obligation of or interest in Residential Asset Mortgage
Products, Inc., the Master Servicer, the Trustee referred to below or any of
their affiliates. Neither this Certificate nor the underlying Mortgage Loans are
guaranteed or insured by any governmental agency or instrumentality or by
Residential Asset Mortgage Products, Inc., the Master Servicer, the Trustee or
any of their affiliates. None of the Depositor, the Master Servicer or any of
their affiliates will have any obligation with respect to any certificate or
other obligation secured by or payable from payments on the Certificates.
This certifies that ___________ is the registered owner of the Percentage
Interest evidenced by this Certificate in certain distributions with respect to
the Trust Fund consisting primarily of a pool of conventional one- to
four-family fixed and adjustable interest rate first lien mortgage loans (the
"Mortgage Loans"), sold by Residential Asset Mortgage Products, Inc.
(hereinafter called the "Depositor," which term includes any successor entity
under the Agreement referred to below). The Trust Fund was created pursuant to a
Pooling and Servicing Agreement dated as specified above (the "Agreement) among
the Depositor, the Master Servicer and JPMorgan Chase Bank, N.A., as trustee
(the "Trustee"), a summary of certain of the pertinent provisions of which is
set forth hereafter. To the extent not defined herein, the capitalized terms
used herein have the meanings assigned in the Agreement. This Certificate is
issued under and is subject to the terms, provisions and conditions of the
Agreement, to which Agreement the Holder of this Certificate by virtue of the
acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, a distribution will be made on the
25th day of each month or, if such 25th day is not a Business Day, the Business
Day immediately following (the "Distribution Date"), commencing as described in
the Agreement, to the Person in whose name this Certificate is registered at the
close of business on the last Business Day of the month next preceding the month
in which the related Distribution Date occurs (the "Record Date"), from the
related Available Distribution Amount in an amount equal to the product of the
Percentage Interest evidenced by this Certificate and the amount of interest and
principal, if any, required to be distributed to Holders of Class R-__
Certificates on such Distribution Date.
Each Holder of this Certificate will be deemed to have agreed to be bound
by the restrictions set forth in the Agreement to the effect that (i) each
person holding or acquiring any Ownership Interest in this Certificate must be a
United States Person and a Permitted Transferee, (ii) the transfer of any
Ownership Interest in this Certificate will be conditioned upon the delivery to
the Trustee of, among other things, an affidavit to the effect that it is a
United States
E-3
Person and Permitted Transferee, (iii) any attempted or purported transfer of
any Ownership Interest in this Certificate in violation of such restrictions
will be absolutely null and void and will vest no rights in the purported
transferee, and (iv) if any person other than a United States Person and a
Permitted Transferee acquires any Ownership Interest in this Certificate in
violation of such restrictions, then the Master Servicer will have the right, in
its sole discretion and without notice to the Holder of this Certificate, to
sell this Certificate to a purchaser selected by the Master Servicer, which
purchaser may be the Master Servicer, or any affiliate of the Master Servicer,
on such terms and conditions as the Master Servicer may choose.
Notwithstanding the above, the final distribution on this Certificate will
be made after due notice of the pendency of such distribution and only upon
presentation and surrender of this Certificate at the office or agency appointed
by the Trustee for that purpose in the City and State of New York. The Holder of
this Certificate may have additional obligations with respect to this
Certificate, including tax liabilities.
No transfer of this Class R-__ Certificate will be made unless such
transfer is exempt from the registration requirements of the Securities Act of
1933, as amended, and any applicable state securities laws or is made in
accordance with said Act and laws. In the event that such a transfer is to be
made, (i) the Trustee or the Depositor may require an opinion of counsel
acceptable to and in form and substance satisfactory to the Trustee and the
Depositor that such transfer is exempt (describing the applicable exemption and
the basis therefor) from or is being made pursuant to the registration
requirements of the Securities Act of 1933, as amended, and of any applicable
statute of any state and (ii) the transferee shall execute an investment letter
in the form described by the Agreement. The Holder hereof desiring to effect
such transfer shall, and does hereby agree to, indemnify the Trustee, the
Depositor, the Master Servicer and the Certificate Registrar acting on behalf of
the Trustee against any liability that may result if the transfer is not so
exempt or is not made in accordance with such Federal and state laws.
As described above, no transfer of this Certificate (or any interest
herein) shall be made unless the transferee provides the Trustee, the Depositor
and the Master Servicer with either (a) a certification pursuant to Section
5.02(e) of the Agreement stating that the transferee is not an employee benefit
or other plan subject to the prohibited transaction provisions of ERISA or
Section 4975 of the Code (each, a "Plan"), or any Person (including, without
limitation, an insurance company investing its general accounts, an investment
manager, a named fiduciary or a trustee of any Plan) who is using "plan assets,"
within the meaning of the U.S. Department of Labor regulation promulgated at 29
C.F.R. ss. 2510.3-101, of any Plan (each, a "Plan Investor") to effect such
acquisition, or (b) an opinion of counsel acceptable to and in form and
substance satisfactory to the Trustee, the Depositor and the Master Servicer to
the effect that the purchase and holding of this Certificate is permissible
under applicable law, will not constitute or result in a non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments), and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Agreement, which opinion of counsel shall
not be an expense of the Trustee, the Depositor or the Master Servicer.
E-4
This Certificate is one of a duly authorized issue of Certificates issued
in several Classes designated as Mortgage Asset-Backed Pass-Through Certificates
of the Series specified hereon (herein collectively called the "Certificates").
The Certificates are limited in right of payment to certain collections and
recoveries respecting the Mortgage Loans, all as more specifically set forth
herein and in the Agreement. In the event Master Servicer funds are advanced
with respect to any Mortgage Loan, such advance is reimbursable to the Master
Servicer, to the extent provided in the Agreement, from related recoveries on
such Mortgage Loan or from other cash that would have been distributable to
Certificateholders.
As provided in the Agreement, withdrawals from the Custodial Account and/or
the Certificate Account created for the benefit of Certificateholders may be
made by the Master Servicer from time to time for purposes other than
distributions to Certificateholders, such purposes including without limitation
reimbursement to the Depositor and the Master Servicer of advances made, or
certain expenses incurred, by either of them.
The Agreement permits, with certain exceptions therein provided, the
amendment of the Agreement and the modification of the rights and obligations of
the Depositor, the Master Servicer and the Trustee and the rights of the
Certificateholders under the Agreement from time to time by the Depositor, the
Master Servicer and the Trustee with the consent of the Holders of Certificates
evidencing in the aggregate not less than 66% of the Percentage Interests of
each Class of Certificates affected thereby. Any such consent by the Holder of
this Certificate shall be conclusive and binding on such Holder and upon all
future holders of this Certificate and of any Certificate issued upon the
transfer hereof or in exchange herefor or in lieu hereof whether or not notation
of such consent is made upon the Certificate. The Agreement also permits the
amendment thereof in certain circumstances without the consent of the Holders of
any of the Certificates and, in certain additional circumstances, without the
consent of the Holders of certain Classes of Certificates.
As provided in the Agreement and subject to certain limitations therein set
forth, the transfer of this Certificate is registrable in the Certificate
Register upon surrender of this Certificate for registration of transfer at the
offices or agencies appointed by the Trustee in 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.
E-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 Depositor, the Master Servicer, the Trustee, the Certificate Registrar
and any agent of the Depositor, the Master Servicer, the Trustee or the
Certificate Registrar may treat the Person in whose name this Certificate is
registered as the owner hereof for all purposes, and neither the Depositor, the
Master Servicer, the Trustee nor any such agent shall be affected by notice to
the contrary.
This Certificate shall be governed by and construed in accordance with the
laws of the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
The obligations created by the Agreement in respect of these Certificates
and the Trust Fund created thereby shall terminate upon the payment to
Certificateholders of all amounts held by or on behalf of the Trustee and
required to be paid to them pursuant to the Agreement following the earlier of
(i) the maturity or other liquidation of the last Mortgage Loan subject thereto
or the disposition of all property acquired upon foreclosure or deed in lieu of
foreclosure of any Mortgage Loan, and (ii) the purchase by Residential Funding
Corporation or its designee from the Trust Fund of all remaining Mortgage Loans
and all property acquired in respect of such Mortgage Loans, thereby effecting
early retirement of the related Certificates. The Agreement permits, but does
not require, Residential Funding Corporation or its designee (i) to purchase, at
a price determined as provided in the Agreement, all remaining Mortgage Loans
and all property acquired in respect of any Mortgage Loan or (ii) subject to the
terms of the Agreement, to purchase in whole, but not in part, all of the
related Certificates from the Holders thereof; provided, that any such option
may only be exercised if the aggregate Stated Principal Balance of the related
Mortgage Loans, as of the Distribution Date upon which the proceeds of any such
purchase are distributed is less than ten percent of the Cut-off Date Principal
Balance of the related Mortgage Loans.
Unless the certificate of authentication hereon has been executed by the
Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
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IN WITNESS WHEREOF, the Trustee has caused this Certificate to be duly
executed.
JPMORGAN CHASE BANK, N.A.,
as Trustee
By:
-------------------------------------
Authorized Signatory
Dated:
-----------------------------
CERTIFICATE OF AUTHENTICATION
This is one of the Class R Certificates referred to in the
within-mentioned Agreement.
JPMORGAN CHASE BANK, N.A.,
as Certificate Registrar
By:
-------------------------------------
Authorized Signatory
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ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
(Please print or typewrite name and address including postal zip code of
assignee) the beneficial interest evidenced by the within Trust Certificate and
hereby authorizes the transfer of registration of such interest to assignee on
the Certificate Register of the Trust Fund.
I (We) further direct the Certificate Registrar to issue a new Certificate
of a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
--------------------------------------------------------------------------------
Dated:
-------------------- -------------------------------------
Signature by or on behalf of assignor
-------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of distribution:
Distributions shall be made, by wire transfer or otherwise, in immediately
available funds to _____________________________________________________________
________________________________________________________________________________
for the account of _____________________________________________________________
account number _________________________________________________________________
or, if mailed by check, to _____________________________________________________
Applicable statements should be mailed to: ________________________________
________________________________________________________________________________
________________________________________________________________________________
This information is provided by ___________________________________, the
assignee named above, or ______________________________, as its agent.
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EXHIBIT F
FORM OF CUSTODIAL AGREEMENT
CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time to time,
the "Agreement"), dated as of June 1, 2006, by and among JPMORGAN CHASE BANK,
N.A., as trustee (including its successors under the Pooling Agreement defined
below, the "Trustee"), RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC., as company
(together with any successor in interest, the "Company"), RESIDENTIAL FUNDING
CORPORATION, as master servicer (together with any successor in interest or
successor under the Pooling Agreement referred to below, the "Master Servicer")
and ▇▇▇▇▇ FARGO BANK, N.A., as custodian (together with any successor in
interest or any successor appointed hereunder, the "Custodian").
W I T N E S S E T H T H A T:
WHEREAS, the Company, the Master Servicer and the Trustee have entered into
a Pooling and Servicing Agreement, dated as of June 1, 2006, relating to the
issuance of Residential Asset Mortgage Products, Inc., Mortgage Asset-Backed
Pass-Through Certificates, Series 2006-RS4 (as in effect on the date of this
Agreement, the "Original Pooling Agreement," and as amended and supplemented
from time to time, the "Pooling Agreement");
WHEREAS, the Custodian has agreed to act as agent for the Trustee for the
purposes of receiving and holding certain documents and other instruments
delivered by the Company and the Master Servicer under the Pooling Agreement,
all upon the terms and conditions and subject to the limitations hereinafter set
forth;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements hereinafter set forth, the Trustee, the Company, the Master
Servicer and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein shall have
the meanings assigned in the Original Pooling Agreement, unless otherwise
required by the context herein.
ARTICLE II
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1 Custodian to Act as Agent: Acceptance of Mortgage Files. The
Company and the Master Servicer, hereby direct the Trustee to appoint ▇▇▇▇▇
Fargo Bank, N.A. as Custodian. The Custodian, as the duly appointed agent of the
Trustee for these purposes, acknowledges receipt of the Mortgage Files relating
to the Mortgage Loans identified on the schedule attached hereto (the "Mortgage
Files") and declares that it holds and will hold the Mortgage Files as agent for
the Trustee, in trust, for the use and benefit of all present and future
Certificateholders.
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Section 2.2 Recordation of Assignments. If any Mortgage File includes one
or more assignments of the related Mortgage Loans to the Trustee that have not
been recorded, each such assignment shall be delivered by the Custodian to the
Company for the purpose of recording it in the appropriate public office for
real property records, and the Company, at no expense to the Custodian, shall
promptly cause to be recorded in the appropriate public office for real property
records each such assignment and, upon receipt thereof from such public office,
shall return each such assignment to the Custodian.
Section 2.3 Review of Mortgage Files.
(a) On or prior to the Closing Date, the Custodian shall deliver to the
Trustee an Initial Certification in the form annexed hereto as Exhibit One
evidencing receipt of a Mortgage File for each Mortgage Loan listed on the
Schedule attached hereto (the "Mortgage Loan Schedule"). The parties hereto
acknowledge that certain documents referred to in Subsection 2.01(b)(i) of the
Pooling Agreement may be missing on or prior to the Closing Date and such
missing documents shall be listed as a Schedule to Exhibit One.
(b) Within 45 days after the Closing Date, the Custodian agrees, for
the benefit of Certificateholders, to review each Mortgage File and to deliver
to the Trustee an Interim Certification in the form annexed hereto as Exhibit
Two to the effect that all documents required to be delivered pursuant to
Section 2.01(b) of the Pooling Agreement have been executed and received and
that such documents relate to the Mortgage Loans identified on the Mortgage Loan
Schedule, except for any exceptions listed on Schedule A attached to such
Interim Certification. For purposes of such review, the Custodian shall compare
the following information in each Mortgage File to the corresponding information
in the Mortgage Loan Schedule: (i) the loan number, (ii) the borrower name and
(iii) the original principal balance. In the event that any Mortgage Note or
Assignment of Mortgage has been delivered to the Custodian by the Company in
blank, the Custodian, upon the direction of the Company, shall cause each such
Mortgage Note to be endorsed to the Trustee and each such Assignment of Mortgage
to be completed in the name of the Trustee prior to the date on which such
Interim Certification is delivered to the Trustee. Within 45 days of receipt of
the documents required to be delivered pursuant to Section 2.01(b) of the
Pooling Agreement, the Custodian agrees, for the benefit of the
Certificateholders, to review each such document, and upon the written request
of the Trustee to deliver to the Trustee an updated Schedule A to the Interim
Certification. The Custodian shall be under no duty or obligation to inspect,
review or examine said documents, instruments, certificates or other papers to
determine that the same are genuine, enforceable, or appropriate for the
represented purpose or that they have actually been recorded or that they are
other than what they purport to be on their face, or that the MIN is accurate.
If in performing the review required by this Section 2.3 the Custodian finds any
document or documents constituting a part of a Mortgage File to be missing or
defective in respect of the items reviewed as described in this Section 2.3(b),
the Custodian shall promptly so notify the Company, the Master Servicer, and the
Trustee.
(c) Upon receipt of all documents required to be in the Mortgage Files
the Custodian shall deliver to the Trustee a Final Certification in the form
annexed hereto as Exhibit Three evidencing the completeness of the Mortgage
Files.
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Upon receipt of written request from the Trustee, the Company or the Master
Servicer, the Custodian shall as soon as practicable supply the Trustee with a
list of all of the documents relating to the Mortgage Loans required to be
delivered pursuant to Section 2.01(b) of the Pooling Agreement not then
contained in the Mortgage Files.
Section 2.4 Notification of Breaches of Representations and Warranties. If
the Custodian discovers, in the course of performing its custodial functions, a
breach of a representation or warranty made by the Master Servicer or the
Company as set forth in the Pooling Agreement with respect to a Mortgage Loan
relating to a Mortgage File, the Custodian shall give prompt written notice to
the Company, the Master Servicer, and the Trustee.
Section 2.5 Custodian to Cooperate: Release of Mortgage Files. Upon the
repurchase or substitution of any Mortgage Loan pursuant to Article II of the
Pooling Agreement or payment in full of any Mortgage Loan, or the receipt by the
Master Servicer of a notification that payment in full will be escrowed in a
manner customary for such purposes, the Master Servicer shall immediately notify
the Custodian by delivering to the Custodian a Request for Release (in the form
of Exhibit Four attached hereto or a mutually acceptable electronic form) and
shall request delivery to it of the Mortgage File. The Custodian agrees, upon
receipt of such Request for Release, promptly to release to the Master Servicer
the related Mortgage File. Upon written notification of a substitution, the
Master Servicer shall deliver to the Custodian and the Custodian agrees to
accept the Mortgage Note and other documents constituting the Mortgage File with
respect to any Qualified Substitute Mortgage Loan, upon receiving written
notification from the Master Servicer of such substitution.
Upon receipt of a Request for Release from the Master Servicer, signed by a
Servicing Officer, stating that (i) the Master Servicer or a Subservicer, as the
case may be, has made a deposit into the Certificate Account in payment for the
purchase of the related Mortgage Loan in an amount equal to the Purchase Price
for such Mortgage Loan or (ii) the Company has chosen to substitute a Qualified
Substitute Mortgage Loan for such Mortgage Loan, the Custodian shall release to
the Master Servicer the related Mortgage File.
From time to time as is appropriate for the servicing or foreclosures of
any Mortgage Loan, including, for this purpose, collection under any Primary
Insurance Policy or any Mortgage Pool Insurance Policy, the Master Servicer
shall deliver to the Custodian a Request for Release certifying as to the reason
for such release. Upon receipt of the foregoing, the Custodian shall deliver the
Mortgage File or such document to the Master Servicer. All Mortgage Files so
released to the Master Servicer shall be held by it in trust for the Trustee for
the use and benefit of all present and future Certificateholders. The Master
Servicer shall cause each Mortgage File or any document therein so released to
be returned to the Custodian when the need therefor by the Master Servicer no
longer exists, unless (i) the Mortgage Loan has been liquidated and the
Liquidation Proceeds relating to the Mortgage Loan have been deposited in the
Custodial Account or (ii) the Mortgage File or such document has been delivered
to an attorney, or to a public trustee or other public official as required by
law, for purposes of initiating or pursuing legal action or other proceedings
for the foreclosure of the Mortgaged Property either judicially or
non-judicially, and the Master Servicer has delivered to the Custodian an
updated Request for Release signed by a Servicing Officer certifying as to the
name and address of the Person to which such Mortgage File or such document was
delivered and the purpose or purposes of such delivery. Immediately upon receipt
of any Mortgage File returned to the Custodian by the
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Master Servicer, the Custodian shall deliver a signed acknowledgment to the
Master Servicer, confirming receipt of such Mortgage File.
Upon the written request of the Master Servicer, the Custodian will send to
the Master Servicer copies of any documents contained in the Mortgage File.
Section 2.6 Assumption Agreements. In the event that any assumption
agreement or substitution of liability agreement is entered into with respect to
any Mortgage Loan subject to this Agreement in accordance with the terms and
provisions of the Pooling Agreement, the Master Servicer shall notify the
Custodian that such assumption or substitution agreement has been completed by
forwarding to the Custodian the original of such assumption or substitution
agreement, which shall be added to the related Mortgage File and, for all
purposes, shall be considered a part of such Mortgage File to the same extent as
all other documents and instruments constituting parts thereof.
ARTICLE III
CONCERNING THE CUSTODIAN
Section 3.1 Custodian a Bailee and Agent of the Trustee. With respect to
each Mortgage Note, Mortgage and other documents constituting each Mortgage File
which are delivered to the Custodian, the Custodian is exclusively the bailee
and agent of the Trustee and has no instructions to hold any Mortgage Note or
Mortgage for the benefit of any person other than the Trustee, holds such
documents for the benefit of the Certificateholders and undertakes to perform
such duties and only such duties as are specifically set forth in this
Agreement. Except upon compliance with the provisions of Section 2.5 of this
Agreement, no Mortgage Note, Mortgage or other document constituting a part of a
Mortgage File shall be delivered by the Custodian to the Company or the Master
Servicer or otherwise released from the possession of the Custodian.
The Master Servicer shall promptly notify the Custodian in writing if it
shall no longer be a member of MERS, or if it otherwise shall no longer be
capable of registering and recording Mortgage Loans using MERS. In addition, the
Master Servicer shall (i) promptly notify the Custodian in writing when a MERS
Mortgage Loan is no longer registered with and recorded under MERS and (ii)
concurrently with any such deregistration of a MERS Mortgage Loan, prepare,
execute and record an original assignment from MERS to the Trustee and deliver
such assignment to the Custodian.
Section 3.2 Indemnification. The Company hereby agrees to indemnify and
hold the Custodian harmless from and against all claims, liabilities, losses,
actions, suits or proceedings at law or in equity, or any other expenses, fees
or charges of any character or nature, which the Custodian may incur or with
which the Custodian may be threatened by reason of its acting as custodian under
this Agreement, including indemnification of the Custodian against any and all
expenses, including attorney's fees if counsel for the Custodian has been
approved by the Company, and the cost of defending any action, suit or
proceedings or resisting any claim. Notwithstanding the foregoing, it is
specifically understood and agreed that in the event any such claim, liability,
loss, action, suit or proceeding or other expense, fee or charge shall have been
caused by reason of any negligent act, negligent failure to act or willful
misconduct on the part of
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the Custodian, or which shall constitute a willful breach of its duties
hereunder, the indemnification provisions of this Agreement shall not apply.
Section 3.3 Custodian May Own Certificates. The Custodian in its individual
or any other capacity may become the owner or pledgee of Certificates with the
same rights it would have if it were not Custodian.
Section 3.4 Master Servicer to Pay Custodian's Fees and Expenses. The
Master Servicer covenants and agrees to pay to the Custodian from time to time,
and the Custodian shall be entitled to, reasonable compensation for all services
rendered by it in the exercise and performance of any of the powers and duties
hereunder of the Custodian, and the Master Servicer will pay or reimburse the
Custodian upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Custodian in accordance with any of the
provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its negligence or bad faith.
Section 3.5 Custodian May Resign: Trustee May Remove Custodian. The
Custodian may resign from the obligations and duties hereby imposed upon it as
such obligations and duties relate to its acting as Custodian of the Mortgage
Loans. Upon receiving such notice of resignation, the Trustee shall either take
custody of the Mortgage Files itself and give prompt notice thereof to the
Company, the Master Servicer and the Custodian, or promptly appoint a successor
Custodian by written instrument, in duplicate, one copy of which instrument
shall be delivered to the resigning Custodian and one copy to the successor
Custodian. If the Trustee shall not have taken custody of the Mortgage Files and
no successor Custodian shall have been so appointed and have accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Custodian may petition any court of competent jurisdiction for the
appointment of a successor Custodian.
The Trustee, at the direction of the Master Servicer and the Company, may
remove the Custodian at any time, with or without cause. In such event, the
Trustee shall appoint, or petition a court of competent jurisdiction to appoint,
a successor Custodian hereunder. Any successor Custodian shall be a depository
institution subject to supervision or examination by federal or state authority
and shall be able to satisfy the other requirements contained in Section 3.7 and
shall be unaffiliated with the Master Servicer or the Company.
Any resignation or removal of the Custodian and appointment of a successor
Custodian pursuant to any of the provisions of this Section 3.5 shall become
effective upon acceptance of appointment by the successor Custodian. The Trustee
shall give prompt notice to the Company and the Master Servicer of the
appointment of any successor Custodian. No successor Custodian shall be
appointed by the Trustee without the prior approval of the Company and the
Master Servicer.
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Section 3.6 Merger or Consolidation of Custodian. Any Person into which the
Custodian may be merged or converted or with which it may be consolidated, or
any Person resulting from any merger, conversion or consolidation to which the
Custodian shall be a party, or any Person succeeding to the business of the
Custodian, shall be the successor of the Custodian hereunder, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding; provided that
such successor is a depository institution subject to supervision or examination
by federal or state authority and is able to satisfy the other requirements
contained in Section 3.7 and is unaffiliated with the Master Servicer or the
Company.
Section 3.7 Representations of the Custodian. The Custodian hereby
represents that it is a depository institution subject to supervision or
examination by a federal or state authority, has a combined capital and surplus
of at least $15,000,000 and is qualified to do business in the jurisdictions in
which it will hold any Mortgage File.
ARTICLE IV
COMPLIANCE WITH REGULATION AB
Section 4.1 Intent of the Parties; Reasonableness. The parties hereto
acknowledge and agree that the purpose of this Article IV is to facilitate
compliance by the Company with the provisions of Regulation AB and related rules
and regulations of the Commission. The Company shall not exercise its right to
request delivery of information or other performance under these provisions
other than in good faith, or for purposes other than compliance with the
Securities Act, the Exchange Act and the rules and regulations of the Commission
under the Securities Act and the Exchange Act. Each of the parties hereto
acknowledges that interpretations of the requirements of Regulation AB may
change over time, whether due to interpretive guidance provided by the
Commission or its staff, consensus among participants in the mortgage-backed
securities markets, advice of counsel, or otherwise, and agrees to comply with
requests made by the Company in good faith for delivery of information under
these provisions on the basis of evolving interpretations of Regulation AB. The
Custodian shall cooperate reasonably with the Company to deliver to the Company
(including any of its assignees or designees), any and all disclosure,
statements, reports, certifications, records and any other information necessary
in the reasonable, good faith determination of the Company to permit the Company
to comply with the provisions of Regulation AB.
Section 4.2 Additional Representations and Warranties of the Custodian.
(a) The Custodian hereby represents and warrants that the information
set forth under the caption "Pooling and Servicing Agreement--General--Custodial
Arrangements" (the "Custodian Disclosure") in the Preliminary Prospectus
Supplement dated June 14, 2006, as supplemented by the Preliminary Supplement to
Preliminary Prospectus Supplement, dated June 16, 2006, and the Final Prospectus
Supplement dated, June 23, 2006, relating to the Certificates does not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading.
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(b) The Custodian shall be deemed to represent to the Company as of the
date hereof and on each date on which information is provided to the Company
under Section 4.3 that, except as disclosed in writing to the Company prior to
such date: (i) there are no aspects of its financial condition that could have a
material adverse effect on the performance by it of its Custodian obligations
under this Agreement or any other Securitization Transaction as to which it is
the custodian; (ii) there are no material legal or governmental proceedings
pending (or known to be contemplated) against it; and (iii) there are no
affiliations, relationships or transactions relating to the Custodian with
respect to the Company or any sponsor, issuing entity, servicer, trustee,
originator, significant obligor, enhancement or support provider or other
material transaction party (as such terms are used in Regulation AB) relating to
the Securitization Transaction contemplated by the Agreement, as identified by
the Company to the Custodian in writing as of the Closing Date (each, a
"Transaction Party").
(c) If so requested by the Company on any date following the Closing
Date, the Custodian shall, within five Business Days following such request,
confirm in writing the accuracy of the representations and warranties set forth
in paragraph (a) of this Section or, if any such representation and warranty is
not accurate as of the date of such confirmation, provide reasonably adequate
disclosure of the pertinent facts, in writing, to the requesting party. Any such
request from the Company shall not be given more than once each calendar
quarter, unless the Company shall have a reasonable basis for a determination
that any of the representations and warranties may not be accurate.
Section 4.3 Additional Information to Be Provided by the Custodian. For so
long as the Certificates are outstanding, for the purpose of satisfying the
Company's reporting obligation under the Exchange Act with respect to any class
of Certificates, the Custodian shall (a) notify the Company in writing of any
material litigation or governmental proceedings pending against the Custodian
that would be material to Certificateholders, and (b) provide to the Company a
written description of such proceedings. Any notices and descriptions required
under this Section 4.3 shall be given no later than five Business Days prior to
the Determination Date following the month in which the Custodian has knowledge
of the occurrence of the relevant event. As of the date the Company or Master
Servicer files each Report on Form 10-D or Form 10-K with respect to the
Certificates, the Custodian will be deemed to represent that any information
previously provided under this Section 4.3, if any, is materially correct and
does not have any material omissions unless the Custodian has provided an update
to such information.
Section 4.4 Report on Assessment of Compliance and Attestation. On or
before March 15 of each calendar year, the Custodian shall:
(a) deliver to the Company a report (in form and substance reasonably
satisfactory to the Company) regarding the Custodian's assessment of compliance
with the Servicing Criteria during the immediately preceding calendar year, as
required under Rules 13a-18 and 15d-18 of the Exchange Act and Item 1122 of
Regulation AB. Such report shall be addressed to the Company and signed by an
authorized officer of the Custodian, and shall address each of the Servicing
Criteria specified on a certification substantially in the form of Exhibit Five
hereto; and
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(b) deliver to the Company a report of a registered public accounting
firm reasonably acceptable to the Company that attests to, and reports on, the
assessment of compliance made by the Custodian and delivered pursuant to the
preceding paragraph. Such attestation shall be in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act.
Section 4.5 Indemnification; Remedies.
(a) The Custodian shall indemnify the Company, each affiliate of the
Company, the Master Servicer and each broker dealer acting as underwriter,
placement agent or initial purchaser of the Certificates or each Person who
controls any of such parties (within the meaning of Section 15 of the Securities
Act and Section 20 of the Exchange Act); and the respective present and former
directors, officers, employees and agents of each of the foregoing, and shall
hold each of them harmless from and against any losses, damages, penalties,
fines, forfeitures, legal fees and expenses and related costs, judgments, and
any other costs, fees and expenses that any of them may sustain arising out of
or based upon:
(i)(A) any untrue statement of a material fact contained or alleged to
be contained in the Custodian Disclosure and any information, report,
certification, accountants' attestation or other material provided under this
Article IV by or on behalf of the Custodian (collectively, the "Custodian
Information"), or (B) the omission or alleged omission to state in the Custodian
Information a material fact required to be stated in the Custodian Information
or necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; or
(ii) any failure by the Custodian to deliver any information, report,
certification, accountants' attestation or other material when and as required
under this Article IV.
(b) In the case of any failure of performance described in clause (ii)
of Section 4.5(a), the Custodian shall promptly reimburse the Company for all
costs reasonably incurred by the Company in order to obtain the information,
report, certification, accountants' letter or other material not delivered as
required by the Custodian.
ARTICLE V
MISCELLANEOUS PROVISIONS
Section 5.1 Notices. All notices, requests, consents and demands and other
communications required under this Agreement or pursuant to any other instrument
or document delivered hereunder shall be in writing and, unless otherwise
specifically provided, may be delivered personally, by telegram or telex, or by
registered or certified mail, postage prepaid, return receipt requested, at the
addresses specified on the signature page hereof (unless changed by the
particular party whose address is stated herein by similar notice in writing),
in which case the notice will be deemed delivered when received.
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Section 5.2 Amendments. No modification or amendment of or supplement to
this Agreement shall be valid or effective unless the same is in writing and
signed by all parties hereto, and none of the Company, the Master Servicer or
the Trustee shall enter into any amendment hereof except as permitted by the
Pooling Agreement. The Trustee shall give prompt notice to the Custodian of any
amendment or supplement to the Pooling Agreement and furnish the Custodian with
written copies thereof.
Section 5.3 GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED A CONTRACT MADE
UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL BE CONSTRUED AND ENFORCED IN
ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK (WITHOUT
REGARD TO THE CONFLICTS OF LAW PRINCIPLES THEREOF, OTHER THAN SECTIONS 5-1401
AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS LAW).
Section 5.4 Recordation of Agreement. To the extent permitted by applicable
law, this Agreement is subject to recordation in all appropriate public offices
for real property records in all the counties or other comparable jurisdictions
in which any or all of the properties subject to the Mortgages are situated, and
in any other appropriate public recording office or elsewhere, such recordation
to be effected by the Master Servicer and at its expense on direction by the
Trustee (pursuant to the request of holders of Certificates evidencing undivided
interests in the aggregate of not less than 25% of the Trust Fund), but only
upon direction accompanied by an Opinion of Counsel reasonably satisfactory to
the Master Servicer to the effect that the failure to effect such recordation is
likely to materially and adversely affect the interests of the
Certificateholders.
For the purpose of facilitating the recordation of this Agreement as herein
provided and for other purposes, this Agreement may be executed simultaneously
in any number of counterparts, each of which counterparts shall be deemed to be
an original, and such counterparts shall constitute but one and the same
instrument.
Section 5.5 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the holders thereof.
[SIGNATURE PAGES FOLLOW]
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IN WITNESS WHEREOF, this Agreement is executed as of the date first above
written.
Address: JPMORGAN CHASE BANK, N.A.,
as Trustee
Structured Finance/MBS
600 ▇▇▇▇▇▇ By:
9th Floor ----------------------------------
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇ Name:
Title:
Address: RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By:
----------------------------------
Name:
Title:
Address: RESIDENTIAL FUNDING CORPORATION,
a Master Servicer
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ By:
----------------------------------
Name:
Title:
Address: ▇▇▇▇▇ FARGO BANK, N.A.
Mortgage Document Custody
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By:
----------------------------------
Name:
Title:
▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇ )
)ss.:
COUNTY OF ▇▇▇▇▇▇ )
On the _____ day of ___________________, 2006, before me, a notary public
in and for said State, personally appeared ____________________________, known
to me to be a _____________________________ of JPMorgan Chase Bank, N.A., that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said national banking association and acknowledged to
me that such national banking association executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
----------------------------
Notary Public
[Notarial Seal]
▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF HENNEPIN )
On the _____ day of ________________, 2006, before me, a notary public in
and for said State, personally appeared _____________________________, known to
me to be a Vice President of Residential Asset Mortgage Products, Inc., one of
the corporations that executed the within instrument, and also known to me to be
the person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF HENNEPIN )
On the _____ day of _______________, 2006, before me, a notary public in
and for said State, personally appeared, _____________________________, known to
me to be an Associate of Residential Funding Corporation, one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said corporation, and acknowledged to me
that such corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
[Notarial Seal]
▇-▇▇
▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇▇ )
) ss.:
COUNTY OF HENNEPIN )
On the _____ day of __________________, 2006, before me, a notary public in
and for said State, personally appeared ______________________________, known to
me to be an Assistant Vice President of ▇▇▇▇▇ Fargo Bank, N.A., one of the
corporations that executed the within instrument, and also known to me to be the
person who executed it on behalf of said national banking association, and
acknowledged to me that such national banking association executed the within
instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
------------------------------
Notary Public
F-14
EXHIBIT ONE
FORM OF CUSTODIAN
INITIAL CERTIFICATION
_______________________, 2006
JPMorgan Chase Bank, N.A.
Structured Finance/MBS
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Asset Mortgage Products, Inc., Series 2006-RS4
Re: Custodial Agreement, dated as of June 1, 2006, by and among JPMorgan
Chase Bank, N.A., Residential Asset Mortgage Products, Inc.,
Residential Funding Corporation and ▇▇▇▇▇ Fargo Bank, N.A., relating
to Mortgage Asset-Backed Pass-Through Certificates, Series 2006-RS4
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement,
and subject to Section 2.02 of the Pooling Agreement, the undersigned, as
Custodian, hereby certifies that it has received a Mortgage File (which contains
an original Mortgage Note or an original Lost Note Affidavit with a copy of the
related Mortgage Note) to the extent required in Section 2.01(b) of the Pooling
Agreement with respect to each Mortgage Loan listed in the Mortgage Loan
Schedule, with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
▇▇▇▇▇ FARGO BANK, N.A.
By:
---------------------------------
Name:
---------------------------------
Title:
---------------------------------
F-15
EXHIBIT TWO
FORM OF CUSTODIAN INTERIM CERTIFICATION
_______________________, 2006
JPMorgan Chase Bank, N.A.
Structured Finance/MBS
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Asset Mortgage Products, Inc., Series 2006-RS4
Re: Custodial Agreement, dated as of June 1, 2006, by and among JPMorgan
Chase Bank, N.A., Residential Asset Mortgage Products, Inc.,
Residential Funding Corporation and ▇▇▇▇▇ Fargo Bank, N.A., relating
to Mortgage Asset-Backed Pass-Through Certificates, Series 2006-RS4
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File to the extent required pursuant to Section 2.01(b) of the Pooling Agreement
with respect to each Mortgage Loan listed in the Mortgage Loan Schedule, and it
has reviewed the Mortgage File and the Mortgage Loan Schedule and has determined
that: all required documents have been executed and received and that such
documents relate to the Mortgage Loans identified on the Mortgage Loan Schedule,
with any exceptions listed on Schedule A attached hereto.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
By:
----------------------------------
Name:
----------------------------------
Title:
----------------------------------
F-16
EXHIBIT THREE
FORM OF CUSTODIAN FINAL CERTIFICATION
_______________________, 2006
JPMorgan Chase Bank, N.A.
Structured Finance/MBS
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Asset Mortgage Products, Inc., Series 2006-RS4
Re: Custodial Agreement, dated as of June 1, 2006, by and among JPMorgan
Chase Bank, N.A., Residential Asset Mortgage Products, Inc.,
Residential Funding Corporation and ▇▇▇▇▇ Fargo Bank, N.A., relating
to Mortgage Asset-Backed Pass-Through Certificates, Series 2006-RS4
Ladies and Gentlemen:
In accordance with Section 2.3 of the above-captioned Custodial Agreement,
the undersigned, as Custodian, hereby certifies that it has received a Mortgage
File with respect to each Mortgage Loan listed in the Mortgage Loan Schedule and
it has reviewed the Mortgage File and the Mortgage Loan Schedule and has
determined that: all required documents referred to in Section 2.01(b) of the
Pooling Agreement have been executed and received and that such documents relate
to the Mortgage Loans identified on the Mortgage Loan Schedule.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the above-captioned Custodial Agreement.
▇▇▇▇▇ FARGO BANK, N.A.
By:
------------------------------------
Name:
------------------------------------
Title:
------------------------------------
F-17
EXHIBIT FOUR
FORM OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement, Dated:
Series#:
Account#:
Pool#:
Loan#:
MIN#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
------------------------------
Residential Funding 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-18
EXHIBIT FIVE
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Custodian shall
address, at a minimum, the criteria identified below as "Applicable Servicing
Criteria":
-----------------------------------------------------------------------------------------------------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
-----------------------------------------------------------------------------------------------------------------
1122(d)(1)(i) Policies and procedures are instituted to monitor any
performance or other triggers and events of default in
accordance with the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(1)(ii) If any material servicing activities are outsourced to
third parties, policies and procedures are instituted to
monitor the third party's performance and compliance with
such servicing activities.
-----------------------------------------------------------------------------------------------------------------
1122(d)(1)(iii) Any requirements in the transaction agreements to maintain
a back-up servicer for the pool assets are maintained.
-----------------------------------------------------------------------------------------------------------------
1122(d)(1)(iv) A fidelity bond and errors and omissions policy is in
effect on the party participating in the servicing function
throughout the reporting period in the amount of coverage
required by and otherwise in accordance with the terms of
the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
CASH COLLECTION AND ADMINISTRATION
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(i) Payments on pool assets are deposited into the appropriate
custodial bank accounts and related bank clearing accounts
no more than two business days following receipt, or such
other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized
personnel.
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(iii) Advances of funds or guarantees regarding collections, cash
flows or distributions, and any interest or other fees
charged for such advances, are made, reviewed and approved
as specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(iv) The related accounts for the transaction, such as cash
reserve accounts or accounts established as a form of
overcollateralization, are separately maintained (e.g.,
with respect to commingling of cash) as set forth in the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(v) Each custodial account is maintained at a federally insured
depository institution as set forth in the transaction
agreements. For purposes of this criterion, "federally
insured depository institution" with respect to a foreign
financial institution means a foreign financial institution
that meets the requirements of Rule 13k-1(b)(1) of the
Securities Exchange Act.
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(vi) Unissued checks are safeguarded so as to prevent
unauthorized access.
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(vii) Reconciliations are prepared on a monthly basis for all
asset-backed securities related bank accounts, including
custodial accounts and related bank clearing accounts.
These reconciliations are (A) mathematically accurate; (B)
prepared within 30 calendar days after the bank statement
cutoff date, or such other number of days specified in the
transaction agreements; (C) reviewed and approved by
someone other than the person who prepared the
reconciliation; and (D) contain explanations for
reconciling items. These reconciling items are resolved
within 90 calendar days of their original identification,
or such other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
F-19
-----------------------------------------------------------------------------------------------------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------------------
INVESTOR REMITTANCES AND REPORTING
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in
the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of pool assets serviced
by the servicer.
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other
terms set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the servicer's investor records, or such
other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or
custodial bank statements.
-----------------------------------------------------------------------------------------------------------------
POOL ASSET ADMINISTRATION
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as
required by the transaction agreements or related asset [X]
pool documents.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Pool assets and related documents are safeguarded as required by [X]
the transaction agreements
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in
accordance with the related pool asset documents are posted
to the servicer's obligor records maintained no more than
two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(v) The servicer's records regarding the pool assets agree with
the servicer's records with respect to an obligor's unpaid
principal balance.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(vi) Changes with respect to the terms or status of an obligor's
pool asset (e.g., loan modifications or re-agings) are
made, reviewed and approved by authorized personnel in
accordance with the transaction agreements and related pool
asset documents.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(vii) Loss mitigation or recovery actions (e.g., forbearance
plans, modifications and deeds in lieu of foreclosure,
foreclosures and repossessions, as applicable) are
initiated, conducted and concluded in accordance with the
timeframes or other requirements established by the
transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(viii) Records documenting collection efforts are maintained
during the period a pool asset is delinquent in accordance
with the transaction agreements. Such records are
maintained on at least a monthly basis, or such other
period specified in the transaction agreements, and
describe the entity's activities in monitoring delinquent
pool assets including, for example, phone calls, letters
and payment rescheduling plans in cases where delinquency
is deemed temporary (e.g., illness or unemployment).
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(ix) Adjustments to interest rates or rates of return for pool
assets with variable rates are computed based on the
related pool asset documents.
-----------------------------------------------------------------------------------------------------------------
F-20
-----------------------------------------------------------------------------------------------------------------
APPLICABLE SERVICING
SERVICING CRITERIA CRITERIA
-----------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's pool asset documents, on at
least an annual basis, or such other period specified in
the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with
applicable pool asset documents and state laws; and (C)
such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool asset, or such
other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
servicer's funds and not charged to the obligor, unless the
late payment was due to the obligor's error or omission.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB,
is maintained
as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
F-21
EXHIBIT G
MORTGAGE LOAN SCHEDULE
[On file with RFC]
G-1
EXHIBIT H
FORMS OF REQUEST FOR RELEASE
DATE:
TO:
RE: REQUEST FOR RELEASE OF DOCUMENTS
In connection with the administration of the pool of Mortgage Loans held by you
for the referenced pool, we request the release of the Mortgage Loan File
described below.
Pooling and Servicing Agreement Dated:
Series#:
Account#:
Pool#:
Loan#:
Borrower Name(s):
Reason for Document Request: (circle one) Mortgage Loan Prepaid in Full
Mortgage Loan Repurchased
"We hereby certify that all amounts received or to be received in connection
with such payments which are required to be deposited have been or will be so
deposited as provided in the Pooling and Servicing Agreement."
Residential Funding 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
H-1
EXHIBIT I-1
FORM OF TRANSFER AFFIDAVIT AND AGREEMENT
STATE OF )
) ss.:
COUNTY OF )
[NAME OF OFFICER], being first duly sworn, deposes, represents and warrants
as follows:
1. That he is [Title of Officer] of [Name of Owner] (record or beneficial
owner of the Mortgage Asset-Backed Pass-Through Certificates, Series _______,
Class R[-__] (the "Owner")), a [savings institution] [corporation] duly
organized and existing under the laws of [the State of ] [the United States], on
behalf of which he makes this affidavit and agreement.
2. That the Owner (i) is not and will not be a "disqualified organization"
or an electing large partnership as of [date of transfer] within the meaning of
Sections 860E(e)(5) and 775, respectively, of the Internal Revenue Code of 1986,
as amended (the "Code") or an electing large partnership under Section 775(a) of
the Code, (ii) will endeavor to remain other than a disqualified organization
for so long as it retains its ownership interest in the Class R[-__]
Certificates, and (iii) is acquiring the Class R[-__] Certificates for its own
account or for the account of another Owner from which it has received an
affidavit and agreement in substantially the same form as this affidavit and
agreement. (For this purpose, a "disqualified organization" means an electing
large partnership under Section 775 of the Code, the United States, any state or
political subdivision thereof, any agency or instrumentality of any of the
foregoing (other than an instrumentality all of the activities of which are
subject to tax and, except for the Federal Home Loan Mortgage Corporation, a
majority of whose board of directors is not selected by any such governmental
entity) or any foreign government, international organization or any agency or
instrumentality of such foreign government or organization, any rural electric
or telephone cooperative, or any organization (other than certain farmers'
cooperatives) that is generally exempt from federal income tax unless such
organization is subject to the tax on unrelated business taxable income).
3. That the Owner is aware (i) of the tax that would be imposed on
transfers of Class R[-__] Certificates to disqualified organizations or electing
large partnerships, under the Code, that applies to all transfers of Class
R[-__] Certificates after March 31, 1988; (ii) that such tax would be on the
transferor (or, with respect to transfers to electing large partnerships, on
each such partnership), or, if such transfer is through an agent (which person
includes a broker, nominee or middleman) for a disqualified organization, on the
agent; (iii) that the person (other than with respect to transfers to electing
large partnerships) otherwise liable for the tax shall be relieved of liability
for the tax if the transferee furnishes to such person an affidavit that the
transferee is not a disqualified organization and, at the time of transfer, such
person does not have actual knowledge that the affidavit is false; and (iv) that
the Class R[-__] Certificates may be "noneconomic residual interests" within the
meaning of Treasury regulations promulgated pursuant to the Code and that the
transferor of a noneconomic residual interest will remain liable for any taxes
due with respect to the income on such residual interest, unless no significant
purpose of the transfer was to impede the assessment or collection of tax.
I-1-1
4. That the Owner is aware of the tax imposed on a "pass-through entity"
holding Class R[-__] Certificates if either the pass-through entity is an
electing large partnership under Section 775 of the Code or if at any time
during the taxable year of the pass-through entity a disqualified organization
is the record holder of an interest in such entity. (For this purpose, a "pass
through entity" includes a regulated investment company, a real estate
investment trust or common trust fund, a partnership, trust or estate, and
certain cooperatives.)
5. The Owner is either (i) a citizen or resident of the United States, (ii)
a corporation, partnership or other entity treated as a corporation or a
partnership for U.S. federal income tax purposes and created or organized in or
under the laws of the United States, any state thereof or the District of
Columbia (other than a partnership that is not treated as a United States person
under any applicable Treasury regulations), (iii) an estate that is described in
Section 7701(a)(30)(D) of the Code, or (iv) a trust that is described in Section
7701(a)(30)(E) of the Code.
6. The Owner hereby agrees that it will not cause income from the Class
R[-__] Certificates to be attributable to a foreign permanent establishment or
fixed base (within the meaning of an applicable income tax treaty) of the Owner
of another United States taxpayer.
7. That the Owner is aware that the Trustee will not register the transfer
of any Class R[- __] Certificates unless the transferee, or the transferee's
agent, delivers to it an affidavit and agreement, among other things, in
substantially the same form as this affidavit and agreement. The Owner expressly
agrees that it will not consummate any such transfer if it knows or believes
that any of the representations contained in such affidavit and agreement are
false.
8. That the Owner has reviewed the restrictions set forth on the face of
the Class R[-__] Certificates and the provisions of Section 5.02(f) of the
Pooling and Servicing Agreement under which the Class R[-__] Certificates were
issued (in particular, clauses (iii)(A) and (iii)(B) of Section 5.02(g) which
authorize the Trustee to deliver payments to a person other than the Owner and
negotiate a mandatory sale by the Trustee in the event the Owner holds such
Certificates in violation of Section 5.02(e)). The Owner expressly agrees to be
bound by and to comply with such restrictions and provisions.
9. That the Owner consents to any additional restrictions or arrangements
that shall be deemed necessary upon advice of counsel to constitute a reasonable
arrangement to ensure that the Class R[-__] Certificates will only be owned,
directly or indirectly, by an Owner that is not a disqualified organization.
10. The Owner's Taxpayer Identification Number is ________________.
11. This affidavit and agreement relates only to the Class R[-__]
Certificates held by the Owner and not to any other holder of the Class R[-__]
Certificates. The Owner understands that the liabilities described herein relate
only to the Class R[-__] Certificates.
I-1-2
12. That no purpose of the Owner relating to the transfer of any of the
Class R[-__] Certificates by the Owner is or will be to impede the assessment or
collection of any tax; in making this representation, the Owner warrants that
the Owner is familiar with (i) Treasury Regulation Section 1.860E-1(c) and
recent amendments thereto, effective as of July 19, 2002, and (ii) the preamble
describing the adoption of the amendments to such regulation, which is attached
hereto as Exhibit 1.
13. That the Owner has no present knowledge or expectation that it will be
unable to pay any United States taxes owed by it so long as any of the
Certificates remain outstanding. In this regard, the Owner hereby represents to
and for the benefit of the person from whom it acquired the Class R[-__]
Certificate that the Owner intends to pay taxes associated with holding such
Class R[- __] Certificate as they become due, fully understanding that it may
incur tax liabilities in excess of any cash flows generated by the Class R[-__]
Certificate.
14. That the Owner has no present knowledge or expectation that it will
become insolvent or subject to a bankruptcy proceeding for so long as any of the
Class R[-__] Certificates remain outstanding.
15. (a) The Owner is not an employee benefit plan or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Code (each, a "Plan"),
or any Person (including, without limitation, an insurance company investing its
general accounts, an investment manager, a named fiduciary or a trustee of any
Plan) who is using "plan assets," within the meaning of the U.S. Department of
Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, of any Plan (each, a
"Plan Investor") to effect such acquisition; or
(b) The Owner has provided the Trustee, the Depositor and the Master
Servicer with an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor, the Master Servicer to the effect
that the purchase and holding of Class R[-__] Certificates is permissible under
applicable law, will not constitute or result in any non-exempt prohibited
transaction under Section 406 of ERISA or Section 4975 of the Code (or
comparable provisions of any subsequent enactments) and will not subject the
Trustee, the Depositor or the Master Servicer to any obligation or liability
(including obligations or liabilities under ERISA or Section 4975 of the Code)
in addition to those undertaken in the Pooling and Servicing Agreement, which
opinion of counsel shall not be an expense of the Trustee, the Depositor or the
Master Servicer.
In addition, the Owner hereby certifies, represents and warrants to, and
covenants with, the Depositor, the Trustee and the Master Servicer that the
Purchaser will not transfer such Certificates to any transferee unless either
such transferee meets the requirements set forth above.
Capitalized terms used but not defined herein shall have the meanings
assigned in the Pooling and Servicing Agreement.
I-1-3
IN WITNESS WHEREOF, the Owner has caused this instrument to be executed on
its behalf, pursuant to the authority of its Board of Directors, by its [Title
of Officer] and its corporate seal to be hereunto attached, attested by its
[Assistant] Secretary, this ________day of _______________________, 200___.
[NAME OF OWNER]
By:
-----------------------------------
[Name of Officer]
[Title of Officer]
[Corporate Seal]
ATTEST:
---------------------------
[Assistant] Secretary
Personally appeared before me the above-named [Name of Officer], known or
proved to me to be the same person who executed the foregoing instrument and to
be the [Title of Officer] of the Owner, and acknowledged to me that he executed
the same as his free act and deed and the free act and deed of the Owner.
Subscribed and sworn before me this _____ day of __________________,
200 ___.
---------------------------------------
NOTARY PUBLIC
COUNTY OF
-----------------------------
STATE OF
------------------------------
My Commission expires the _____ day of
______________________, 20__ .
I-1-4
EXHIBIT 1
DEPARTMENT OF THE TREASURY
Internal Revenue Service
26 CFR Parts 1 and 602
[TD 9004]
RIN 1545-AW98
Real Estate Mortgage Investment Conduits
AGENCY: Internal Revenue Service (IRS), Treasury.
ACTION: Final regulations.
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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.
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Comments on the collection of information should be sent to the Office of
Management and Budget, Attn: Desk Officer for the Department of the Treasury,
Office of Information and Regulatory Affairs, ▇▇▇▇▇▇▇▇▇▇, ▇▇, ▇▇▇▇▇, with copies
to the Internal Revenue Service, Attn: IRS Reports Clearance Officer,
W:CAR:MP:FP:S, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇. Comments on the collection of information
should be received by September 17, 2002. Comments are specifically requested
concerning:
Whether the collection of information is necessary for the proper
performance of the functions of the Internal Revenue Service, including whether
the information will have practical utility;
The accuracy of the estimated burden associated with the collection of
information (see below);
How the quality, utility, and clarity of the information to be collected
may be enhanced;
How the burden of complying with the collection of information may be
minimized, including through the application of automated collection techniques
or other forms of information technology; and Estimates of capital or start-up
costs and costs of operation, maintenance, and purchase of service to provide
information.
An agency may not conduct or sponsor, and a person is not required to
respond to, a collection of information unless it displays a valid control
number assigned by the Office of Management and Budget.
The estimated total annual reporting burden is 470 hours, based on an
estimated number of respondents of 470 and an estimated average annual burden
hours per respondent of one hour.
Books or records relating to a collection of information must be retained
as long as their contents may become material in the administration of any
internal revenue law. Generally, tax returns and tax return information are
confidential, as required by 26 U.S.C. 6103.
BACKGROUND
This document contains final regulations regarding the proposed amendments
to 26 CFR part 1 under section 860E of the Internal Revenue Code (Code). The
regulations provide the circumstances under which a transferor of a noneconomic
REMIC residual interest meeting the investigation and representation
requirements may avail itself of the safe harbor by satisfying either the
formula test or the asset test.
Final regulations governing REMICs, issued in 1992, contain rules governing
the transfer of noneconomic REMIC residual interests. In general, a transfer of
a noneconomic residual interest is disregarded for all tax purposes if a
significant purpose of the transfer is to enable the transferor to impede the
assessment or collection of tax. A purpose to impede the assessment or
collection of tax (a wrongful purpose) exists if the transferor, at the time of
the transfer, either knew or should have known that the transferee would be
unwilling or unable to pay taxes due on its share of the REMIC's taxable income.
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Under a safe harbor, the transferor of a REMIC noneconomic residual
interest is presumed not to have a wrongful purpose if two requirements are
satisfied: (1) the transferor conducts a reasonable investigation of the
transferee's financial condition (the investigation requirement); and (2) the
transferor secures a representation from the transferee to the effect that the
transferee understands the tax obligations associated with holding a residual
interest and intends to pay those taxes (the representation requirement).
The IRS and Treasury have been concerned that some transferors of
noneconomic residual interests claim they satisfy the safe harbor even in
situations where the economics of the transfer clearly indicate the transferee
is unwilling or unable to pay the tax associated with holding the interest. For
this reason, on February 7, 2000, the IRS published in the Federal Register (65
FR 5807) a notice of proposed rulemaking (REG-100276-97; REG-122450-98) designed
to clarify the safe harbor by adding the "formula test," an economic test. The
proposed regulation provides that the safe harbor is unavailable unless the
present value of the anticipated tax liabilities associated with holding the
residual interest does not exceed the sum of: (1) The present value of any
consideration given to the transferee to acquire the interest; (2) the present
value of the expected future distributions on the interest; and (3) the present
value of the anticipated tax savings associated with holding the interest as the
REMIC generates losses.
In January 2001, the IRS published Rev. Proc. 2001-12 (2001-3 I.R.B. 335)
to set forth an alternative safe harbor that taxpayers could use while the IRS
and the Treasury considered comments on the proposed regulations. Under the
alternative safe harbor, if a transferor meets the investigation requirement and
the representation requirement but the transfer fails to meet the formula test,
the transferor may invoke the safe harbor if the transferee meets a two- prong
test (the asset test). A transferee generally meets the first prong of this test
if, at the time of the transfer, and in each of the two years preceding the year
of transfer, the transferee's gross assets exceed $100 million and its net
assets exceed $10 million. A transferee generally meets the second prong of this
test if it is a domestic, taxable corporation and agrees in writing not to
transfer the interest to any person other than another domestic, taxable
corporation that also satisfies the requirements of the asset test. A transferor
cannot rely on the asset test if the transferor knows, or has reason to know,
that the transferee will not comply with its written agreement to limit the
restrictions on subsequent transfers of the residual interest.
Rev. Proc. 2001-12 provides that the asset test fails to be satisfied in
the case of a transfer or assignment of a noneconomic residual interest to a
foreign branch of an otherwise eligible transferee. If such a transfer or
assignment were permitted, a corporate taxpayer might seek to claim that the
provisions of an applicable income tax treaty would resource excess inclusion
income as foreign source income, and that, as a consequence, any U.S. tax
liability attributable to the excess inclusion income could be offset by foreign
tax credits. Such a claim would impede the assessment or collection of U.S. tax
on excess inclusion income, contrary to the congressional purpose of assuring
that such income will be taxable in all events. See, e.g., sections 860E(a)(1),
(b), (e) and 860G(b) of the Code.
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The Treasury and the IRS have learned that certain taxpayers transferring
noneconomic residual interests to foreign branches have attempted to rely on the
formula test to obtain safe harbor treatment in an effort to impede the
assessment or collection of U.S. tax on excess inclusion income. Accordingly,
the final regulations provide that if a noneconomic residual interest is
transferred to a foreign permanent establishment or fixed base of a U.S.
taxpayer, the transfer is not eligible for safe harbor treatment under either
the asset test or the formula test. The final regulations also require a
transferee to represent that it will not cause income from the noneconomic
residual interest to be attributable to a foreign permanent establishment or
fixed base.
Section 1.860E -1(c)(8) provides computational rules that a taxpayer may
use to qualify for safe harbor status under the formula test. Section
1.860E-1(c)(8)(1) provides that the transferee is presumed to pay tax at a rate
equal to the highest rate of tax specified in section 11(b). Some commentators
were concerned that this presumed rate of taxation was too high because it does
not take into consideration taxpayers subject to the alternative minimum tax
rate. In light of the comments received, this provision has been amended in the
final regulations to allow certain transferees that compute their taxable income
using the alternative minimum tax rate to use the alternative minimum tax rate
applicable to corporations.
Additionally, Sec. 1.860E-1(c)(8)(iii) provides that the present values in
the formula test are to be computed using a discount rate equal to the
applicable Federal short-term rate prescribed by section 1274(d). This is a
change from the proposed regulation and Rev. Proc. 2001-12. In those
publications the provision stated that "present values are computed using a
discount rate equal to the applicable Federal rate prescribed in section 1274(d)
compounded semiannually" and that "[a] lower discount rate may be used if the
transferee can demonstrate that it regularly borrows, in the course of its trade
or business, substantial funds at such lower rate from an unrelated third
party." The IRS and the Treasury Department have learned that, based on this
provision, certain taxpayers have been attempting to use unrealistically low or
zero interest rates to satisfy the formula test, frustrating the intent of the
test. Furthermore, the Treasury Department and the IRS believe that a rule
allowing for a rate other than a rate based on an objective index would add
unnecessary complexity to the safe harbor. As a result, the rule in the proposed
regulations that permits a transferee to use a lower discount rate, if the
transferee can demonstrate that it regularly borrows substantial funds at such
lower rate, is not included in the final regulations; and the Federal short-term
rate has been substituted for the applicable Federal rate. To simplify
taxpayers' computations, the final regulations allow use of any of the published
short-term rates, provided that the present values are computed with a
corresponding period of compounding. With the exception of the provisions
relating to transfers to foreign branches, these changes generally have the
proposed applicability date of February 4, 2000, but taxpayers may choose to
apply the interest rate formula set forth in the proposed regulation and Rev.
Proc. 2001-12 for transfers occurring before August 19, 2002.
Effect on Other Documents. Rev. Proc. 2001-12 (2001-3 I.R.B. 335) is
obsolete for transfers of noneconomic residual interests in REMICs occurring on
or after August 19, 2002.
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SPECIAL ANALYSES
It is hereby certified that these regulations will not have a significant
economic impact on a substantial number of small entities. This certification is
based on the fact that it is unlikely that a substantial number of small
entities will hold REMIC residual interests. Therefore, a Regulatory Flexibility
Analysis under the Regulatory Flexibility Act (5 U.S.C. chapter 6) is not
required. It has been determined that this Treasury decision is not a
significant regulatory action as defined in Executive Order 12866. Therefore, a
regulatory assessment is not required. It also has been determined that sections
553(b) and 553(d) of the Administrative Procedure Act (5 U.S.C. chapter 5) do
not apply to these regulations.
DRAFTING INFORMATION
The principal author of these regulations is ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇. However,
other personnel from the IRS and Treasury Department participated in their
development.
LIST OF SUBJECTS
26 CFR Part 1
Income taxes, Reporting and record keeping requirements.
26 CFR Part 602
Reporting and record keeping requirements.
Adoption of Amendments to the Regulations.
Accordingly, 26 CFR parts 1 and 602 are amended as follows:
PART 1--INCOME TAXES
Paragraph 1. The authority citation for part 1 continues to read in part
as follows:
Authority: 26 U.S.C. 7805
* * *
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EXHIBIT I-2
FORM OF TRANSFEROR CERTIFICATE
__________________, 200__
Residential Asset Mortgage Products, Inc.
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▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
JPMorgan Chase Bank, N.A.
Structured Finance/MBS
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Attention: Residential Funding Corporation Series 2006-RS4
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-RS4, Class R-[ ]
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Ladies and Gentlemen:
This letter is delivered to you in connection with the transfer by
_______________________________ (the "Seller") to
_______________________________ (the "Purchaser") of $_____________ Initial
Certificate Principal Balance of Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-RS4, Class R-[__] (the "Certificates"), pursuant to
Section 5.02 of the Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of June 1, 2006 among Residential Asset Mortgage Products,
Inc., as seller (the "Company"), Residential Funding Corporation, as master
servicer, and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Seller hereby certifies, represents and
warrants to, and covenants with, the Company and the Trustee that:
1. No purpose of the Seller relating to the transfer of the Certificate by
the Seller to the Purchaser is or will be to impede the assessment or collection
of any tax.
2. The Seller understands that the Purchaser has delivered to the Trustee
and the Master Servicer a transfer affidavit and agreement in the form attached
to the Pooling and Servicing Agreement as Exhibit I-1. The Seller does not know
or believe that any representation contained therein is false.
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3. The Seller has at the time of the transfer conducted a reasonable
investigation of the financial condition of the Purchaser as contemplated by
Treasury Regulations Section 1.860E-1(c)(4)(i) and, as a result of that
investigation, the Seller has determined that the Purchaser has historically
paid its debts as they become due and has found no significant evidence to
indicate that the Purchaser will not continue to pay its debts as they become
due in the future. The Seller understands that the transfer of a Class R
Certificate may not be respected for United States income tax purposes (and the
Seller may continue to be liable for United States income taxes associated
therewith) unless the Seller has conducted such an investigation.
4. The Seller has no actual knowledge that the proposed Purchaser is not
both a United States Person and a Permitted Transferee.
Very truly yours,
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(Seller)
By:
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Name:
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Title:
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EXHIBIT J
FORM OF INVESTOR REPRESENTATION LETTER
______________, 20__
Residential Asset Mortgage Products, Inc
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JPMorgan Chase Bank, N.A.
Structured Finance/MBS
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Residential Funding Corporation
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Attention: Residential Funding Corporation Series 2006-RS4
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-RS4, [Class SB]
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate
Principal Balance of Mortgage Asset-Backed Pass-Through Certificates, Series
2006-RS4, Class SB (the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of June 1,
2006 among Residential Asset Mortgage Products, Inc., as seller (the "Company"),
Residential Funding Corporation, as master servicer (the "Master Servicer"), and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"). All terms used herein and
not otherwise defined shall have the meanings set forth in the Pooling and
Servicing Agreement. The Purchaser hereby certifies, represents and warrants to,
and covenants with, the Company, the Trustee and the Master Servicer that:
1. The Purchaser understands that (a) the Certificates have not been
and will not be registered or qualified under the Securities Act of 1933,
as amended (the "Act") or any state securities law, (b) the Company is not
required to so register or qualify the Certificates, (c) the Certificates
may be resold only if registered and qualified pursuant to the provisions
of the Act or any state securities law, or if an exemption from such
registration and qualification is available, (d) the Pooling and Servicing
Agreement contains restrictions regarding
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the transfer of the Certificates and (e) the Certificates will bear a
legend to the foregoing effect.
2. The Purchaser is acquiring the Certificates for its own account for
investment only and not with a view to or for sale in connection with any
distribution thereof in any manner that would violate the Act or any
applicable state securities laws.
3. The Purchaser is (a) a substantial, sophisticated institutional
investor having such knowledge and experience in financial and business
matters, and, in particular, in such matters related to securities similar
to the Certificates, such that it is capable of evaluating the merits and
risks of investment in the Certificates, (b) able to bear the economic
risks of such an investment and (c) an "accredited investor" within the
meaning of Rule 501(a) promulgated pursuant to the Act.
4. The Purchaser has been furnished with, and has had an opportunity
to review (a) [a copy of the Private Placement Memorandum, dated
___________________, 20__, relating to the Certificates (b)] a copy of the
Pooling and Servicing Agreement and [b] [c] such other information
concerning the Certificates, the Mortgage Loans and the Company as has been
requested by the Purchaser from the Company or the Seller and is relevant
to the Purchaser's decision to purchase the Certificates. The Purchaser has
had any questions arising from such review answered by the Company or the
Seller to the satisfaction of the Purchaser. [If the Purchaser did not
purchase the Certificates from the Seller in connection with the initial
distribution of the Certificates and was provided with a copy of the
Private Placement Memorandum (the "Memorandum") relating to the original
sale (the "Original Sale") of the Certificates by the Company, the
Purchaser acknowledges that such Memorandum was provided to it by the
Seller, that the Memorandum was prepared by the Company solely for use in
connection with the Original Sale and the Company did not participate in or
facilitate in any way the purchase of the Certificates by the Purchaser
from the Seller, and the Purchaser agrees that it will look solely to the
Seller and not to the Company with respect to any damage, liability, claim
or expense arising out of, resulting from or in connection with (a) error
or omission, or alleged error or omission, contained in the Memorandum, or
(b) any information, development or event arising after the date of the
Memorandum.]
5. The Purchaser has not and will not nor has it authorized or will it
authorize any person to (a) offer, pledge, sell, dispose of or otherwise
transfer any Certificate, any interest in any Certificate or any other
similar security to any person in any manner, (b) solicit any offer to buy
or to accept a pledge, disposition of other transfer of any Certificate,
any interest in any Certificate or any other similar security from any
person in any manner, (c) otherwise approach or negotiate with respect to
any Certificate, any interest in any Certificate or any other similar
security with any person in any manner, (d) make any general solicitation
by means of general advertising or in any other manner or (e) take any
other action, that (as to any of (a) through (e) above) would constitute a
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distribution of any Certificate under the Act, that would render the
disposition of any Certificate a violation of Section 5 of the Act or any
state securities law, or that would require registration or qualification
pursuant thereto. The Purchaser will not sell or otherwise transfer any of
the Certificates, except in compliance with the provisions of the Pooling
and Servicing Agreement.
6. The Purchaser hereby certifies, represents and warrants to, and
covenants with the Trustee, the Company and the Master Servicer that the
following statements in (a) or (b) are correct:
(a) The Purchaser is not an employee benefit plan or other plan
subject to the prohibited transaction provisions of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or
Section 4975 of the Internal Revenue Code of 1986, as amended (the
"Code") (each, a "Plan"), or any Person (including, without
limitation, an insurance company investing its general accounts, an
investment manager, a named fiduciary or a trustee of any Plan) who is
using "plan assets," within the meaning of the U.S. Department of
Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, of any Plan
(each, a "Plan Investor"), to effect such acquisition; or
(b) The Purchaser has provided the Trustee, the Company and the
Master Servicer with an opinion of counsel acceptable to and in form
and substance satisfactory to the Trustee, the Company and the Master
Servicer to the effect that the purchase and holding of the
Certificates is permissible under applicable law, will not constitute
or result in any non-exempt prohibited transaction under Section 406
of ERISA or Section 4975 of the Code (or comparable provisions of any
subsequent enactments) and will not subject the Trustee, the Company
or the Master Servicer to any obligation or liability (including
obligations or liabilities under ERISA or Section 4975 of the Code) in
addition to those undertaken in the Pooling and Servicing Agreement,
which opinion of counsel shall not be an expense of the Trustee, the
Company or the Master Servicer.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Trustee, the Company and the Master Servicer that the
Purchaser will not transfer the Certificates to any transferee unless such
transferee meets the requirements set forth in either (a) or (b) above.
Very truly yours,
(Purchaser)
By:
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Name:
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Title:
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EXHIBIT K
FORM OF TRANSFEROR REPRESENTATION LETTER
_______________________ , 20 __
Residential Asset Mortgage Products, Inc.
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JPMorgan Chase Bank, N.A.
Structured Finance/MBS
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Attention: Residential Funding Corporation Series 2006-RS4
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-RS4, [Class SB]
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Ladies and Gentlemen:
In connection with the sale by (the "Seller") to (the "Purchaser") of $
Initial Certificate Principal Balance of Mortgage Asset-Backed Pass-Through
Certificates, Series 2006-RS4, Class SB (the "Certificates"), issued pursuant to
the Pooling and Servicing Agreement (the "Pooling and Servicing Agreement"),
dated as of June 1, 2006 among Residential Asset Mortgage Products, Inc., as
seller (the "Company"), Residential Funding Corporation, as master servicer, and
JPMorgan Chase Bank, N.A., as trustee (the "Trustee"). The Seller hereby
certifies, represents and warrants to, and covenants with, the Company and the
Trustee that:
Neither the Seller nor anyone acting on its behalf has (a) offered,
pledged, sold, disposed of or otherwise transferred any Certificate, any
interest in any Certificate or any other similar security to any person in any
manner, (b) has solicited any offer to buy or to accept a pledge, disposition or
other transfer of any Certificate, any interest in any Certificate or any other
similar security from any person in any manner, (c) has otherwise approached or
negotiated with respect to any Certificate, any interest in any Certificate or
any other similar security with any person in any manner, (d) has made any
general solicitation by means of general advertising or in any other manner, or
(e) has taken any other action, that (as to any of (a) through (e) above) would
constitute a distribution of the Certificates under the Securities Act of 1933
(the "Act"), that would render the disposition of any Certificate a violation of
Section 5 of the Act or any state securities law, or that would require
registration or qualification pursuant thereto. The
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Seller will not act, in any manner set forth in the foregoing sentence with
respect to any Certificate. The Seller has not and will not sell or otherwise
transfer any of the Certificates, except in compliance with the provisions of
the Pooling and Servicing Agreement.
Very truly yours,
(Seller)
By:
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Name:
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Title:
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EXHIBIT L
TEXT OF AMENDMENT TO POOLING AND SERVICING
AGREEMENT PURSUANT TO SECTION 11.01(E) FOR A
LIMITED GUARANTY
ARTICLE XIII
Subordinate Certificate Loss Coverage; Limited Guaranty
Section 13.01. Subordinate Certificate Loss Coverage; Limited Guaranty. (a)
Subject to subsection (c) below, prior to the later of the third Business Day
prior to each Distribution Date or the related Determination Date, the Master
Servicer shall determine whether it or any Subservicer will be entitled to any
reimbursement pursuant to Section 4.02(a) on such Distribution Date for Advances
or Subservicer Advances previously made, (which will not be Advances or
Subservicer Advances that were made with respect to delinquencies which were
subsequently determined to be Excess Special Hazard Losses, Excess Fraud Losses,
Excess Bankruptcy Losses or Extraordinary Losses) and, if so, the Master
Servicer shall demand payment from Residential Funding of an amount equal to the
amount of any Advances or Subservicer Advances reimbursed pursuant to Section
4.02(a), to the extent such Advances or Subservicer Advances have not been
included in the amount of the Realized Loss in the related Mortgage Loan, and
shall distribute the same to the Class SB Certificateholders in the same manner
as if such amount were to be distributed pursuant to Section 4.02(a).
(b) Subject to subsection (c) below, prior to the later of the third
Business Day prior to each Distribution Date or the related Determination Date,
the Master Servicer shall determine whether any Realized Losses (other than
Excess Special Hazard Losses, Excess Bankruptcy Losses, Excess Fraud Losses and
Extraordinary Losses) will be allocated to the Class SB Certificates on such
Distribution Date pursuant to Section 4.05, and, if so, the Master Servicer
shall demand payment from Residential Funding of the amount of such Realized
Loss and shall distribute the same to the Class SB Certificateholders in the
same manner as if such amount were to be distributed pursuant to Section
4.02(a); provided, however, that the amount of such demand in respect of any
Distribution Date shall in no event be greater than the sum of (i) the
additional amount of Accrued Certificate Interest that would have been paid for
the Class SB Certificateholders on such Distribution Date had such Realized Loss
or Losses not occurred plus (ii) the amount of the reduction in the Certificate
Principal Balances of the Class SB Certificates on such Distribution Date due to
such Realized Loss or Losses. Notwithstanding such payment, such Realized Losses
shall be deemed to have been borne by the Certificateholders for purposes of
Section 4.05. Excess Special Hazard Losses, Excess Fraud Losses, Excess
Bankruptcy Losses and Extraordinary Losses allocated to the Class SB
Certificates will not be covered by the Subordinate Certificate Loss Obligation.
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(c) Demands for payments pursuant to this Section shall be made prior to
the later of the third Business Day prior to each Distribution Date or the
related Determination Date by the Master Servicer with written notice thereof to
the Trustee. The maximum amount that Residential Funding shall be required to
pay pursuant to this Section on any Distribution Date (the "Amount Available")
shall be equal to the lesser of (X) minus the sum of (i) all previous payments
made under subsections (a) and (b) hereof and (ii) all draws under the Limited
Guaranty made in lieu of such payments as described below in subsection (d) and
(Y) the then outstanding Certificate Principal Balances of the Class SB
Certificates, or such lower amount as may be established pursuant to Section
13.02. Residential Funding's obligations as described in this Section are
referred to herein as the "Subordinate Certificate Loss Obligation."
(d) The Trustee will promptly notify 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 SB Certificateholders.
(f) The Company shall have the option, in its sole discretion, to
substitute for either or both of the Limited Guaranty or the Subordinate
Certificate Loss Obligation another instrument in the form of a corporate
guaranty, an irrevocable letter of credit, a surety bond, insurance policy or
similar instrument or a reserve fund; provided that (i) the Company obtains
(subject to the provisions of Section 10.01(f) as if the Company was substituted
for the Master Servicer solely for the purposes of such provision) an Opinion of
Counsel (which need not be an opinion of Independent counsel) to the effect that
obtaining such substitute corporate guaranty, irrevocable letter of credit,
surety bond, insurance policy or similar instrument or reserve fund will not
cause either (a) any federal tax to be imposed on the Trust Fund, including
without limitation, any federal tax imposed on "prohibited transactions" under
Section 860(F)(a)(1) of the Code or on "contributions after the startup date"
under Section 860(G)(d)(1) of the Code or (b) the Trust Fund to fail to qualify
as a REMIC at any time that any Certificate is outstanding, and (ii) no such
substitution shall be made unless (A) the substitute Limited Guaranty or
Subordinate Certificate Loss Obligation is for an initial amount not less than
the then current Amount Available and contains provisions that are in all
material respects equivalent to the original Limited Guaranty or Subordinate
Certificate Loss Obligation (including that no portion of the fees,
reimbursements or other obligations under any such instrument will be borne by
the Trust Fund), (B) the long term debt obligations of any obligor of any
substitute Limited Guaranty or Subordinate Certificate Loss Obligation (if not
supported by the Limited Guaranty) shall be rated at least the lesser of (a) the
rating of the long term debt obligations of 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
L-2
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 SB Certificates at the request of the Company that such substitution shall
not lower the rating on the Class SB Certificates below the lesser of (a) the
then-current rating assigned to the Class SB Certificates by such rating agency
and (b) the original rating assigned to the Class SB Certificates by such rating
agency. Any replacement of the Limited Guaranty or Subordinate Certificate Loss
Obligation pursuant to this Section shall be accompanied by a written Opinion of
Counsel to the substitute guarantor or obligor, addressed to the Master Servicer
and the Trustee, that such substitute instrument constitutes a legal, valid and
binding obligation of the substitute guarantor or obligor, enforceable in
accordance with its terms, and concerning such other matters as the Master
Servicer and the Trustee shall reasonably request. Neither the Company, the
Master Servicer nor the Trustee shall be obligated to substitute for or replace
the Limited Guaranty or Subordinate Certificate Loss Obligation under any
circumstance.
Section 13.02. Amendments Relating to the Limited Guaranty. Notwithstanding
Sections 11.01 or 13.01: (i) the provisions of this Article XIII may be amended,
superseded or deleted, (ii) the Limited Guaranty or Subordinate Certificate Loss
Obligation may be amended, reduced or canceled, and (iii) any other provision of
this Agreement which is related or incidental to the matters described in this
Article XIII may be amended in any manner; in each case by written instrument
executed or consented to by the Company and Residential Funding but without the
consent of any Certificateholder and without the consent of the Master Servicer
or the Trustee being required unless any such amendment would impose any
additional obligation on, or otherwise adversely affect the interests of, the
Master Servicer or the Trustee, as applicable; provided that the Company shall
also obtain a letter from each nationally recognized credit rating agency that
rated the Class SB Certificates at the request of the Company to the effect that
such amendment, reduction, deletion or cancellation will not lower the rating on
the Class SB Certificates below the lesser of (a) the then-current rating
assigned to the Class SB Certificates by such rating agency and (b) the original
rating assigned to the Class SB Certificates by such rating agency, unless (A)
the Holder of 100% of the Class SB Certificates is Residential Funding or an
Affiliate of Residential Funding, or (B) such amendment, reduction, deletion or
cancellation is made in accordance with Section 11.01(e) and, provided further
that the Company obtains (subject to the provisions of Section 10.01(f) as if
the Company was substituted for the Master Servicer solely for the purposes of
such provision), in the case of a material amendment or supersession (but not a
reduction, cancellation or deletion of the Limited Guaranty or the Subordinate
Certificate Loss Obligation), an Opinion of Counsel (which need not be an
opinion of Independent counsel) to the effect that any such amendment or
supersession will not cause either (a) any federal tax to be imposed on the
Trust Fund, including without limitation, any federal tax imposed on "prohibited
transactions" under Section 860F(a)(1) of the Code or on "contributions after
the startup date" under Section 860G(d)(1) of the Code or (b) the Trust Fund to
fail to qualify as a REMIC at any time that any Certificate is outstanding. A
copy of any such instrument shall be provided to the Trustee and the Master
Servicer together with an Opinion of Counsel that such amendment complies with
this Section 13.02.
L-3
EXHIBIT M
FORM OF LIMITED GUARANTY
RESIDENTIAL ASSET MORTGAGE PRODUCTS, INC.
Mortgage Asset-Backed Pass-Through Certificates
Series 2006-RS4
_____________ , 200__
JPMorgan Chase Bank, N.A.
Structured Finance/MBS
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Funding Corporation Series 2006-RS4
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 13.01 of the Pooling and Servicing
Agreement dated as of June 1, 2006 (the "Servicing Agreement"), among
Residential Asset Mortgage Products, Inc. (the "Company"), Residential Funding
and JPMorgan Chase Bank, N.A. (the "Trustee") as amended by Amendment No. ___
thereto, dated as of ________, with respect to the Mortgage Asset-Backed
Pass-Through Certificates, Series 2006-RS4 (the "Certificates"); and
WHEREAS, pursuant to Section 13.01 of the Servicing Agreement, Residential
Funding agrees to make payments to the Holders of the Class SB Certificates with
respect to certain losses on the Mortgage Loans as described in the Servicing
Agreement; and
WHEREAS, GMAC desires to provide certain assurances with respect to the
ability of Residential Funding to secure sufficient funds and faithfully to
perform its Subordinate Certificate Loss Obligation;
NOW THEREFORE, in consideration of the premises herein contained and
certain other good and valuable consideration, the receipt of which is hereby
acknowledged, GMAC agrees as follows:
1. Provision of Funds. (a) GMAC agrees to contribute and deposit in the
Certificate Account on behalf of Residential Funding (or otherwise provide to
Residential Funding, or to cause to be made available to Residential Funding),
either directly or through a subsidiary, in any case prior to the related
Distribution Date, such moneys as may be
M-1
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 13.01 of the Servicing Agreement.
(b) The agreement set forth in the preceding clause (a) shall be absolute,
irrevocable and unconditional and shall not be affected by the transfer by GMAC
or any other person of all or any part of its or their interest in Residential
Funding, by any insolvency, bankruptcy, dissolution or other proceeding
affecting Residential Funding or any other person, by any defense or right of
counterclaim, set-off or recoupment that GMAC may have against Residential
Funding or any other person or by any other fact or circumstance.
Notwithstanding the foregoing, GMAC's obligations under clause (a) shall
terminate upon the earlier of (x) substitution for this Limited Guaranty
pursuant to Section 13.01(f) of the Servicing Agreement, or (y) the termination
of the Trust Fund pursuant to the Servicing Agreement.
2. Waiver. GMAC hereby waives any failure or delay on the part of
Residential Funding, the Trustee or any other person in asserting or enforcing
any rights or in making any claims or demands hereunder. Any defective or
partial exercise of any such rights shall not preclude any other or further
exercise of that or any other such right. GMAC further waives demand,
presentment, notice of default, protest, notice of acceptance and any other
notices with respect to this Limited Guaranty, including, without limitation,
those of action or nonaction on the part of Residential Funding or the Trustee.
3. Modification, Amendment and Termination. This Limited Guaranty may be
modified, amended or terminated only by the written agreement of GMAC and the
Trustee and only if such modification, amendment or termination is permitted
under Section 13.02 of the Servicing Agreement. The obligations of GMAC under
this Limited Guaranty shall continue and remain in effect so long as the
Servicing Agreement is not modified or amended in any way that might affect the
obligations of GMAC under this Limited Guaranty without the prior written
consent of GMAC.
4. Successor. Except as otherwise expressly provided herein, the guarantee
herein set forth shall be binding upon GMAC and its respective successors.
5. Governing Law. This Limited Guaranty shall be governed by the laws of
the State of New York, without regard to the conflicts of law principles
thereof, other than Sections 5-1401 and 5-1402 of the New York General
Obligations Law.
6. Authorization and Reliance. GMAC understands that a copy of this Limited
Guaranty shall be delivered to the Trustee in connection with the execution of
Amendment No. 1 to the Servicing Agreement and GMAC hereby authorizes the
Company and the Trustee to rely on the covenants and agreements set forth
herein.
7. Definitions. Capitalized terms used but not otherwise defined herein
shall have the meaning given them in the Servicing Agreement.
8. Counterparts. This Limited Guaranty may be executed in any number of
counterparts, each of which shall be deemed to be an original and such
counterparts shall constitute but one and the same instrument.
M-2
IN WITNESS WHEREOF, GMAC has caused this Limited Guaranty to be executed
and delivered by its respective officers thereunto duly authorized as of the day
and year first above written.
GENERAL MOTORS ACCEPTANCE
CORPORATION
By:
------------------------------------------
Name:
----------------------------------------
Title:
--------------------------------------
Acknowledged by:
JPMORGAN CHASE BANK, N.A.,
as Trustee
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
RESIDENTIAL ASSET MORTGAGE
PRODUCTS, INC.
By:
--------------------------------------
Name:
------------------------------------
Title:
-----------------------------------
M-3
EXHIBIT N
FORM OF LENDER CERTIFICATION FOR ASSIGNMENT OF MORTGAGE LOAN
__________________, 20____
Residential Asset Mortgage
Products, Inc.
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
JPMorgan Chase Bank, N.A.
Structured Finance/MBS
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Residential Funding Corporation Series 2006-RS4
Re: Mortgage Asset-Backed Pass-Through Certificates, Series 2006-RS4
Assignment of Mortgage Loan
---------------------------
Ladies and Gentlemen:
This letter is delivered to you in connection with the assignment by
_________________ (the "Trustee") to _______________________ (the "Lender") of
_______________ (the "Mortgage Loan") pursuant to Section 3.13(d) of the Pooling
and Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of
June 1, 2006 among Residential Asset Mortgage Products, Inc., as seller (the
"Company"), Residential Funding Corporation, as master servicer, and the
Trustee. All terms used herein and not otherwise defined shall have the meanings
set forth in the Pooling and Servicing Agreement. The Lender hereby certifies,
represents and warrants to, and covenants with, the Master Servicer and the
Trustee that:
(i) the Mortgage Loan is secured by Mortgaged Property located in a
jurisdiction in which an assignment in lieu of satisfaction is required to
preserve lien priority, minimize or avoid mortgage recording taxes or otherwise
comply with, or facilitate a refinancing under, the laws of such jurisdiction;
(ii) the substance of the assignment is, and is intended to be, a
refinancing of such Mortgage Loan and the form of the transaction is solely to
comply with, or facilitate the transaction under, such local laws;
N-1
(iii) the Mortgage Loan following the proposed assignment will be modified
to have a rate of interest at least 0.25 percent below or above the rate of
interest on such Mortgage Loan prior to such proposed assignment; and
(iv) such assignment is at the request of the borrower under the related
Mortgage Loan.
Very truly yours,
-----------------------------------------
(Lender)
By:
---------------------------------------
Name:
-------------------------------------
Title:
------------------------------------
N-2
EXHIBIT O
FORM OF RULE 144A INVESTMENT REPRESENTATION
Description of Rule 144A Securities, including numbers:
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
-------------------------------------------------------
The undersigned seller, as registered holder (the "Seller"), intends to
transfer the Rule 144A Securities described above to the undersigned buyer (the
"Buyer").
1. In connection with such transfer and in accordance with the agreements
pursuant to which the Rule 144A Securities were issued, the Seller hereby
certifies the following facts: Neither the Seller nor anyone acting on its
behalf has offered, transferred, pledged, sold or otherwise disposed of the Rule
144A Securities, any interest in the Rule 144A Securities or any other similar
security to, or solicited any offer to buy or accept a transfer, pledge or other
disposition of the Rule 144A Securities, any interest in the Rule 144A
Securities or any other similar security from, or otherwise approached or
negotiated with respect to the Rule 144A Securities, any interest in the Rule
144A Securities or any other similar security with, any person in any manner, or
made any general solicitation by means of general advertising or in any other
manner, or taken any other action, that would constitute a distribution of the
Rule 144A Securities under the Securities Act of 1933, as amended (the "1933
Act"), or that would render the disposition of the Rule 144A Securities a
violation of Section 5 of the 1933 Act or require registration pursuant thereto,
and that the Seller has not offered the Rule 144A Securities to any person other
than the Buyer or another "qualified institutional buyer" as defined in Rule
144A under the ▇▇▇▇ ▇▇▇.
2. The Buyer warrants and represents to, and covenants with, the Seller,
the Trustee and the Master Servicer (as defined in the Pooling and Servicing
Agreement (the "Agreement"), dated as of June 1, 2006 among Residential Funding
Corporation as Master Servicer (the "Master Servicer"), Residential Asset
Mortgage Products, Inc. as depositor pursuant to Section 5.02 of the Agreement
and JPMorgan Chase Bank, N.A., as trustee (the "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 Master Servicer.
O-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 plan or other plan subject to the
prohibited transaction provisions of the Employee Retirement Income
Security Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal
Revenue Code of 1986, as amended (the "Code") (each, a "Plan"), or any
Person (including, without limitation, an insurance company investing its
general accounts, an investment manager, a named fiduciary or a trustee of
any Plan) who is using "plan assets," within the meaning of the U.S.
Department of Labor regulation promulgated at 29 C.F.R. ss. 2510.3-101, of
any Plan (each, a "Plan Investor"), to effect such acquisition; or
(b.) has provided the Trustee, the Depositor and the Master Servicer
with an opinion of counsel acceptable to and in form and substance
satisfactory to the Trustee, the Depositor and the Master Servicer to the
effect that the purchase and holding of Class SB Certificates is
permissible under applicable law, will not constitute or result in any
non-exempt prohibited transaction under Section 406 of ERISA or Section
4975 of the Code (or comparable provisions of any subsequent enactments)
and will not subject the Trustee, the Depositor or the Master Servicer to
any obligation or liability (including obligations or liabilities under
ERISA or Section 4975 of the Code) in addition to those undertaken in the
Pooling and Servicing Agreement, which opinion of counsel shall not be an
expense of the Trustee, the Depositor or the Master Servicer.
O-2
4. This document may be executed in one or more counterparts and by the
different parties hereto on separate counterparts, each of which, when so
executed, shall be deemed to be an original; such counterparts, together, shall
constitute one and the same document.
[SIGNATURE PAGE FOLLOWS]
O-3
IN WITNESS WHEREOF, each of the parties has executed this document as of
the date set forth below.
-------------------------------------- --------------------------------------
Print Name of Seller Print Name of Buyer
By: By:
---------------------------------- ----------------------------------
Name: Name:
Title: Title:
Taxpayer Identification: Taxpayer Identification:
No. No.
---------------------------------- ----------------------------------
Date: Date:
-------------------------------- --------------------------------
O-4
ANNEX 1 TO EXHIBIT O
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers Other Than Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer, Senior Vice President or other executive officer of the Buyer.
2. In connection with purchases by the Buyer, the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because (i) the Buyer owned and/or invested on a
discretionary basis $_____________________ in securities (except for the
excluded securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule 144A) and (ii)
the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a bank,
savings and loan association or similar institution), Massachusetts
or similar business trust, partnership, or charitable organization
described in Section 501(c)(3) of the Internal Revenue Code.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District of
Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan association,
building and loan association, cooperative bank, homestead
association or similar institution, which is supervised and
examined by a State or Federal authority having supervision over
any such institutions or is a foreign savings and loan association
or equivalent institution and (b) has an audited net worth of at
least $25,000,000 as demonstrated in its latest annual financial
statements.
___ Broker-Dealer. The Buyer is a dealer registered pursuant to Section
15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose primary
and predominant business activity is the writing of insurance or
the reinsuring of risks underwritten by insurance companies and
which is subject to supervision by the insurance commissioner or a
similar official or agency of a State or territory or the District
of Columbia.
O-5
___ State or Local Plan. The Buyer is a plan established and maintained
by a State, its political subdivisions, or any agency or
instrumentality of the State or its political subdivisions, for the
benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Adviser. The Buyer is an investment adviser registered
under the Investment Advisers Act of 1940.
___ SBIC. The Buyer is a Small Business Investment Company licensed by
the U.S. Small Business Administration under Section 301(c) or (d)
of the Small Business Investment Act of 1958.
___ Business Development Company. The Buyer is a business development
company as defined in Section 202(a)(22) of the Investment Advisers
Act of 1940.
___ Trust Fund. The Buyer is a trust fund whose trustee is a bank or
trust company and whose participants are exclusively (a) plans
established and maintained by a State, its political subdivisions,
or any agency or instrumentality of the State or its political
subdivisions, for the benefit of its employees, or (b) employee
benefit plans within the meaning of Title I of the Employee
Retirement Income Security Act of 1974, but is not a trust fund
that includes as participants individual retirement accounts or
H.R. 10 plans.
3. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer, (ii) securities that 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.
O-6
5. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
___ ___ Will the Buyer be purchasing the Rule 144A
Yes No Securities only for the Buyer's own account?
6. If the answer to the foregoing question is "no", the Buyer agrees that,
in connection with any purchase of securities sold to the Buyer for the account
of a third party (including any separate account) in reliance on Rule 144A, the
Buyer will only purchase for the account of a third party that at the time is a
"qualified institutional buyer" within the meaning of Rule 144A. In addition,
the Buyer agrees that the Buyer will not purchase securities for a third party
unless the Buyer has obtained a current representation letter from such third
party or taken other appropriate steps contemplated by Rule 144A to conclude
that such third party independently meets the definition of "qualified
institutional buyer" set forth in Rule 144A.
7. The Buyer will notify each of the parties to which this certification is
made of any changes in the information and conclusions herein. Until such notice
is given, the Buyer's purchase of Rule 144A Securities will constitute a
reaffirmation of this certification as of the date of such purchase.
-------------------------------------------
Print Name of Buyer
By:
---------------------------------------
Name:
Title:
Date:
--------------------------------------
O-7
ANNEX 2 TO EXHIBIT O
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Buyers That Are Registered Investment Companies]
The undersigned hereby certifies as follows in connection with the Rule
144A Investment Representation to which this Certification is attached:
1. As indicated below, the undersigned is the President, Chief Financial
Officer or Senior Vice President of the Buyer or, if the Buyer is a "qualified
institutional buyer" as that term is defined in Rule 144A under the Securities
Act of 1933 ("Rule 144A") because Buyer is part of a Family of Investment
Companies (as defined below), is such an officer of the Adviser.
2. In connection with purchases by Buyer, the Buyer is a "qualified
institutional buyer" as defined in SEC Rule 144A because (i) the Buyer is an
investment company registered under the Investment Company Act of 1940, and (ii)
as marked below, the Buyer alone, or the Buyer's Family of Investment Companies,
owned at least $100,000,000 in securities (other than the excluded securities
referred to below) as of the end of the Buyer's most recent fiscal year. For
purposes of determining the amount of securities owned by the Buyer or the
Buyer's Family of Investment Companies, the cost of such securities was used.
____ The Buyer owned $___________________ in securities (other than the
excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year (such amount being calculated in accordance
with Rule 144A).
____ The Buyer is part of a Family of Investment Companies which owned in
the aggregate $______________ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most recent
fiscal year (such amount being calculated in accordance with Rule
144A).
3. The term "Family of Investment Companies" as used herein means two or
more registered investment companies (or series thereof) that have the same
investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i) securities of
issuers that are affiliated with the Buyer or are part of the Buyer's Family of
Investment Companies, (ii) bank deposit notes and certificates of deposit, (iii)
loan participations, (iv) repurchase agreements, (v) securities owned but
subject to a repurchase agreement and (vi) currency, interest rate and commodity
swaps.
O-8
5. The Buyer is familiar with Rule 144A and understands that each of the
parties to which this certification is made are relying and will continue to
rely on the statements made herein because one or more sales to the Buyer will
be in reliance on Rule 144A. In addition, the Buyer will only purchase for the
Buyer's own account.
6. The undersigned will notify each of the parties to which this
certification is made of any changes in the information and conclusions herein.
Until such notice, the Buyer's purchase of Rule 144A Securities will constitute
a reaffirmation of this certification by the undersigned as of the date of such
purchase.
-------------------------------------------
Print Name of Buyer
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
IF AN ADVISER:
-------------------------------------------
Print Name of Buyer
Date:
----------------------------------
O-9
EXHIBIT P
[RESERVED]
P-1
EXHIBIT Q
FORM OF ERISA REPRESENTATION LETTER
______________, 2006
Residential Asset Mortgage Products, Inc
▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
JPMorgan Chase Bank, N.A.
Structured Finance/MBS
▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Residential Funding Corporation
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Attention: Residential Funding Corporation Series 2006-RS4
Re: Mortgage Asset-Backed Pass-Through Certificates,
Series 2006-RS4, Class [A-__], Class M-[_]
------------------------------------------
Ladies and Gentlemen:
_________________________ (the "Purchaser") intends to purchase from
___________________________ (the "Seller") $_____________ Initial Certificate
Principal Balance of Mortgage Asset-Backed Pass-Through Certificates, Series
2006-RS4, Class __ (the "Certificates"), issued pursuant to the Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), dated as of June 1,
2006 among Residential Asset Mortgage Products, Inc., as seller (the
"Depositor"), Residential Funding Corporation, as master servicer (the "Master
Servicer"), and JPMorgan Chase Bank, N.A., as trustee (the "Trustee"). All terms
used herein and not otherwise defined shall have the meanings set forth in the
Pooling and Servicing Agreement. The Purchaser hereby certifies, represents and
warrants to, and covenants with, the Depositor, the Trustee and the Master
Servicer that:
(a) The Purchaser is not an employee benefit plan or other plan subject to
the prohibited transaction provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") (each, a "Plan"), or any Person (including,
without limitation, an insurance company investing its general accounts, an
investment manager, a named fiduciary or a trustee of any Plan) who is using
"plan assets," within the meaning of the U.S. Department of Labor regulation
promulgated at 29 C.F.R. ss. 2510.3-101, of any Plan (each, a "Plan Investor"),
to effect such acquisition; or
Q-1
(b) The Purchaser is an insurance company, the source of funds used to
purchase or hold the Certificates (or any interest therein) is an "insurance
company general account" (as defined in U.S. Department of Labor Prohibited
Transaction Class Exemption ("PTCE") 95-60, and (iii) the conditions set forth
in Sections I and III of PTCE 95-60 have been satisfied.
In addition, the Purchaser hereby certifies, represents and warrants to,
and covenants with, the Trustee, the Depositor and the Master Servicer that the
Purchaser will not transfer the Certificates to any transferee unless either
such transferee meets the requirements set forth in either (a) or (b) above.
Very truly yours,
(Purchaser)
By:
------------------------------
Name:
----------------------------
Title:
---------------------------
Q-2
EXHIBIT R-1
FORM OF FORM 10-K CERTIFICATION
I, [identify the certifying individual], certify that:
I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on Form
10-K of the trust (the Exchange Act periodic reports) created pursuant to the
Pooling and Servicing Agreement dated ____________ (the "Agreement") among
Residential Asset Mortgage Products, Inc., Residential Funding Corporation (the
"Master Servicer") and [Name of Trustee] (the "Trustee");
(1) Based on my knowledge, Exchange Act periodic reports, taken as a whole,
do not contain any untrue statement of a material fact or omit to state a
material fact necessary to make the statements made, in light of the
circumstances under which such statements were made, not misleading with respect
to the period covered by this report;
(2) Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period covered by
this report is included in the Exchange Act periodic reports;
(3) I am responsible for reviewing the activities performed by the Master
Servicer and based on my knowledge and the compliance review conducted in
preparing the servicer compliance statement required in this report under Item
1123 of Regulation AB and except as disclosed in the Exchange Act periodic
reports, the Master Servicer has fulfilled its obligations under the Agreement;
and
(4) All of the reports on assessment of compliance with servicing criteria
for asset-backed securities and their related attestation reports on assessment
of compliance with servicing criteria for asset-backed securities required to be
included in this report in accordance with Item 1122 of Regulation AB and
Exchange Act Rules 13a-18 and 15d-18 have been included as an exhibit to this
report, except as otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this report on
Form 10-K.
In giving the certifications above, I have reasonably relied on the
information provided to me by the following unaffiliated parties: [the Trustee].
Date:____________
_________________________________*
[Signature]
Name:
Title:
* - to be signed by the senior officer in charge of the servicing functions of
the Master Servicer
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇
FORM OF BACK-UP CERTIFICATION TO FORM 10-K CERTIFICATE
The undersigned, a Responsible Officer of JPMorgan Chase Bank, N.A. (the
"Trustee") certifies that:
1. The Trustee has performed all of the duties specifically required to be
performed by it pursuant to the provisions of the Pooling and Servicing
Agreement dated as of June 1, 2006 (the "Agreement") by and among Residential
Asset Mortgage Products, Inc. (the "Depositor"), Residential Funding Corporation
(the "Master Servicer") and the Trustee in accordance with the standards set
forth therein.
2. Based on my knowledge, the list of Certificateholders as shown on the
Certificate Register as of the end of each calendar year that is provided by the
Trustee pursuant to Section 4.03(f)(I) of the Agreement is accurate as of the
last day of the 20___ calendar year.
Capitalized terms used and not defined herein shall have the meanings given
such terms in the Agreement.
IN WITNESS THEREOF, I have duly executed this certificate as of
____________, 20___.
---------------------------------
[Signature] Name:
Title:
R-2-1
EXHIBIT S
INFORMATION TO BE PROVIDED BY THE MASTER SERVICER TO THE RATING
AGENCIES RELATING TO REPORTABLE MODIFIED MORTGAGE LOANS
Account number
Transaction Identifier
Unpaid Principal Balance prior to Modification
Next Due Date
Monthly Principal and Interest Payment
Total Servicing Advances
Current Interest Rate
Original Maturity Date
Original Term to Maturity (Months)
Remaining Term to Maturity (Months)
Trial Modification Indicator
Mortgagor Equity Contribution
Total Servicer Advances
Trial Modification Terms (Months)
Trial Modification Start Date
Trial Modification End Date
Trial Modification Period Principal and Interest Payment
Trial Modification Interest Rate
Trial Modification Term
Rate Reduction Indicator
Interest Rate Post Modification
Rate Reduction Start Date
Rate Reduction End Date
Rate Reduction Term
Term Modified Indicator
Modified Amortization Period
Modified Final Maturity Date
Total Advances Written Off
Unpaid Principal Balance Written Off
Other Past Due Amounts Written Off
Write Off Date
Unpaid Principal Balance Post Write Off
Capitalization Indicator
Mortgagor Contribution
Total Capitalized Amount
Modification Close Date
Unpaid Principal Balance Post Capitalization Modification
Next Payment Due Date per Modification Plan
Principal and Interest Payment Post Modification
Interest Rate Post Modification
Payment Made Post Capitalization
Delinquency Status to Modification Plan
S-1
EXHIBIT T
FINAL MATURITY RESERVE FUND SCHEDULE
------------------------------------------------------------------------------------------------
NOTIONAL NOTIONAL NOTIONAL NOTIONAL
PERIOD BALANCE ($) PERIOD BALANCE ($) PERIOD BALANCE ($) PERIOD BALANCE ($)
------------------------------------------------------------------------------------------------
121 $944,566.44 181 $397,443.06 241 $162,099.16 301 $62,502.93
122 $931,201.65 182 $391,664.70 242 $159,633.83 302 $61,473.30
123 $918,021.28 183 $385,967.08 243 $157,203.63 303 $60,458.80
124 $905,022.82 184 $380,349.09 244 $154,808.05 304 $59,459.22
125 $892,203.78 185 $374,809.63 245 $152,446.64 305 $58,474.35
126 $879,561.71 186 $369,347.64 246 $150,118.90 306 $57,503.97
127 $867,094.21 187 $363,962.04 247 $147,824.39 307 $56,547.89
128 $854,798.89 188 $358,651.79 248 $145,562.62 308 $55,605.91
129 $842,673.40 189 $353,415.86 249 $143,333.16 309 $54,677.82
130 $830,715.44 190 $348,253.22 250 $141,135.55 310 $53,763.44
131 $818,922.70 191 $343,162.87 251 $138,969.35 311 $52,862.56
132 $807,292.95 192 $338,143.81 252 $136,834.12 312 $51,975.00
133 $795,823.95 193 $333,195.07 253 $134,729.44 313 $51,100.57
134 $784,513.51 194 $328,315.67 254 $132,654.88 314 $50,239.09
135 $773,359.47 195 $323,504.68 255 $130,610.03 315 $49,390.36
136 $762,359.69 196 $318,761.14 256 $128,594.47 316 $48,554.23
137 $751,512.07 197 $314,084.13 257 $126,607.79 317 $47,730.49
138 $740,814.53 198 $309,472.74 258 $124,649.60 318 $46,918.99
139 $730,265.02 199 $304,926.06 259 $122,719.49 319 $46,119.55
140 $719,861.52 200 $300,443.20 260 $120,817.09 320 $45,331.99
141 $709,602.04 201 $296,023.30 261 $118,941.99 321 $44,556.15
142 $699,484.62 202 $291,665.47 262 $117,093.83 322 $43,791.87
143 $689,507.30 203 $287,368.87 263 $115,272.23 323 $43,038.98
144 $679,668.18 204 $283,132.65 264 $113,476.82 324 $42,297.32
145 $669,965.37 205 $278,955.99 265 $111,707.23 325 $41,566.73
146 $660,397.00 206 $274,838.06 266 $109,963.11 326 $40,847.05
147 $650,961.25 207 $270,778.06 267 $108,244.10 327 $40,138.14
148 $641,656.30 208 $266,775.19 268 $106,549.85 328 $39,439.83
149 $632,480.36 209 $262,828.66 269 $104,880.02 329 $38,751.98
150 $623,431.66 210 $258,937.70 270 $103,234.27 330 $38,074.43
151 $614,508.48 211 $255,101.54 271 $101,612.26 331 $37,407.06
152 $605,709.09 212 $251,319.42 272 $100,013.66 332 $36,749.70
153 $597,031.80 213 $247,590.61 273 $98,438.15 333 $36,102.22
154 $588,474.95 214 $243,914.37 274 $96,885.40 334 $35,464.47
155 $580,036.88 215 $240,289.97 275 $95,355.10 335 $34,836.33
156 $571,715.97 216 $236,716.69 276 $93,846.93 336 $34,217.64
157 $563,510.62 217 $233,193.85 277 $92,360.58 337 $33,608.29
158 $555,419.25 218 $229,720.73 278 $90,895.76 338 $33,008.13
159 $547,440.30 219 $226,296.66 279 $89,452.15 339 $32,417.03
160 $539,572.23 220 $222,920.95 280 $88,029.47 340 $31,834.88
161 $531,813.52 221 $219,592.95 281 $86,627.42 341 $31,261.53
162 $524,162.68 222 $216,311.98 282 $85,245.71 342 $30,696.86
163 $516,618.24 223 $213,077.42 283 $83,884.06 343 $30,140.75
164 $509,178.73 224 $209,888.60 284 $82,542.20 344 $29,593.09
165 $501,842.72 225 $206,744.90 285 $81,219.83 345 $29,053.74
166 $494,608.79 226 $203,645.71 286 $79,916.70 346 $28,522.59
167 $487,475.55 227 $200,590.40 287 $78,632.52 347 $27,999.52
168 $480,441.61 228 $197,578.37 288 $77,367.04 348 $27,484.42
169 $473,505.62 229 $194,609.02 289 $76,120.00 349 $26,977.17
170 $466,666.24 230 $191,681.76 290 $74,891.13 350 $26,477.67
171 $459,922.14 231 $188,796.01 291 $73,680.19 351 $25,985.79
172 $453,272.01 232 $185,951.19 292 $72,486.91 352 $25,501.44
173 $446,714.58 233 $183,146.75 293 $71,311.06 353 $25,024.50
174 $440,248.56 234 $180,382.12 294 $70,152.39 354 $24,554.87
175 $433,872.71 235 $177,656.75 295 $69,010.66 355 $24,092.44
176 $427,585.79 236 $174,970.10 296 $67,885.63 356 $23,637.12
177 $421,386.58 237 $172,321.64 297 $66,777.07 357 $23,188.79
178 $415,273.88 238 $169,710.83 298 $65,684.75 358 $22,747.36
179 $409,246.51 239 $167,137.15 299 $64,608.43 359 $22,312.73
180 $403,303.29 240 $164,600.10 300 $63,547.90 360 $21,884.81
-------------------------------------------------------------------------------------------------
T-1
EXHIBIT U
YIELD MAINTENANCE AGREEMENT
[See Tab 5 of the closing set]
U-1
EXHIBIT V
SERVICING CRITERIA TO BE ADDRESSED IN ASSESSMENT OF COMPLIANCE
The assessment of compliance to be delivered by the Trustee shall address,
at a minimum, the criteria identified below as "Applicable Servicing Criteria":
-----------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA APPLICABLE SERVICING
CRITERIA
-----------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------------------
GENERAL SERVICING CONSIDERATIONS
-----------------------------------------------------------------------------------------------------------------
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] (as to accounts
custodial bank accounts and related bank clearing accounts held by Trustee)
no more than two business days following receipt, or such
other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(2)(ii) Disbursements made via wire transfer on behalf of an
obligor or to an investor are made only by authorized [X] (as to investors
personnel. only)
-----------------------------------------------------------------------------------------------------------------
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 [X] (as to accounts
transaction agreements. held by Trustee)
-----------------------------------------------------------------------------------------------------------------
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.
-----------------------------------------------------------------------------------------------------------------
V-1
-----------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA APPLICABLE SERVICING
CRITERIA
-----------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------------------
INVESTOR REMITTANCES AND REPORTING
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(i) Reports to investors, including those to be filed with the
Commission, are maintained in accordance with the
transaction agreements and applicable Commission
requirements. Specifically, such reports (A) are prepared
in accordance with timeframes and other terms set forth in
the transaction agreements; (B) provide information
calculated in accordance with the terms specified in the
transaction agreements; (C) are filed with the Commission
as required by its rules and regulations; and (D) agree
with investors' or the trustee's records as to the total
unpaid principal balance and number of pool assets serviced
by the servicer.
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(ii) Amounts due to investors are allocated and remitted in
accordance with timeframes, distribution priority and other [X]
terms set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(iii) Disbursements made to an investor are posted within two
business days to the servicer's investor records, or such [X]
other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(3)(iv) Amounts remitted to investors per the investor reports
agree with cancelled checks, or other form of payment, or [X]
custodial bank statements.
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POOL ASSET ADMINISTRATION
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(i) Collateral or security on pool assets is maintained as
required by the transaction agreements or related asset
pool documents.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(ii) Pool assets and related documents are safeguarded as
required by the transaction agreements
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(iii) Any additions, removals or substitutions to the asset pool
are made, reviewed and approved in accordance with any
conditions or requirements in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(iv) Payments on pool assets, including any payoffs, made in
accordance with the related pool asset documents are posted
to the servicer's obligor records maintained no more than
two business days after receipt, or such other number of
days specified in the transaction agreements, and allocated
to principal, interest or other items (e.g., escrow) in
accordance with the related pool asset documents.
-----------------------------------------------------------------------------------------------------------------
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.
-----------------------------------------------------------------------------------------------------------------
V-2
-----------------------------------------------------------------------------------------------------------------
SERVICING CRITERIA APPLICABLE SERVICING
CRITERIA
-----------------------------------------------------------------------------------------------------------------
REFERENCE CRITERIA
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(x) Regarding any funds held in trust for an obligor (such as
escrow accounts): (A) such funds are analyzed, in
accordance with the obligor's pool asset documents, on at
least an annual basis, or such other period specified in
the transaction agreements; (B) interest on such funds is
paid, or credited, to obligors in accordance with
applicable pool asset documents and state laws; and (C)
such funds are returned to the obligor within 30 calendar
days of full repayment of the related pool asset, or such
other number of days specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xi) Payments made on behalf of an obligor (such as tax or
insurance payments) are made on or before the related
penalty or expiration dates, as indicated on the
appropriate bills or notices for such payments, provided
that such support has been received by the servicer at
least 30 calendar days prior to these dates, or such other
number of days specified in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xii) Any late payment penalties in connection with any payment
to be made on behalf of an obligor are paid from the
servicer's funds and not charged to the obligor, unless the
late payment was due to the obligor's error or omission.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiii) Disbursements made on behalf of an obligor are posted
within two business days to the obligor's records
maintained by the servicer, or such other number of days
specified in the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xiv) Delinquencies, charge-offs and uncollectible accounts are
recognized and recorded in accordance with the transaction
agreements.
-----------------------------------------------------------------------------------------------------------------
1122(d)(4)(xv) Any external enhancement or other support, identified in
Item 1114(a)(1) through (3) or Item 1115 of Regulation AB, [X]
is maintained as set forth in the transaction agreements.
-----------------------------------------------------------------------------------------------------------------
V-3
