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EXECUTION COPY
RESIDENTIAL ASSET SECURITIES CORPORATION,
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
JPMORGAN CHASE BANK, N.A.
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of November 1, 2004
Home Equity Mortgage Asset-Backed Pass-Through Certificates
Series 2004-KS11
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
<S> <C>
ARTICLE I
DEFINITIONS..................................................................4
Section 1.01.
Definitions.......................................................4
Section 1.02. Determination of
LIBOR...........................................56
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.............57
Section 2.01. Conveyance of Mortgage
Loans.....................................57
Section 2.02. Acceptance by
Trustee............................................60
Section 2.03. Representations, Warranties and Covenants of the
Master
Servicer and the
Depositor.......................................61
Section 2.04. Representations and Warranties of
Sellers........................63
Section 2.05. Execution and Authentication of Certificates;
Conveyance of
Uncertificated REMIC Regular
Interests...........................65
Section 2.06. Purposes and Powers of the
Trust.................................66
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS..............................67
Section 3.01. Master Servicer to Act as
Servicer...............................67
Section 3.02. Subservicing Agreements Between Master Servicer
and
Subservicers; Enforcement of Subservicers'
Obligations...........69
Section 3.03. Successor
Subservicers...........................................70
Section 3.04. Liability of the Master
Servicer.................................70
Section 3.05. No Contractual Relationship Between Subservicer
and Trustee
or
Certificateholders............................................71
Section 3.06. Assumption or Termination of Subservicing
Agreements by
Trustee..........................................................71
Section 3.07. Collection of Certain Mortgage Loan Payments;
Deposits to
Custodial
Account................................................71
Section 3.08. Subservicing Accounts; Servicing
Accounts........................73
Section 3.09. Access to Certain Documentation and Information
Regarding
the Mortgage
Loans...............................................75
Section 3.10. Permitted Withdrawals from the Custodial
Account.................75
Section 3.11. Maintenance of Primary Insurance
Coverage........................77
Section 3.12. Maintenance of Fire Insurance and Omissions and
Fidelity
Coverage.........................................................77
Section 3.13. Enforcement of Due-on-Sale Clauses; Assumption
and
Modification Agreements; Certain
Assignments.....................78
Section 3.14. Realization Upon Defaulted Mortgage
Loans........................80
Section 3.15. Trustee to Cooperate; Release of Mortgage
Files..................82
Section 3.16. Servicing and Other Compensation; Compensating
Interest..........83
<PAGE>
Section 3.17. Reports to the Trustee and the
Depositor.........................84
Section 3.18. Annual Statement as to
Compliance................................84
Section 3.19. Annual Independent Public Accountants' Servicing
Report..........85
Section 3.20. Right of the Depositor in Respect of the Master
Servicer.........85
Section 3.21.
[Reserved].......................................................86
Section 3.22. Advance
Facility.................................................86
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS..............................................90
Section 4.01. Certificate
Account..............................................90
Section 4.02.
Distributions....................................................90
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..................................98
Section 4.05. Allocation of Realized
Losses....................................99
Section 4.06. Reports of Foreclosures and Abandonment of
Mortgaged Property...100
Section 4.07. Optional Purchase of Defaulted Mortgage
Loans...................101
Section 4.08.
[Reserved]......................................................101
Section 4.09.
[Reserved]......................................................101
Section 4.10. Hedge
Agreements................................................101
ARTICLE V THE
CERTIFICATES...........................................................102
Section 5.01. The
Certificates................................................102
Section 5.02. Registration of Transfer and Exchange of
Certificates...........103
Section 5.03. Mutilated, Destroyed, Lost or Stolen
Certificates...............108
Section 5.04. Persons Deemed
Owners...........................................108
Section 5.05. Appointment of Paying
Agent.....................................108
ARTICLE VI THE DEPOSITOR AND THE MASTER
SERVICER......................................110
Section 6.01. Respective Liabilities of the Depositor and the
Master
Servicer........................................................110
Section 6.02. Merger or Consolidation of the Depositor or the
Master
Servicer; Assignment of Rights and Delegation of Duties by
Master
Servicer.................................................110
Section 6.03. Limitation on Liability of the Depositor, the
Master
Servicer and
Others.............................................111
Section 6.04. Depositor and Master Servicer Not to
Resign.....................111
ARTICLE VII
DEFAULT....................................................................112
<PAGE>
Section 7.01. Events of
Default...............................................112
Section 7.02. Trustee or Depositor to Act; Appointment of
Successor...........113
Section 7.03. Notification to
Certificateholders..............................114
Section 7.04. Waiver of Events of
Default.....................................115
ARTICLE VIII CONCERNING THE
TRUSTEE.....................................................116
Section 8.01. Duties of
Trustee...............................................116
Section 8.02. Certain Matters Affecting the
Trustee...........................117
Section 8.03. Trustee Not Liable for Certificates or Mortgage
Loans...........118
Section 8.04. Trustee May Own
Certificates....................................119
Section 8.05. Master Servicer to Pay Trustee's Fees and
Expenses;
Indemnification.................................................119
Section 8.06. Eligibility Requirements for
Trustee............................120
Section 8.07. Resignation and Removal of the
Trustee..........................120
Section 8.08. Successor
Trustee...............................................121
Section 8.09. Merger or Consolidation of
Trustee..............................121
Section 8.10. Appointment of Co-Trustee or Separate
Trustee...................121
Section 8.11. Appointment of
Custodians.......................................122
Section 8.12. Appointment of Office or
Agency.................................122
Section 8.13. DTC Letter of
Representations...................................123
ARTICLE IX
TERMINATION................................................................124
Section 9.01. Termination Upon Purchase or Liquidation of All
Mortgage
Loans...........................................................124
Section 9.02. Additional Termination
Requirements.............................127
ARTICLE X REMIC
PROVISIONS...........................................................129
Section 10.01. REMIC
Administration............................................129
Section 10.02. Master Servicer, REMIC Administrator and
Trustee
Indemnification.................................................132
ARTICLE XI MISCELLANEOUS
PROVISIONS...................................................133
Section 11.01.
Amendment.......................................................133
Section 11.02. Recordation of Agreement;
Counterparts..........................135
Section 11.03. Limitation on Rights of
Certificateholders......................135
Section 11.04. Governing
Law...................................................136
Section 11.05.
Notices.........................................................136
Section 11.06. Notices to Rating
Agencies......................................137
Section 11.07. Severability of
Provisions......................................137
Section 11.08. Supplemental Provisions for
Resecuritization....................137
<PAGE>
Section 11.09. Third-Party
Beneficiary.........................................138
Exhibit A Form of Class A
Certificate................................................A-1
Exhibit B Form of Class M
Certificate................................................B-1
Exhibit C Form of Class SB
Certificate...............................................C-1
Exhibit D Form of Class R
Certificate................................................D-1
Exhibit E Form of Custodial
Agreement................................................E-1
Exhibit F-1 Group I Loan
Schedule....................................................F-1-1
Exhibit F-2 Group II Loan
Schedule...................................................F-2-1
Exhibit G Forms of Request for
Release...............................................G-1
Exhibit H-1 Form of Transfer Affidavit and
Agreement.................................H-1-1
Exhibit H-2 Form of Transferor
Certificate...........................................H-2-1
Exhibit I Form of Investor Representation
Letter.....................................I-1
Exhibit J Form of Transferor Representation
Letter...................................J-1
Exhibit K Text of Amendment to Pooling and Servicing Agreement
Pursuant to
Section 11.01(e) for a Limited
Guaranty....................................K-1
Exhibit L Form of Limited
Guaranty...................................................L-1
Exhibit M Form of Lender Certification for Assignment of
Mortgage Loan...............M-1
Exhibit N Form of Rule 144A Investment
Representation................................N-1
Exhibit O
[Reserved].................................................................O-1
Exhibit P Form of ERISA
Letter.......................................................P-1
Exhibit Q
Reserved...................................................................Q-1
Exhibit R Assignment
Agreement......................................................R-1
Exhibit S
[Reserved].................................................................S-1
Exhibit T-1 Form of 10-K
Certification...............................................T-1-1
Exhibit T-2 Form of Back-Up
Certification............................................T-2-1
Exhibit U Information to be Provided by the Master Servicer to
the Rating
Agencies Relating to Reportable Modified Mortgage
Loans....................U-1
</TABLE>
<PAGE>
This Pooling and Servicing Agreement, effective as of November
1, 2004,
among RESIDENTIAL ASSET SECURITIES CORPORATION, as the 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 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 Hedge Agreements) subject
to this
Agreement as a real estate mortgage investment conduit (a
"REMIC") for federal
income tax purposes, and such segregated pool of assets will be
designated as
"REMIC I." The Class R-I Certificates will represent the sole
Class of "residual
interests" in REMIC I for purposes of the REMIC Provisions (as
defined herein)
under federal income tax law. The following table irrevocably
sets forth the
designation, remittance rate (the "Uncertificated REMIC I
Pass-Through Rate")
and initial Uncertificated Principal Balance for each of the
"regular interests"
in REMIC I (the "REMIC I Regular Interests"). The "latest
possible maturity
date" (determined solely for purposes of satisfying Treasury
regulation Section
1.860G-1(a)(4)(iii)) for each REMIC I Regular Interest shall be
the Maturity
Date. None of the REMIC I Regular Interests will be
certificated.
<TABLE>
<CAPTION>
UNCERTIFICATED
REMIC I INITIAL UNCERTIFICATED
------------------- REMIC I LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY
DATE
<S> <C> <C> <C> <C> <C>
Y-1 Variable(1) $ 175,000.03 December 25, 2034
Y-2 Variable(1) $ 174,999.98 December 25, 2034
Z-1 Variable(1) $349,825,059.02 December 25, 2034
Z-2 Variable(1) $349,825,041.68 December 25, 2034
</TABLE>
---------------
(1) Calculated as provided in the definition of Uncertificated
REMIC I
Pass-Through Rate.
1
<PAGE>
REMIC II
As provided herein, the REMIC Administrator will make an
election to
treat the segregated pool of assets consisting of the REMIC I
Regular Interests
subject to this Agreement as a REMIC for federal income tax
purposes, and such
segregated pool of assets will be designated as "REMIC II." The
Class R-II
Certificates will represent the sole Class of "residual
interests" in REMIC II
for purposes of the REMIC Provisions (as defined herein) under
federal income
tax law. The following table irrevocably sets forth the
designation, remittance
rate (the "Uncertificated REMIC II Pass-Through Rate") and
initial
Uncertificated Principal Balance for each of the "regular
interests" in REMIC II
(the "REMIC II Regular Interests"). The "latest possible
maturity date"
(determined solely for purposes of satisfying Treasury
regulation Section
1.860G-1(a)(4)(iii)) for each REMIC II Regular Interest shall be
the Maturity
Date. None of the REMIC II Regular Interests will be
certificated.
<TABLE>
<CAPTION>
UNCERTIFICATED
REMIC II INITIAL UNCERTIFICATED
------------------- REMIC II LATEST POSSIBLE
DESIGNATION PASS-THROUGH RATE PRINCIPAL BALANCE MATURITY
DATE
<S> <C> <C> <C> <C> <C>
LT1 Variable(1) $349,761,632.27 December 25, 2034
LT2 Variable(1) $ 6,573.26 December 25, 2034
LT3 0.00% $ 28,426.75 December 25, 2034
LT4 Variable(1) $ 28,426.75 December 25, 2034
LT5 Variable(1) $349,761,722.93 December 25, 2034
LT6 Variable(1) $ 6,681.26 December 25, 2034
LT7 0.00% $ 28,318.75 December 25, 2034
LT8 Variable(1) $ 28,318.75 December 25, 2034
LT-Y1(2) Variable(1) $ 175,000.03 December 25, 2034
LT-Y2(2) Variable(1) $ 174,999.98 December 25, 2034
</TABLE>
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(1) Calculated as provided in the definition of Uncertificated
REMIC II
Pass-Through Rate. (2) LT-Y1 will have the same interest rate,
principal
balance, Principal Reduction Amount and allocation of Realized
Losses as the
REMIC I Regular Interest Y-1. LT-Y2 will have the same interest
rate, principal
balance, Principal Reduction Amount and allocation of Realized
Losses as the
REMIC I Regular Interest Y-2.
REMIC III
As provided herein, the REMIC Administrator will elect to treat
the
segregated pool of assets consisting of the REMIC II Regular
Interests as a
REMIC for federal income tax purposes, and such segregated pool
of assets will
be designated as REMIC III. The Class R-III Certificates will
represent the sole
Class of "residual interests" in REMIC III for purposes of the
REMIC Provisions
under federal income tax law. The following table irrevocably
sets forth the
designation, Pass-Through Rate, aggregate Initial Certificate
Principal Balance,
certain features, month of Final Scheduled Distribution Date and
initial ratings
for each Class of Certificates comprising the interests
representing "regular
interests" in REMIC III. The "latest possible maturity date"
(determined solely
for purposes of satisfying Treasury Regulation Section
1.860G-1(a)(4)(iii)) for
each Class of REMIC III Regular Certificates shall be the
Maturity Date.
2
<PAGE>
<TABLE>
<CAPTION>
Month of
Final
Aggregate Initial Scheduled
Pass-Through Certificate Distribution
Designation Type Rate Principal Balance Features Date Initial
Ratings
S&P Moody's Fitch
<S> <C> <C> <C> <C> <C>
Class A-I-1 Regular(1) Adjustable(2)(3) $140,690,000.00
Senior/Adjustable August 2025 AAA Aaa AAA
Rate
Class A-I-2 Regular(1) Adjustable(2)(3) $133,320,000.00
Senior/Adjustable January 2034 AAA Aaa AAA
Rate
Class A-I-3 Regular(1) Adjustable(2)(3) $ 14,740,000.00
Senior/Adjustable December 2034 AAA Aaa AAA
Rate
Class A-II-1 Regular Adjustable(2) $259,875,000.00
Senior/Adjustable December 2034 AAA Aaa AAA
Rate
Class A-II-2 Regular(1) Adjustable(2)(3) $ 28,875,000.00
Senior/Adjustable December 2034 AAA Aaa AAA
Rate
Class M-1 Regular(1) Adjustable(2)(3) $ 44,100,000.00
Mezzanine/Adjustable December 2034 AA Aa2 AA
Rate
Class M-2 Regular(1) Adjustable(2)(3) $ 36,750,000.00
Mezzanine/Adjustable December 2034 A+ A2 A
Rate
Class M-3 Regular(1) Adjustable(2)(3) $ 7,000,000.00
Mezzanine/Adjustable December 2034 A A3 A-
Rate
Class M-4 Regular(1) Adjustable(2)(3) $ 6,300,000.00
Mezzanine/Adjustable December 2034 A- Baa1 BBB+
Rate
Class M-5 Regular(1) Adjustable(2)(3) $ 7,000,000.00
Mezzanine/Adjustable December 2034 BBB+ Baa2 BBB
Rate
Class M-6 Regular(1) Adjustable(2)(3) $ 7,000,000.00
Mezzanine/Adjustable December 2034 BBB Baa3 BBB-
Rate
Class B Regular(1) Adjustable(2)(3) $ 7,000,000.00
Subordinate/Adjustable December 2034 BBB- Ba1 BB+
Rate
Class SB Regular (4) $ 7,350,101.71 Subordinate December 2034
N/R N/R N/R
(4)
</TABLE>
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(1) The Class A-I, Class A-II-2, Class M and Class B
Certificates will represent
ownership of REMIC III Regular Interests together with certain
rights to
payments to be made from amounts received under the related
Hedge Agreement
which will be deemed made for federal income tax purposes
outside of REMIC
III by the holder of the Class SB Certificates as the owner of
the Hedge
Agreement.
(2) The REMIC III Regular Interests ownership of which is
represented by the
Class A-I, Class A-II, Class M and Class B Certificates, will
accrue
interest at a per annum rate equal to LIBOR plus the applicable
Margin, each
subject to a payment cap as described in the definition of
"Pass-Through
Rate" and the provisions for the payment of Basis Risk
Shortfalls herein,
which payments will not be part of the entitlement of the REMIC
III Regular
Interests related to such Certificates.
(3) The Class A-I, Class A-II-2, Class M and Class B
Certificates will also
entitle their holders to certain payments from the Holder of the
Class SB
Certificates from amounts to which the related REMIC III Regular
Interest is
entitled and from amounts received under the Hedge Agreement,
which will not
be a part of their ownership of the REMIC III Regular
Interests.
(4) The Class SB Certificates will accrue interest as described
in the
definition of Accrued Certificate Interest. The Class SB
Certificates will
not accrue interest on their Certificate Principal Balance. The
Class SB
Certificates will be comprised of two REMIC III regular
interests, a
principal only regular interest designated SB-PO and an interest
only
regular interest designated SB-IO, which will be entitled to
distributions
as set forth herein. The rights of the Holder of the Class SB
Certificates
to payments from the Hedge Agreements shall be outside and apart
from its
rights under the REMIC III Regular Interests SB-IO and
SB-PO.
In consideration of the mutual agreements herein contained,
the
Depositor, the Master Servicer and the Trustee agree as
follows:
ARTICLE I......
DEFINITIONS
Section 1.01...Definitions.
Whenever used in this Agreement, the following words and
phrases, unless
the context otherwise requires, shall have the meanings
specified in this
Article.
3
<PAGE>
Accrued Certificate Interest: With respect to each Distribution
Date and
each Class of Class A Certificates, Class M Certificates and
Class B
Certificates, interest accrued during the related Interest
Accrual Period on the
Certificate Principal Balance thereof immediately prior to such
Distribution
Date at the related Pass-Through Rate for that Distribution
Date.
The amount of Accrued Certificate Interest on each Class of
Certificates
shall be reduced by the amount of Prepayment Interest Shortfalls
on the related
Mortgage Loans during the prior calendar month to the extent not
covered by
Compensating Interest pursuant to Section 3.16, and by Relief
Act Shortfalls on
the related Mortgage Loans during the related Due Period. The
portion of any
Prepayment Interest Shortfalls or Relief Act Shortfalls
allocated to the Class A
Certificates will be based upon the related Senior Percentage of
all such
reductions with respect to the related Mortgage Loans, such
reductions to be
allocated among the related Class A Certificates, pro rata, on
the basis of
Accrued Certificate Interest payable on such Distribution Date
absent such
reductions, with the remainder of such reductions allocated
among the Holders of
all Classes of Class M Certificates and Class B Certificates,
pro rata, on the
basis of Accrued Certificate Interest payable on such
Distribution Date absent
such reductions.
Accrued Certificate Interest on each Class of Class A-I
Certificates,
the Class A-II-2 Certificates, each Class of Class M
Certificates and the Class
B Certificates for any Distribution Date shall also be reduced
by any interest
shortfalls resulting from the failure of the Hedge Agreements
Provider to make
the related required Hedge Payment for such Distribution Date,
with all such
reductions on the Class A-I Certificates allocated to the Class
A-I Certificates
on a pro rata basis, based on the portion of the Class A-I Hedge
Payment each
such Class was entitled to, but did not receive, on such
Distribution Date, all
such reductions on the Class A-II-2 Certificates based on the
portion of the
Class A-II-2 Hedge Payment the Class A-II-2 Certificates were
entitled to, but
did not receive, on such Distribution Date and all such
reductions on the Class
M Certificates and Class B Certificates allocated to the Class M
Certificates
and Class B Certificates on a pro rata basis, based on the
portion of the
Subordinate Hedge Payment each such Class was entitled to, but
did not receive,
on such Distribution Date.
Accrued Certificate Interest for any Distribution Date shall
further be
reduced by the interest portion of Realized Losses allocated to
any Class of
Certificates pursuant to Section 4.05.
Accrued Certificate Interest shall accrue on the basis of a
360-day year
and the actual number of days in the related Interest Accrual
Period.
With respect to each Distribution Date and the Class SB
Certificates,
interest accrued during the preceding Interest Accrual Period at
the
Pass-Through Rate on the notional amount as specified in the
definition of
Pass-Through Rate, immediately prior to such Distribution Date,
reduced by any
interest shortfalls with respect to the Mortgage Loans,
including Prepayment
Interest Shortfalls to the extent not covered by Compensating
Interest pursuant
to Section 3.16 or by Excess Cash Flow pursuant to Section
4.02(c)(v) and (vi).
Accrued Certificate Interest on the Class SB Certificates shall
accrue on the
basis of a 360-day year and the actual number of days in the
related Interest
Accrual Period.
Adjusted Mortgage Rate: With respect to any Mortgage Loan and
any date
of determination, the Mortgage Rate borne by the related
Mortgage Note, less the
rate at which the related Subservicing Fee accrues.
Adjustment Date: With respect to each adjustable-rate Mortgage
Loan,
each date set forth in the related Mortgage Note on which an
adjustment to the
interest rate on such Mortgage Loan becomes effective.
4
<PAGE>
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 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, Insurance Proceeds, REO
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 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, the
lesser of
(i) the appraised value of such Mortgaged Property based upon
the appraisal made
at the time of the origination of the related Mortgage Loan, and
(ii) the sales
price of the Mortgaged Property at such time of origination,
except in the case
of a Mortgaged Property securing a refinanced or modified
Mortgage Loan as to
which it is either the appraised value based upon the appraisal
made at the time
of origination of the loan which was refinanced or modified or
the appraised
value determined in an appraisal at the time of refinancing or
modification, as
the case may be.
Assignment: An assignment of the Mortgage, notice of transfer
or
equivalent instrument, in recordable form, sufficient under the
laws of the
jurisdiction wherein the related Mortgaged Property is located
to reflect of
record the sale of the Mortgage Loan to the Trustee for the
benefit of
Certificateholders, which assignment, notice of transfer or
equivalent
instrument may be in the form of one or more blanket assignments
covering
Mortgages secured by Mortgaged Properties located in the same
county, if
permitted by law and accompanied by an Opinion of Counsel to
that effect.
Assignment Agreement: The Assignment and Assumption Agreement,
dated the
Closing Date, between Residential Funding and the Depositor
relating to the
transfer and assignment of the Mortgage Loans, attached hereto
as Exhibit R.
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
5
<PAGE>
related Certificate Account Deposit Date pursuant to the second
paragraph of
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,
4.08 or 9.01 in
respect of the Mortgage, reduced by (b) the sum as of the close
of business on
the immediately preceding Determination Date of (x) the Amount
Held for Future
Distribution with respect to the Mortgage Loans, and (y) amounts
permitted to be
withdrawn by the Master Servicer from the Custodial Account in
respect of the
Mortgage Loans pursuant to clauses (ii)-(x), inclusive, of
Section 3.10(a).
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.
Book-Entry Certificate: Any Certificate registered in the name
of the
Depository or its nominee.
Business Day: Any day other than (i) a Saturday or a Sunday or
(ii) a
day on which banking institutions in the State of California,
the State of
Minnesota, the State of Texas, the State of New York or the
State of Illinois
(and such other state or states in which the Custodial Account
or the
Certificate Account are at the time located) are required or
authorized by law
or executive order to be closed.
Capitalization Reimbursement Amount: With respect to any
Distribution
Date, the amount of Advances or Servicing Advances that were
added to the Stated
Principal Balance of the Mortgage Loans during the prior
calendar month and
reimbursed to the Master Servicer or Subservicer on or prior to
such
Distribution Date pursuant to Section 3.10(a)(vii).
Cash Liquidation: With respect to any defaulted Mortgage Loan
other than
a Mortgage Loan as to which an REO Acquisition occurred, a
determination by the
Master Servicer that it has received all Insurance Proceeds,
Liquidation
Proceeds and other payments or cash recoveries which the Master
Servicer
reasonably and in good faith expects to be finally recoverable
with respect to
such Mortgage Loan.
Certificate: Any Class A Certificate, Class M Certificate, Class
B
Certificate, Class SB Certificate or Class R Certificate.
Certificate Account: The account or accounts created and
maintained
pursuant to Section 4.01, which shall be entitled "JPMorgan
Chase Bank, N.A., as
trustee, in trust for the registered holders of Residential
Asset Securities
Corporation, Home Equity Mortgage Asset-Backed Pass-Through
Certificates, Series
2004-KS11" and which account shall be held for the benefit of
the
Certificateholders and which must be an Eligible Account.
Certificate Account Deposit Date: With respect to any
Distribution Date,
the Business Day prior thereto.
Certificateholder or Holder: The Person in whose name a
Certificate is
registered in the Certificate Register, except that neither a
Disqualified
Organization nor a Non-United States Person shall be a holder of
a Class R
Certificate for any purpose hereof. Solely for the purpose of
giving any consent
or direction pursuant to this Agreement, any Certificate, other
than a Class R
Certificate, registered in the name of the Depositor, the Master
Servicer or any
Subservicer or any Affiliate thereof shall be deemed not to be
outstanding and
the Percentage Interest or Voting Rights evidenced thereby shall
not be taken
into account in determining whether the requisite amount of
Percentage Interests
or Voting Rights necessary to effect any such consent or
direction has been
obtained. All references herein to "Holders" or
"Certificateholders" shall
6
<PAGE>
reflect the rights of Certificate Owners as they may indirectly
exercise such
rights through the Depository and participating members thereof,
except as
otherwise specified herein; provided, however, that the Trustee
shall be
required to recognize as a "Holder" or "Certificateholder" only
the Person in
whose name a Certificate is registered in the Certificate
Register. Unless
otherwise indicated in this Agreement, the Custodial Agreement
or the Assignment
Agreement, whenever reference is made to the actions taken by
the Trustee on
behalf of the Certificateholders.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person
who is the beneficial owner of such Certificate, as reflected on
the books of an
indirect participating brokerage firm for which a Depository
Participant acts as
agent, if any, and otherwise on the books of a Depository
Participant, if any,
and otherwise on the books of the Depository.
Certificate Principal Balance: With respect to any Class A
Certificate,
Class M Certificate or Class B Certificate, on any date of
determination, an
amount equal to (i) the Initial Certificate Principal Balance of
such
Certificate as specified on the face thereof, minus (ii) the sum
of (x) the
aggregate of all amounts previously distributed with respect to
such Certificate
(or any predecessor Certificate) and applied to reduce the
Certificate Principal
Balance thereof pursuant to Section 4.02(c) and (y) the
aggregate of all
reductions in Certificate Principal Balance 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. With
respect to any Class SB Certificate, on any date of
determination, an amount
equal to the Percentage Interest evidenced by such Certificate
multiplied by an
amount equal to (i) the excess, if any, of (A) the then
aggregate Stated
Principal Balance of the Mortgage Loans over (B) the then
aggregate Certificate
Principal Balance of the Class A Certificates, Class M
Certificates and Class B
Certificates then outstanding, which represents the sum of (i)
the Initial
Principal Balance of the REMIC III Regular Interest SB-PO, as
reduced by
Realized Losses allocated thereto and payments deemed made
thereon, and (ii)
accrued and unpaid interest on the REMIC III Regular Interest
SB-IO, as reduced
by Realized Losses allocated thereto. The Class R Certificates
will not have a
Certificate Principal Balance.
Certificate Register and Certificate Registrar: The register
maintained
and the registrar appointed pursuant to Section 5.02.
Class: Collectively, all of the Certificates or uncertificated
interests
bearing the same designation.
Class A-I-1 Certificate: Any one of the Class A-I-1
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit A, senior to
the Class M
Certificates, Class B Certificates, SB Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized
Losses in respect
of Group I Loans as set forth in Section 4.05, and evidencing an
interest
designated as a "regular interest" in REMIC III for purposes of
the REMIC
Provisions.
Class A-I-1 Margin: Initially, 0.140% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 0.280% per annum.
Class A-I-2 Certificate: Any one of the Class A-I-2
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit A, senior to
the Class M
Certificates, Class B Certificates, SB Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized
Losses in respect
of Group I Loans as set forth in Section 4.05, and evidencing an
interest
designated as a "regular interest" in REMIC III for purposes of
the REMIC
Provisions.
7
<PAGE>
Class A-I-2 Margin: Initially, 0.270% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 0.540% per annum.
Class A-I-3 Certificate: Any one of the Class A-I-3
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit A, senior to
the Class M
Certificates, Class B Certificates, SB Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized
Losses in respect
of Group I Loans as set forth in Section 4.05, and evidencing an
interest
designated as a "regular interest" in REMIC III for purposes of
the REMIC
Provisions.
Class A-I-3 Margin: Initially, 0.470% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 0.940% per annum.
Class A-I Certificates: Collectively, the Class A-I-1
Certificates,
Class A-I-2 Certificates and Class A-I-3 Certificates.
Class A-I Hedge Agreement: The confirmation, dated as of the
Closing
Date, between the Trustee, on behalf of the Trust Fund, and the
Hedge Agreements
Provider, relating to the Class A-I Certificates or any
replacement, substitute,
collateral or other arrangement in lieu thereof.
Class A-I Hedge Payment: For any Distribution Date, the payment,
if any,
due under the Class A-I Hedge Agreement in respect of such
Distribution Date.
Class A-I Interest Remittance Amount: With respect to any
Distribution
Date, the portion of the Available Distribution Amount for that
Distribution
Date attributable to interest received or advanced with respect
to the Group I
Loans plus, with respect to payments on the Class A-I
Certificates pursuant to
Section 4.02(c)(iii)(A) only, the amount necessary to make such
payments paid
from amounts received on the Class A-I Hedge Agreement for such
Distribution
Date.
Class A-II-1 Certificate: Any one of the Class A-II-1
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit A, senior to
the Class M
Certificates, Class B Certificates, SB Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized
Losses in respect
of Group II Loans as set forth in Section 4.05, and evidencing
an interest
designated as a "regular interest" in REMIC III for purposes of
the REMIC
Provisions.
Class A-II-1 Margin: Initially, 0.310% per annum, and on any
Distribution Date on or after the first Distribution Date after
the second
possible Optional Termination Date, 0.620% per annum.
Class A-II-2 Certificate: Any one of the Class A-II-2
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit A, senior to
the Class M
Certificates, Class B Certificates, SB Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized
Losses in respect
of Group II Loans as set forth in Section 4.05, and evidencing
(i) an interest
designated as a "regular interest" in REMIC III for purposes of
the REMIC
Provisions and (ii) the right to receive payments under the
Class A-II-2 Hedge
Agreement.
8
<PAGE>
Class A-II-2 Hedge Agreement: The confirmation, dated as of the
Closing
Date, between the Trustee, on behalf of the Trust Fund, and the
Hedge Agreements
Provider, relating to the Class A-II-2 Certificates or any
replacement,
substitute, collateral or other arrangement in lieu thereof.
Class A-II-2 Hedge Payment: For any Distribution Date, the
payment, if
any, due under the Class A-II-2 Hedge Agreement in respect of
such Distribution
Date.
Class A-II-2 Margin: Initially, 0.380% per annum, and on any
Distribution Date on or after the first Distribution Date after
the second
possible Optional Termination Date, 0.760% per annum.
Class A-II-2 Net WAC Cap Rate: With respect to any Distribution
Date,
the sum of (a) the Group II Net WAC Cap Rate for such
Distribution Date and (b)
a per annum rate equal to (i) the amount, if any, required to be
paid under the
Class A-II-2 Hedge Agreement with respect to such Distribution
Date divided by
(ii) the Certificate Principal Balance of the Class A-II-2
Certificates
immediately prior to such Distribution Date, multiplied by a
fraction, the
numerator of which is 30, and the denominator of which is the
actual number of
days in the related Interest Accrual Period.
Class A-II Certificates: Collectively, the Class A-II-1
Certificates and
Class A-II-2 Certificates.
Class A-II Interest Remittance Amount: With respect to any
Distribution
Date, the portion of the Available Distribution Amount for that
Distribution
Date attributable to interest received or advanced with respect
to the Group II
Loans plus, with respect to payments on the Class A-II-2
Certificates pursuant
to Section 4.02(c)(iii)(B) only, the amount necessary to make
such payments paid
from amounts received on the Class A-II-2 Hedge Agreement for
such Distribution
Date.
Class A Certificates: Collectively, the Class A-I Certificates
and Class
A-II Certificates.
Class A Interest Distribution Priority: With respect to each
Class of
Class A Certificates and any Distribution Date, the amount
available for payment
of Accrued Certificate Interest thereon for that Distribution
Date plus Accrued
Certificate Interest thereon remaining unpaid from any prior
Distribution Date,
in the amounts and priority as follows:
o first, concurrently, to the Class A-I Certificates, pro
rata,
from the Class A-I Interest Remittance Amount and to the
Class
A-II Certificates, pro rata, from the Class A-II Interest
Remittance Amount;
o second, to the Class A-I Certificates, pro rata, from the
remaining Class A-II Interest Remittance Amount or to the
Class
A-II Certificates, pro rata, from the remaining Class A-I
Interest Remittance Amount, as needed after taking into
account
any distributions in respect of interest on the Class A
Certificates made in first above;
o third, concurrently, from the Principal Remittance Amount
related
to Loan Group I to the Class A-I Certificates, pro rata, and
from
the Principal Remittance Amount related to Loan Group II to
the
Class A-II Certificates, pro rata, after taking into account
any
distributions in respect of interest on the Class A
Certificates
made in first and second above; and
o fourth, from the remaining Principal Remittance Amount related
to
Loan Group II to the Class A-I Certificates, pro rata, or
from
the remaining Principal Remittance Amount related to Loan Group
I
to the Class A-II Certificates, pro rata, as needed after
taking
into account any distributions in respect of interest on the
Class A Certificates made in first, second and third above.
9
<PAGE>
Class A Principal Distribution Amount: With respect to any
Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
Principal
Distribution Amount for that Distribution Date or (b) on or
after the Stepdown
Date if a Trigger Event is not in effect for that Distribution
Date, the lesser
of:
(i) the Principal Distribution Amount for that Distribution
Date; and
(ii) the excess, if any, of (A) the aggregate Certificate
Principal Balance of
the Class A Certificates immediately prior to that Distribution
Date over
(B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage and (2) the aggregate Stated Principal Balance of the
Mortgage
Loans after giving effect to distributions to be made on that
Distribution
Date and (y) the excess, if any, of the aggregate Stated
Principal Balance
of the Mortgage Loans after giving effect to distributions to be
made on
that Distribution Date, over the Overcollateralization
Floor.
Class B Certificate: Any one of the Class B Certificates
executed by the
Trustee and authenticated by the Certificate Registrar
substantially in the form
annexed hereto as Exhibit B, senior to 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 III for purposes of the REMIC
Provisions and (ii)
the right to receive payments under the Subordinate Hedge
Agreement.
Class B Margin: Initially, 3.500% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 5.250% per annum.
Class B Principal Distribution Amount: With respect to any
Distribution
Date (a) prior to the Stepdown Date or on or after the Stepdown
Date if a
Trigger Event is in effect for that Distribution Date, the
remaining Principal
Distribution Amount for that Distribution Date after
distribution of the Class A
Principal Distribution Amount, the Class M-1 Principal
Distribution Amount, the
Class M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution
Amount, the Class M-4 Principal Distribution Amount, the Class
M-5 Principal
Distribution Amount and the Class M-6 Principal Distribution
Amount or (b) on or
after the Stepdown Date if a Trigger Event is not in effect for
that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class
M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution
Amount, the Class M-3 Principal Distribution Amount, the Class
M-4
Principal Distribution Amount, the Class M-5 Principal
Distribution Amount
and the Class M-6 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates,
Class M-5 Certificates and Class M-6 Certificates (after taking
into
account the payment of the Class A Principal Distribution
Amount, the Class
M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution
Amount, the Class M-3 Principal Distribution Amount, the Class
M-4
10
<PAGE>
Principal Distribution Amount, the Class M-5 Principal
Distribution Amount
and the Class M-6 Principal Distribution Amount for that
Distribution Date)
and (2) the Certificate Principal Balance of the Class B
Certificates
immediately prior to that Distribution Date over (B) the lesser
of (x) the
product of (1) the applicable Subordination Percentage and (2)
the
aggregate Stated Principal Balance of the Mortgage Loans after
giving
effect to distributions to be made on that Distribution Date and
(y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage
Loans after giving effect to distributions to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class 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
Certificates, Class
M-3 Certificates, Class M-4 Certificates, Class M-5
Certificates, Class M-6
Certificates, Class B Certificates, Class SB Certificates and
Class R
Certificates with respect to distributions and the allocation of
Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii)
the right to receive payments under the Subordinate Hedge
Agreement.
Class M-1 Margin: Initially, 0.560% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 0.840% per annum.
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after
the Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A Principal Distribution Amount or (b) on or after the
Stepdown Date
if a Trigger Event is not in effect for that Distribution Date,
the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date
after distribution of the Class A Principal Distribution Amount;
and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal Balance of the Class A Certificates (after taking into
account
the payment of the Class A Principal Distribution Amount for
that
Distribution Date) and (2) the Certificate Principal Balance of
the Class
M-1 Certificates immediately prior to that Distribution Date
over (B) the
lesser of (x) the product of (1) the applicable Subordination
Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after
giving effect to distributions to be made on that Distribution
Date and (y)
the excess, if any, of the aggregate Stated Principal Balance of
the
Mortgage Loans after giving effect to distributions to be made
on that
Distribution Date, over the Overcollateralization Floor.
Class M-2 Certificate: Any one of the Class M-2 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-3
Certificates, Class
M-4 Certificates, Class M-5 Certificates, Class M-6
Certificates, Class B
Certificates, Class SB Certificates and Class R Certificates
with respect to
distributions and the allocation of Realized Losses as set forth
in Section
4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC
III for purposes of the REMIC Provisions and (ii) the right to
receive payments
under the Subordinate Hedge Agreement.
Class M-2 Margin: Initially, 1.000% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 1.500% per annum.
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after
the Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A Principal Distribution Amount and the Class M-1
Principal
Distribution Amount or (b) on or after the Stepdown Date if a
Trigger Event is
not in effect for that Distribution Date, the lesser of:
11
<PAGE>
(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
Certificates, Class
M-5 Certificates, Class M-6 Certificates, Class B Certificates,
Class SB
Certificates and Class R Certificates with respect to
distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing (i)
an interest designated as a "regular interest" in REMIC III for
purposes of the
REMIC Provisions and (ii) the right to receive payments under
the Subordinate
Hedge Agreement.
Class M-3 Margin: Initially, 1.200% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 1.800% per annum.
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after
the Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A Principal Distribution Amount, the Class M-1
Principal Distribution
Amount and the Class M-2 Principal Distribution Amount or (b) on
or after the
Stepdown Date if a Trigger Event is not in effect for that
Distribution Date,
the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class
M-1 Principal Distribution Amount and the Class M-2 Principal
Distribution
Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates and
Class M-2 Certificates (after taking into account the payment of
the Class
A Principal Distribution Amount, the Class M-1 Principal
Distribution
Amount and the Class M-2 Principal Distribution Amount for
that
Distribution Date) and (2) the Certificate Principal Balance of
the Class
M-3 Certificates immediately prior to that Distribution Date
over (B) the
lesser of (x) the product of (1) the applicable Subordination
Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after
giving effect to distributions to be made on that Distribution
Date and (y)
the excess, if any, of the aggregate Stated Principal Balance of
the
Mortgage Loans after giving effect to distributions to be made
on that
Distribution Date, over the Overcollateralization Floor.
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<PAGE>
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
Certificates, Class
M-6 Certificates, Class B Certificates, Class SB Certificates
and Class R
Certificates with respect to distributions and the allocation of
Realized Losses
as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular interest" in REMIC III for purposes of the REMIC
Provisions and (ii)
the right to receive payments under the Subordinate Hedge
Agreement.
Class M-4 Margin: Initially, 1.650% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 2.475% per annum.
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after
the Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A Principal Distribution Amount, the Class M-1
Principal Distribution
Amount, the Class M-2 Principal Distribution Amount and the
Class M-3 Principal
Distribution Amount or (b) on or after the Stepdown Date if a
Trigger Event is
not in effect for that Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class
M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution
Amount and the Class M-3 Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates,
Class M-2 Certificates and Class M-3 Certificates (after taking
into
account the payment of the Class A Principal Distribution
Amount, the Class
M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution
Amount and the Class M-3 Principal Distribution Amount for
that
Distribution Date) and (2) the Certificate Principal Balance of
the Class
M-4 Certificates immediately prior to that Distribution Date
over (B) the
lesser of (x) the product of (1) the applicable Subordination
Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after
giving effect to distributions to be made on that Distribution
Date and (y)
the excess, if any, of the aggregate Stated Principal Balance of
the
Mortgage Loans after giving effect to distributions to be made
on that
Distribution Date, over the Overcollateralization Floor.
Class M-5 Certificate: Any one of the Class M-5 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to the Class M-6
Certificates, Class B
Certificates, Class SB Certificates and Class R Certificates
with respect to
distributions and the allocation of Realized Losses as set forth
in Section
4.05, and evidencing (i) an interest designated as a "regular
interest" in REMIC
III for purposes of the REMIC Provisions and (ii) the right to
receive payments
under the Subordinate Hedge Agreement.
Class M-5 Margin: Initially, 1.750% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 2.625% per annum.
13
<PAGE>
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after
the Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A Principal Distribution Amount, the Class M-1
Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class
M-3 Principal
Distribution Amount and the Class M-4 Principal Distribution
Amount or (b) on or
after the Stepdown Date if a Trigger Event is not in effect for
that
Distribution Date, the lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class
M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution
Amount, the Class M-3 Principal Distribution Amount and the
Class M-4
Principal Distribution Amount; and
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates,
Class M-2 Certificates, Class M-3 Certificates and Class M-4
Certificates
(after taking into account the payment of the Class A
Principal
Distribution Amount, the Class M-1 Principal Distribution
Amount, the Class
M-2 Principal Distribution Amount, the Class M-3 Principal
Distribution
Amount and the Class M-4 Principal Distribution Amount for
that
Distribution Date) and (2) the Certificate Principal Balance of
the Class
M-5 Certificates immediately prior to that Distribution Date
over (B) the
lesser of (x) the product of (1) the applicable Subordination
Percentage
and (2) the aggregate Stated Principal Balance of the Mortgage
Loans after
giving effect to distributions to be made on that Distribution
Date and (y)
the excess, if any, of the aggregate Stated Principal Balance of
the
Mortgage Loans after giving effect to distributions to be made
on that
Distribution Date, over the Overcollateralization Floor.
Class M-6 Certificate: Any one of the Class M-6 Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, senior to Class B
Certificates, Class SB
Certificates and Class R Certificates with respect to
distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing (i)
an interest designated as a "regular interest" in REMIC III for
purposes of the
REMIC Provisions and (ii) the right to receive payments under
the Subordinate
Hedge Agreement.
Class M-6 Margin: Initially, 2.900% per annum, and on any
Distribution
Date on or after the first Distribution Date after the second
possible Optional
Termination Date, 4.350% per annum.
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date (a) prior to the Stepdown Date or on or after
the Stepdown
Date if a Trigger Event is in effect for that Distribution Date,
the remaining
Principal Distribution Amount for that Distribution Date after
distribution of
the Class A Principal Distribution Amount, the Class M-1
Principal Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class
M-3 Principal
Distribution Amount, the Class M-4 Principal Distribution Amount
and the Class
M-5 Principal Distribution Amount or (b) on or after the
Stepdown Date if a
Trigger Event is not in effect for that Distribution Date, the
lesser of:
(i) the remaining Principal Distribution Amount for that
Distribution Date
after distribution of the Class A Principal Distribution Amount,
the Class
M-1 Principal Distribution Amount, the Class M-2 Principal
Distribution
Amount, the Class M-3 Principal Distribution Amount, the Class
M-4
Principal Distribution Amount and the Class M-5 Principal
Distribution
Amount; and
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<PAGE>
(ii) the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal Balance of the Class A Certificates, Class M-1
Certificates,
Class M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates and
Class M-5 Certificates (after taking into account the payment of
the Class
A Principal Distribution Amount, the Class M-1 Principal
Distribution
Amount, the Class M-2 Principal Distribution Amount, the Class
M-3
Principal Distribution Amount, the Class M-4 Principal
Distribution Amount
and the Class M-5 Principal Distribution Amount for that
Distribution Date)
and (2) the Certificate Principal Balance of the Class M-6
Certificates
immediately prior to that Distribution Date over (B) the lesser
of (x) the
product of (1) the applicable Subordination Percentage and (2)
the
aggregate Stated Principal Balance of the Mortgage Loans after
giving
effect to distributions to be made on that Distribution Date and
(y) the
excess, if any, of the aggregate Stated Principal Balance of the
Mortgage
Loans after giving effect to distributions to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M Certificates: Collectively, the Class M-1 Certificates,
Class
M-2 Certificates, Class M-3 Certificates, Class M-4
Certificates, Class M-5
Certificates and Class M-6 Certificates.
Class R Certificate: Collectively, the Class R-I Certificates,
Class
R-II Certificates and Class R-III Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit D and evidencing an interest
designated as a
"residual interest" in REMIC I for purposes of the REMIC
Provisions.
Class R-II Certificate: Any one of the Class R-II Certificates
executed
by the Trustee and authenticated by the Certificate Registrar
substantially in
the form annexed hereto as Exhibit D and evidencing an interest
designated as a
"residual interest" in REMIC II for purposes of the REMIC
Provisions.
Class R-III Certificate: Any one of the Class R-III
Certificates
executed by the Trustee and authenticated by the Certificate
Registrar
substantially in the form annexed hereto as Exhibit D and
evidencing an interest
designated as a "residual interest" in REMIC III for purposes of
the REMIC
Provisions.
Class SB Certificate: Any one of the Class SB Certificates
executed by
the Trustee and authenticated by the Certificate Registrar
substantially in the
form annexed hereto as Exhibit B, subordinate to the Class A
Certificates, Class
M Certificates and Class B Certificates with respect to
distributions and the
allocation of Realized Losses as set forth in Section 4.05, and
evidencing an
interest comprised of "regular interests" in REMIC III together
with certain
rights to payments under the Hedge Agreements for purposes of
the REMIC
Provisions.
Closing Date: November 29, 2004.
Code: The Internal Revenue Code of 1986.
Commission: The Securities and Exchange Commission.
Compensating Interest: With respect to any Distribution Date,
any amount
paid by the Master Servicer in accordance with Section
3.16(f).
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<PAGE>
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 JPMorgan Chase Bank, N.A., 4 New York
Plaza, 6th Floor,
New York, New York 10004, Attn: Institutional Trust
Services/Global Debt, RASC
2004-KS11.
Credit Repository: Equifax, Transunion and Experian, or their
successors in
interest.
Curtailment: Any Principal Prepayment made by a Mortgagor which
is not a
Principal Prepayment in Full.
Custodial Account: The custodial account or accounts created
and
maintained pursuant to Section 3.07 in the name of a depository
institution, as
custodian for the holders of the Certificates, for the holders
of certain other
interests in mortgage loans serviced or sold by the Master
Servicer and for the
Master Servicer, into which the amounts set forth in Section
3.07 shall be
deposited directly. Any such account or accounts shall be an
Eligible Account.
Custodial Agreement: An agreement that may be entered into among
the
Depositor, the Master Servicer, the Trustee and a Custodian in
substantially the
form of Exhibit E hereto.
Custodian: Wells Fargo Bank, N.A., or any successor custodian
appointed
pursuant to a Custodial Agreement.
Cut-off Date: November 1, 2004.
Cut-off Date Balance: $700,000,101.71.
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 in the
month of the
Cut-off Date), whether or not received.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction
in the scheduled Monthly Payment for such Mortgage Loan by a
court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except
such a reduction
constituting a Deficient Valuation or any reduction that results
in a permanent
forgiveness of principal.
Deficient Valuation: With respect to any Mortgage Loan, a
valuation by a
court of competent jurisdiction of the Mortgaged Property in an
amount less than
the then outstanding indebtedness under the Mortgage Loan, or
any reduction in
the amount of principal to be paid in connection with any
scheduled Monthly
Payment that constitutes a permanent forgiveness of principal,
which valuation
or reduction results from a proceeding under the Bankruptcy
Code.
Definitive Certificate: Any 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.
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<PAGE>
Depositor: As defined in the preamble hereto.
Depository: The Depository Trust Company, or any successor
Depository
hereafter named. The nominee of the initial Depository for
purposes of
registering those Certificates that are to be Book-Entry
Certificates is Cede &
Co. The Depository shall at all times be a "clearing
corporation" as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State
of New York and
a "clearing agency" registered pursuant to the provisions of
Section 17A of the
Exchange Act.
Depository Participant: A broker, dealer, bank or other
financial
institution or other Person for whom from time to time a
Depository effects
book-entry transfers and pledges of securities deposited with
the Depository.
Destroyed Mortgage Note: A Mortgage Note the original of which
was
permanently lost or destroyed and has not been replaced.
Determination Date: With respect to any Distribution Date, the
20th day
(or if such 20th day is not a Business Day, the Business Day
immediately
following such 20th day) of the month of the related
Distribution Date.
Disqualified Organization: Any organization defined as a
"disqualified
organization" under Section 860E(e)(5) of the Code, including,
if not otherwise
included, any of the following: (i) the United States, any State
or political
subdivision thereof, any possession of the United States, or any
agency or
instrumentality of any of the foregoing (other than an
instrumentality which is
a corporation if all of its activities are subject to tax and,
except for
Freddie 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
November 2004
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 November 24,
2004,
among the Trustee on behalf of the Trust Fund, JPMorgan Chase
Bank, N.A., in its
individual capacity as agent thereunder and the Depository.
17
<PAGE>
Due Date: With respect to any Distribution Date and any Mortgage
Loan,
the day during the related Due Period on which the Monthly
Payment is due.
Due Period: With respect to any Distribution Date, the calendar
month of
such Distribution Date.
Eligible Account: An account that is any of the following:
(i)
maintained with a depository institution the debt obligations of
which have been
rated by each Rating Agency in its highest rating available, or
(ii) an account
or accounts in a depository institution in which such accounts
are fully insured
to the limits established by the FDIC, provided that any
deposits not so insured
shall, to the extent acceptable to each Rating Agency, as
evidenced in writing,
be maintained such that (as evidenced by an Opinion of Counsel
delivered to the
Trustee and each Rating Agency) the registered Holders of
Certificates have a
claim with respect to the funds in such account or a perfected
first security
interest against any collateral (which shall be limited to
Permitted
Investments) securing such funds that is superior to claims of
any other
depositors or creditors of the depository institution with which
such account is
maintained, or (iii) in the case of the Custodial Account, a
trust account or
accounts maintained in the corporate trust department of U.S.
Bank, National
Association, or (iv) in the case of the Certificate Account, a
trust account or
accounts maintained in the corporate trust division of JPMorgan
Chase Bank,
N.A., or (v) an account or accounts of a depository institution
acceptable to
each Rating Agency (as evidenced in writing by each Rating
Agency that use of
any such account as the Custodial Account or the Certificate
Account will not
reduce the rating assigned to any Class of Certificates by such
Rating Agency
below the lower of the then-current rating or the rating
assigned to such
Certificates as of the Closing Date by such Rating Agency).
Eligible Master Servicing Compensation: With respect to any
Distribution
Date and each Loan Group, the lesser of (a) one-twelfth of
0.125% of the Stated
Principal Balance of the related Mortgage Loans immediately
preceding such
Distribution Date and (b) the sum of the Servicing Fee and all
income and gain
on amounts held in the Custodial Account and the Certificate
Account and payable
to the Certificateholders with respect to such Distribution
Date, in each case
with respect to the related Loan Group; provided that for
purposes of this
definition the amount of the Servicing Fee will not be reduced
pursuant to
Section 7.02(a) except as may be required pursuant to the last
sentence of such
Section.
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
Event of Default: As defined in Section 7.01.
Excess Cash Flow: With respect to any Distribution Date, an
amount equal
to the sum of (A) the excess of (i) the Available Distribution
Amount for that
Distribution Date increased by the amount, if any, paid from the
Hedge Payments
for that Distribution Date pursuant to Section 4.02(c)(iii) over
(ii) the sum of
(a) the Interest Distribution Amount for that Distribution Date
and (b) the
lesser of (1) the aggregate Certificate Principal Balance of
Class A
Certificates, Class M Certificates and Class B Certificates
immediately prior to
such Distribution Date and (2) the Principal Remittance Amount
for that
Distribution Date to the extent not applied to pay interest on
the Class A
Certificates, Class M Certificates and Class B Certificates on
such Distribution
Date and (B) the Overcollateralization Reduction Amount, if any,
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.
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<PAGE>
Expense Fee Rate: With respect to any Mortgage Loan as of any
date of
determination, the sum of the applicable Servicing Fee Rate and
the per annum
rate at which the applicable Subservicing Fee accrues.
Fannie Mae: Fannie Mae, a federally chartered and privately
owned
corporation organized and existing under the Federal National
Mortgage
Association Charter Act, or any successor thereto.
FASIT: A "financial asset securitization investment trust"
within the
meaning of Section 860L of the Code.
FDIC: Federal Deposit Insurance Corporation or any successor
thereto.
----
Final Distribution Date: The Distribution Date on which the
final
distribution in respect of the Certificates will be made
pursuant to Section
9.01, which Final Distribution Date shall in no event be later
than the end of
the 90-day liquidation period described in Section 9.02.
Final Scheduled Distribution Date: Solely for purposes of the
face of
the Certificates, as follows: with respect to the Class A-I-1
Certificates, the
Distribution Date occurring in August 2025; with respect to the
Class A-I-2
Certificates, the Distribution Date occurring in January 2034;
and with respect
to the Class A-I-3 Certificates, Class A-II-1 Certificates,
Class A-II-2
Certificates, Class M Certificates and Class B Certificates, the
Distribution
Date occurring in December 2034. 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.
Fitch: Fitch Ratings, or its successors in interest.
Foreclosure Profits: With respect to any Distribution Date or
related
Determination Date and any Mortgage Loan, the excess, if any, of
Liquidation
Proceeds, Insurance Proceeds and REO Proceeds (net of all
amounts reimbursable
therefrom pursuant to Section 3.10(a)(ii)) in respect of each
Mortgage Loan or
REO Property for which a Cash Liquidation or REO Disposition
occurred in the
related Prepayment Period over the sum of the unpaid principal
balance of such
Mortgage Loan or REO Property (determined, in the case of an REO
Disposition, in
accordance with Section 3.14) plus accrued and unpaid interest
at the Mortgage
Rate on such unpaid principal balance from the Due Date to which
interest was
last paid by the Mortgagor to the first day of the month
following the month in
which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification: As defined in Section 4.03(e).
Freddie Mac: Freddie Mac, a corporate instrumentality of the
United
States created and existing under Title III of the Emergency
Home Finance Act of
1970, as amended, or any successor thereto.
Gross Margin: With respect to each adjustable-rate Mortgage
Loan, the
fixed percentage set forth in the related Mortgage Note and
indicated on the
Mortgage Loan Schedule as the "NOTE MARGIN," which percentage is
added to the
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.
Group I Basis Risk Shortfalls: With respect to each Class of the
Class
A-I Certificates and any Distribution Date, the sum of (a) with
respect to any
Distribution Date on which the Group I Net WAC Cap Rate is used
to determine the
Pass-Through Rate of such Class, an amount equal to the excess
of (x) Accrued
Certificate Interest for such Class calculated at a per annum
rate equal to the
lesser of (i) LIBOR plus the related Margin for such
Distribution Date and (ii)
the Group I Weighted Average Maximum Net Mortgage Rate, over (y)
Accrued
Certificate Interest for such Class calculated using the Group I
Net WAC Cap
19
<PAGE>
Rate plus, an amount equal to any reduction in the Accrued
Certificate Interest
of such Class due to the failure of the Hedge Agreements
Provider to make any
required Class A-I Hedge Payment with respect to such
Distribution Date, (b) any
shortfalls for such Class calculated pursuant to clause (a)
above remaining
unpaid from prior Distribution Dates, and (c) one month's
interest on the amount
in clause (b) (based on the number of days in the preceding
Interest Accrual
Period) at a per annum rate equal to LIBOR plus the related
Margin for such
Distribution Date.
Group I Loans: The Mortgage Loans designated on the Mortgage
Loan
Schedule attached hereto as Exhibit F-1. The Group I Loans
relate to the Class
A-I Certificates, Class M Certificates, Class B Certificates and
Class SB
Certificates.
Group I Net WAC Cap Rate: With respect to any Distribution Date,
the sum
of (a) the product of (i) a per annum rate equal to the weighted
average of the
Net Mortgage Rates (or, if applicable, the Modified Net Mortgage
Rates) on the
Group I Loans using the Net Mortgage Rates in effect for the
Monthly Payments
due on such Mortgage Loans during the related Due Period,
weighted on the basis
of the respective Stated Principal Balances thereof for such
Distribution Date
and (ii) a fraction equal to 30 divided by the actual number of
days in the
related Interest Accrual Period, and (b) a per annum rate equal
to (i) the
amount, if any, required to be paid under the Class A-I Hedge
Agreement with
respect to such Distribution Date divided by (ii) the aggregate
Certificate
Principal Balance of the Class A-I Certificates immediately
prior to such
Distribution Date, multiplied by a fraction, the numerator of
which is 30, and
the denominator of which is the actual number of days in the
related Interest
Accrual Period.
Group I Principal Distribution Amount: For any Distribution
Date, the
product of (x) the Class A Principal Distribution Amount for
such Distribution
Date and (y) a fraction, the numerator of which is the Principal
Allocation
Amount for the Group I Loans for such Distribution Date and the
denominator of
which is the Principal Allocation Amount for all of the Mortgage
Loans for such
Distribution Date.
Group I REMIC Net WAC Rate: For any Distribution Date, a per
annum rate
equal to the weighted average of the Net Mortgage Rates (or, if
applicable, the
Modified Net Mortgage Rates) on the Group I Loans using the Net
Mortgage Rates
in effect for the Monthly Payments due on such Mortgage Loans
during the related
Due Period, weighted on the basis of the respective Stated
Principal Balances
thereof for such Distribution Date and (ii) a fraction equal to
30 divided by
the actual number of days in the related Interest Accrual
Period.
Group I Weighted Average Maximum Net Mortgage Rate: For any
Distribution
Date, the weighted average of the Maximum Net Mortgage Rates of
the Group I
Loans, multiplied by a fraction equal to 30 divided by the
actual number of days
in the related Interest Accrual Period.
Group II Basis Risk Shortfalls: With respect to each Class of
the Class
A-II Certificates and any Distribution Date, the sum of (a) with
respect to any
Distribution Date on which the Group II Net WAC Cap Rate, with
respect to the
Class A-II-1 Certificates or Class A-II-2 Net WAC Cap Rate, with
respect to the
Class A-II-2 Certificates, is used to determine the Pass-Through
Rate of such
Class, an amount equal to the excess of (x) Accrued Certificate
Interest for
such Class calculated at a per annum rate equal to the lesser of
(i) LIBOR plus
the related Margin for such Distribution Date and (ii) the Group
II Weighted
Average Maximum Net Mortgage Rate, over (y) Accrued Certificate
Interest for
such Class calculated using the Group II Net WAC Cap Rate or
Class A-II-2 Net
20
<PAGE>
WAC Cap Rate, as applicable, plus, with respect to the Class
A-II-2 Certificates
only, an amount equal to any reduction in the Accrued
Certificate Interest of
the Class A-II-2 Certificates due to the failure of the Hedge
Agreements
Provider to make any required Class A-II-2 Hedge Payment with
respect to such
Distribution Date, (b) any shortfalls for such Class calculated
pursuant to
clause (a) above remaining unpaid from prior Distribution Dates,
and (c) one
month's interest on the amount in clause (b) (based on the
number of days in the
preceding Interest Accrual Period) at a per annum rate equal to
LIBOR plus the
related Margin for such Distribution Date.
Group II Loans: The Mortgage Loans designated on the Mortgage
Loan
Schedule attached hereto as Exhibit F-2. The Group II Loans
relate to the Class
A-II Certificates, Class M Certificates, Class B Certificates
and Class SB
Certificates.
Group II Net WAC Cap Rate: With respect to any Distribution
Date, the
product of (i) a per annum rate equal to the weighted average of
the Net
Mortgage Rates (or, if applicable, the Modified Net Mortgage
Rates) on the Group
II Loans using the Net Mortgage Rates in effect for the Monthly
Payments due on
such Mortgage Loans during the related Due Period, weighted on
the basis of the
respective Stated Principal Balances thereof for such
Distribution Date and (ii)
a fraction equal to 30 divided by the actual number of days in
the related
Interest Accrual Period.
Group II Principal Distribution Amount: For any Distribution
Date, the
product of (x) the Class A Principal Distribution Amount for
such Distribution
Date and (y) a fraction, the numerator of which is the Principal
Allocation
Amount for the Group II Loans for such Distribution Date and the
denominator of
which is the Principal Allocation Amount for all of the Mortgage
Loans for such
Distribution Date.
Group II REMIC Net WAC Rate: With respect to any Distribution
Date, the
Group II Net WAC Cap Rate for such Distribution Date.
Group II Weighted Average Maximum Net Mortgage Rate: For any
Distribution Date, the weighted average of the Maximum Net
Mortgage Rates of the
Group II Loans, multiplied by a fraction equal to 30 divided by
the actual
number of days in the related Interest Accrual Period.
Hedge Agreement: The Class A-I Hedge Agreement, Class A-II-2
Hedge
Agreement or Subordinate Hedge Agreement, as applicable.
Hedge Agreements Provider: HSBC Bank USA, National Association,
and its
successors and assigns or any party to any replacement,
substitute, collateral
or other arrangement in lieu thereof.
Hedge Payment: The Class A-I Hedge Payment, Class A-II-2 Hedge
Payment or
Subordinate Hedge Payment, as applicable.
Hedge Shortfall Amount: For any Distribution Date, the amount,
if any,
by which the payment on the Class A Certificates, Class M
Certificates and Class
B Certificates pursuant to Section 4.02(c)(iii) is paid from the
Hedge Payments
for such Distribution Date pursuant to the provisions thereof or
would have been
so paid but for the failure of the Hedge Agreements Provider to
make a payment
required under the Hedge Agreements.
Hedge Shortfall Carry-Forward Amount: For any Distribution Date,
the
aggregate Hedge Shortfall Amounts for prior Distribution Dates
to the extent not
reimbursed to the Class SB Certificates pursuant to Section
4.02(c)(xi).
HUD: The United States Department of Housing and Urban
Development.
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<PAGE>
Independent: When used with respect to any specified Person,
means such
a Person who (i) is in fact independent of the Depositor, the
Master Servicer
and the Trustee, or any Affiliate thereof, (ii) does not have
any direct
financial interest or any material indirect financial interest
in the Depositor,
the Master Servicer or the Trustee or in an Affiliate thereof,
and (iii) is not
connected with the Depositor, the Master Servicer or the Trustee
as an officer,
employee, promoter, underwriter, trustee, partner, director or
person performing
similar functions.
Index: With respect to any adjustable-rate Mortgage Loan and as
to any
Adjustment Date therefor, the related index as stated in the
related Mortgage
Note.
Initial Certificate Principal Balance: With respect to each
Class of
Certificates (other than the Class R Certificates), the
Certificate Principal
Balance of such Class of Certificates as of the Cut-off Date as
set forth in the
Preliminary Statement hereto.
Insurance Proceeds: Proceeds paid in respect of the Mortgage
Loans
pursuant to any Primary Insurance Policy or any other related
insurance policy
covering a Mortgage Loan, to the extent such proceeds are
payable to the
mortgagee under the Mortgage, any Subservicer, the Master
Servicer or the
Trustee and are not applied to the restoration of the related
Mortgaged Property
or released to the Mortgagor in accordance with the procedures
that the Master
Servicer would follow in servicing mortgage loans held for its
own account.
Interest Accrual Period: With respect to the Distribution Date
in
December 2004, the period commencing the Closing Date and ending
on the day
preceding the Distribution Date in December 2004, and with
respect to any
Distribution Date after the Distribution Date in December 2004,
the period
commencing on the Distribution Date in the month immediately
preceding the month
in which such Distribution Date occurs and ending on the day
preceding such
Distribution Date.
Interest Distribution Amount: For any Distribution Date, the
amounts
payable pursuant to Section 4.02(c)(i)-(iii).
Interim Certification: As defined in Section 2.02.
Late Collections: With respect to any Mortgage Loan, all
amounts
received during any Due Period, whether as late payments of
Monthly Payments or
as Insurance Proceeds, Liquidation Proceeds or otherwise, which
represent late
payments or collections of Monthly Payments due but delinquent
for a previous
Due Period and not previously recovered.
LIBOR: 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 by law to be closed.
LIBOR Certificates: Collectively, the Class A Certificates,
Class M
Certificates and Class B Certificates.
LIBOR Rate Adjustment Date: With respect to each Distribution
Date, the
second LIBOR Business Day immediately preceding the commencement
of the related
Interest Accrual Period.
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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 Group: Loan Group I or Loan Group II, as applicable.
Loan Group I: The Mortgage Loans designated on the Mortgage
Loan
Schedule attached hereto as Exhibit F-1.
Loan Group II: The Mortgage Loans designated on the Mortgage
Loan
Schedule attached hereto as Exhibit F-2.
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.
Margin: The Class A-I-1 Margin, Class A-I-2 Margin, Class A-I-3
Margin,
Class A-II-1 Margin, Class A-II-2 Margin, Class M-1 Margin,
Class M-2 Margin,
Class M-3 Margin, Class M-4 Margin, Class M-5 Margin, Class M-6
Margin or Class
B Margin, as applicable.
Marker Rate: With respect to the Class SB Certificates or the
SB-IO
REMIC III Regular Interest and any Distribution Date, in
relation to the REMIC
II Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, a per annum
rate equal to two
(2) times the weighted average of the Uncertificated REMIC II
Pass-Through Rates
for REMIC II Regular Interest LT2 and REMIC II Regular Interest
LT3. With
respect to the Class SB Certificates or the SB-IO REMIC III
Regular Interest and
any Distribution Date, in relation to the REMIC II Regular
Interests LT5, LT6,
LT7, LT8 and LT-Y2, a per annum rate equal to two (2) times the
weighted average
of the Uncertificated REMIC II Pass-Through Rates for REMIC II
Regular Interest
LT6 and REMIC II Regular Interest LT7.
Master Servicer: As defined in the preamble hereto.
Maturity Date: With respect to each Class of Certificates
representing
ownership of regular interests or Uncertificated Regular
Interest issued by each
of REMIC I, REMIC II and REMIC III 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, December 25, 2034,
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 per annum rate indicated on the Mortgage Loan Schedule
as the "NOTE
CEILING," which rate is the maximum interest rate that may be
applicable to such
Mortgage Loan at any time during the life of such Mortgage
Loan.
Maximum Net Mortgage Rate: With respect to any adjustable-rate
Mortgage
Loan and any date of determination, the Maximum Mortgage Rate
minus the Expense
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.
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MERS(R) System: The system of recording transfers of
Mortgages
electronically maintained by MERS.
MIN: The Mortgage Identification Number for Mortgage Loans
registered
with MERS on the MERS(R) System.
Minimum Mortgage Rate: With respect to any adjustable-rate
Mortgage
Loan, a per annum rate equal to the greater of (i) the Note
Margin and (ii) the
rate indicated on the Mortgage Loan Schedule as the "NOTE
FLOOR," which rate may
be applicable to such Mortgage Loan at any time during the life
of such Mortgage
Loan.
Modified Mortgage Loan: Any Mortgage Loan that has been the
subject of a
Servicing Modification.
Modified Net Mortgage Rate: With respect to any Mortgage Loan
that is
the subject of a Servicing Modification, the Net Mortgage Rate
minus the rate
per annum by which the Mortgage Rate on such Mortgage Loan was
reduced.
MOM Loan: With respect to any Mortgage Loan, MERS acting as
the
mortgagee of such Mortgage Loan, solely as nominee for the
originator of such
Mortgage Loan and its successors and assigns, at the origination
thereof.
Monthly Payment: With respect to any Mortgage Loan (including
any REO
Property) and the Due Date in any Due Period, the payment of
principal and
interest due thereon in accordance with the amortization
schedule at the time
applicable thereto (after adjustment, if any, for Curtailments
and for Deficient
Valuations occurring prior to such Due Date but before any
adjustment to such
amortization schedule by reason of any bankruptcy, other than a
Deficient
Valuation, or similar proceeding or any moratorium or similar
waiver or grace
period and before any Servicing Modification that constitutes a
reduction of the
interest rate on such Mortgage Loan).
Moody's: Moody's Investors Service, Inc., or its successors in
interest.
Mortgage: With respect to each Mortgage Note, the mortgage, deed
of
trust or other comparable instrument creating a first or junior
lien on an
estate in fee simple or leasehold interest in real property
securing a Mortgage
Note.
Mortgage File: The mortgage documents listed in Section 2.01
pertaining
to a particular Mortgage Loan and any additional documents
required to be added
to the Mortgage File pursuant to this Agreement.
Mortgage Loans: Such of the mortgage loans transferred and
assigned to
the Trustee pursuant to Section 2.01 as from time to time are
held or deemed to
be held as a part of the Trust Fund, the Mortgage Loans
originally so held being
identified in the initial Mortgage Loan Schedule, and Qualified
Substitute
Mortgage Loans held or deemed held as part of the Trust Fund
including, without
limitation, each related Mortgage Note, Mortgage and Mortgage
File and all
rights appertaining thereto.
Mortgage Loan Schedule: The lists of the Mortgage Loans attached
hereto
as Exhibit F-1 and Exhibit F-2 (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 #");
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<PAGE>
(ii) [reserved];
(iii) the maturity of the Mortgage Note ("MATURITY DATE," or
"MATURITY
DT");
(iv) for the adjustable-rate Mortgage Loans, the Mortgage Rate
as of
origination ("ORIG RATE");
(v) the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(vi) the Net Mortgage Rate as of the Cut-off Date ("CURR
NET");
(vii) the scheduled monthly payment of principal, if any, and
interest as
of the Cut-off Date ("ORIGINAL P & I" or "CURRENT P &
I");
(viii) the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix) the Loan-to-Value Ratio at origination ("LTV");
(x) a code "T," "BT" or "CT" under the column "LN FEATURE,"
indicating
that the Mortgage Loan is secured by a second or vacation
residence
(the absence of any such code means the Mortgage Loan is secured
by
a primary residence);
(xi) a code "N" under the column "OCCP CODE," indicating that
the
Mortgage Loan is secured by a non-owner occupied residence
(the
absence of any such code means the Mortgage Loan is secured by
an
owner occupied residence);
(xii) for the adjustable-rate Mortgage Loans, the Maximum
Mortgage Rate
("NOTE CEILING");
(xiii) for the adjustable-rate Mortgage Loans, the maximum Net
Mortgage
Rate ("NET CEILING");
(xiv) for the adjustable-rate Mortgage Loans, the Note Margin
("NOTE
MARGIN");
(xv) for the adjustable-rate Mortgage Loans, the first
Adjustment Date
after the Cut-off Date ("NXT INT CHG DT");
(xvi) for the adjustable-rate Mortgage Loans, the Periodic Cap
("PERIODIC
DECR" or "PERIODIC INCR");
(xvii) [reserved]; and
(xviii) for the adjustable-rate Mortgage Loans, the rounding of
the
semi-annual or annual adjustment to the Mortgage Rate ("NOTE
METHOD").
Such schedules may consist of multiple reports that collectively
set
forth all of the information required.
Mortgage Note: The originally executed note or other evidence
of
indebtedness evidencing the indebtedness of a Mortgagor under a
Mortgage Loan,
together with any modification thereto.
Mortgage Rate: With respect to any Mortgage Loan, the interest
rate
borne by the related Mortgage Note, or any modification thereto
other than a
Servicing Modification. The Mortgage Rate on the adjustable-rate
Mortgage Loans
will adjust on each Adjustment Date to equal the sum (rounded to
the nearest
multiple of one-eighth of one percent (0.125%) or up to the
nearest one-eighth
of one percent, which are indicated by a "U" on the Mortgage
Loan Schedule,
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<PAGE>
except in the case of the adjustable-rate Mortgage Loans
indicated by an "X" on
the Mortgage Loan Schedule under the heading "NOTE METHOD"), of
the related
Index plus the Note Margin, in each case subject to the
applicable Periodic Cap,
Maximum Mortgage Rate and Minimum Mortgage Rate.
Mortgaged Property: The underlying real property securing a
Mortgage Loan.
Mortgagor: The obligor on a Mortgage Note.
Net Mortgage Rate: With respect to any Mortgage Loan as of any
date of
determination, a per annum rate equal to the Mortgage Rate for
such Mortgage
Loan as of such date minus the related Expense Fee Rate.
Net WAC Cap Rate: The Group I Net WAC Cap Rate, Group II Net WAC
Cap
Rate, Class A-II-2 Net WAC Cap Rate or Subordinate Net WAC Cap
Rate, as
applicable.
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 a certificate of a
Servicing
Officer, Responsible Officer or Vice President or its equivalent
or senior
officer of the Master Servicer, 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 on the
Mortgage Loan Schedule as the "NOTE MARGIN," which percentage is
added to the
Index on each Adjustment Date to determine (subject to rounding
in accordance
with the related Mortgage Note, the Periodic Cap, the Maximum
Mortgage Rate and
the Minimum Mortgage Rate) the interest rate to be borne by such
Mortgage Loan
until the next Adjustment Date.
Notice: As defined in Section 4.04.
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<PAGE>
Notional Amount: With respect to the Class SB Certificates or
the REMIC
III Regular Interest SB-IO, immediately prior to any
Distribution Date, the
aggregate of the Uncertificated Principal Balances of the REMIC
I Regular
Interests.
Officers' Certificate: A certificate signed by the Chairman of
the
Board, the President, a Vice President, Assistant Vice
President, Director,
Managing Director, the Treasurer, the Secretary, an Assistant
Treasurer or an
Assistant Secretary of the Depositor or the Master Servicer, as
the case may be,
and delivered to the Trustee, as required by this Agreement.
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 to
the qualification
of REMIC I, REMIC II or REMIC III 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, Class M Certificates and Class B
Certificates immediately
prior to such 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, the lesser of (a) Excess Cash Flow for that Distribution
Date (to the
extent not used to cover Realized Losses pursuant to clause (iv)
of the
definition of Principal Distribution Amount as of such
Distribution Date) and
(b) the excess of (1) the Required Overcollateralization Amount
for such
Distribution Date over (2) the Overcollateralization Amount for
such
Distribution Date.
Overcollateralization Reduction Amount: With respect to any
Distribution
Date on which the Excess Overcollateralization Amount is, after
taking into
account all other distributions to be made on such Distribution
Date, greater
than zero, the Overcollateralization Reduction Amount shall be
equal to the
lesser of (i) the Excess Overcollateralization Amount for that
Distribution Date
and (ii) the Principal Remittance Amount on such Distribution
Date.
Ownership Interest: With respect to any Certificate, any
ownership or
security interest in such Certificate, including any interest in
such
Certificate as the Holder thereof and any other interest
therein, whether direct
or indirect, legal or beneficial, as owner or as pledgee.
Pass-Through Rate: With respect to each Class of Class A
Certificates,
Class M Certificates and Class B Certificates and any
Distribution Date, the
lesser of (i) LIBOR plus the related Margin and (ii) the related
Net WAC Cap
Rate.
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<PAGE>
With respect to the Class SB Certificates and any Distribution
Date or
the REMIC III Regular Interest SB-IO, a rate per annum equal to
the percentage
equivalent of a fraction, the numerator of which is the sum of
the amounts
calculated pursuant to clauses (i) through (viii) below, and the
denominator of
which is the aggregate principal balance of the REMIC II Regular
Interests. For
purposes of calculating the Pass-Through Rate for the Class SB
Certificates or
the SB-IO REMIC III Regular Interest, the numerator is equal to
the sum of the
following components:
(i) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT1 minus the related Marker Rate, applied to a
notional amount
equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT1;
(ii) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT2 minus the related Marker Rate, applied to a
notional amount
equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT2;
(iii) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT4 minus twice the related Marker Rate, applied to a
notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT4;
(iv) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT5 minus the related Marker Rate, applied to a
notional amount
equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT5;
(v) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT6 minus the related Marker Rate, applied to a
notional amount
equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT6;
(vi) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT8 minus twice the related Marker Rate, applied to a
notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT8;
(vii) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT-Y1 minus the related Marker Rate, applied to a
notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT-Y1; and
(viii) the Uncertificated Pass-Through Rate for REMIC II
Regular
Interest LT-Y2 minus the related Marker Rate, applied to a
notional
amount equal to the Uncertificated Principal Balance of REMIC II
Regular
Interest LT-Y2.
Paying Agent: JPMorgan Chase Bank, N.A. or any successor Paying
Agent
appointed by the Trustee.
Percentage Interest: With respect to any Class A Certificate,
Class M
Certificate or Class B Certificate, the undivided percentage
ownership interest
in the related Class evidenced by such Certificate, which
percentage ownership
interest shall be equal to the Initial Certificate Principal
Balance thereof
divided by the aggregate Initial Certificate Principal Balance
of all of the
Certificates of the same Class. The Percentage Interest with
respect to a Class
SB Certificate or Class R Certificate shall be stated on the
face thereof.
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<PAGE>
Periodic Cap: With respect to each adjustable-rate Mortgage
Loan, the
periodic rate cap that limits the increase or the decrease of
the related
Mortgage Rate on any Adjustment Date pursuant to the terms of
the related
Mortgage Note.
Permitted Investments: One or more of the following:
(i) obligations of or guaranteed as to principal and interest by
the
United States or any agency or instrumentality thereof when
such
obligations are backed by the full faith and credit of the
United
States;
(ii) repurchase agreements on obligations specified in clause
(i)
maturing not more than one month from the date of
acquisition
thereof, provided that the unsecured obligations of the
party
agreeing to repurchase such obligations are at the time rated
by
each Rating Agency in its highest short-term rating
available;
(iii) federal funds, certificates of deposit, demand deposits,
time
deposits and bankers' acceptances (which shall each have an
original maturity of not more than 90 days and, in the case
of
bankers' acceptances, shall in no event have an original
maturity
of more than 365 days or a remaining maturity of more than
30
days) denominated in United States dollars of any U.S.
depository
institution or trust company incorporated under the laws of
the
United States or any state thereof or of any domestic branch of
a
foreign depository institution or trust company; provided
that
the debt obligations of such depository institution or trust
company at the date of acquisition thereof have been rated
by
each Rating Agency in its highest short-term rating
available;
and, provided further that, if the original maturity of such
short-term obligations of a domestic branch of a foreign
depository institution or trust company shall exceed 30 days,
the
short-term rating of such institution shall be A-1+ in the
case
of Standard & Poor's if Standard & Poor's is a Rating
Agency;
(iv) commercial paper and demand notes (having original
maturities of
not more than 365 days) of any corporation incorporated under
the
laws of the United States or any state thereof which on the
date
of acquisition has been rated by each Rating Agency in its
highest short term rating available; provided that such
commercial paper and demand notes shall have a remaining
maturity
of not more than 30 days;
(v) a money market fund or a qualified investment fund rated by
each
Rating Agency in its highest long-term rating available; and
(vi) other obligations or securities that are acceptable to
each
Rating Agency as a Permitted Investment hereunder and will
not
reduce the rating assigned to any Class of Certificates by
such
Rating Agency below the lower of the then-current rating or
the
rating assigned to such Certificates as of the Closing Date
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 Fitch 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
29
<PAGE>
Standard & Poor's, P-1 in the case of Moody's and F-1 in the
case of Fitch;
provided, however, that any Permitted Investment that is a
short-term debt
obligation rated A-1 by Standard & Poor's must satisfy the
following additional
conditions: (i) the total amount of debt from A-1 issuers must
be limited to the
investment of monthly principal and interest payments (assuming
fully amortizing
collateral); (ii) the total amount of A-1 investments must not
represent more
than 20% of the aggregate outstanding Certificate Principal
Balance of the
Certificates and each investment must not mature beyond 30 days;
(iii) 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.
Permitted Transferee: Any Transferee of a Class R Certificate,
other
than a Disqualified Organization or Non-United States
Person.
Person: Any individual, corporation, limited liability
company,
partnership, joint venture, association, joint-stock company,
trust,
unincorporated organization or government or any agency or
political subdivision
thereof.
Prepayment Assumption: With respect to the Class A, Class M and
Class B
Certificates, the prepayment assumption to be used for
determining the accrual
of original issue discount and premium and market discount on
such Certificates
for federal income tax purposes, which (a) with respect to the
fixed-rate
Mortgage Loans, assumes a constant prepayment rate of one-tenth
of 23% per annum
of the then outstanding Stated Principal Balance of the
fixed-rate Mortgage
Loans in the first month of the life of such Mortgage Loans and
an additional
one-tenth of 23% per annum in each month thereafter until the
tenth month, and
beginning in the tenth month and in each month thereafter during
the life of the
fixed-rate Mortgage Loans, a constant prepayment rate of 23% per
annum each
month ("23% HEP") and (b) with respect to the adjustable-rate
Mortgage Loans
assumes a prepayment assumption of 2% of the constant prepayment
rate in month
one, increasing by approximately 2.545% from month 2 until month
12, a constant
prepayment rate of 30% from month 12 to month 22, a constant
prepayment rate of
50% from month 23 to month 27, and a constant prepayment rate of
35% thereafter,
used for determining the accrual of original issue discount and
premium and
market discount on the Class A, Class M and Class B Certificates
for federal
income tax purposes. The constant prepayment rate assumes that
the stated
percentage of the outstanding Stated Principal Balance of the
adjustable-rate
Mortgage Loans is prepaid over the course of a year.
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.
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<PAGE>
Primary Insurance Policy: Each primary policy of mortgage
guaranty
insurance as indicated by a numeric code on the Mortgage Loan
Schedule with the
exception of code "A23," "A34" or "A96" under the column "MI CO
CODE."
Principal Allocation Amount: With respect to any Distribution
Date, the
sum of (a) the Principal Remittance Amount for that Distribution
Date and (b)
the principal portion of any Realized Losses incurred (or deemed
to have been
incurred) on the Mortgage Loans in the calendar month preceding
such
Distribution Date to the extent covered by Excess Cash Flow for
such
Distribution Date; provided, that on any Distribution Date on
which there is
insufficient Excess Cash Flow to cover all Realized Losses
incurred (or deemed
to have been incurred) on the Mortgage Loans in the calendar
month preceding
such Distribution Date, in determining the Group I Principal
Distribution Amount
and Group II Principal Distribution Amount, the available Excess
Cash Flow will
be allocated to the Class A-I Certificates and Class A-II
Certificates, pro
rata, based on the principal portion of Realized Losses on the
Group I Loans and
Group II Loans, respectively.
Principal Distribution Amount: With respect to any Distribution
Date,
the lesser of (a) the sum of (i) the excess of (x) Available
Distribution Amount
over (y) the Interest Distribution Amount, and (b) the sum
of:
(i) the principal portion of each Monthly Payment received or
Advanced
with respect to the related Due Period on each Outstanding
Mortgage
Loan;
(ii) the Stated Principal Balance of any Mortgage Loan
repurchased during
the related Prepayment Period (or deemed to have been so
repurchased
in accordance with Section 3.07(b)) pursuant to Section 2.02,
2.03,
2.04, 4.07 or 4.08 and the amount of any shortfall deposited in
the
Custodial Account in connection with the substitution of a
Deleted
Mortgage Loan pursuant to Section 2.03 or 2.04 during the
related
Prepayment Period;
(iii) the principal portion of all other unscheduled
collections, other
than Subsequent Recoveries, on the Mortgage Loans (including,
without
limitation, Principal Prepayments in Full, Curtailments,
Insurance
Proceeds, Liquidation Proceeds and REO Proceeds) received during
the
related Prepayment Period (or deemed to have been so received)
to the
extent applied by the Master Servicer as recoveries of
principal
pursuant to Section 3.14;
(iv) the lesser of (1) the Excess Cash Flow for such
Distribution Date and
(2) the principal portion of any Realized Losses incurred (or
deemed
to have been incurred) on any Mortgage Loans in the calendar
month
preceding such Distribution; and
(v) the lesser of (1) the Excess Cash Flow for such Distribution
Date (to
the extent not used to cover Realized Losses pursuant to clause
(iv)
of this definition on such Distribution Date) and (2) the
Overcollateralization Increase Amount for such Distribution
Date;
minus
(vi) (A) the amount of any Overcollateralization Reduction
Amount for such
Distribution Date and (B) the amount of any Capitalization
Reimbursement Amount for such Distribution Date.
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.
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<PAGE>
Principal Prepayment in Full: Any Principal Prepayment made by
a
Mortgagor of the entire principal balance of a Mortgage
Loan.
Principal Remittance Amount: With respect to any Distribution
Date, all
amounts described in clauses (b)(i) through (iii) of the
definition of Principal
Distribution Amount for that Distribution Date.
Program Guide: The AlterNet Seller Guide as incorporated into
the
Residential Funding Seller Guide for mortgage collateral sellers
that
participate in Residential Funding's AlterNet Mortgage Program,
and Residential
Funding's Servicing Guide and any other subservicing
arrangements which
Residential Funding has arranged to accommodate the servicing of
the Mortgage
Loans and in each case all supplements and amendments thereto
published by
Residential Funding.
Purchase Price: With respect to any Mortgage Loan (or REO
Property)
required to be or otherwise purchased on any date pursuant to
Section 2.02,
2.03, 2.04, 4.07 or 4.08, an amount equal to the sum of (i) (a)
if such Mortgage
Loan (or REO Property) is being purchased pursuant to Sections
2.02, 2.03, 2.04
or 4.07 of this Agreement, 100% of the Stated Principal Balance
thereof plus the
principal portion of any related unreimbursed Advances or (b) if
such Mortgage
Loan (or REO Property) is being purchased pursuant to Section
4.08 of this
Agreement, the greater of (1) 100% of the Stated Principal
Balance thereof plus
the principal portion of any related unreimbursed Advances of
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
either (a) 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 the
first day of the month following the month of purchase from the
Due Date to
which interest was last paid by the Mortgagor.
Qualified Substitute Mortgage Loan: A Mortgage Loan substituted
by
Residential Funding or the 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 (other
than the representations and warranties set forth therein with
respect to the
number of loans (including the related percentage) in excess of
zero which meet
or do not meet a specified criteria); (vi) not be 30 days or
more Delinquent;
(vii) not be subject to the requirements of HOEPA (as defined in
the Assignment
32
<PAGE>
Agreement); (viii) have a policy of title insurance, in the form
and amount that
is in material compliance with the Program Guide, that was
effective as of the
closing of such Mortgage Loan, is valid and binding, and remains
in full force
and effect, unless the Mortgage Property is located in the State
of Iowa where
an attorney's certificate has been provided as described in the
Program Guide;
(ix) if the Deleted Loan is not a Balloon Loan, not be a Balloon
Loan; (x) have
a Mortgage Rate that adjusts with the same frequency and based
upon the same
Index as that of the Deleted Mortgage Loan; (xi) have a Note
Margin not less
than that of the Deleted Mortgage Loan; (xii) have a Periodic
Rate Cap that is
equal to that of the Deleted Mortgage Loan; and (xiii) have a
next Adjustment
Date no later than that of the Deleted Mortgage Loan.
Rating Agency: Standard & Poor's, Fitch and Moody's. If any
agency or a
successor is no longer in existence, "Rating Agency" shall be
such statistical
credit rating agency, or other comparable Person, designated by
the Depositor,
notice of which designation shall be given to the Trustee and
the Master
Servicer.
Realized Loss: With respect to each Mortgage Loan (or REO
Property) as
to which a Cash Liquidation or REO Disposition has occurred, an
amount (not less
than zero) equal to (i) the Stated Principal Balance of the
Mortgage Loan (or
REO Property) as of the date of Cash Liquidation or REO
Disposition, plus (ii)
interest (and REO Imputed Interest, if any) at the Net Mortgage
Rate from the
Due Date as to which interest was last paid or advanced to
Certificateholders up
to the last day of the month in which the Cash Liquidation (or
REO Disposition)
occurred on the Stated Principal Balance of such Mortgage Loan
(or REO Property)
outstanding during each Due Period that such interest was not
paid or advanced,
minus (iii) the proceeds, if any, received during the month in
which such Cash
Liquidation (or REO Disposition) occurred, to the extent applied
as recoveries
of interest at the Net Mortgage Rate and to principal of the
Mortgage Loan, net
of the portion thereof reimbursable to the Master Servicer or
any Subservicer
with respect to related Advances, Servicing Advances or other
expenses as to
which the Master Servicer or Subservicer is entitled to
reimbursement thereunder
but which have not been previously reimbursed. With respect to
each Mortgage
Loan which is the subject of a Servicing Modification, (a) (1)
the amount by
which the interest portion of a Monthly Payment or the principal
balance of such
Mortgage Loan was reduced or (2) the sum of any other amounts
owing under the
Mortgage Loan that were forgiven and that constitute Servicing
Advances that are
reimbursable to the Master Servicer or a Subservicer, and (b)
any such amount
with respect to a Monthly Payment that was or would have been
due in the month
immediately following the month in which a Principal Prepayment
or the Purchase
Price of such Mortgage Loan is received or is deemed to have
been received. With
respect to each Mortgage Loan which has become the subject of a
Deficient
Valuation, the difference between the principal balance of the
Mortgage Loan
outstanding immediately prior to such Deficient Valuation and
the principal
balance of the Mortgage Loan as reduced by the Deficient
Valuation. With respect
to each Mortgage Loan which has become the object of a Debt
Service Reduction,
the amount of such Debt Service Reduction. Notwithstanding the
above, neither a
Deficient Valuation nor a Debt Service Reduction shall be deemed
a Realized Loss
hereunder so long as the Master Servicer has notified the
Trustee in writing
that the Master Servicer is diligently pursuing any remedies
that may exist in
connection with the representations and warranties made
regarding the related
Mortgage Loan and either (A) the related Mortgage Loan is not in
default with
regard to payments due thereunder or (B) delinquent payments of
principal and
interest under the related Mortgage Loan and any premiums on any
applicable
primary hazard insurance policy and any related escrow payments
in respect of
such Mortgage Loan are being advanced on a current basis by the
Master Servicer
or a Subservicer, in either case without giving effect to any
Debt Service
Reduction.
Realized Losses allocated to the Class SB Certificates shall
be
allocated first to the REMIC III Regular Interest SB-IO in
reduction of the
accrued but unpaid interest thereon until such accrued and
unpaid interest shall
have been reduced to zero and then to the REMIC III Regular
Interest SB-PO in
reduction of the Principal Balance thereof.
Record Date: With respect to each Distribution Date and the
LIBOR
Certificates, the Business Day immediately preceding such
Distribution Date.
With respect to each Distribution Date and the Certificates
(other than the
LIBOR 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.
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<PAGE>
Regular Certificates: The Class A, Class M, Class B and Class
SB
Certificates.
Regular Interest: Any one of the regular interests in the Trust
Fund.
Relief Act: The Servicemembers Civil Relief Act, formerly known
as the
Soldiers' and Sailors' Civil Relief Act of 1940.
Relief Act Shortfalls: Interest shortfalls on the Mortgage Loans
resulting
from the Relief Act or similar legislation or regulations.
REMIC: A "real estate mortgage investment conduit" within the
meaning of
Section 860D of the Code. As used herein, the term "REMIC" shall
mean REMIC I,
REMIC II or REMIC III.
REMIC Administrator: Residential Funding 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 Interest Amount: For any Distribution Date and each Class
of Class
A-I Certificates, Class A-II-2 Certificates, Class M
Certificates and Class B
Certificates, the Accrued Certificate Interest for such Class
reduced by the
portion thereof attributable to the excess, if any, of the
related Pass-Through
Rate for such Distribution Date over the related REMIC Net WAC
Rate for such
Distribution Date.
REMIC Net WAC Rate: The Group I REMIC Net WAC Rate, Group II
REMIC Net
WAC Rate or Subordinate REMIC Net WAC Rate, as applicable.
REMIC I: The segregated pool of assets subject hereto,
constituting a
portion of the primary trust created hereby and to be
administered hereunder,
with respect to which a separate REMIC election is to be made,
consisting of:
(i) the Mortgage Loans and the related Mortgage Files;
(ii) all payments on and collections in respect of the
Mortgage
Loans due after the Cut-off Date (other than Monthly Payments
due in the
month of the Cut-off Date) as shall be on deposit in the
Custodial
Account or in the Certificate Account and identified as
belonging to the
Trust Fund;
(iii) property which secured a Mortgage Loan and which has
been
acquired for the benefit of the Certificateholders by
foreclosure or
deed in lieu of foreclosure;
(iv) the hazard insurance policies and Primary Insurance
Policies
pertaining to the Mortgage Loans, if any; and
(v) all proceeds of clauses (i) through (iv) above.
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<PAGE>
REMIC I Available Distribution Amount: The Available
Distribution Amount.
REMIC I Distribution Amount: For any Distribution Date, the
REMIC I
Available Distribution Amount shall be distributed to the REMIC
I Regular
Interests and the Class R-1 Residual Interest in the following
amounts and
priority:
(a) To the extent of the portion of the REMIC I Available
Distribution
Amount for related to Loan Group I:
(i) first, to REMIC I Y-1 and REMIC I Z-1 Regular Interests,
concurrently, the Uncertificated Accrued Interest for such
Regular Interests
remaining unpaid from previous Distribution Dates, pro rata
according to their
respective shares of such unpaid amounts;
(ii) second, to the REMIC I Y-1 and REMIC I Z-1 Regular
Interests, concurrently, the Uncertificated Accrued Interest for
such Classes
for the current Distribution Date, pro rata according to their
respective
Uncertificated Accrued Interest; and
(iii) third, to the REMIC I Y-1 and REMIC I Z-1 Regular
Interests, the REMIC I Y-1 Principal Distribution Amount and the
REMIC I Z-1
Principal Distribution Amount, respectively.
(b) To the extent of the portion of the REMIC I Available
Distribution
Amount related to Loan Group II:
(i) first, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests,
concurrently, the Uncertificated Accrued Interest for such
Classes remaining
unpaid from previous Distribution Dates, pro rata according to
their respective
shares of such unpaid amounts;
(ii) second, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, concurrently, the Uncertificated Accrued Interest for
such Classes
for the current Distribution Date, pro rata according to their
respective
Uncertificated Accrued Interest; and
(iii) third, to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests, the REMIC I Y-2 Principal Distribution Amount and the
REMIC I Z-2
Principal Distribution Amount, respectively.
(c) To the extent of the REMIC I Available Distribution Amounts
for
Group I and Group II for such Distribution Date remaining after
payment of the
amounts pursuant to paragraphs (a) and (b) of this definition of
"REMIC I
Distribution Amount:"
(i) first, to each Class of REMIC I Y and REMIC I Z Regular
Interests, pro rata according to the amount of unreimbursed
Realized Losses
allocable to principal previously allocated to each such Regular
Interest, the
aggregate amount of any distributions to the Certificates as
reimbursement of
such Realized Losses on such Distribution Date pursuant to
clause (xiii) in
Section 4.02(c); provided, however, that any amounts distributed
pursuant to
this paragraph (c)(i) of this definition of "REMIC I
Distribution Amount" shall
not cause a reduction in the Uncertificated Principal Balances
of any of the
REMIC I Y and REMIC I Z Regular Interests; and
(ii) second, to the Class R-I Certificates, any remaining
amount.
REMIC I Interests: The REMIC I Regular Interests and the Class R
I
Certificates.
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<PAGE>
REMIC I Y Principal Reduction Amounts: For any Distribution Date
the
amounts by which the Uncertificated Principal Balances of the
REMIC I Y-1
Regular Interest and REMIC I Y-2 Regular Interest respectively
will be reduced
on such distribution date by the allocation of Realized Losses
and the
distribution of principal, determined as follows:
First for each of Loan Group I and Loan Group II determine the
related
Group REMIC Net WAC Cap Rate for distributions of interest that
will be made on
the next succeeding Distribution Date (the "Group Interest
Rate"). The REMIC I
Principal Reduction Amount for each of the REMIC I Y Regular
Interests will be
determined pursuant to the "Generic solution for the REMIC I Y
Regular
Interests" set forth below (the "Generic Solution") by making
the following
identifications among the Loan Groups and their related REMIC I
Y Regular
Interests and REMIC I Z Regular Interests:
A. Determine which Loan Group has the lower Group REMIC Net
WAC
Cap Rate. That Loan Group will be identified with Loan Group AA
and the REMIC I
Y Regular Interests and REMIC I Z Regular Interests related to
that Loan Group
will be respectively identified with the REMIC I YAA and REMIC I
ZAA Regular
Interests. The Group Interest Rate for that Loan Group will be
identified with
J%. If the two Loan Groups have the same Group Interest Rate
pick one for this
purpose, subject to the restriction that each Loan Group may be
picked only once
in the course of any such selections pursuant to paragraphs A
and B of this
definition.
B. Determine which Loan Group has the higher Group REMIC Net
WAC
Cap Rate. That Loan Group will be identified with Loan Group BB
and the REMIC I
Y Regular Interests and REMIC I Z Regular Interests related to
that Group will
be respectively identified with the REMIC I YBB and REMIC I ZBB
Regular
Interests. The Group Interest Rate for that Loan Group will be
identified with
K%. If the two Loan Groups have the same Group Interest Rate the
Loan Group not
selected pursuant to paragraph A, above, will be selected for
purposes of this
paragraph B.
Second, apply the Generic Solution set forth below to determine
the
REMIC I Y Principal Reduction Amounts for the Distribution Date
using the
identifications made above.
GENERIC SOLUTION FOR THE REMIC I Y PRINCIPAL REDUCTION AMOUNTS:
For any
Distribution Date, the amounts by which the Uncertificated
Principal Balances of
REMIC I YAA and REMIC I ZAA Regular Interests respectively will
be reduced on
such Distribution Date by the allocation of Realized Losses and
the distribution
of principal, determined as follows:
J% and K% represent the interest rates on Loan Group AA and
Loan
Group BB respectively. J% less than K%.
For purposes of the succeeding formulas the following symbols
shall have
the meanings set forth below:
PJB = the Loan Group AA Subordinate Balance after the
allocation
of Realized Losses and distributions of principal on such
Distribution Date.
PKB = the Loan Group BB Subordinate Balance after the
allocation
of Realized Losses and distributions of principal on such
Distribution Date.
R = the Class CB Pass Through Rate = (J%PJB plus K%PKB)/(PJB
plus PKB)
Yj = the REMIC I YAA Principal Balance after distributions on
the
prior Distribution Date.
Yk = the REMIC I YBB Principal Balance after distributions on
the
prior Distribution Date.
(DELTA)Yj = the REMIC I YAA Principal Reduction Amount.
36
<PAGE>
(DELTA)Yk = the REMIC I YBB Principal Reduction Amount.
Zj = the REMIC I ZAA Principal Balance after distributions on
the
prior Distribution Date.
Zk = the REMIC I ZBB Principal Balance after distributions on
the
prior Distribution Date.
(DELTA)Zj = the REMIC I ZAA Principal Reduction Amount.
= (DELTA)Pj - (DELTA)Yj
(DELTA)Zk = the REMIC I ZBB Principal Reduction Amount.
= (DELTA)Pk - (DELTA)Yk
Pj = the aggregate Uncertificated Principal Balance of the
REMIC
I YAA and REMIC I ZAA Regular Interests after distributions on
the prior
Distribution Date, which is equal to the aggregate principal
balance of the
Group AA Loans.
Pk = the aggregate Uncertificated Principal Balance of the
REMIC
I YBB and REMIC I ZBB Regular Interests after distributions on
the prior
Distribution Date, which is equal to the aggregate principal
balance of the Loan
Group BB Mortgage Loans.
(DELTA)Pj = the aggregate principal reduction resulting on
such
Distribution Date on the Loan Group AA Mortgage Loans as a
result of principal
distributions (exclusive of any amounts distributed pursuant to
clauses (c)(i)
or (c)(ii) of the definition of REMIC I Distribution Amount) to
be made and
Realized Losses to be allocated on such Distribution Date, if
applicable, which
is equal to the aggregate of the REMIC I YAA and REMIC I ZAA
Principal Reduction
Amounts.
(DELTA)Pk= the aggregate principal reduction resulting on
such
Distribution Date on the Loan Group BB Mortgage Loans as a
result of principal
distributions (exclusive of any amounts distributed pursuant to
clauses (c)(i)
or (c)(ii) of the definition of REMIC I Distribution Amount) to
be made and
realized losses to be allocated on such Distribution Date, which
is equal to the
aggregate of the REMIC I YBB and REMIC I ZBB Principal Reduction
Amounts.
(alpha) = .0005
(gamma) = (R - J%)/(K% - R). (gamma) is a non-negative
number
unless its denominator is zero, in which event it is
undefined.
If (gamma) is zero, (DELTA)Yk = Yk and (DELTA)Yj =
(Yj/Pj)(DELTA)Pj.
If (gamma) is undefined, (DELTA)Yj = Yj, (DELTA)Yk =
(Yk/Pk)(DELTA)Pk. if denominator
In the remaining situations, (DELTA)Yk and (DELTA)Yj shall
be
defined as follows:
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<PAGE>
1. If Yk - (alpha)(Pk - (DELTA)Pk) => 0, Yj- (alpha)(Pj -
(DELTA)Pj) => 0, and
(gamma) (Pj - (DELTA)Pj) < (Pk - (DELTA)Pk), (DELTA)Yk = Yk -
(alpha)(gamma)
(Pj - (DELTA)Pj) and (DELTA)Yj = Yj - (alpha)(Pj -
(DELTA)Pj).
2. If Yk - (alpha)(Pk - (DELTA)Pk) => 0, Yj - (alpha)(Pj -
(DELTA)Pj) => 0, and
(gamma) (Pj - (DELTA)Pj) => (Pk - (DELTA)Pk), (DELTA)Yk = Yk
- (alpha)(Pk -
(DELTA)Pk) and (DELTA)Yj = Yj - ((alpha)/(gamma))(Pk -
(DELTA)Pk).
3. If Yk - (alpha)(Pk - (DELTA)Pk) < 0, Yj - (alpha)(Pj -
(DELTA)Pj) => 0, and
Yj - (alpha)(Pj - (DELTA)Pj) => Yj - (Yk/(gamma)), (DELTA)Yk
= Yk -
(alpha)(gamma) (Pj - (DELTA)Pj) and (DELTA)Yj = Yj - (alpha)(Pj
-
(DELTA)Pj).
4. If Yk - (alpha)(Pk - (DELTA)Pk) < 0, Yj - (Yk/(gamma))
=> 0, and Yj -
(alpha)(Pj - (DELTA)Pj) <= Yj - (Yk/(gamma)), (DELTA)Yk = 0
and (DELTA)Yj =
Yj - (Yk/(gamma)).
5. If Yj - (alpha)(Pj - (DELTA)Pj) < 0, Yj - (Yk/(gamma))
< 0, and Yk -
(alpha)(Pk - (DELTA)Pk) <= Yk - ((gamma)Yj), (DELTA)Yk = Yk -
((gamma)Yj)
and (DELTA)Yj = 0.
6. If Yj - (alpha)(Pj - (DELTA)Pj) < 0, Yk - (alpha)(Pk -
(DELTA)Pk) => 0, and
Yk - (alpha)(Pk - (DELTA)Pk) => Yk - ((gamma)Yj), (DELTA)Yk =
Yk -
(alpha)(Pk - (DELTA)Pk) and (DELTA)Yj = Yj -
((alpha)/(gamma))(Pk -
(DELTA)Pk).
The purpose of the foregoing definitional provisions together
with the
related provisions allocating Realized Losses and defining the
REMIC I Y and
REMIC I Z Principal Distribution Amounts is to accomplish the
following goals in
the following order of priority:
1. Making the ratio of Yk to Yj equal to (gamma) after taking
account of the
allocation Realized Losses and the distributions that will be
made through
end of the Distribution Date to which such provisions relate and
assuring
that the Principal Reduction Amount for each of the REMIC I YAA,
REMIC I
YBB, REMIC I ZAA and REMIC I ZBB Regular Interests is greater
than or equal
to zero for such Distribution Date;
2. Making (i) the REMIC I YAA Principal Balance less than or
equal to 0.0005 of
the sum of the REMIC I YAA and REMIC I ZAA principal balances
and (ii) the
REMIC I YBB principal balances less than or equal to 0.0005 of
the sum of
the REMIC I YBB and REMIC I ZBB Principal Balances in each case
after giving
effect to allocations of Realized Losses and distributions to be
made
through the end of the Distribution Date to which such
provisions relate;
and
3. Making the larger of (a) the fraction whose numerator is Yk
and whose
denominator is the sum of Yk and Zk and (b) the fraction whose
numerator is
Yj and whose denominator is the sum of Yj, and Zj as large as
possible while
remaining less than or equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of
REMIC I Y Principal Reduction Amount to accomplish both of goals
1 and 2 above,
the amounts thereof should be adjusted to so as to accomplish
such goals within
the requirement that each REMIC I Y Principal Reduction Amount
must be less than
or equal to the sum of (a) the principal Realized Losses to be
allocated on the
related Distribution Date for the related Pool and (b) the
remainder of the
Available Distribution Amount for the related Pool or after
reduction thereof by
the distributions to be made on such Distribution in respect of
interest on the
related REMIC I Y and REMIC I Z Regular Interests, or, if both
of such goals
cannot be accomplished within such requirement, such adjustment
as is necessary
shall be made to accomplish goal 1 within such requirement. In
the event of any
conflict among the provisions of the definition of the REMIC I Y
Principal
Reduction Amounts, such conflict shall be resolved on the basis
of the goals and
their priorities set forth above within the requirement set
forth in the
preceding sentence.
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<PAGE>
REMIC I Realized Losses: Realized Losses on Group I Loans and
Group II
Loans shall be allocated to the REMIC I Regular Interests as
follows: (1) The
interest portion of Realized Losses on Group I Loans, if any,
shall be allocated
among the REMIC I Y-1 and REMIC I Z-1 Regular Interests pro rata
according to
the amount of interest accrued but unpaid thereon, in reduction
thereof; and (2)
the interest portion of Realized Losses on Group II Loans, if
any, shall be
allocated among the REMIC I Y-2 and REMIC I Z-2 Regular
Interests pro rata
according to the amount of interest accrued but unpaid thereon,
in reduction
thereof. Any interest portion of such Realized Losses in excess
of the amount
allocated pursuant to the preceding sentence shall be treated as
a principal
portion of Realized Losses not attributable to any specific
Mortgage Loan in
such Loan Group and allocated pursuant to the succeeding
sentences. The
principal portion of Realized Losses with respect to Loan Group
I and Loan Group
II shall be allocated to the REMIC I Regular Interests as
follows: (1) The
principal portion of Realized Losses on Group I Loans shall be
allocated, first,
to the REMIC I Y-1 Regular Interest to the extent of the REMIC I
Y-1 Principal
Reduction Amount in reduction of the Uncertificated Principal
Balance of such
REMIC I Regular Interest and, second, the remainder, if any, of
such principal
portion of such Realized Losses shall be allocated to the REMIC
I Z-1 Regular
Interest in reduction of the Uncertificated Principal Balance
thereof; and (2)
the principal portion of Realized Losses on Group II Loans shall
be allocated,
first, to the REMIC I Y-2 Regular Interest to the extent of the
REMIC I Y-2
Principal Reduction Amount in reduction of the Uncertificated
Principal Balance
of such Regular Interest and, second, the remainder, if any, of
such principal
portion of such Realized Losses shall be allocated to the REMIC
I Z-2 Regular
Interest in reduction of the Uncertificated Principal Balance
thereof.
REMIC I Regular Interests: REMIC I Regular Interest Y-1, Y-2,
Z-1 and Z-2.
REMIC I Regular Interest Y-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 Y-1 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC I Regular
Interest Y-1
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC I Regular Interest Y-1 on such
Distribution Date.
REMIC I Regular Interest Y-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 Y-2 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC I Regular
Interest Y-2
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC I Regular Interest Y-2 on such
Distribution Date.
REMIC I Regular Interest Z-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.
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<PAGE>
REMIC I Regular Interest Z-1 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC I Regular
Interest Z-1
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC I Regular Interest Z-1 on such
Distribution Date.
REMIC I Regular Interest Z-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 Z-2 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC I Regular
Interest Z-2
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC I Regular Interest Z-2 on such
Distribution Date.
REMIC I Z Principal Reduction Amounts: For any Distribution
Date, the
amounts by which the Uncertificated Principal Balances of the
REMIC I Z-1 and
REMIC I Z-2 Regular Interests, respectively, will be reduced on
such
Distribution Date by the allocation of Realized Losses and the
distribution of
principal, which shall be in each case the excess of (A) the sum
of (x) the
excess of the REMIC I Available Distribution Amount for the
related Loan Group
(i.e. the "related Group" for the REMIC I Z-1 Regular Interest
is Group I and
the "related Loan Group" for the REMIC I Z-2 Regular Interest is
Loan Group II)
exclusive of any amount in respect of Subsequent Recoveries
included therein
over the amount thereof distributable in respect of interest on
such REMIC I Z
Regular Interest and the related REMIC I Y Regular Interest and
(iv) to such
REMIC I Z Regular Interest and the related REMIC I Y Regular
Interest pursuant
to the definition of "REMIC I Distribution Amount" and (y) the
amount of
Realized Losses allocable to principal for the related Loan
Group over (B) the
REMIC I Y Principal Reduction Amount for the related Loan
Group.
REMIC II: The segregated pool of assets subject hereto,
constituting a
portion of the primary trust created hereby and to be
administered hereunder,
with respect to which a separate REMIC election is to be made,
consisting of the
REMIC I Regular Interests.
REMIC II Available Distribution Amount: For any Distribution
Date, the
amount distributed from REMIC I to REMIC II on such Distribution
Date in respect
of the REMIC I Regular Interests.
REMIC II Distribution Amount:
(a) On each Distribution Date, the following amounts, in the
following
order of priority, shall be distributed by REMIC II to REMIC III
on account of
the REMIC II Regular Interests related to Loan Group I:
(i) to the extent of the portion of the REMIC II Available
Distribution Amount related to Group I, to REMIC III as the
holder of REMIC II
Regular Interests LT1, LT2, LT3, LT4 and LT-Y1, pro rata, in an
amount equal to
(A) their Uncertificated Accrued Interest for such Distribution
Date, plus (B)
any amounts in respect thereof remaining unpaid from previous
Distribution
Dates; and
(ii) on each Distribution Date, to REMIC III as the holder of
the
REMIC II Regular Interests, in an amount equal to the remainder
of such portion
of the REMIC II Available Distribution Amount after the
distributions made
pursuant to clause (i) above, allocated as follows (except as
provided below):
(A) in respect of the REMIC I Regular Interests LT2, LT3, LT4
and LT-Y1,
their respective Principal Distribution Amounts;
40
<PAGE>
(B) in respect of the REMIC I Regular Interest LT1 any remainder
until the
Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of the REMIC II Regular Interests
LT2, LT3 and
LT4, pro rata according to their respective Uncertificated
Principal Balances as
reduced by the distributions deemed made pursuant to (A) above,
until their
respective Uncertificated Principal Balances are reduced to
zero; and
(D) any remaining amounts to the Holders of the Class R-II
Certificates.
(b) On each Distribution Date, the following amounts, in the
following
order of priority, shall be distributed by REMIC II to REMIC III
on account of
the REMIC II Regular Interests related to Loan Group II:
(i) to the extent of the portion of the REMIC II Available
Distribution Amount related to Group II, to REMIC III as the
holder of REMIC II
Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, pro rata, in an
amount equal to
(A) their Uncertificated Accrued Interest for such Distribution
Date, plus (B)
any amounts in respect thereof remaining unpaid from previous
Distribution
Dates; and
(ii) on each Distribution Date, to REMIC III as the holder of
the
REMIC II Regular Interests, in an amount equal to the remainder
of such portion
of the REMIC II Available Distribution Amount after the
distributions made
pursuant to clause (i) above, allocated as follows (except as
provided below):
(A) in respect of the REMIC II Regular Interests LT6, LT7, LT8
and LT-Y2,
their respective Principal Distribution Amounts;
(B) in respect of the REMIC II Regular Interest LT5 any
remainder until the
Uncertificated Principal Balance thereof is reduced to zero;
(C) any remainder in respect of the REMIC II Regular Interests
LT6, LT7 and
LT8, pro rata according to their respective Uncertificated
Principal Balances as
reduced by the distributions deemed made pursuant to (A) above,
until their
respective Uncertificated Principal Balances are reduced to
zero; and
(D) any remaining amounts to the Holders of the Class R-II
Certificates.
REMIC II Principal Reduction Amounts: For any Distribution Date,
the
amounts by which the principal balances of the REMIC II Regular
Interests LT1,
LT2, LT3, LT4, LT5, LT6, LT7, LT8, LT-Y1 and LT-Y2,
respectively, will be
reduced on such Distribution Date by the allocation of Realized
Losses and the
distribution of principal, determined as follows:
For purposes of the succeeding formulas the following symbols
shall have
the meanings set forth below:
Y1 = the aggregate principal balance of the REMIC II Regular
Interests
LT1 and LT-Y1 after distributions on the prior Distribution
Date.
Y2 = the principal balance of the REMIC II Regular Interest LT2
after
distributions on the prior Distribution Date.
41
<PAGE>
Y3 = the principal balance of the REMIC II Regular Interest LT3
after
distributions on the prior Distribution Date.
Y4 = the principal balance of the REMIC II Regular Interest LT4
after
distributions on the prior Distribution Date (note: Y3 =
Y4).
AY1 = the combined REMIC II Regular Interest LT1 and LT-Y1
Principal
Reduction Amount. Such amount shall be allocated first to LT-Y1
up to the Class
Y1 Principal Reduction Amount and thereafter the remainder shall
be allocated to
LT1.
AY2 = the REMIC I Regular Interest LT2 Principal Reduction
Amount.
AY3 = the REMIC I Regular Interest LT3 Principal Reduction
Amount.
AY4 = the REMIC I Regular Interest LT4 Principal Reduction
Amount.
P0 = the aggregate principal balance of the REMIC I Regular
Interests
LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the
allocation of Realized
Losses on the prior Distribution Date.
P1 = the aggregate principal balance of the REMIC I Regular
Interests
LT1, LT2, LT3, LT4 and LT-Y1 after distributions and the
allocation of Realized
Losses to be made on such Distribution Date.
AP = P0 - P1 = the aggregate of the REMIC I Regular Interests
LT1, LT2,
LT3, LT4 and LT-Y1 Principal Reduction Amounts.
=the aggregate of the principal portions of Realized Losses to
be
allocated to, and the principal distributions to be made on, the
Group I
Certificates on such Distribution Date (including distributions
of accrued and
unpaid interest on the Class SB Certificates for prior
Distribution Dates).
R0 = the Group I Net WAC Cap Rate (stated as a monthly rate)
after
giving effect to amounts distributed and Realized Losses
allocated on the prior
Distribution Date.
R1 = the Group I Net WAC Cap Rate (stated as a monthly rate)
after
giving effect to amounts to be distributed and Realized Losses
to be allocated
on such Distribution Date.
a = (Y2 + Y3)/P0. The initial value of a on the Closing Date for
use on
the first Distribution Date shall be 0.0001.
a0 = the lesser of (A) the sum of (1) for all Classes of Class
A-I
Certificates of the product for each Class of (i) the monthly
interest rate (as
limited by the Net Rate Cap, if applicable) for such Class
applicable for
distributions to be made on such Distribution Date and (ii) the
aggregate
Certificate Principal Balance for such Class after distributions
and the
allocation of Realized Losses on the prior Distribution Date,
(2) for all
Classes of Class M Certificates of the product for each Class of
(i) the monthly
interest rate (as limited by the Net Rate Cap, if applicable)
for such Class
applicable for distributions to be made on such Distribution
Date and (ii) the
aggregate Certificate Principal Balance for such Class
multiplied by a fraction
whose numerator is the principal balance of the REMIC I Regular
Interest Y-1 and
whose denominator is the sum of the principal balances of the
REMIC I Regular
Interests Y-1 and Y-2 after distributions and the allocation of
Realized Losses
on the prior Distribution Date and (3) the amount, if any, by
which the sum of
the amounts in clauses (A)(1), (2) and (3) of the definition of
A0 exceeds S0 *
Q0 and (B) R0*P0.
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<PAGE>
a1 = the lesser of (A) the sum of (1) for all Classes of Class
A-I
Certificates of the product for each Class of (i) the monthly
interest rate (as
limited by the Net Rate Cap, if applicable) for such Class
applicable for
distributions to be made on the next succeeding Distribution
Date and (ii) the
aggregate Certificate Principal Balance for such Class after
distributions and
the allocation of Realized Losses to be made on such
Distribution Date, (2) for
all Classes of Class M Certificates of the product for each
Class of (i) the
monthly interest rate (as limited by the Net Rate Cap, if
applicable) for such
Class applicable for distributions to be made on the next
succeeding
Distribution Date and (ii) the aggregate Certificate Principal
Balance for such
Class multiplied by a fraction whose numerator is the principal
balance of the
REMIC I Regular Interest Y-1 and whose denominator is the sum of
the principal
balances of the REMIC I Regular Interests Y-1 and Y-2 after
distributions and
the allocation of Realized Losses to be made on such
Distribution Date and (3)
the amount, if any, by which the sum of the amounts in clauses
(A)(1), (2) and
(3) of the definition of A1 exceeds S1 * Q1 and (B) R1*P1.
Then, based on the foregoing definitions:
AY1 = AP - AY2 - AY3 - AY4;
AY2 = (a/2){( a0R1 - a1R0)/R0R1};
AY3 = aAP - AY2; and
AY4 = AY3.
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1) If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
(2) If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a1R0P0 - a0R1P1}/{2R1R0P1 - a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
For purposes of the succeeding formulas the following symbols
shall have
the meanings set forth below:
Y5 = the aggregate principal balance of the REMIC II Regular
Interests
LT5 and LT-Y2 after distributions on the prior Distribution
Date.
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<PAGE>
Y6 = the principal balance of the REMIC II Regular Interest LT6
after
distributions on the prior Distribution Date.
Y7 = the principal balance of the REMIC II Regular Interest LT7
after
distributions on the prior Distribution Date.
Y8 = the principal balance of the REMIC II Regular Interest LT8
after
distributions on the prior Distribution Date (note: Y7 =
Y8).
AY5 = the aggregate of the REMIC II Regular Interest LT5 and
LT-Y2
Principal Reduction Amounts. Such amount shall be allocated
first to LT-Y2 up to
the Class Y2 Principal Reduction Amount and thereafter the
remainder shall be
allocated to LT5.
AY6 = the REMIC II Regular Interest LT6 Principal Reduction
Amount.
AY7 = the REMIC II Regular Interest LT7 Principal Reduction
Amount.
AY8 = the REMIC II Regular Interest LT8 Principal Reduction
Amount.
Q0 = the aggregate principal balance of the REMIC II Regular
Interests
LT5, LT6, LT7, LT8 and LT-Y2 after distributions and the
allocation of Realized
Losses on the prior Distribution Date.
Q1 = the aggregate principal balance of the REMIC II Regular
Interests
LT5, LT6, LT7, LT8, LT-Y1 and LT-Y2 after distributions and the
allocation of
Realized Losses to be made on such Distribution Date.
AQ = Q0 - Q1 = the aggregate of the REMIC II Regular Interests
LT5, LT6,
LT7, LT8 and LT-Y2 Principal Reduction Amounts.
=the aggregate of the principal portions of Realized Losses to
be
allocated to, and the principal distributions to be made on, the
Group II
Certificates on such Distribution Date (including distributions
of accrued and
unpaid interest on the Class SB Certificates for prior
Distribution Dates).
S0 = the Group II Net WAC Rate (stated as a monthly rate) after
giving
effect to amounts distributed and Realized Losses allocated on
the prior
Distribution Date.
S1 = the Group II Net WAC Rate (stated as a monthly rate) after
giving
effect to amounts to be distributed and Realized Losses to be
allocated on such
Distribution Date.
a = (Y6 + Y7)/Q0. The initial value of a on the Closing Date for
use on
the first Distribution Date shall be 0.0001.
A0 = the lesser of (A) the sum of (1) for all Classes of Class
A-II
Certificates of the product for each Class of (i) the monthly
interest rate (as
limited by the Net Rate Cap, if applicable) for such Class
applicable for
distributions to be made on such Distribution Date and (ii) the
aggregate
Certificate Principal Balance for such Class after distributions
and the
allocation of Realized Losses on the prior Distribution Date,
(2) for all
Classes of Class M Certificates of the product for each Class of
(i) the monthly
interest rate (as limited by the Net Rate Cap, if applicable)
for such Class
applicable for distributions to be made on such Distribution
Date and (ii) the
aggregate Certificate Principal Balance for such Class
multiplied by a fraction
whose numerator is the principal balance of the REMIC I Regular
Interest Y-2 and
whose denominator is the sum of the principal balances of the
REMIC I Regular
Interests Y-1 and Y-2 after distributions and the allocation of
Realized Losses
on the prior Distribution Date and (3) the amount, if any, by
which the sum of
the amounts in clauses (A)(1), (2) and (3) of the definition of
a0 exceeds R0 *
P0 and (B) S0*Q0.
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<PAGE>
A1 = the lesser of (A) the sum of (1) for all Classes of Class
A-II
Certificates of the product for each Class of (i) the monthly
interest rate (as
limited by the Net Rate Cap, if applicable) for such Class
applicable for
distributions to be made on the next succeeding Distribution
Date and (ii) the
aggregate Certificate Principal Balance for such Class after
distributions and
the allocation of Realized Losses to be made on such
Distribution Date, (2) for
all Classes of Class M Certificates of the product for each
Class of (i) the
monthly interest rate (as limited by the Net Rate Cap, if
applicable) for such
Class applicable for distributions to be made on the next
succeeding
Distribution Date and (ii) the aggregate Certificate Principal
Balance for such
Class multiplied by a fraction whose numerator is the principal
balance of the
REMIC I Regular Interest Y-2 and whose denominator is the sum of
the principal
balances of the REMIC I Regular Interests Y-1 and Y-2 after
distributions and
the allocation of Realized Losses to be made on such
Distribution Date and (3)
the amount, if any, by which the sum of the amounts in clauses
(A)(1), (2) and
(3) of the definition of a1 exceeds R1 * P1 and (B) S1*Q1.
Then, based on the foregoing definitions:
AY5 = AQ - AY6 - AY7 - AY8;
AY6 = (a/2){(A0S1 - A1S0)/S0S1};
AY7 = aAQ - AY6; and
AY8 = AY7.
if both AY6 and AY7, as so determined, are non-negative numbers.
Otherwise:
(1) If AY6, as so determined, is negative, then
AY6 = 0;
AY7 = a{A1S0Q0 - A0S1Q1}/{A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
(2) If AY7, as so determined, is negative, then
AY7 = 0;
AY6 = a{A1S0Q0 - A0S1Q1}/{2S1S0Q1 - A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
REMIC II Realized Losses: Realized Losses on Group I Loans and
Group II
Loans shall be allocated to the REMIC II Regular Interests as
follows: (1) The
interest portion of Realized Losses on Group I Loans, if any,
shall be allocated
among the LT1, LT2, LT4 and LT-Y1 REMIC II Regular Interests pro
rata according
to the amount of interest accrued but unpaid thereon, in
reduction thereof; and
(2) the interest portion of Realized Losses on Group II Loans,
if any, shall be
allocated among the LT5, LT6, LT8 and LT-Y2 REMIC II Regular
Interests pro rata
according to the amount of interest accrued but unpaid thereon,
in reduction
thereof. Any interest portion of such Realized Losses in excess
of the amount
allocated pursuant to the preceding sentence shall be treated as
a principal
45
<PAGE>
portion of Realized Losses not attributable to any specific
Mortgage Loan in
such Loan Group and allocated pursuant to the succeeding
sentences. The
principal portion of Realized Losses with respect to Loan Group
I and Loan Group
II shall be allocated to the REMIC I Regular Interests as
follows: (1) The
principal portion of Realized Losses on Group I Loans shall be
allocated, first,
to the LT-Y1 REMIC II Regular Interest to the extent that such
losses were
allocated to the Y-1 REMIC I Regular Interest in reduction of
the Uncertificated
Principal Balance thereof, second, to the LT 2, LT3 and LT4
REMIC II Regular
Interests pro-rata according to their respective REMIC II
Principal Reduction
Amounts to the extent thereof in reduction of the Uncertificated
Principal
Balance of such REMIC II Regular Interests and, third, the
remainder, if any, of
such principal portion of such Realized Losses shall be
allocated to the LT1
REMIC II Regular Interest in reduction of the Uncertificated
Principal Balance
thereof; and (2) the principal portion of Realized Losses on
Group II Loans
shall be allocated, first, to the LT-Y2 REMIC II Regular
Interest to the extent
that such losses were allocated to the Y-2 REMIC I Regular
Interest in reduction
of the Uncertificated Principal Balance thereof, second, to the
LT 6, LT7 and
LT8 REMIC II Regular Interests pro-rata according to their
respective REMIC II
Principal Reduction Amounts to the extent thereof in reduction
of the
Uncertificated Principal Balance of such REMIC II Regular
Interests and, third,
the remainder, if any, of such principal portion of such
Realized Losses shall
be allocated to the LT5 REMIC II Regular Interest in reduction
of the
Uncertificated Principal Balance thereof.
REMIC II Regular Interests: REMIC II Regular Interest LT1, REMIC
II
Regular Interest LT2, REMIC II Regular Interest LT3, REMIC II
Regular Interest
LT4, REMIC II Regular Interest LT5, REMIC II Regular Interest
LT6, REMIC II
Regular Interest LT7, REMIC II Regular Interest LT8, REMIC II
Regular Interest
LT-Y1 and REMIC II Regular Interest LT-Y2.
REMIC II Regular Interest LT1: A regular interest in REMIC II
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 II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT1 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT1
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT1 on such
Distribution Date.
REMIC II Regular Interest LT2: A regular interest in REMIC II
that is
held as an asset of REMIC II, that has an initial principal
balance equal to the
related Uncertificated Principal Balance, that bears interest at
the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT2 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT2
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT2 on such
Distribution Date.
REMIC II Regular Interest LT3: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
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<PAGE>
REMIC II Regular Interest LT3 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT3
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT3 on such
Distribution Date.
REMIC II Regular Interest LT4: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT4 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT4
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT4 on such
Distribution Date.
REMIC II Regular Interest LT5: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT5 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT5
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT5 on such
Distribution Date.
REMIC II Regular Interest LT6: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT6 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT6
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT6 on such
Distribution Date.
REMIC II Regular Interest LT7: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT7 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT7
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT7 on such
Distribution Date.
REMIC II Regular Interest LT8: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT8 Principal Distribution Amount: For
any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT8
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT8 on such
Distribution Date.
REMIC II Regular Interest LT-Y1: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
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<PAGE>
REMIC II Regular Interest LT-Y1 Principal Distribution Amount:
For any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT-Y1
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT-Y1 on such
Distribution Date.
REMIC II Regular Interest LT-Y2: A regular interest in REMIC II
that is
held as an asset of REMIC III, that has an initial principal
balance equal to
the related Uncertificated Principal Balance, that bears
interest at the related
Uncertificated REMIC II Pass-Through Rate, and that has such
other terms as are
described herein.
REMIC II Regular Interest LT-Y2 Principal Distribution Amount:
For any
Distribution Date, the excess, if any, of the REMIC II Regular
Interest LT-Y2
Principal Reduction Amount for such Distribution Date over the
Realized Losses
allocated to the REMIC II Regular Interest LT-Y2 on such
Distribution Date.
REMIC III: The segregated pool of assets subject hereto,
constituting a
portion of the primary trust created hereby and to be
administered hereunder,
with respect to which a separate REMIC election is to be made,
consisting of the
REMIC II Regular Interests.
REMIC III Regular Interest SB-PO: A separate non-certificated
beneficial
ownership interests in REMIC III issued hereunder and designated
as a Regular
Interest in REMIC III. REMIC III Regular Interest SB-PO shall
have no
entitlement to interest, and shall be entitled to distributions
of principal
subject to the terms and conditions hereof, in aggregate amount
equal to the
initial Certificate Principal Balance of the Class SB
Certificates as set forth
in the Preliminary Statement hereto.
REMIC III Regular Interest SB-IO:: A separate
non-certificated
beneficial ownership interests in REMIC III issued hereunder and
designated as a
Regular Interest in REMIC III. REMIC III Regular Interest SB-IO
shall have no
entitlement to principal, and shall be entitled to distributions
of interest
subject to the terms and conditions hereof, in aggregate amount
equal to the
interest distributable with respect to the Class SB Certificates
pursuant to the
terms and conditions hereof.
REMIC III Regular Interests: REMIC III Regular Interests SB-IO
and
SB-PO, together with the Class A and Class M Certificates.
REMIC Provisions: Provisions of the federal income tax law
relating to
real estate mortgage investment conduits, which appear at
Sections 860A through
860G of Subchapter M of Chapter 1 of the Code, and related
provisions, and
temporary and final regulations (or, to the extent not
inconsistent with such
temporary or final regulations, proposed regulations) and
published rulings,
notices and announcements promulgated thereunder, as the
foregoing may be in
effect from time to time.
REO Acquisition: The acquisition by the Master Servicer on
behalf of the
Trustee for the benefit of the Certificateholders of any REO
Property pursuant
to Section 3.14.
REO Disposition: With respect to any REO Property, a
determination by
the Master Servicer that it has received substantially all
Insurance Proceeds,
Liquidation Proceeds, REO Proceeds and other payments and
recoveries (including
proceeds of a final sale) which the Master Servicer expects to
be finally
recoverable from the sale or other disposition of the REO
Property.
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REO Imputed Interest: With respect to any REO Property, for any
period,
an amount equivalent to interest (at a rate equal to the Net
Mortgage Rate that
would have been applicable to the related Mortgage Loan had it
been outstanding)
on the unpaid principal balance of the Mortgage Loan as of the
date of
acquisition thereof for such period.
REO Proceeds: Proceeds, net of expenses, received in respect of
any REO
Property (including, without limitation, proceeds from the
rental of the related
Mortgaged Property) which proceeds are required to be deposited
into the
Custodial Account only upon the related REO Disposition.
REO Property: A Mortgaged Property acquired by the Master
Servicer on
behalf of the Trustee for the benefit of the Certificateholders
through
foreclosure or deed in lieu of foreclosure in connection with a
defaulted
Mortgage Loan.
Reportable Modified Mortgage Loan: Any Mortgage Loan that (a)
has been
subject to an interest rate reduction, (b) has been subject to a
term extension
or (c) 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 (a) 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 forms of which
are
attached as Exhibit G hereto, or an electronic request in a form
acceptable to
the Custodian.
Required Insurance Policy: With respect to any Mortgage Loan,
any
insurance policy which is required to be maintained from time to
time under this
Agreement, the Program Guide or the related Subservicing
Agreement in respect of
such Mortgage Loan.
Required Overcollateralization Amount: With respect to any
Distribution
Date, (a) prior to the Stepdown Date, an amount equal to 1.05%
of the aggregate
Stated Principal Balance of the Mortgage Loans as of the Cut-off
Date, (b) on or
after the Stepdown Date if a Trigger Event is not in effect, the
greater of (i)
an amount equal to 2.10% of the aggregate outstanding Stated
Principal Balance
of the Mortgage Loans after giving effect to distributions made
on that
Distribution Date and (ii) the Overcollateralization Floor and
(c) on or after
the Stepdown Date if a Trigger Event is in effect, an amount
equal to the
Required Overcollateralization Amount from the immediately
preceding
Distribution Date. The Required Overcollateralization Amount may
be reduced so
long as written confirmation is obtained from each Rating Agency
that such
reduction shall not reduce the ratings assigned to the
Certificates by such
Rating Agency below the lower of the then current rating or the
rating assigned
to such Certificates as of the Closing Date by such Rating
Agency.
Residential Funding: Residential Funding Corporation, a
Delaware
corporation, in its capacity as seller of the Mortgage Loans to
the Depositor
and any successor thereto.
Responsible Officer: When used with respect to the Trustee, any
officer
of the Corporate Trust Department of the Trustee, including any
Senior Vice
President, any Vice President, any Assistant Vice President, any
Assistant
Secretary, any Trust Officer or Assistant Trust Officer, or any
other officer of
the Trustee, in each case, with direct responsibility for the
administration of
this Agreement.
RFC Exemption: As defined in Section 5.02(e)(ii).
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Rule 144A: Rule 144A under the Securities Act of 1933, as in
effect from
time to time.
Seller: With respect to any Mortgage Loan, a Person, including
any
Subservicer, that executed a Seller's Agreement applicable to
such Mortgage
Loan.
Seller's Agreement: An agreement for the origination and sale
of
Mortgage Loans generally in the form of the seller contract
referred to or
contained in the Program Guide, or in such other form as has
been approved by
the Master Servicer and the Depositor, each containing
representations and
warranties in respect of one or more Mortgage Loans.
Senior Enhancement Percentage: For any Distribution Date, the
fraction,
expressed as a percentage, the numerator of which is the sum of
(i) the
aggregate Certificate Principal Balance of the Class M-1, Class
M-2, Class M-3,
Class M-4, Class M-5, Class M-6 and Class B 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 the aggregate Stated Principal Balance of the Mortgage
Loans after
giving effect to distributions to be made on that Distribution
Date.
Senior Percentage: With respect to each Loan Group and any
Distribution
Date, the percentage equal to the lesser of (x) the aggregate
Certificate
Principal Balances of the related Class A Certificates
immediately prior to such
Distribution Date divided by the aggregate Stated Principal
Balance of the
Mortgage Loans in such Loan Group immediately prior to such
Distribution Date
and (y) 100%.
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(R) System, (iii) the
management and
liquidation of any REO Property, (iv) any mitigation procedures
implemented in
accordance with Section 3.07, and (v) compliance with the
obligations under
Sections 3.01, 3.08, 3.11, 3.12(a) and 3.14, including, if the
Master Servicer
or any Affiliate of the Master Servicer provides services such
as appraisals and
brokerage services that are customarily provided by Persons
other than servicers
of mortgage loans, reasonable compensation for such
services.
Servicing 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).
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Servicing Officer: Any officer of the Master Servicer involved
in, or
responsible for, the administration and servicing of the
Mortgage Loans whose
name and specimen signature appear on a list of servicing
officers furnished to
the Trustee by the Master Servicer on the Closing Date, as such
list may from
time to time be amended.
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
foreclosure and REO, 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
McGraw-Hill 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 ending with the Due Period relating to the most recent
Distribution Date
which were received or with respect to which an Advance was
made, (b) all
Principal Prepayments with respect to such Mortgage Loan or REO
Property, and
all Insurance Proceeds, Liquidation Proceeds and REO Proceeds,
to the extent
applied by the Master Servicer as recoveries of principal in
accordance with
Section 3.14 with respect to such Mortgage Loan or REO Property,
in each case
which were distributed pursuant to Section 4.02 on any previous
Distribution
Date, and (c) any Realized Loss incurred with respect to such
Mortgage Loan
allocated to Certificateholders with respect thereto for any
previous
Distribution Date.
Stepdown Date: That Distribution Date which is the earlier to
occur of
(a) 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 and (b) the latest to occur of (i) the
Distribution Date in
December 2007 and (ii) the first Distribution Date on which the
Senior
Enhancement Percentage is equal to or greater than 35.00%.
Subordinate Basis Risk Shortfalls: With respect to each Class of
the
Class M Certificates and Class B Certificates, and any
Distribution Date, the
sum of (a) with respect to any Distribution Date on which the
Subordinate Net
WAC Cap Rate is used to determine the Pass-Through Rate of such
Class, an amount
equal to the excess of (x) Accrued Certificate Interest for such
Class
calculated at a per annum rate equal to the lesser of (i) LIBOR
plus the related
Margin for such Distribution Date and (ii) the weighted average
of the Group I
Weighted Average Maximum Net Mortgage Rate and the Group II
Weighted Average
Maximum Net Mortgage Rate, weighted on the basis of the related
Subordinate
Component, over (y) Accrued Certificate Interest for such Class
calculated using
the Subordinate Net WAC Cap Rate plus, an amount equal to any
reduction in the
Accrued Certificate Interest of such Class due to the failure of
the Hedge
Agreements Provider to make any required Subordinate Hedge
Payment with respect
to such Distribution Date, (b) any shortfalls for such Class
calculated pursuant
to clause (a) above remaining unpaid from prior Distribution
Dates, and (c) one
month's interest on the amount in clause (b) (based on the
number of days in the
preceding Interest Accrual Period) at a per annum rate equal to
LIBOR plus the
related Margin for such Distribution Date.
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Subordinate Component: With respect to each Loan Group and
any
Distribution Date, the positive excess, if any, of the aggregate
Stated
Principal Balance of the Mortgage Loans in that Loan Group, over
the aggregate
Certificate Principal Balance of the related Class A
Certificates, in each case
immediately prior to that Distribution Date.
Subordinate Hedge Agreement: The confirmation, dated as of the
Closing
Date, between the Trustee, on behalf of the Trust Fund, and the
Hedge Agreements
Provider, relating to the Class M Certificates and Class B
Certificates or any
replacement, substitute, collateral or other arrangement in lieu
thereof.
Subordinate Hedge Payment: For any Distribution Date, the
payment, if any,
due under the Subordinate Hedge Agreement in respect of such
Distribution Date
Subordinate Net WAC Cap Rate: With respect to any Distribution
Date and
the Class M Certificates and Class B Certificates, the sum of
(a) the
Subordinate REMIC Net WAC Rate for such Distribution Date and
(b) a per annum
rate equal to (i) the amount, if any, required to be paid under
the Subordinate
Hedge Agreement with respect to such Distribution Date divided
by (ii) the
aggregate Certificate Principal Balance of the Class M
Certificates and Class B
Certificates immediately prior to such Distribution Date,
multiplied by a
fraction, the numerator of which is 30, and the denominator of
which is the
actual number of days in the related Interest Accrual
Period.
Subordinate REMIC Net WAC Rate: With respect to any Distribution
Date
and the Class M Certificates and Class B Certificates, a per
annum rate equal to
the weighted average of the Group I REMIC Net WAC Rate and Group
II REMIC Net
WAC Rate, weighted on the basis of the related Subordinate
Component, which for
tax purposes is equal to the weighted average of the interests
rates on the Y-1
and Y-2 REMIC I Regular Interests.
Subordination: The provisions described in Section 4.05 relating
to the
allocation of Realized Losses.
Subordination Percentage: With respect to the Class A
Certificates and any
Class of Class M Certificates and the Class B Certificates, the
respective
percentage set forth below.
Class Percentage
A 65.00%
M-1 77.60%
M-2 88.10%
M-3 90.10%
M-4 91.90%
M-5 93.90%
M-6 95.90%
B 97.90%
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.
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Subserviced Mortgage Loan: Any Mortgage Loan that, at the time
of
reference thereto, is subject to a Subservicing Agreement.
Subservicer: Any Person with whom the Master Servicer has
entered into a
Subservicing Agreement and who generally satisfied the
requirements set forth in
the Program Guide in respect of the qualification of a
Subservicer as of the
date of its approval as a Subservicer by the Master
Servicer.
Subservicer Advance: Any delinquent installment of principal
and
interest on a Mortgage Loan which is advanced by the related
Subservicer (net of
its Subservicing Fee) pursuant to the Subservicing
Agreement.
Subservicing Account: An account established by a Subservicer in
accordance
with Section 3.08.
Subservicing Agreement: The written contract between the Master
Servicer
and any Subservicer relating to servicing and administration of
certain Mortgage
Loans as provided in Section 3.02, generally in the form of the
servicer
contract referred to or contained in the Program Guide or in
such other form as
has been approved by the Master Servicer and the Depositor.
Subservicing Fee: With respect to any Mortgage Loan, the fee
payable
monthly to the related Subservicer (or, in the case of a
Nonsubserviced Mortgage
Loan, to the Master Servicer) in respect of subservicing and
other compensation
that accrues with respect to each Distribution Date at an annual
rate designated
as "SUBSERV FEE" on the Mortgage Loan Schedule.
Tax Returns: The federal income tax return on Internal Revenue
Service
Form 1066, U.S. Real Estate Mortgage Investment Conduit Income
Tax Return,
including Schedule Q thereto, Quarterly Notice to Residual
Interest Holders of
REMIC Taxable Income or Net Loss Allocation, or any successor
forms, to be filed
on behalf of REMIC I, REMIC II and REMIC III due to their
classification as
REMICs under the REMIC Provisions, together with any and all
other information,
reports or returns that may be required to be furnished to
the
Certificateholders or filed with the Internal Revenue Service or
any other
governmental taxing authority under any applicable provisions of
federal, state
or local tax laws.
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 on or after the Stepdown Date if either (a)
the product of
2.00 and the Sixty-Plus Delinquency Percentage, as determined on
that
Distribution Date, exceeds the Senior Enhancement Percentage for
that
Distribution Date or (b) on or after the Distribution Date in
December 2007, 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:
December 2007 to November 2008: 3.00% with
respect to December 2007, plus an
additional 1/12th of 1.75% for each
month thereafter.
December 2008 to November 2009: 4.75% with
respect to December 2008, plus an
additional 1/12th of 1.50% for each
month thereafter.
December 2009 to November 2010: 6.25% with
respect to December 2009, plus an
additional 1/12th of 0.50% for each
month thereafter.
December 2010 and thereafter: 6.75%.
Trustee: As defined in the preamble hereto.
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; and
(v) all
proceeds of clauses (i) through (iv) above.
Uniform Single Attestation Program for Mortgage Bankers: The
Uniform
Single Attestation Program for Mortgage Bankers, as published by
the Mortgage
Bankers Association of America and effective with respect to
fiscal periods
ending on or after December 15, 1995.
Uncertificated Accrued Interest: With respect to any
Uncertificated
Regular Interest for any Distribution Date, one month's interest
at the related
Uncertificated Pass-Through Rate for such Distribution Date,
accrued on the
Uncertificated Principal Balance or Uncertificated Notional
Amount, as
applicable, immediately prior to such Distribution Date.
Uncertificated Accrued
Interest for the Uncertificated Regular Interests shall accrue
on the basis of a
360-day year consisting of twelve 30-day months. For purposes of
calculating the
amount of Uncertificated Accrued Interest for the REMIC I
Regular Interests for
any Distribution Date, any Prepayment Interest Shortfalls and
Relief Act
Shortfalls (to the extent not covered by Compensating Interest)
(i) relating to
the Loan Group I Loans for any Distribution Date shall be
allocated among REMIC
I Regular Interests Y-1 and Z-1 and (ii) relating to the Loan
Group II Loans
shall be allocated among the REMIC I Regular Interests Y-2 and
Z-2, pro rata,
based on, and to the extent of, Uncertificated Accrued Interest,
as calculated
without application of this sentence. For purposes of
calculating the amount of
Uncertificated Accrued Interest for the REMIC II Regular
Interest for any
Distribution Date, any Prepayment Interest Shortfalls and Relief
Act Shortfalls
(to the extent not covered by Compensating Interest) (i)
relating to the Loan
Group I Loans for any Distribution Date shall be allocated among
REMIC II
Regular Interests LT1, LT2, LT3, LT4 and LT-Y1 and (ii) relating
to the Loan
Group II Loans for any Distribution Date shall be allocated
among REMIC II
Regular Interests LT5, LT6, LT7, LT8 and LT-Y2, pro rata, based
on, and to the
extent of, Uncertificated Accrued Interest, as calculated
without application of
this sentence. Uncertificated Interest on REMIC III Regular
Interest SB-PO shall
be zero. Uncertificated Interest on the REMIC III Regular
Interest SB-IO for
each Distribution Date shall equal Accrued Certificate Interest
for the Class SB
Certificates.
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Uncertificated Notional Amount: With respect to REMIC III
Regular
Interest SB-IO, the Notional Amount for such Class.
Uncertificated Pass-Through Rate: The Uncertificated REMIC I
Pass-Through Rate or the Uncertificated REMIC II Pass-Through
Rate, as
applicable.
Uncertificated Principal Balance: The principal amount of
any
Uncertificated Regular Interest outstanding as of any date of
determination. The
Uncertificated Principal Balance of each REMIC Regular Interest
shall never be
less than zero. With respect to the REMIC III Regular Interest
SB-PO the initial
amount set forth with respect thereto in the Preliminary
Statement as reduced by
distributions deemed made in respect thereof pursuant to Section
4.02 and
Realized Losses allocated thereto pursuant to Section 4.05.
Uncertificated Regular Interests: The REMIC I Regular Interests
and the
REMIC II Regular Interests.
Uncertificated REMIC I Pass-Through Rate: With respect to
any
Distribution Date, the REMIC I Regular Interest Y-1 and the
REMIC I Regular
Interest Z-1, the weighted average of the Net Mortgage Rates of
the Mortgage
Loans in Loan Group I. With respect to any Distribution Date the
REMIC I Regular
Interest Y-2 and the REMIC I Regular Interest Z-2, the weighted
average of the
Net Mortgage Rates of the Mortgage Loans in Loan Group II.
Uncertificated REMIC II Pass-Through Rate: With respect to
any
Distribution Date and (i) REMIC II Regular Interests LT1, LT2
and LT-Y1, the
weighted average of the Net Mortgage Rates of the Mortgage Loans
in Loan Group
I, (ii) REMIC II Regular Interests LT5, LT6 and LT-Y2, the
weighted average of
the Net Mortgage Rates of the Mortgage Loans in Loan Group II,
(iii) REMIC II
Regular Interests LT3 and LT7, zero (0.00%), (iv) REMIC II
Regular Interest LT4,
twice the weighted average of the Net Mortgage Rates of the
Mortgage Loans in
Loan Group I and (v) REMIC II Regular Interest LT8, twice the
weighted average
of the Net Mortgage Rates of the Mortgage Loans in Loan Group
II.
Uninsured Cause: Any cause of damage to property subject to a
Mortgage
such that the complete restoration of such property is not fully
reimbursable by
the hazard insurance policies.
United States Person: A citizen or resident of the United
States, a
corporation, partnership or other entity (treated as a
corporation or
partnership for United States federal income tax purposes)
created or organized
in, or under the laws of, the United States, any state thereof,
or the District
of Columbia (except in the case of a partnership, to the extent
provided in
Treasury regulations) provided that, for purposes solely of the
restrictions on
the transfer of Class R Certificates, no partnership or other
entity treated as
a partnership for United States federal income tax purposes
shall be treated as
a United States Person unless all persons that own an interest
in such
partnership either directly or through any entity that is not a
corporation for
United States federal income tax purposes are required by the
applicable
operative agreement to be United States Persons, or an estate
that is described
in Section 7701(a)(30)(D) of the Code, or a trust that is
described in Section
7701(a)(30)(E) of the Code.
Voting Rights: The portion of the voting rights of all of
the
Certificates which is allocated to any Certificate. 98.00% of
all of the Voting
Rights shall be allocated among Holders of the Class A
Certificates, Class M
Certificates and Class B Certificates, in proportion to the
outstanding
Certificate Principal Balances of their respective Certificates;
1% of all of
the Voting Rights shall be allocated to the Holders of the Class
SB
Certificates, and 0.33%, 0.33% and 0.34% of all of the Voting
Rights shall be
allocated to the Holders of the Class R-I Certificates, Class
R-II Certificates
and Class R-III Certificates, respectively; in each case to be
allocated among
the Certificates of such Class in accordance with their
respective Percentage
Interest.
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Section 1.02. Determination of LIBOR.
LIBOR applicable to the calculation of the Pass-Through Rate on
the
LIBOR Certificates for any Interest Accrual Period will be
determined as of 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 LIBOR Certificates then outstanding. The Trustee will
request the principal
London office of each of the reference banks to provide a
quotation of its rate.
If at least two such quotations are provided, the rate will be
the arithmetic
mean of the quotations rounded up to the next multiple of 1/16%.
If on such date
fewer than two quotations are provided as requested, the rate
will be the
arithmetic mean of the rates quoted by one or more major banks
in New York City,
selected by the Trustee after consultation with the Master
Servicer, as of 11:00
a.m., New York City time, on such date for loans in U.S. Dollars
to leading
European banks for a period of one month in amounts
approximately equal to the
aggregate Certificate Principal Balance of the LIBOR
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 Rate
applicable to the
LIBOR Certificates for the relevant Interest Accrual Period, in
the absence of
manifest error, will be final and binding. Promptly following
each LIBOR Rate
Adjustment Date the Trustee shall supply the Master Servicer
with the results of
its determination of LIBOR on such date. Furthermore, the
Trustee will supply to
any Certificateholder so requesting by calling the Bondholder
Inquiry Line at
1-800-275-2048 the Pass-Through Rate on the LIBOR Certificates
for the current
and the immediately preceding Interest Accrual Period.
ARTICLE II
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CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) The Depositor, concurrently with the execution and delivery
hereof, does
hereby assign to the Trustee in respect of the Trust Fund
without recourse all
the right, title and interest of the Depositor in and to (i) the
Mortgage Loans,
including all interest and principal on or with respect to the
Mortgage Loans
due on or after the Cut-off Date (other than Monthly Payments
due in the month
of the Cut-off Date); and (ii) all proceeds of the
foregoing.
(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 Hedge Agreements (the delivery of which
shall evidence that
the fixed payment for the Hedge Agreements have 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 so
assigned:
(i) The original Mortgage Note, endorsed without recourse to the
order of the
Trustee and showing an unbroken chain of endorsements from the
originator
thereof to the Person endorsing it to the Trustee, or with
respect to any
Destroyed Mortgage Note, an original lost note affidavit from
the related Seller
or Residential Funding stating that the original Mortgage Note
was lost,
misplaced or destroyed, together with a copy of the related
Mortgage Note;
(ii) The original Mortgage, noting the presence of the MIN of
the Mortgage Loan
and language indicating that the Mortgage Loan is a MOM Loan if
the Mortgage
Loan is a MOM Loan, with evidence of recording indicated thereon
or, if the
original Mortgage has not yet been returned from the public
recording office, a
copy of the original Mortgage with evidence of recording
indicated thereon;
(iii) Unless the Mortgage Loan is registered on the MERS(R)
System, the
assignment (which may be included in one or more blanket
assignments if
permitted by applicable law) of the Mortgage to the Trustee with
evidence of
recording indicated thereon or a copy of such assignment with
evidence of
recording indicated thereon;
(iv) The original recorded assignment or assignments of the
Mortgage showing an
unbroken chain of title from the originator to the Person
assigning it to the
Trustee (or to MERS, if the Mortgage Loan is registered on the
MERS(R) System
and noting the presence of a MIN) with evidence of recordation
noted thereon or
attached thereto, or a copy of such assignment or assignments of
the Mortgage
with evidence of recording indicated thereon; and
(v) The original of each modification, assumption agreement or
preferred loan
agreement, if any, relating to such Mortgage Loan, or a copy of
each
modification, assumption agreement or preferred loan
agreement.
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 or
Custodians,
deliver such documents to the Master Servicer, and the Master
Servicer shall
hold such documents in trust for the use and benefit of all
present and future
Certificateholders until such time as is set forth in the next
sentence. Within
thirty Business Days following the earlier of (i) the receipt of
the original of
all of the documents or instruments set forth in Section
2.01(b)(ii), (iii),
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(iv) and (v) (or copies thereof as permitted by such Section)
for any Mortgage
Loan and (ii) a written request by the Trustee to deliver those
documents with
respect to any or all of the Mortgage Loans then being held by
the Master
Servicer, the Master Servicer shall deliver a complete set of
such documents to
the Trustee or the Custodian or Custodians that are the duly
appointed agent or
agents of the Trustee.
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 (i) a
"High-Cost Home Loan" as defined in the New Jersey Home
Ownership Act effective
November 27, 2003, (ii) a "High-Cost Home Loan" as defined in
the New Mexico
Home Loan Protection Act effective January 1, 2004 or (iii) a
"High Cost Home
Mortgage Loan" as defined in the Massachusetts Predatory Home
Practices Act
effective November 7, 2004.
(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 Trustee and the Master Servicer, such
recording is not
required to protect the Trustee's interests in the Mortgage Loan
or (b) if MERS
is identified on the Mortgage or on a properly recorded
assignment of the
Mortgage, as applicable, as the mortgagee of record solely as
nominee for
Residential Funding and its successors and assigns. If any
Assignment is lost or
returned unrecorded to the Depositor because of any defect
therein, the
Depositor shall prepare a substitute Assignment or cure such
defect, as the case
may be, and cause such Assignment to be recorded in accordance
with this
paragraph. The Depositor shall promptly deliver or cause to be
delivered to the
Trustee or the respective Custodian such Mortgage or Assignment,
as applicable
(or copy thereof as permitted by Section 2.01(b)), with evidence
of recording
indicated thereon upon receipt thereof from the public recording
office or from
the related Subservicer or Seller.
If the Depositor delivers to the Trustee or Custodian any
Mortgage Note
or Assignment of Mortgage in blank, the Depositor shall, or
shall cause the
Custodian to, complete the endorsement of the Mortgage Note and
the Assignment
of Mortgage in the name of the Trustee in conjunction with the
Interim
Certification issued by the Custodian, as contemplated by
Section 2.02.
Any of the items set forth in Sections 2.01(b)(ii), (iii), (iv)
and (v)
and that may be delivered as a copy rather than the original may
be delivered to
the Trustee or the Custodian.
In connection with the assignment of any Mortgage Loan
registered on the
MERS(R) System, the 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
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in the field "Pool Field" which identifies the series of the
Certificates issued
in connection with such Mortgage Loans. The Depositor further
agrees that it
will not, and will not permit the Master Servicer to, and the
Master Servicer
agrees that it will not, alter the codes referenced in this
paragraph with
respect to any Mortgage Loan during the term of this Agreement
unless and until
such Mortgage Loan is repurchased in accordance with the terms
of this
Agreement.
(d) It is intended that the conveyances by the Depositor to the
Trustee of the
Mortgage Loans as provided for in this Section 2.01 and the
Uncertificated
Regular Interests be construed as a sale by the Depositor to the
Trustee of the
Mortgage Loans and the Uncertificated Regular Interests for the
benefit of the
Certificateholders. Further, it is not intended that any such
conveyance be
deemed to be a pledge of the Mortgage Loans and the
Uncertificated Regular
Interests by the Depositor to the Trustee to secure a debt or
other obligation
of the Depositor. Nonetheless, (a) this Agreement is intended to
be and hereby
is a security agreement within the meaning of Articles 8 and 9
of the New York
Uniform Commercial Code and the Uniform Commercial Code of any
other applicable
jurisdiction; (b) the conveyances provided for in this Section
2.01 shall be
deemed to be (1) a grant by the Depositor to the Trustee of a
security interest
in all of the Depositor's right (including the power to convey
title thereto),
title and interest, whether now owned or hereafter acquired, in
and to (A) the
Mortgage Loans, including the related Mortgage Note, the
Mortgage, any insurance
policies and all other documents in the related Mortgage File,
(B) all amounts
payable pursuant to the Mortgage Loans in accordance with the
terms thereof, (C)
any Uncertificated Regular Interests and any and all general
intangibles,
payment intangibles, accounts, chattel paper, instruments,
documents, money,
deposit accounts, certificates of deposit, goods, letters of
credit, advices of
credit and investment property and other property of whatever
kind or
description now existing or hereafter acquired consisting of,
arising from or
relating to any of the foregoing, and (D) all proceeds of the
conversion,
voluntary or involuntary, of the foregoing into cash,
instruments, securities or
other property, including without limitation all amounts from
time to time held
or invested in the Certificate Account or the Custodial Account,
whether in the
form of cash, instruments, securities or other property and (2)
an assignment by
the Depositor to the Trustee of any security interest in any and
all of
Residential Funding's right (including the power to convey title
thereto), title
and interest, whether now owned or hereafter acquired, in and to
the property
described in the foregoing clauses (1)(A), (B), (C) and (D)
granted by
Residential Funding to the Depositor pursuant to the Assignment
Agreement; (c)
the possession by the Trustee, the Custodian or any other agent
of the Trustee
of Mortgage Notes or such other items of property as constitute
instruments,
money, payment intangibles, negotiable documents, goods, deposit
accounts,
letters of credit, advices of credit, investment property,
certificated
securities or chattel paper shall be deemed to be "possession by
the secured
party," or possession by a purchaser or a person designated by
such secured
party, for purposes of perfecting the security interest pursuant
to the
Minnesota Uniform Commercial Code and the Uniform Commercial
Code of any other
applicable jurisdiction as in effect (including, without
limitation, Sections
8-106, 9-313 and 9-106 thereof); and (d) notifications to
persons holding such
property, and acknowledgments, receipts or confirmations from
persons holding
such property, shall be deemed notifications to, or
acknowledgments, receipts or
confirmations from, securities intermediaries, bailees or agents
of, or persons
holding for, (as applicable) the Trustee for the purpose of
perfecting such
security interest under applicable law.
The Depositor and, at the Depositor's direction, Residential
Funding and
the Trustee shall, to the extent consistent with this Agreement,
take such
reasonable actions as may be necessary to ensure that, if this
Agreement were
deemed to create a security interest in the Mortgage Loans and
the
Uncertificated Regular Interests and the other property
described above, such
security interest would be deemed to be a perfected security
interest of first
priority under applicable law and will be maintained as such
throughout the term
of this Agreement. Without limiting the generality of the
foregoing, the
Depositor shall prepare and deliver to the Trustee not less than
15 days prior
to any filing date and, the Trustee shall forward for filing, or
shall cause to
be forwarded for filing, at the expense of the Depositor, all
filings necessary
to maintain the effectiveness of any original filings necessary
under the
Uniform Commercial Code as in effect in any jurisdiction to
perfect the
Trustee's security interest in or lien on the Mortgage Loans and
the
Uncertificated Regular Interests, as evidenced by an Officers
Certificate of the
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Depositor, including without limitation (x) continuation
statements, and (y)
such other statements as may be occasioned by (1) any change of
name of
Residential Funding, the Depositor or the Trustee (such
preparation and filing
shall be at the expense of the Trustee, if occasioned by a
change in the
Trustee's name), (2) any change of location of the place of
business or the
chief executive office of Residential Funding or the Depositor,
(3) any transfer
of any interest of Residential Funding or the Depositor in any
Mortgage Loan or
(4) any transfer of any interest of Residential Funding or the
Depositor in any
Uncertificated Regular Interests.
Section 2.02. Acceptance by Trustee.
---------------------
The Trustee acknowledges receipt (or, with respect to Mortgage
Loans
subject to a Custodial Agreement, and based solely upon a
receipt or
certification executed by the Custodian, receipt by the
respective Custodian as
the duly appointed agent of the Trustee) of the documents
referred to in Section
2.01(b)(i) above (except that for purposes of such
acknowledgement only, a
Mortgage Note may be endorsed in blank and an Assignment of
Mortgage may be in
blank) and declares that it, or 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 90 days after the Closing
Date to ascertain
that all required documents (specifically as set forth in
Section 2.01(b)), have
been executed and received, and that such documents relate to
the Mortgage Loans
identified on the Mortgage Loan Schedule, as supplemented, that
have been
conveyed to it, and to deliver to the Trustee a certificate (the
"Interim
Certification") to the effect that all documents required to be
delivered
pursuant to Section 2.01(b) above have been executed and
received and that such
documents relate to the Mortgage Loans identified on the
Mortgage Loan Schedule,
except for any exceptions listed on Schedule A attached to such
Interim
Certification. Upon delivery of the 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 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. Pursuant to Section 2.03
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 the related Subservicer or Seller
of such
omission or defect and request that such Subservicer or Seller
correct or cure
such omission or defect within 60 days from the date the Master
Servicer was
notified of such omission or defect and, if such Subservicer or
Seller does not
correct or cure such omission or defect within such period, that
such
Subservicer or Seller purchase such Mortgage Loan from the Trust
Fund at its
Purchase Price, in either case within 90 days from the date the
Master Servicer
was notified of such omission or defect; provided that if the
omission or defect
would cause the Mortgage Loan to be other than a "qualified
mortgage" as defined
in Section 860G(a)(3) of the Code, any such cure or repurchase
must occur within
90 days from the date such breach was discovered. The Purchase
Price for any
such Mortgage Loan shall be deposited or caused to be deposited
by the Master
Servicer in the Custodial Account maintained by it pursuant to
Section 3.07 and,
upon receipt by the Trustee of written notification of such
deposit signed by a
Servicing Officer, the Trustee 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 Subservicer or Seller or its designee, as the case may be,
any Mortgage Loan
released pursuant hereto and thereafter such Mortgage Loan shall
not be part of
the Trust Fund. In furtherance of the foregoing and Section
2.04, if the
Subservicer or Seller or Residential Funding that repurchases
the Mortgage Loan
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<PAGE>
is not a member of MERS and the Mortgage is registered on the
MERS(R) System,
the Master Servicer, at its own expense and without any right of
reimbursement,
shall cause MERS to execute and deliver an assignment of the
Mortgage in
recordable form to transfer the Mortgage from MERS to such
Subservicer or Seller
or Residential Funding and shall cause such Mortgage to be
removed from
registration on the MERS(R) System in accordance with MERS'
rules and
regulations. It is understood and agreed that the obligation of
the Subservicer
or Seller, to so cure or purchase any Mortgage Loan as to which
a material and
adverse defect in or omission of a constituent document exists
shall constitute
the sole remedy respecting such defect or omission available
to
Certificateholders or the Trustee on behalf of
Certificateholders.
Section 2.03. Representations, Warranties and Covenants of the
Master Servicer
and the Depositor.
(a) The Master Servicer hereby represents and warrants to the
Trustee for the
benefit of the Certificateholders that:
(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;
(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;
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(vi) The Master Servicer will comply in all material respects in
the performance
of this Agreement with all reasonable rules and requirements of
each insurer
under each Required Insurance Policy;
(vii) No information, certificate of an officer, statement
furnished in writing
or report delivered to the Depositor, any Affiliate of the
Depositor or the
Trustee by the Master Servicer will, to the knowledge of the
Master Servicer,
contain any untrue statement of a material fact or omit a
material fact
necessary to make the information, certificate, statement or
report not
misleading;
(viii) The Master Servicer has examined each existing, and will
examine each
new, Subservicing Agreement and is or will be familiar with the
terms thereof.
The terms of each existing Subservicing Agreement and each
designated
Subservicer are acceptable to the Master Servicer and any new
Subservicing
Agreements will comply with the provisions of Section 3.02;
(ix) The Master Servicer is a member of MERS in good standing,
and will comply
in all material respects with the rules and procedures of MERS
in connection
with the servicing of the Mortgage Loans that are registered
with MERS; and
(x) The Servicing Guide of the Master Servicer requires that the
Subservicer for
each Mortgage Loan accurately and fully reports its borrower
credit files to
each of the Credit Repositories in a timely manner.
It is understood and agreed that the representations and
warranties set forth in
this Section 2.03(a) shall survive delivery of the respective
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 in
this Section 2.03(a) available to the Certificateholders or the
Trustee on
behalf of the Certificateholders.
(b) The Depositor hereby represents and warrants to the Trustee
for the benefit
of the Certificateholders that as of the Closing Date (or, if
otherwise
specified below, as of the date so specified): (i) immediately
prior to the
conveyance of the Mortgage Loans to the Trustee, the Depositor
had good title
to, and was the sole owner of, each Mortgage Loan free and clear
of any pledge,
lien, encumbrance or security interest (other than rights to
servicing and
related compensation) and such conveyance validly transfers
ownership of the
Mortgage Loans to the Trustee free and clear of any pledge,
lien, encumbrance or
security interest; and (ii) each Mortgage Loan constitutes a
qualified mortgage
under Section 860G(a)(3)(A) of the Code and Treasury Regulations
Section
1.860G-2(a)(1).
It is understood and agreed that the representations and
warranties set
forth in this Section 2.03(b) shall survive delivery of the
respective Mortgage
Files to the Trustee or any Custodian.
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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)(ii), the party discovering such breach shall give such
notice within
five days of discovery. Within 90 days of its discovery or its
receipt of notice
of breach, the Depositor shall either (i) cure such breach in
all material
respects or (ii) purchase such Mortgage Loan from the Trust Fund
at the Purchase
Price and in the manner set forth in Section 2.02; provided that
the Depositor
shall have the option to substitute a Qualified Substitute
Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within
two years
following the Closing Date; provided that if the omission or
defect would cause
the Mortgage Loan to be other than a "qualified mortgage" as
defined in Section
860G(a)(3) of the Code, any such cure, substitution or
repurchase must occur
within 90 days from the date such breach was discovered. Any
such substitution
shall be effected by the Depositor under the same terms and
conditions as
provided in Section 2.04 for substitutions by Residential
Funding. It is
understood and agreed that the obligation of the Depositor to
cure such breach
or to so purchase or substitute for any Mortgage Loan as to
which such a breach
has occurred and is continuing shall constitute the sole remedy
respecting such
breach available to the Certificateholders or the Trustee on
behalf of the
Certificateholders. Notwithstanding the foregoing, the Depositor
shall not be
required to cure breaches or purchase or substitute for Mortgage
Loans as
provided in this Section 2.03(b) if the substance of the breach
of a
representation set forth above also constitutes fraud in the
origination of the
Mortgage Loan.
Section 2.04. Representations and Warranties of Sellers.
-----------------------------------------
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 and each Seller's Agreement applicable to a
Mortgage Loan
as and to the extent set forth in the Assignment Agreement.
Insofar as the
Assignment Agreement or such Seller's Agreement relates to the
representations
and warranties made by Residential Funding or the related Seller
in respect of
such Mortgage Loan and any remedies provided thereunder for any
breach of such
representations and warranties, such right, title and interest
may be enforced
by the Master Servicer on behalf of the Trustee and the
Certificateholders. Upon
the discovery by the Depositor, the Master Servicer, the Trustee
or any
Custodian of a breach of any of the representations and
warranties made in a
Seller's Agreement or 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 the related Seller and Residential Funding of such breach
or Repurchase
Event and request that such Seller or Residential Funding either
(i) cure such
breach or Repurchase Event in all material respects within 90
days from the date
the Master Servicer was notified of such breach or Repurchase
Event or (ii)
purchase such Mortgage Loan from the Trust Fund at the Purchase
Price and in the
manner set forth in Section 2.02.
Upon the discovery by the Depositor, the Master Servicer, the
Trustee,
or any Custodian of a breach of any of such representations and
warranties set
forth in the Assignment Agreement in respect of any Mortgage
Loan which
materially and adversely affects the interests of the
Certificateholders in such
Mortgage Loan, the party discovering such breach shall give
prompt written
notice to the other parties (any Custodian being so obligated
under a Custodial
Agreement) at the same time as notice is given pursuant to the
preceding
paragraph of any corresponding breach of representation or
warranty made in
Seller's Agreement. The Master Servicer shall promptly notify
Residential
Funding of such breach of a representation or warranty set forth
in the
Assignment Agreement and request that Residential Funding either
(i) cure such
breach in all material respects within 90 days from the date the
Master Servicer
was notified of such breach or (ii) purchase such Mortgage Loan
from the Trust
Fund within 90 days of the date of such written notice of such
breach at the
Purchase Price and in the manner set forth in Section 2.02, but
only if the
Mortgage Loan has not been purchased by the Seller due to a
breach of
representation and warranty of the related Seller's Agreement as
set forth in
the preceding paragraph; provided that Residential Funding shall
have the option
to substitute a Qualified Substitute Mortgage Loan or Loans for
such Mortgage
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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
(xlvii) of Section 4 thereof, then the Master Servicer shall
request that
Residential Funding pay to the Trust Fund, concurrently with and
in addition to
the remedies provided in the preceding sentence, an amount equal
to any
liability, penalty or expense that was actually incurred and
paid out of or on
behalf of the Trust Fund, and that directly resulted from such
breach, or if
incurred and paid by the Trust Fund thereafter, concurrently
with such payment.
In the event that Residential Funding elects to substitute a
Qualified
Substitute Mortgage Loan or Loans for a Deleted Mortgage Loan
pursuant to this
Section 2.04, Residential Funding shall deliver to the Trustee
for the benefit
of the Certificateholders with respect to such Qualified
Substitute Mortgage
Loan or Loans, the original Mortgage Note, the Mortgage, an
Assignment of the
Mortgage in recordable form, and such other documents and
agreements as are
required by Section 2.01, with the Mortgage Note endorsed as
required by Section
2.01. No substitution will be made in any calendar month after
the Determination
Date for such month. Monthly Payments due with respect to
Qualified Substitute
Mortgage Loans in the month of substitution shall not be part of
the Trust Fund
and will be retained by the Master Servicer and remitted by the
Master Servicer
to Residential Funding on the next succeeding Distribution Date.
For the month
of substitution, distributions to the Certificateholders will
include the
Monthly Payment due on a Deleted Mortgage Loan for such month
and thereafter
Residential Funding shall be entitled to retain all amounts
received in respect
of such Deleted Mortgage Loan. The Master Servicer shall amend
or cause to be
amended the Mortgage Loan Schedule for the benefit of the
Certificateholders to
reflect the removal of such Deleted Mortgage Loan and the
substitution of the
Qualified Substitute Mortgage Loan or Loans and the Master
Servicer shall
deliver the amended Mortgage Loan Schedule to the Trustee. Upon
such
substitution, the Qualified Substitute Mortgage Loan or Loans
shall be subject
to the terms of this Agreement and the related Subservicing
Agreement in all
respects, the related Seller shall be deemed to have made the
representations
and warranties with respect to the Qualified Substitute Mortgage
Loan made in
the related Seller Agreements as of the date of substitution,
Residential
Funding shall be deemed to have made the representations and
warranties with
respect to the Qualified Substitute Mortgage Loan (other than
those of a
statistical nature) contained in the Assignment Agreement as of
the date of
substitution, and the covenants, representations and warranties
set forth in
this Section 2.04, and in Section 2.03(b) hereof.
In connection with the substitution of one or more Qualified
Substitute
Mortgage Loans for one or more Deleted Mortgage Loans, the
Master Servicer will
determine the amount (if any) by which the aggregate principal
balance of all
such Qualified Substitute Mortgage Loans as of the date of
substitution is less
than the aggregate Stated Principal Balance of all such Deleted
Mortgage Loans
(in each case after application of the principal portion of the
Monthly Payments
due in the month of substitution that are to be distributed to
the
Certificateholders in the month of substitution). Residential
Funding shall
deposit or cause the related Seller to deposit the amount of
such shortfall into
the Custodial Account on the day of substitution, without any
reimbursement
therefor. Residential Funding shall give notice in writing to
the Trustee of
such event, which notice shall be accompanied by an Officers'
Certificate as to
the calculation of such shortfall and (subject to Section
10.01(f) by an Opinion
of Counsel to the effect that such substitution will not cause
(a) any federal
tax to be imposed on the Trust Fund, including without
limitation, any federal
tax imposed on "prohibited transactions" under Section
860F(a)(1) of the Code or
on "contributions after the startup date" under Section
860G(d)(1) of the Code
or (b) any portion of any REMIC created hereunder to fail to
qualify as a REMIC
at any time that any Certificate is outstanding.
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It is understood and agreed that the obligation of the Seller
or
Residential Funding, as the case may be, to cure such breach or
purchase (and in
the case of Residential Funding to substitute for) such Mortgage
Loan as to
which such a breach has occurred and is continuing and to make
any additional
payments required under the Assignment Agreement in connection
with a breach of
the representation and warranty in clause (xlvii) of Section 4
thereof shall
constitute the sole remedy respecting such breach available to
the
Certificateholders or the Trustee on behalf of the
Certificateholders. If the
Master Servicer is Residential Funding, then the Trustee shall
also have the
right to give the notification and require the purchase or
substitution provided
for in the second preceding paragraph in the event of such a
breach of a
representation or warranty made by Residential Funding in the
Assignment
Agreement. In connection with the purchase of or substitution
for any such
Mortgage Loan by Residential Funding, the Trustee shall assign
to Residential
Funding all of the right, title and interest in respect of the
Seller's
Agreement and the Assignment Agreement applicable to such
Mortgage Loan.
Section 2.05. Execution and Authentication of Certificates;
Conveyance of
Uncertificated REMIC Regular Interests.
(a) The Trustee acknowledges the assignment to it of the
Mortgage Loans and the
delivery of the Mortgage Files to it, or any Custodian on its
behalf, subject to
any exceptions noted, together with the assignment to it of all
other assets
included in the Trust Fund, receipt of which is hereby
acknowledged.
Concurrently with such delivery and in exchange therefor, the
Trustee, pursuant
to the written request of the 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, concurrently with the execution and delivery
hereof, does
hereby transfer, assign, set over and otherwise convey in trust
to the Trustee
without recourse all the right, title and interest of the
Depositor in and to
the REMIC I Regular Interests and the REMIC II Regular Interests
for the benefit
of the holders of the Regular Certificates and the Class R-III
certificates. The
Trustee acknowledges receipt of the REMIC I Regular Interests
and the REMIC II
Regular Interests (each of which are uncertificated) and
declares that it holds
and will hold the same in trust for the exclusive use and
benefit of the holders
of the Regular Certificates and the Class R-III Certificates.
The interests
evidenced by the Class R-III Certificate, together with the
Regular
Certificates, constitute the entire beneficial ownership
interest in REMIC III.
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Section 2.06. Purposes and Powers of the Trust.
The purpose of the trust, as created hereunder, is to engage in
the
following activities:
(a) to sell the Certificates to the Depositor in exchange for
the
Mortgage Loans;
(b) to enter into and perform its obligations under this
Agreement;
(c) to engage in those activities that are necessary, suitable
or
convenient to accomplish the foregoing or are incidental thereto
or connected
therewith; and
(d) subject to compliance with this Agreement, to engage in such
other
activities as may be required in connection with conservation of
the Trust Fund
and the making of distributions to the Certificateholders.
The trust is hereby authorized to engage in the foregoing
activities.
Notwithstanding the provisions of Section 11.01, the trust shall
not engage in
any activity other than in connection with the foregoing or
other than as
required or authorized by the terms of this Agreement while any
Certificate is
outstanding, and this Section 2.06 may not be amended, without
the consent of
the Certificateholders evidencing a majority of the aggregate
Voting Rights of
the Certificates.
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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
completion of judicial
or non-judicial foreclosure, the conveyance of a Mortgaged
Property to the
related insurer, the acquisition of any property acquired by
foreclosure or deed
in lieu of foreclosure, or the management, marketing and
conveyance of any
property acquired by foreclosure or deed in lieu of foreclosure
with respect to
the Mortgage Loans and with respect to the Mortgaged Properties.
The Master
Servicer further is authorized and empowered by the Trustee, on
behalf of the
Certificateholders and the Trustee, in its own name or in the
name of the
Subservicer, when the Master Servicer or the Subservicer, as the
case may be,
believes it is appropriate in its best judgment to register any
Mortgage Loan on
the MERS(R) System, or cause the removal from the registration
of any Mortgage
Loan on the MERS(R) System, to execute and deliver, on behalf of
the Trustee and
the Certificateholders or any of them, any and all instruments
of assignment and
other comparable instruments with respect to such assignment or
re-recording of
a Mortgage in the name of MERS, solely as nominee for the
Trustee and its
successors and assigns. Any expenses incurred in connection with
the actions
described in the preceding sentence shall be borne by the Master
Servicer in
accordance with Section 3.16(c), with no right of reimbursement;
provided, that
if, as a result of MERS discontinuing or becoming unable to
continue operations
in connection with the MERS(R) System, it becomes necessary to
remove any
Mortgage Loan from registration on the MERS(R) System and to
arrange for the
assignment of the related Mortgages to the Trustee, then any
related expenses
shall be reimbursable to the Master Servicer as set forth in
Section
3.10(a)(ii). Notwithstanding the foregoing, subject to Section
3.07(a), the
Master Servicer shall not permit any modification with respect
to any Mortgage
Loan that would both constitute a sale or exchange of such
Mortgage Loan within
the meaning of Section 1001 of the Code and any proposed,
temporary or final
regulations promulgated thereunder (other than in connection
with a proposed
conveyance or assumption of 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.
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If the Mortgage relating to a Mortgage Loan did not have a lien
senior
to the Mortgage Loan on the related Mortgaged Property as of the
Cut-off Date,
then the Master Servicer, in such capacity, may not consent to
the placing of a
lien senior to that of the Mortgage on the related Mortgaged
Property. If the
Mortgage relating to a Mortgage Loan had a lien senior to the
Mortgage Loan on
the related Mortgaged Property as of the Cut-off Date, then the
Master Servicer,
in such capacity, may consent to the refinancing of the prior
senior lien,
provided that the following requirements are met:
(i) (A) the Mortgagor's debt-to-income ratio resulting from
such
refinancing is less than the original debt-to-income ratio as
set forth on the
Mortgage Loan Schedule; provided, however, that in no instance
shall the
resulting Combined Loan-to-Value Ratio ("Combined Loan-to-Value
Ratio") of such
Mortgage Loan be higher than that permitted by the Program
Guide; or
(B) the resulting Combined Loan-to-Value Ratio of such
Mortgage
Loan is no higher than the Combined Loan-to-Value Ratio prior to
such
refinancing; provided, however, if such refinanced mortgage loan
is a "rate and
term" mortgage loan (meaning, the Mortgagor does not receive any
cash from the
refinancing), the Combined Loan-to-Value Ratio may increase to
the extent of
either (x) the reasonable closing costs of such refinancing or
(y) any decrease
in the value of the related Mortgaged Property, if the Mortgagor
is in good
standing as defined by the Program Guide;
(ii) the interest rate, or, in the case of an adjustable
rate
existing senior lien, the maximum interest rate, for the loan
evidencing the
refinanced senior lien is no more than 2.0% higher than the
interest rate or the
maximum interest rate, as the case may be, on the loan
evidencing the existing
senior lien immediately prior to the date of such refinancing;
provided, however
(A) if the loan evidencing the existing senior lien prior to the
date of
refinancing has an adjustable rate and the loan evidencing the
refinanced senior
lien has a fixed rate, then the current interest rate on the
loan evidencing the
refinanced senior lien may be up to 2.0% higher than the
then-current loan rate
of the loan evidencing the existing senior lien and (B) if the
loan evidencing
the existing senior lien prior to the date of refinancing has a
fixed rate and
the loan evidencing the refinanced senior lien has an adjustable
rate, then the
maximum interest rate on the loan evidencing the refinanced
senior lien shall be
less than or equal to (x) the interest rate on the loan
evidencing the existing
senior lien prior to the date of refinancing plus (y) 2.0%;
and
(iii) the loan evidencing the refinanced senior lien is not
subject to negative amortization.
(b) 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 Seller or 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 (ii) cause any REMIC formed 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.
(g) The Master Servicer shall comply with the terms of Section 9
of the
Assignment Agreement.
Section 3.02. Subservicing Agreements Between Master Servicer
and
Subservicers; Enforcement of Subservicers' Obligations.
(a) The Master Servicer may continue in effect Subservicing
Agreements entered
into by Residential Funding and Subservicers prior to the
execution and delivery
of this Agreement, and may enter into new Subservicing
Agreements with
Subservicers, for the servicing and administration of all or
some of the
Mortgage Loans. Each Subservicer shall be either (i) an
institution the accounts
of which are insured by the FDIC or (ii) another entity that
engages in the
business of originating or servicing mortgage loans, and in
either case shall be
authorized to transact business in the state or states in which
the related
Mortgaged Properties it is to service are situated, if and to
the extent
required by applicable law to enable the Subservicer to perform
its obligations
hereunder and under the Subservicing Agreement, and in either
case shall be a
Freddie Mac, Fannie Mae or HUD approved mortgage servicer. Each
Subservicer of a
Mortgage Loan shall be entitled to receive and retain, as
provided in the
related Subservicing Agreement and in Section 3.07, the related
Subservicing Fee
from payments of interest received on such Mortgage Loan after
payment of all
amounts required to be remitted to the Master Servicer in
respect of such
Mortgage Loan. For any Mortgage Loan that is a Nonsubserviced
Mortgage Loan, the
Master Servicer shall be entitled to receive and retain an
amount equal to the
Subservicing Fee from payments of interest. Unless the context
otherwise
requires, references in this Agreement to actions taken or to be
taken by the
Master Servicer in servicing the Mortgage Loans include actions
taken or to be
taken by a Subservicer on behalf of the Master Servicer. Each
Subservicing
Agreement will be upon such terms and conditions as are
generally required by,
permitted by or consistent with the Program Guide and are not
inconsistent with
this Agreement and as the Master Servicer and the Subservicer
have agreed. With
the approval of the Master Servicer, a Subservicer may delegate
its servicing
obligations to third-party servicers, but such Subservicer will
remain obligated
under the related Subservicing Agreement. The Master Servicer
and a Subservicer
may enter into amendments thereto or a different form of
Subservicing Agreement,
and the form referred to or included in the Program Guide is
merely provided for
information and shall not be deemed to limit in any respect the
discretion of
the Master Servicer to modify or enter into different
Subservicing Agreements;
provided, however, that any such amendments or different forms
shall be
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consistent with and not violate the provisions of either this
Agreement or the
Program Guide in a manner which would materially and adversely
affect the
interests of the Certificateholders. The Program Guide and any
other
Subservicing Agreement entered into between the Master Servicer
and any
Subservicer shall require the Subservicer to accurately and
fully report its
borrower credit files to each of the Credit Repositories in a
timely manner.
(b) As part of its servicing activities hereunder, the Master
Servicer, for the
benefit of the Trustee and the Certificateholders, shall use its
best reasonable
efforts to enforce the obligations of each Subservicer under the
related
Subservicing Agreement and of each Seller under the related
Seller's Agreement,
to the extent that the non-performance of any such obligation
would have a
material and adverse effect on a Mortgage Loan, including,
without limitation,
the obligation to purchase a Mortgage Loan on account of
defective
documentation, as described in Section 2.02, or on account of a
breach of a
representation or warranty, as described in Section 2.04. Such
enforcement,
including, without limitation, the legal prosecution of claims,
termination of
Subservicing Agreements or Seller's Agreements, as appropriate,
and the pursuit
of other appropriate remedies, shall be in such form and carried
out to such an
extent and at such time as the Master Servicer would employ in
its good faith
business judgment and which are normal and usual in its general
mortgage
servicing activities. The Master Servicer shall pay the costs of
such
enforcement at its own expense, and shall be reimbursed therefor
only (i) from a
general recovery resulting from such enforcement to the extent,
if any, that
such recovery exceeds all amounts due in respect of the related
Mortgage Loan or
(ii) from a specific recovery of costs, expenses or attorneys
fees against the
party against whom such enforcement is directed. For purposes of
clarification
only, the parties agree that the foregoing is not intended to,
and does not,
limit the ability of the Master Servicer to be reimbursed for
expenses that are
incurred in connection with the enforcement of a Seller's
obligations and are
reimbursable pursuant to Section 3.10(a)(vii).
Section 3.03. Successor Subservicers.
----------------------
The Master Servicer shall be entitled to terminate any
Subservicing
Agreement that may exist in accordance with the terms and
conditions of such
Subservicing Agreement and without any limitation by virtue of
this Agreement;
provided, however, that in the event of termination of any
Subservicing
Agreement by the Master Servicer or the Subservicer, the Master
Servicer shall
either act as servicer of the related Mortgage Loan or enter
into a Subservicing
Agreement with a successor Subservicer which will be bound by
the terms of the
related Subservicing Agreement. If the Master Servicer or any
Affiliate of
Residential Funding acts as servicer, it will not assume
liability for the
representations and warranties of the Subservicer which it
replaces. If the
Master Servicer enters into a Subservicing Agreement with a
successor
Subservicer, the Master Servicer shall use reasonable efforts to
have the
successor Subservicer assume liability for the representations
and warranties
made by the terminated Subservicer in respect of the related
Mortgage Loans and,
in the event of any such assumption by the successor
Subservicer, the Master
Servicer may, in the exercise of its business judgment, release
the terminated
Subservicer from liability for such representations and
warranties.
Section 3.04. Liability of the Master Servicer.
--------------------------------
Notwithstanding any Subservicing Agreement, any of the
provisions of
this Agreement relating to agreements or arrangements between
the Master
Servicer or a Subservicer or reference to actions taken through
a Subservicer or
otherwise, the Master Servicer shall remain obligated and liable
to the Trustee,
and Certificateholders for the servicing and administering of
the Mortgage Loans
in accordance with the provisions of Section 3.01 without
diminution of such
obligation or liability by virtue of such Subservicing
Agreements or
arrangements or by virtue of indemnification from the
Subservicer or the
Depositor and to the same extent and under the same terms and
conditions as if
the Master Servicer alone were servicing and administering the
Mortgage Loans.
The Master Servicer shall be entitled to enter into any
agreement with a
Subservicer or Seller for indemnification of the Master Servicer
and nothing
contained in this Agreement shall be deemed to limit or modify
such
indemnification.
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Section 3.05. No Contractual Relationship Between Subservicer
and Trustee or
---------------------------------------------------------------
Certificateholders.
------------------
Any Subservicing Agreement that may be entered into and any
other
transactions or services relating to the Mortgage Loans
involving a Subservicer
in its capacity as such and not as an originator shall be deemed
to be between
the Subservicer and the Master Servicer alone and the Trustee
and
Certificateholders shall not be deemed parties thereto and shall
have no claims,
rights, obligations, duties or liabilities with respect to the
Subservicer in
its capacity as such except as set forth in Section 3.06. The
foregoing
provision shall not in any way limit a Subservicer's obligation
to cure an
omission or defect or to repurchase a Mortgage Loan as referred
to in Section
2.02 hereof.
Section 3.06. Assumption or Termination of Subservicing
Agreements by Trustee.
---------------------------------------------------------------
(a) In the event the Master Servicer shall for any reason no
longer be the
master servicer (including by reason of an Event of Default),
the Trustee, as
successor Master Servicer, its designee or its successor shall
thereupon assume
all of the rights and obligations of the Master Servicer under
each Subservicing
Agreement that may have been entered into. The Trustee, its
designee or the
successor servicer for the Trustee shall be deemed to have
assumed all of the
Master Servicer's interest therein and to have replaced the
Master Servicer as a
party to the Subservicing Agreement to the same extent as if the
Subservicing
Agreement had been assigned to the assuming party except that
the Master
Servicer shall not thereby be relieved of any liability or
obligations under the
Subservicing Agreement.
(b) The Master Servicer shall, upon request of the Trustee but
at the expense of
the Master Servicer, deliver to the assuming party all documents
and records
relating to each Subservicing Agreement and the Mortgage Loans
then being
serviced and an accounting of amounts collected and held by it
and otherwise use
its best efforts to effect the orderly and efficient transfer of
each
Subservicing Agreement to the assuming party.
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
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materially adverse to the interests of the
Certificateholders(taking into
account any estimated Realized Loss that might result absent
such action),
provided, however, that the Master Servicer may not modify
materially or permit
any Subservicer to modify any Mortgage Loan, including without
limitation any
modification that would change the Mortgage Rate, forgive the
payment of any
principal or interest (unless in connection with the liquidation
of the related
Mortgage Loan or except in connection with prepayments to the
extent that such
reamortization is not inconsistent with the terms of the
Mortgage Loan),
capitalize any amounts owing on the Mortgage Loan by adding such
amount to the
outstanding principal balance of the Mortgage Loan, or extend
the final maturity
date of such Mortgage Loan, unless such Mortgage Loan is in
default or, in the
judgment of the Master Servicer, such default is reasonably
foreseeable. No such
modification shall reduce the Mortgage Rate on a Mortgage Loan
below the greater
of (A) one-half of the Mortgage Rate as in effect on the Cut-off
Date and (B)
one-half of the Mortgage Rate as in effect on the date of such
modification, but
not less than the sum of the Servicing Fee Rate and the per
annum rate at which
the Subservicing Fee accrues. The final maturity date for any
Mortgage Loan
shall not be extended beyond the Maturity Date. Also, the
aggregate principal
balance of all Reportable Modified Mortgage Loans subject to
Servicing
Modifications (measured at the time of the Servicing
Modification and after
giving effect to any Servicing Modification) can be no more than
five percent of
the aggregate principal balance of the Mortgage Loans as of the
Cut-off Date,
provided, that such limit may be increased from time to time if
each Rating
Agency provides written confirmation that an increase in excess
of that limit
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. In
addition, any
amounts owing on a Mortgage Loan added to the outstanding
principal balance of
such Mortgage Loan must be fully amortized over the term of such
Mortgage Loan,
and such amounts may be added to the outstanding principal
balance of a Mortgage
Loan only once during the life of such Mortgage Loan. Also, the
addition of such
amounts described in the preceding sentence shall be implemented
in accordance
with the Program Guide and may be implemented only by
Subservicers that have
been approved by the Master Servicer for such purposes. In
connection with any
Curtailment of a Mortgage Loan, the Master Servicer, to the
extent not
inconsistent with the terms of the Mortgage Note and local law
and practice, may
permit the Mortgage Loan to be re-amortized such that the
Monthly Payment is
recalculated as an amount that will fully amortize the remaining
principal
balance thereof by the original maturity date based on the
original Mortgage
Rate; provided, that such reamortization shall not be permitted
if it would
constitute a reissuance of the Mortgage Loan for federal income
tax purposes.
(b) The Master Servicer shall establish and maintain a Custodial
Account in
which the Master Servicer shall deposit or cause to be deposited
on a daily
basis, except as otherwise specifically provided herein, the
following payments
and collections remitted by Subservicers or received by it in
respect of the
Mortgage Loans subsequent to the Cut-off Date (other than in
respect of 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;
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(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of
any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02,
2.03, 2.04, 4.07 or 4.08 (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 (xlvii) 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 notice to the Trustee and the
Depositor of
any change in the location of the Custodial Account and the
location of the
Certificate Account prior to the use thereof.
Section 3.08. Subservicing Accounts; Servicing Accounts.
-----------------------------------------
(a) In those cases where a Subservicer is servicing a Mortgage
Loan pursuant to
a Subservicing Agreement, the Master Servicer shall cause the
Subservicer,
pursuant to the Subservicing Agreement, to establish and
maintain one or more
Subservicing Accounts which shall be an Eligible Account or, if
such account is
not an Eligible Account, shall generally satisfy the
requirements of the Program
Guide and be otherwise acceptable to the Master Servicer and
each Rating Agency.
The Subservicer will be required thereby to deposit into the
Subservicing
Account on a daily basis all proceeds of Mortgage Loans received
by the
Subservicer, less its Subservicing Fees and unreimbursed
advances and expenses,
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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
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.
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(d) The Master Servicer shall advance the payments referred to
in the preceding
subsection that are not timely paid by the Mortgagors or
advanced by the
Subservicers on the date when the tax, premium or other cost for
which such
payment is intended is due, but the Master Servicer shall be
required so to
advance only to the extent that such advances, in the good faith
judgment of the
Master Servicer, will be recoverable by the Master Servicer out
of Insurance
Proceeds, Liquidation Proceeds or otherwise.
Section 3.09. Access to Certain Documentation and Information
Regarding the
Mortgage Loans.
In the event that compliance with this Section 3.09 shall make
any Class
of Certificates legal for investment by federally insured
savings and loan
associations, the Master Servicer shall provide, or cause the
Subservicers to
provide, to the Trustee, the Office of Thrift Supervision or the
FDIC and the
supervisory agents and examiners thereof access to the
documentation regarding
the Mortgage Loans required by applicable regulations of the
Office of Thrift
Supervision, such access being afforded without charge but only
upon reasonable
request and during normal business hours at the offices
designated by the Master
Servicer. The Master Servicer shall permit such representatives
to photocopy any
such documentation and shall provide equipment for that purpose
at a charge
reasonably approximating the cost of such photocopying to the
Master Servicer.
Section 3.10. Permitted Withdrawals from the Custodial
Account.
------------------------------------------------
(a) The Master Servicer may, from time to time as provided
herein, make
withdrawals from the Custodial Account of amounts on deposit
therein pursuant to
Section 3.07 that are attributable to the Mortgage Loans for the
following
purposes:
(i) to make deposits into the Certificate Account in the amounts
and in the
manner provided for in Section 4.01;
(ii) to reimburse itself or the related Subservicer for
previously unreimbursed
Advances, Servicing Advances or other expenses made pursuant to
Sections 3.01,
3.07(a), 3.08, 3.11, 3.12(a), 3.14 and 4.04 or otherwise
reimbursable pursuant
to the terms of this Agreement, such withdrawal right being
limited to amounts
received on the related Mortgage Loans (including, for this
purpose, REO
Proceeds, Insurance Proceeds, Liquidation Proceeds and proceeds
from the
purchase of a Mortgage Loan pursuant to Section 2.02, 2.03,
2.04, 4.07 or 4.08)
which represent (A) Late Collections of Monthly Payments for
which any such
advance was made in the case of Subservicer Advances or Advances
pursuant to
Section 4.04 and (B) recoveries of amounts in respect of which
such advances
were made in the case of Servicing Advances;
(iii) to pay to itself or the related Subservicer (if not
previously retained by
such Subservicer) out of each payment received by the Master
Servicer on account
of interest on a Mortgage Loan as contemplated by Sections 3.14
and 3.16, an
amount equal to that remaining portion of any such payment as to
interest (but
not in excess of the Servicing Fee and the Subservicing Fee, if
not previously
retained) which, when deducted, will result in the remaining
amount of such
interest being interest at 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;
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(iv) to pay to itself as additional servicing compensation any
interest or
investment income earned on funds or other property deposited in
or credited to
the Custodial Account that it is entitled to withdraw pursuant
to Section
3.07(c);
(v) to pay to itself as additional servicing compensation any
Foreclosure
Profits, and any amounts remitted by Subservicers as interest in
respect of
Curtailments pursuant to Section 3.08(b);
(vi) to pay to itself, a Subservicer, a Seller, Residential
Funding, the
Depositor or any other appropriate Person, as the case may be,
with respect to
each Mortgage Loan or property acquired in respect thereof that
has been
purchased or otherwise transferred pursuant to Section 2.02,
2.03, 2.04, 4.07,
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 a prior calendar month;
(viii) to reimburse itself or the Depositor for expenses
incurred by and
reimbursable to it or the Depositor pursuant to Section 3.01(a),
3.11, 3.13,
3.14(c), 6.03, 10.01 or otherwise, or in connection with
enforcing any
repurchase, substitution or indemnification obligation of any
Seller (other than
the Depositor or an Affiliate of the Depositor) pursuant to the
related Seller's
Agreement;
(ix) to reimburse itself for amounts expended by it (a) pursuant
to Section 3.14
in good faith in connection with the restoration of property
damaged by an
Uninsured Cause, and (b) in connection with the liquidation of a
Mortgage Loan
or disposition of 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).
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Section 3.11. Maintenance of Primary Insurance Coverage.
-----------------------------------------
(a) The Master Servicer shall not take, or permit any
Subservicer to take, any
action which would result in noncoverage under any applicable
Primary Insurance
Policy of any loss which, but for the actions of the Master
Servicer or
Subservicer, would have been covered thereunder. To the extent
coverage is
available, the Master Servicer shall keep or cause to be kept in
full force and
effect each such Primary Insurance Policy until the principal
balance of the
related Mortgage Loan secured by a Mortgaged Property is reduced
to 80% or less
of the Appraised Value at origination in the case of such a
Mortgage Loan having
a Loan-to-Value Ratio at origination in excess of 80%, provided
that such
Primary Insurance Policy was in place as of the Cut-off Date and
the Master
Servicer had knowledge of such Primary Insurance Policy. The
Master Servicer
shall not cancel or refuse to renew any such Primary Insurance
Policy applicable
to a Nonsubserviced Mortgage Loan, or consent to any Subservicer
canceling or
refusing to renew any such Primary Insurance Policy applicable
to a Mortgage
Loan subserviced by it, that is in effect at the date of the
initial issuance of
the Certificates and is required to be kept in force hereunder
unless the
replacement Primary Insurance Policy for such canceled or
non-renewed policy is
maintained with an insurer whose claims-paying ability is
acceptable to each
Rating Agency for mortgage pass-through certificates having a
rating equal to or
better than the lower of the then-current rating or the rating
assigned to the
Certificates as of the Closing Date by such Rating Agency.
(b) In connection with its activities as administrator and
servicer of the
Mortgage Loans, the Master Servicer agrees to present or to
cause the related
Subservicer to 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% of the insurable value of the improvements;
provided, however,
that such coverage may not be less than the minimum amount
required to fully
compensate for any loss or damage on a replacement cost basis.
To the extent it
may do so without breaching the related Subservicing Agreement,
the Master
Servicer shall replace any Subservicer that does not cause such
insurance, to
the extent it is available, to be maintained. The Master
Servicer shall also
cause to be maintained on property acquired upon foreclosure, or
deed in lieu of
foreclosure, of any Mortgage Loan, fire insurance with extended
coverage in an
amount which is at least equal to the amount necessary to avoid
the applic
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