EXECUTION COPY
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RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
DATED AS OF DECEMBER 1, 2004,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of August 1, 2004
Mortgage Asset-Backed Pass-Through Certificates
Series 2004-QS16
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<PAGE>
<TABLE>
<CAPTION>
<S>
<C>
Article I
DEFINITIONS....................................................................4
Section 1.01.
Definitions..........................................................4
Section 1.02. Use of
Words and Phrases............................................15
Article II CONVEYANCE OF MORTGAGE
LOANS; ORIGINAL
ISSUANCE OF
CERTIFICATES...........................................................17
Section 2.01.
Conveyance of Mortgage
Loans.......................................17
Section 2.02.
Acceptance by Trustee.
(See Section 2.02 of the Standard
Terms)...............................................................17
Section 2.03.
Representations, Warranties and Covenants of the
Master Servicer and the
Company......................................17
Section 2.04. Representations and Warranties of
Sellers............................22
Section 2.05. Execution and Authentication of Certificates/Issuance
of
Certificates Evidencing Interests in REMIC I and REMIC
II............20
Section 2.06. Conveyance of Uncertificated REMIC I Regular
Interests and
REMIC II Regular Interests; Acceptance by the
Trustee................20
Section 2.07. Issuance of Certificates Evidencing Interests in
REMIC III...........20
Section 2.08. Purposes and Powers of the Trust (See Section 2.08 of
the
Standard
Terms)......................................................20
Article III ADMINISTRATION AND SERVICING OF
MORTGAGE LOANS................................21
Article IV PAYMENTS TO
CERTIFICATEHOLDERS.................................................22
Section 4.01. Certificate Account. (See Section 4.01 of the Standard
Terms) .....22
Section 4.02. Distributions.
......................................................22
Section 4.03. Statements to Certificateholders; Statements to the
Rating
Agencies; Exchange Act Reporting (See Section 4.03 of the
Standard
Terms)......................................................30
Section 4.04. Distribution of Reports to the Trustee and the
Company;
Advances by the Master Servicer (See Section 4.04 of the
Standard
Terms)......................................................30
Section 4.05. Allocation of Realized Losses.
......................................30
Section 4.06. Reports of Foreclosures and Abandonment of Mortgaged
Property.
(See Section 4.06 of the Standard
Terms).............................31
Section 4.07. Optional Purchase of Defaulted Mortgage Loans.
(See Section
4.07 of the Standard
Terms)..........................................31
Section 4.08. Surety
Bond. (See Section 4.08 of the Standard
Terms)................31
Article V THE
CERTIFICATES................................................................32
Article VI THE COMPANY AND THE
MASTER SERVICER..........................................33
i
<PAGE>
Article VII
DEFAULT......................................................................34
Article VIII CONCERNING THE
TRUSTEE.......................................................35
Article IX
TERMINATION..................................................................36
Article X REMIC
PROVISIONS............................................................37
Section 10.01.REMIC Administration. (See Section 10.01 of the Standard
Terms).....37
Section 10.02.Master Servicer; REMIC Administrator and Trustee
Indemnification. (See
Section 10.02 of the Standard Terms)..........37
Section 10.03.Designation of
REMICs................................................37
Section 10.04.Distributions on the Uncertificated REMIC I and REMIC
II
Regular
Interests....................................................37
Section 10.05.Compliance with Withholding
Requirements.............................37
Article XI MISCELLANEOUS
PROVISIONS......................................................38
Section 11.01.Amendment. (See Section 11.01 of the Standard
Terms)................38
Section 11.02.Recordation of Agreement; Counterparts. (See Section 11.02 of
the Standard
Terms)..................................................38
Section 11.03.Limitation on Rights of Certificateholders.
(See Section 11.03
of the Standard
Terms)...............................................38
Section 11.04.Governing Laws. (See Section 11.04 of the Standard
Terms)...........38
Section
11.05.Notices..............................................................38
Section 11.06.Required Notices to Rating Agency and Subservicer.
(See
Section 11.06 of the Standard
Terms).................................39
Section 11.07.Severability of Provisions. (See Section 11.07 of the
Standard
Terms)...............................................................39
Section 11.08.Supplemental Provisions for Resecuritization.
(See Section
11.08 of the Standard
Terms).........................................39
Section 11.09.Allocation of Voting
Rights..........................................39
Section 11.10.No
Petition..........................................................39
ii
</TABLE>
<PAGE>
EXHIBITS
Exhibit One-I:
Mortgage Loan Schedule (Group I Loans)
Exhibit One-II:
Mortgage Loan Schedule (Group II Loans)
Exhibit Two:
Schedule of Discount Fractions
Exhibit Three:
Information to be Included in
Monthly Distribution Date Statement
Exhibit Four:
Standard Terms of Pooling and Servicing
Agreement Dated as of August 1, 2004
iii
<PAGE>
This is a Series
Supplement, dated as
of December 1, 2004 (the "Series
Supplement"), to the Standard Terms of
Pooling and Servicing Agreement, dated as
of August 1, 2004 and attached as Exhibit
Four hereto (the "Standard Terms" and,
together with this Series Supplement,
the "Pooling and
Servicing Agreement"
or
"Agreement"), among RESIDENTIAL ACCREDIT LOANS, INC., as the
company (together
with its permitted successors and assigns,
the "Company"),
RESIDENTIAL
FUNDING
CORPORATION, as master servicer (together with its permitted successors and
assigns, the "Master Servicer"),
and DEUTSCHE BANK
TRUST COMPANY AMERICAS, as
Trustee (together with its permitted
successors and assigns, the "Trustee").
PRELIMINARY STATEMENT:
The Company
intends
to sell mortgage asset-backed pass-through
certificates (collectively, the "Certificates"), to be issued hereunder in
multiple classes, which in the aggregate
will evidence the
entire beneficial
ownership interest in the Mortgage Loans
(as defined herein. As provided herein,
the REMIC Administrator will make an election to treat the entire segregated
pool of assets described in the definition of Trust Fund,
and subject to
this
Agreement (including the Mortgage Loans), as three real estate mortgage
investment conduits (each, a "REMIC") for
federal income tax purposes.
The terms and provisions of the Standard Terms are hereby incorporated
by reference herein as though set forth in
full herein. If any term or provision
contained herein shall conflict with or be inconsistent with any provision
contained in the Standard Terms, the terms and provisions of this Series
Supplement shall govern. All capitalized terms not otherwise defined herein
shall have the meanings set forth in the Standard Terms. The Pooling and
Servicing Agreement shall be dated as of
the date of this Series Supplement.
1
<PAGE>
The following table sets forth the designation, type, Pass-Through
Rate,
aggregate Initial Certificate Principal
Balance, Maturity
Date, initial ratings
and certain features for each Class of
Certificates
comprising the interests in
the Trust Fund created hereunder.
<TABLE>
<CAPTION>
Aggregate Initial
Pass-Through
Certificate
Maturity
Fitch/
Minimum
Designation
Rate Principal
Balance
Features1
Date
Moody's
Denominations2
<S>
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<C> <C>
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Class I-A-1
5.50%
$325,000.,000.00
Senior/Fixed Rate December
25, 2034 AAA/Aaa
$25,000.00
Class I-A-2
5.50%
$15,000.,000.00
Senior/Fixed Rate December
25, 2034 AAA/Aaa
$25,000.00
Class I-A-3
5.50%
$17,496.,000.00
Senior/Fixed Rate December
25, 2034 AAA/Aaa
$25,000.00
Senior/Interest Only/
Class I-A-4
6.00%
$0.00(3)
Fixed Rate
December 25, 2034 AAA/Aaa
$2,000,000.00
Class I-A-5
5.50%
$43,000.,000.00 Senior/Lockout/Fixed
Rate December 25, 2034
AAA/Aaa
$25,000.00
Class II-A-1
5.00%
$100,459,000.00 Senior/Fixed Rate
December 25, 2019 AAA/Aaa
$25,000.00
Class I-A-P
0.00%
$9,107,012.76
Senior/Principal Only December 25,
2034
AAA/Aaa
$25,000.00
Class I-A-V
Variable
$0.00
Senior/Interest Only/
December 25, 2034 AAA/Aaa
$2,000,000.00
Rate(4)
Variable Rate
Class II-A-P
0.00%
$107,120.64
Senior/Principal Only December
25, 2019 AAA/Aaa
$25,000.00
Class II-A-V Variable
$0.00
Senior/Interest Only/
December 25, 2019 AAA/Aaa
$2,000,000.00
Rate(5)
Variable Rate
Class R-I
6.00%
$100.00
Senior/Residual/Fixed Rate December 25, 2034
AAA/Aaa
6
Class R-II
5.00%
$100.00
Senior/Residual/Fixed Rate December 25, 2019
AAA/Aaa
6
Class R-III
6.00%
$100.00
Senior/Residual/Fixed Rate December 25, 2034
AAA/Aaa
6
Class I-M-1
6.00%
$9,691,700.00
Mezzanine/Fixed Rate December
25, 2034 AA/NA
$25,000.00
Class I-M-2
6.00%
$3,876,400.00
Mezzanine/Fixed Rate December
25, 2034 A/NA
$250,000.00
Class I-M-3
6.00%
$2,153,600.00
Mezzanine/Fixed Rate December
25, 2034 BBB/NA
$250,000.00
Class II-M-1
5.00%
$2,496,200.00
Mezzanine/Fixed Rate December
25, 2019 AA/NA
$25,000.00
Class II-M-2
5.00%
$208,000.00
Mezzanine/Fixed Rate
December 25, 2019 A/NA
$250,000.00
Class II-M-3
5.00%
$312,000.00
Mezzanine/Fixed Rate
December 25, 2019 BBB/NA
$250,000.00
Class I-B-1
6.00%
$2,153,500.00
Subordinate/Fixed Rate December 25,
2034 BB/NA
$250,000.00
Class I-B-2
6.00%
$1,292,100.00
Subordinate/Fixed Rate December 25,
2034 B/NA
$250,000.00
Class I-B-3
6.00%
$1,938,287.73
Subordinate/Fixed Rate December 25,
2034 NA/NA
$250,000.00
Class II-B-1
5.00%
$156,000.00
Subordinate/Fixed Rate December
25, 2019 BB/NA
(2)
Class II-B-2
5.00%
$104,000.00
Subordinate/Fixed Rate December
25, 2019 B/NA
(2)
Class II-B-3
5.00%
$156,061.08
Subordinate/Fixed Rate December
25, 2019 NA/NA
(2)
</TABLE>
--------
1 The Certificates,
other than the Class B and Class R Certificates, shall be
Book-Entry
Certificates.
The Class B and Class R Certificates shall be
delivered to the
holders thereof in physical form.
2 The Certificates,
other than the Class R Certificates, shall be issuable in
minimum dollar
denominations as
indicated above (by Certificate Principal
Balance or
Notional Amount, as applicable) and integral multiples of $1
(or
$1,000 in the
case of the Class I-A-P, Class II-A-P, Class I-B-1, Class
I-B-2,
Class
I-B-3, Class II-B-1, Class II-B-2 and Class II-B-3
Certificates) in
excess thereof, except
that one Certificate of any of the
Class I-A-P,
Class II-A-P,
Class I-B-1,
Class I-B-2,
Class I-B-3, Class
II-B-1,
Class II-B-2 and Class
II-B-3 Certificates
that contain an uneven
multiple of
$1,000 shall be issued
in a denomination
equal to the sum
of
the related minimum denomination set forth above (or in the case of
the
Class
II-B-1, Class II-B-2 and Class II-B-3 Certificates in minimum
original
denominations equal to
the initial Certificate Principal Balance
of such Certificate) and such uneven
multiple for such Class or the sum of
such
denomination and an integral multiple of $1,000.
3 The Class I-A-4 Certificates do not have a principal balance. For the
purpose of
calculating
interest payments, interest on the Class I-A-4
Certificates
will
accrue on a notional amount equal to aggregate
Certificate
Principal Balance of
the Class I-A-1, Class I-A-2, Class I-A-3
and Class I-A-5
Certificates
immediately prior to the related Distribution
Date divided by
12.
2
<PAGE>
4 The initial
Pass-Through Rate on the Class I-A-V Certificates is 0.1672%.
5 The initial
Pass-Through Rate on the Class II-A-V Certificates is 0.4884%.
6 Each class of the Class R Certificates shall be issuable in minimum
denominations
of not less than a 20% Percentage Interest; provided,
however,
that one Class R
Certificate
of each Class will be
issuable to
Residential
Funding as "tax
matters person"
pursuant to Section
10.01(c)
and (e) in a
minimum denomination representing a Percentage Interest of not
less than
0.01%.
The Group I Loans have an aggregate principal balance as of the
Cut-off
Date of $430,708,800.49. The Group II Loans have an
aggregate principal balance
as of the Cut-off Date of
$103,998,481.72.
In consideration of the mutual agreements herein contained, the
Company,
the Master Servicer and the Trustee agree
as follows:
ARTICLE I
3
<PAGE>
ARTICLE I
DEFINITIONS
Section 1.01. Definitions.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution
Date, as
to any Class or Subclass of Certificates (other than any Principal Only
Certificates), interest accrued during the related
Interest Accrual
Period at
the related Pass-Through Rate on the
Certificate Principal
Balance or Notional
Amount thereof immediately prior to such
Distribution Date. Accrued Certificate
Interest will be calculated on the basis of
a 360-day year, consisting of twelve
30-day months. In each case Accrued Certificate Interest on any Class or
Subclass of Certificates will be reduced by
the amount of:
(i)
Prepayment Interest
Shortfalls
on all Mortgage Loans in the
related Loan
Group (to the
extent not offset by the Master
Servicer with a payment of Compensating Interest as provided in
Section 4.01),
(ii) the interest
portion (adjusted to the Net Mortgage Rate
(or the
Modified Net
Mortgage Rate in the case of a Modified
Mortgage
Loan)) of Realized
Losses on all Mortgage
Loans in the
related
Loan Group (including Excess Special Hazard Losses, Excess Fraud
Losses, Excess
Bankruptcy Losses and
Extraordinary Losses)
not
allocated solely to
one or more specific Classes of Certificates
pursuant to Section 4.05,
(iii) the interest
portion of Advances that were (A) previously made
with respect to a
Mortgage Loan or REO
Property on the Mortgage
Loans in the related
Loan Group,
which remained unreimbursed
following the
Cash Liquidation or REO Disposition of such
Mortgage Loan or REO
Property and (B) made with respect to
delinquencies that
were ultimately determined to be Excess
Special Hazard Losses,
Excess Fraud Losses,
Excess Bankruptcy
Losses or Extraordinary Losses on the Mortgage Loans in the
related Loan Group and were not allocated solely to one or more
specific Classes of Certificates pursuant to Section 4.05, and
(iv) any other
interest shortfalls
not covered by the
subordination
provided by the related Class M Certificates and related Class B
Certificates, including interest that is not collectible from
the
Mortgagor pursuant to
the Servicemembers
Civil Relief Act, as
amended, or similar
legislation or regulations as in effect from
time to time,
with all such reductions allocated the related Senior Percentage of such
reductions among the related Senior Certificates in the related Certificate
Group in proportion to the amounts of
Accrued Certificate
Interest payable from
the related Loan Group on such Distribution Date absent such reductions,
with
the remainder of such reductions allocated among the holders of the
related
Class M Certificates and related Class B Certificates in proportion to their
respective amounts of Accrued Certificate
Interest payable on
such Distribution
Date absent such reductions. In addition to that portion of the reductions
4
<PAGE>
described in the preceding sentence that are allocated to any
Class of Class B
Certificates or any Class of Class M
Certificates, Accrued
Certificate Interest
on such Class of Class B Certificates or
such Class of Class M Certificates will
be reduced by the interest portion (adjusted to the Net Mortgage Rate) of
Realized Losses that are allocated
solely to such Class
of Class B Certificates
or such Class of Class M Certificates
pursuant to Section 4.05.
Affected Loan
Group: As to any Excess Special Hazard Loss or Excess
Fraud Loss, the Loan Group of the Mortgage
Loan on which such loss occurred.
Available Distribution Amount: As to any Distribution Date and each
Loan
Group, an amount equal to (a) the sum of
(i) the amount relating to the Mortgage
Loans on deposit in the Custodial Account as of the close of
business on the
immediately preceding Determination Date, including any
Subsequent
Recoveries,
and amounts deposited in the Custodial Account in connection with the
substitution of Qualified Substitute Mortgage Loans, (ii) the amount of any
Advance made on the immediately preceding Certificate Account Deposit Date,
(iii) any amount deposited in the
Certificate Account on the related Certificate
Account Deposit Date pursuant to the second
paragraph of Section
3.12(a), (iv)
any amount deposited in the Certificate
Account pursuant to Section 4.07, (v)
any amount that the Master Servicer is not permitted to withdraw from the
Custodial Account or the Certificate
Account pursuant to
Section 3.16(e),
(vi)
any amount received by the Trustee pursuant to the Surety Bond in
respect of
such Distribution Date, (vii) the proceeds
of any Pledged Assets received by the
Master Servicer and (viii) any Diverted
Amount allocated to such Loan Group from
the non-related Loan Group pursuant to Section
4.05, reduced by (b)
the sum as
of the close of business on the immediately
preceding
Determination Date of (w)
aggregate Foreclosure Profits, (x) the
Amount Held for Future Distribution, and
(y) amounts permitted to be withdrawn by the
Master Servicer from the Custodial
Account in respect of the Mortgage
Loans in the related
Loan Group pursuant
to
clauses (ii)-(x), inclusive, of Section 3.10(a) and (c) any Diverted
Amount
allocated from such Loan Group to the
non-related Loan Group pursuant to Section
4.05. Such amount shall be determined
separately for each Loan Group.
Bankruptcy Amount:
With respect to each Loan Group as of any date
of
determination prior to the first anniversary of the Cut-off Date, an amount
equal to the excess, if any, of (A) $186,749,
in the case of Loan
Group I, and
$100,000, in the case of Loan Group II, over (B) the aggregate amount of
Bankruptcy Losses allocated solely to one or more specific Classes of
Certificates in the related Certificate
Group in accordance with Section 4.05 of
this Series Supplement. As of any date of determination on or after the
first
anniversary of the Cut-off Date, an amount
equal to the excess, if any, of
(1) the lesser of (a) the related Bankruptcy Amount calculated
as
of the close of business on the Business Day immediately preceding the
most recent anniversary of the Cut-off Date coinciding with or
preceding
such date of
determination (or,
if such date of
determination
is an
anniversary of the
Cut-off Date, the Business Day immediately preceding
such date of
determination)
(for purposes of this definition, the
"Relevant Anniversary") and (b) the greater of
5
<PAGE>
(A) (i) if the aggregate principal balance of the
Non-Primary Residence
Loans in the related
Loan Group as of the
Relevant Anniversary
is less than 10% of
the Stated
Principal
Balance of the Mortgage Loans in the related Loan Group as of
the
Relevant Anniversary,
$0.00, or (ii) if the
aggregate principal
balance of the
Non-Primary Residence
Loans in the related
Loan
Group as of the Relevant Anniversary is equal to or greater
than
10% of the Stated Principal Balance of the Mortgage Loans in
the
related Loan Group as of the Relevant Anniversary, the sum of
(I)
the aggregate
principal balance of the Non-Primary Residence
Loans in the related
Loan Group with a
Loan-to-Value
Ratio of
greater than 80.00% but less than or equal to 90.00% (other than
Additional Collateral
Loans), times 0.25%, (II) the aggregate
principal balance
of the Non-Primary Residence Loans in the
related Loan Group
with a Loan-to-Value
Ratio of greater
than
90.00% but less than or equal to 95.00% (other than Additional
Collateral Loans), times 0.50%, and (III) the aggregate
principal
balance of the
Non-Primary Residence
Loans in the related
Loan
Group with a
Loan-to-Value Ratio of
greater than 95.00%
(other
than Additional Collateral Loans) times 0.75%, in each case as
of
the Relevant Anniversary; and
(B) the greater of (i) the product of (x) an amount equal
to the largest
difference in the related Monthly Payment for any
Non-Primary Residence
Loan remaining in the related Loan
Group
(other than Additional
Collateral
Loans) which had an
original
Loan-to-Value Ratio of
80% or greater that
would result if
the
Net Mortgage
Rate thereof was equal to the weighted average
(based on the
principal balance
of the Mortgage Loans in the
related Loan Group as
of the Relevant
Anniversary)
of the Net
Mortgage Rates of all Mortgage Loans in the related Loan Group
as
of the Relevant
Anniversary less 1.25%
per annum, (y) a
number
equal to the weighted
average remaining
term to maturity, in
months, of all
Non-Primary
Residence Loans remaining in the
related Loan Group as
of the Relevant
Anniversary, and (z)
one
plus the quotient
of the number of all Non-Primary Residence
Loans
remaining in the
related Loan Group
divided by the
total
number of Outstanding Mortgage Loans in the related Loan Group
as
of the Relevant Anniversary, and (ii) $50,000,
over (2) the aggregate
amount of Bankruptcy
Losses on Mortgage
Loans in the related Loan Group allocated solely to one or more
specific
Classes of related
Certificates in
accordance with
Section 4.05 since
the Relevant Anniversary.
The Bankruptcy Amount
for each Loan Group may be further reduced by the
Master Servicer (including accelerating the manner in which such coverage
is
reduced) provided that prior to any such
reduction,
the Master Servicer
shall
(i) obtain written confirmation from each Rating Agency that such reduction
shall not reduce the rating assigned to any Class of related
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 and
(ii) provide a copy of such written
confirmation to the Trustee.
Capitalization
Reimbursement Amount:
As to any Distribution
Date and
Loan Group, the amount of Advances or
Servicing Advances
that were added to the
Stated Principal Balance of the Mortgage Loans in such Loan Group during
the
6
<PAGE>
prior calendar month and reimbursed to the
Master Servicer or
Subservicer on or
prior to such Distribution Date pursuant to Section 3.10(a)(vii), plus the
related Capitalization Reimbursement Shortfall Amount remaining
unreimbursed
from any prior Distribution Date and reimbursed to the Master Servicer or
Subservicer on or prior to such
Distribution Date.
Capitalization
Reimbursement
Shortfall Amount: As
to any Distribution
Date and Loan Group, the amount, if any, by which the amount of Advances
or
Servicing Advances that were added to the Stated Principal Balance of the
Mortgage Loans in such Loan Group during
the preceding calendar
month exceeds
the amount of principal payments on the
Mortgage Loans included in the Available
Distribution Amount for that Loan Group and
Distribution Date.
Certificate: Any Class
I-A-1, Class I-A-2,
Class I-A-3,
Class I-A-4,
Class I-A-5, Class I-A-V, Class I-A-P,
Class II-A-1, Class II-A-V, Class II-A-P,
Class R-I, Class R-II, Class R-III, Class
I-M-1, Class I-M-2, Class I-M-3, Class
II-M-1, Class II-M-2, Class II-M-3, Class
I-B-1, Class I-B-2, Class I-B-3, Class
II-B-1, Class II-B-2 and Class II-B-3
Certificates.
Certificate Account:
The separate account or accounts created and
maintained pursuant to Section 4.01 of the Standard Terms, which shall be
entitled "Deutsche Bank Trust Company
Americas, as trustee, in trust for the
registered holders of Residential
Accredit Loans, Inc.,
Mortgage Asset-Backed
Pass-Through Certificates, Series 2004-QS16" and which must be an Eligible
Account.
Certificate Group: With respect to (i) Loan Group I, the Group I
Senior,
Class I-M, Class I-B-1, Class I-B-2 and
Class I-B-3 Certificates; and (ii) Loan
Group II, the Group II Senior, Class II-M, Class II-B-1, Class
II-B-2 and Class
II-B-3 Certificates.
Certificate
Policy: None.
Certificate
Principal Balance: With respect to each Certificate (other than
any Interest Only Certificate), on any date of determination,
an amount equal
to:
(i) the Initial
Certificate Principal
Balance of such Certificate as
specified on the face thereof, plus
(ii) any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 4.02, minus
(iii) the sum of (x) the aggregate of all amounts previously
distributed with
respect to such Certificate (or any predecessor
Certificate) and
applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02(a) and (y) the
aggregate
of all reductions in Certificate Principal Balance deemed to
have
occurred in connection with Realized Losses which were
previously
allocated to such
Certificate (or any
predecessor
Certificate)
pursuant to Section 4.05;
provided, that the Certificate Principal Balance of each Certificate of the
Class of Subordinate Certificates with the Lowest Priority at any given time
shall be further reduced by an amount equal to the Percentage Interest
represented by such Certificate multiplied by the excess,
if any, of (A) the
then aggregate Certificate Principal Balance of all Classes
of Certificates in
the related Certificate Group then outstanding over (B) the then aggregate
7
<PAGE>
Stated Principal Balance of the Mortgage Loans in the related Loan Group;
provided, however, that the Certificate Principal Balance of the Class of
Certificates in the related Certificate
Group with the Lowest Priority shall not
be reduced to the extent of the amount of
any Excess Special
Hazard Losses or
Excess Fraud Losses to be covered by Diverted Amounts allocated from the
non-related Loan Group pursuant to Section
4.05; provided,
further, that, on
each Distribution Date, the Certificate
Principal Balance of a
Class of Class B
Certificates shall be reduced by the amount that the Subordinated Principal
Distribution Amount of such Class has been
reduced by Diverted
Amounts on such
Distribution Date.
Class A-P Collection Shortfall: With respect to the Cash
Liquidation or
REO Disposition of a Discount Mortgage Loan, any Distribution
Date and any Loan
Group, the excess of the amount described
in clause (C)(1) of the definition of
Class A-P Principal Distribution Amount for such Loan Group over the amount
described in clause (C)(2) of such
definition.
Class A-P Principal Distribution Amount: With respect to any
Distribution Date and Loan Group, an amount
equal to the aggregate of:
(A) the related
Discount Fraction of
the principal
portion of
each Monthly Payment on each Discount Mortgage Loan in the related
Loan
Group due
during the related Due Period, whether or not received on or
prior to the related
Determination Date, minus the Discount Fraction of
the principal
portion of any
related Debt Service Reduction which
together with other Bankruptcy Losses exceeds the Bankruptcy
Amount;
(B) the related Discount Fraction of the principal portion of
all
unscheduled
collections on each
Discount Mortgage Loan
in the related
Loan Group received during the preceding calendar month or, in the case
of Principal
Prepayments in Full, during the related Prepayment Period
(other than amounts
received in connection
with a Cash
Liquidation or
REO Disposition
of a Discount
Mortgage Loan described in clause (C)
below),
including
Principal
Prepayments in
Full, Curtailments,
Subsequent Recoveries
and repurchases
(including
deemed repurchases
under Section
3.07(b)) of Discount
Mortgage Loan in the related Loan
Group (or, in the case of a substitution of a Deleted Mortgage Loan in
the related
Loan Group, the Discount Fraction of the amount of any
shortfall deposited in
the Custodial Account
in connection
with such
substitution);
(C) in connection with the Cash Liquidation or REO Disposition
of
a Discount Mortgage
Loan in the related Loan Group that occurred during
the preceding calendar month (or was deemed to have occurred during
such
period in accordance
with Section
3.07(b)) that did not
result in any
Excess Special Hazard
Losses, Excess Fraud
Losses, Excess
Bankruptcy
Losses or Extraordinary Losses, an amount equal to the lesser of
(1) the
applicable Discount
Fraction of the Stated
Principal Balance of such
Discount Mortgage Loan
immediately prior to
such Distribution Date and
(2) the aggregate amount of the collections on such Mortgage Loan
to the
extent applied as
recoveries of principal;
8
<PAGE>
(D) any amounts allocable to principal for any previous
Distribution Date (calculated pursuant to clauses (A) through (C)
above)
that remain undistributed; and
(E) the amount of any Class A-P Collection Shortfalls for such
Distribution Date
and Loan Group and the amount of any Class A-P
Collection Shortfalls
for such Loan
Group remaining unpaid for all
previous Distribution
Dates, but only to the extent of the Eligible
Funds for such Distribution Date; minus
(F) the related Discount Fraction of the portion of the
Capitalization
Reimbursement Amount for the related Loan Group for such
Distribution Date, if any, related to each Discount Mortgage Loan
in the
related Loan Group.
Notwithstanding the foregoing, with respect to any Distribution
Date on
and after the Credit Support Depletion Date, the Class A-P Principal
Distribution Amount for a Loan Group
shall equal the excess of (i) the sum
of
(a) the related Discount Fraction of the principal portion of each Monthly
Payment on each Discount Mortgage Loan in the related Loan Group
received or
advanced prior to the related Determination
Date and not previously distributed
minus the Discount Fraction of the
principal portion of any related Debt Service
Reduction which together with other Bankruptcy Losses exceeds the Bankruptcy
Amount and (b) the aggregate amount
calculated
pursuant to clauses
(B) and (C)
above over (ii) the amount calculated
pursuant to clause (F) above.
Class A-P
Certificates:
The Class I-A-P Certificates and Class II-A-P
Certificates.
Class A-V
Certificates:
The Class I-A-V Certificates and Class II-A-V
Certificates.
Class B
Certificates:
The Class I-B-1,
Class I-B-2,
Class I-B-3,
Class
II-B-1, Class II-B-2 and Class II-B-3
Certificates.
Class M
Certificates:
The Class I-M-1,
Class I-M-2,
Class I-M-3,
Class
II-M-1, Class II-M-2 and Class II-M-3
Certificates.
Class R
Certificate:
Any one of the Class
R-I, Class R-II 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 to the Standard Terms 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 to the Standard
Terms 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 to the Standard Terms as Exhibit D and
evidencing an interest designated as a "residual interest" in REMIC III for
purposes of the REMIC Provisions.
9
<PAGE>
Class I-A Percentage:
As of any Distribution
Date, the lesser of
100%
and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Group I Senior Certificates
(other than the Class I-A-P Certificates)
immediately prior to such Distribution
Date and the denominator of which is the
aggregate Stated
Principal Balance
of
all of the Mortgage Loans (or related REO Properties) (other than the related
Discount Fraction of each Discount
Mortgage Loan) in Loan Group I
immediately
prior to such Distribution Date.
Class
I-M Certificates: The Class I-M-1, Class I-M-2 and Class I-M-3
Certificates.
Class II-A Percentage:
As of any Distribution
Date, the lesser of 100%
and a fraction, expressed as a percentage, the numerator of which is the
aggregate Certificate Principal Balance of the Group II Senior
Certificates
(other than the Class II-A-P Certificates) immediately prior to such
Distribution Date and the denominator of
which is the aggregate Stated Principal
Balance of all of the Mortgage Loans (or
related REO Properties) (other than the
related Discount Fraction of each Discount Mortgage Loan) in Loan Group II
immediately prior to such Distribution
Date.
Class II-M
Certificates:
The Class II-M-1,
Class II-M-2 and Class
II-M-3
Certificates.
Closing Date: December
29, 2004.
Compensating Interest:
With respect to any
Distribution Date and
each
Loan Group, an amount equal to Prepayment
Interest Shortfalls resulting from
Principal Prepayments in Full during the related Prepayment Period and
Curtailments during the prior calendar month and included in the Available
Distribution Amount for the such Loan Group on
such Distribution
Date, but not
more than the lesser of (a) one-twelfth of 0.125% of the aggregate Stated
Principal Balance of the Mortgage
Loans in the related
Loan Group
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 the Mortgage Loans
in the related Loan Group and such
Distribution Date; provided that for purposes
of this definition the amount of the
Servicing Fee will not be reduced pursuant
to Section 7.02(a) except as may be required
pursuant to the last
sentence of
such Section.
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 1761 East St.
Andrew Place, Santa Ana, California
92705-4934, Attention: Residential Funding
Corporation Series 2004-QS16.
Credit Support
Depletion Date: With
respect to Loan Group I, the first
Distribution Date on which the Certificate
Principal Balances of
the Class I-M,
Class I-B-1, Class I-B-2 and Class I-B-3
Certificates have been reduced to zero.
With respect to Loan Group II, the first Distribution Date on which the
Certificate Principal Balances of the Class
II-M, Class II-B-1, Class II-B-2 and
Class II-B-3 Certificates have been reduced
to zero.
Credit
Repository: Equifax, Transunion and Experian, or their successors
in
interest.
Cut-off Date: December
1, 2004.
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<PAGE>
Determination
Date: With respect to any Distribution Date, the second
Business Day prior to each Distribution
Date.
Discount Net
Mortgage Rate: With
respect to Loan Group I, 6.00% per annum.
With respect to Loan Group II, 5.00% per
annum.
Diverted Amount: On any Distribution Date on which Excess Special
Hazard
Losses or Excess Fraud Losses from the
Affected Loan Group
are allocated to the
Class B Certificates related to the Unaffected Loan Group pursuant to Section
4.05, or on any subsequent Distribution Date occurring before such losses are
fully covered by a Diverted Amount, an amount equal to the least of (a) the
aggregate amount of all Excess Special
Hazard Losses or Excess Fraud Losses from
the Affected Loan Group which occurred
prior to the related
Distribution Date,
minus the aggregate amount of Diverted Amounts previously distributed to the
Certificates related to the Affected Loan Group
in respect of such losses, (b)
the amounts otherwise payable in respect of principal
to the related
Class B
Certificates related to the Unaffected Loan
Group on such Distribution Date, and
(c) the excess of (i) the sum of (1) the
aggregate of the
Diverted Amounts
for
all prior Distribution Dates corresponding to Excess Special
Hazard Losses or
Excess Fraud Losses, as applicable, for the
Affected Group and (2) the aggregate
Special Hazard Losses or Fraud Losses, as
applicable, for such Distribution Date
and all prior Distribution Dates for the Unaffected Loan Group over (ii) the
Special Hazard Amount or Fraud Loss Amount,
as applicable, for the Unaffected
Loan Group.
Due Period: With
respect to each Distribution Date, the calendar month
in which such Distribution Date occurs.
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 the
Trustee, or (v) an
account or accounts of a depository
institution acceptable to each Rating Agency
(as evidenced in writing by each
Rating Agency that use
of any such account as
the Custodial Account or the Certificate Account will not reduce the rating
assigned to any Class of Certificates by such Rating Agency below the
lower of
the then-current rating or the rating assigned to
such Certificates as
of the
Closing Date by such Rating Agency).
Eligible Funds: With respect to any Distribution Date and Loan
Group, an
amount equal to the excess of the
Available Distribution Amount for such Loan
Group over the sum of (i) the aggregate
amount of Accrued
Certificate
Interest
on the related Senior Certificates, (ii) the related Senior Principal
Distribution Amount (determined without regard to Section 4.02(a)(ii)(Y)(D)
11
<PAGE>
hereof), (iii) the related Class A-P
Principal Distribution
Amount (determined
without regard to clause (E) of the definition of Class A-P Principal
Distribution Amount) and (iv) the aggregate amount of Accrued Certificate
Interest on the Class I-M, Class I-B-1 and Class I-B-2 Certificates, or the
Class II-M, Class II-B-1 and Class II-B-2
Certificates, as applicable.
Excess Subordinate
Principal Amount:
With respect to any
Distribution
Date on which the aggregate Certificate Principal Balance of the Class of
Subordinate Certificates in the Certificate
Group related to a
Loan Group then
outstanding with the Lowest Priority is to be reduced to zero and on which
Realized Losses are to be allocated to such Class or
Classes, the excess,
if
any, of (i) the amount that would otherwise be distributable in respect of
principal on such class or classes of
Certificates
on such Distribution Date
over (ii) the excess, if any, of the
aggregate Certificate
Principal Balance of
such Class or Classes of Certificates immediately prior to such Distribution
Date over the aggregate amount of Realized Losses to be allocated to such
Classes of Certificates on such Distribution Date as reduced by any amount
calculated pursuant to clause (E) of the definition of Class A-P Principal
Distribution Amount.
Fraud Loss
Amount: With respect to each Loan Group as of
any date of
determination after the Cut-off Date, an
amount equal to: (X) prior to the first
anniversary of the Cut-off Date an amount
equal to 3.00% (in the case of Group I
Loans) or 2.25% (in the case of Group II
Loans) of the aggregate outstanding
principal balance of the Mortgage Loans in the related Loan Group as of the
Cut-off Date minus the aggregate
amount of Fraud Losses
allocated solely to one
or more specific Classes of related
Certificates in accordance with Section 4.05
of this Series Supplement since the Cut-off Date up to such date of
determination, (Y) from the first to, but not
including, the second anniversary
12
<PAGE>
of the Cut-off Date, an amount equal to (1) the lesser of (a) the
Fraud Loss
Amount for such Loan Group as of the most
recent anniversary of the Cut-off Date
and (b) 2.00% (in the case of Group I Loans) or
1.50% (in the case of Group II
Loans) of the aggregate outstanding principal balance of all of the Mortgage
Loans in the related Loan Group as of the
most recent anniversary of the Cut-off
Date minus (2) the aggregate amount of Fraud Losses
allocated solely to
one or
more specific Classes of related Certificates in accordance with Section
4.05
since the most recent anniversary of the Cut-off Date up to such date of
determination, and (Z) from the second to, but not including, the fifth
anniversary of the Cut-off Date, an amount equal to (1) the lesser
of (a) the
Fraud Loss Amount for the related
Loan Group as of the
most recent
anniversary
of the Cut-off Date and (b) 1.00% of the
aggregate outstanding principal balance
of all of the Mortgage Loans in the related Loan Group as of the most
recent
anniversary of the Cut-off Date minus (2) the
aggregate amount of
Fraud Losses
for the related Loan Group allocated
solely to one or more
specific Classes
of
Certificates in accordance with Section 4.05 since the most
recent anniversary
of the Cut-off Date up to such date of
determination.
On and after the
fifth
anniversary of the Cut-off Date, the Fraud
Loss Amount for such Loan Group shall
be zero.
The Fraud Loss Amount
for a Loan
Group may be further
reduced by the
Master Servicer (including accelerating the manner in which such coverage
is
reduced) provided that prior to any such
reduction,
the Master Servicer
shall
(i) obtain written confirmation from each Rating Agency that such reduction
shall not reduce the rating assigned to any Class of related
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 and
(ii) provide a copy of such written
confirmation to the Trustee.
Group I Loans: The
Mortgage Loans designated on the Mortgage Loan
Schedule as Group I Loans.
Group II Loans: The
Mortgage Loans
designated
on the Mortgage Loan
Schedule as Group II Loans.
Group I Senior Certificates: The Class I-A-1, Class I-A-2,
Class I-A-3,
Class I-A-4, Class I-A-5, Class I-A-V, Class I-A-P, Class R-I and Class
R-III
Certificates.
Group II Senior
Certificates: The
Class II-A-1, Class
II-A-V, Class
II-A-P and Class R-II Certificates.
Highest Priority: As of any date of determination, the Class of related
Subordinate Certificates then outstanding with
a Certificate
Principal Balance
greater than zero, with the earliest
priority for payments
pursuant to
Section
4.02(a), in the following order: (a) for
the Subordinate Certificates related to
Loan Group I, Class I-M-1, Class I-M-2, Class I-M-3, Class I-B-1, Class I-B-2
and Class I-B-3 Certificates and (b) for
the Subordinate Certificates related to
Loan Group II, Class II-M-1, Class II-M-2, Class II-M-3, Class II-B-1, Class
II-B-2 and Class II-B-3 Certificates.
Initial Monthly
Payment Fund: $56,158.34, representing scheduled
principal amortization and interest at the
Net Mortgage Rate payable during the
January 2005 Due Period, for those Mortgage
Loans for which the Trustee will not
be entitled to receive such payment.
Initial Notional Amount: With respect to the Class I-A-V
Certificates,
the aggregate Cut-off Date Principal Balance of
the Group I Loans; with respect
to the Class II-A-V Certificates, the aggregate Cut-off Date
Principal Balance
of the Group II Loans; and with respect to the Class I-A-4 Certificates, an
amount equal to the aggregate Certificate Principal Balance of
the Class I-A-1,
Class I-A-2, Class I-A-3 and Class I-A-5
Certificates
as of the Cut-Off
Date.
With respect to any Subclass issued
pursuant to Section
5.01(c), the
aggregate
Stated Principal Balance of the Mortgage
Loans corresponding to such Subclass as
of the Cut-Off Date.
Initial Subordinate
Class Percentage: With respect to each Class of
related Subordinate Certificates, an amount which is equal to the initial
aggregate Certificate Principal Balance of such related Class of
Subordinate
Certificates divided by the aggregate Stated Principal Balance of all the
Mortgage Loans in the related Loan Group as
of the Cut-off Date as follows:
Class I-M-1: 2.25%
Class I-B-1: 0.50%
Class I-M-2: 0.90%
Class I-B-2: 0.30%
Class I-M-3: 0.50%
Class I-B-3: 0.45%
Class II-M-1: 2.40%
Class II-B-1:
0.15%
Class II-M-2: 0.20%
Class II-B-2:
0.10%
Class II-M-3: 0.30%
Class II-B-3:
0.15%
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<PAGE>
Interest Accrual
Period: With respect
to any Class of Certificates and
any Distribution Date, the calendar month preceding the month in which
such
Distribution Date occurs.
Interest Only
Certificates:
Any one of the Class
I-A-V, Class II-A-V
and
Class I-A-4 Certificates. The Interest Only Certificates will have no
Certificate Principal Balance.
Loan Group: Any of
Loan Group I or Loan Group II.
Loan Group I:
The group of Mortgage Loans comprised of the Group I Loans.
Loan Group II:
The group of Mortgage Loans comprised of the Group II Loans.
Lockout Certificates:
The Class A-5 Certificates.
Lockout Percentage:
For any Distribution Date occurring prior to the
Distribution Date in January 2010, 0%, and
for any Distribution Date thereafter,
as follows: 30% for any Distribution Date on
or after January 2010 and prior to
January 2011; 40% for any Distribution Date on or after January 2011 and
prior
to January 2012; 60% for any Distribution Date on or after January 2012 and
prior to January 2013; 80% for any Distribution Date on or after January 2013
and prior to January 2014; and 100% for any
Distribution Date thereafter.
Lower Priority:
As of any date of determination and any Class of
Subordinate Certificates, any other Class of related
Subordinate
Certificates
then outstanding with a later priority for payments pursuant to Section 4.02
(a).
Lowest Priority: As of
any date of determination, the Class of related
Subordinate Certificates then outstanding with
a Certificate
Principal Balance
greater than zero, with the latest priority for payments pursuant to Section
4.02(a), in the following order: (a) for
the Subordinate Certificates related to
Loan Group I, Class I-B-3, Class I-B-2, Class I-B-1, Class I-M-3, Class I-M-2
and Class I-M-1 Certificates and (b) for
the Subordinate Certificates related to
Loan Group II, Class II-B-3, Class II-B-2, Class II-B-1, Class II-M-3, Class
II-M-2 and Class II-M-1 Certificates .
Maturity Date: With respect to Certificates in the Certificate Group
related to Loan Group I, December 25, 2034,
the Distribution
Date immediately
following the latest scheduled maturity date of any Mortgage Loan
in Loan Group
I. With respect to Certificates
in the Certificate
Group related to Loan
Group
II, December 25, 2019, the Distribution
Date immediately following the latest
scheduled maturity date of any Mortgage
Loan in Loan Group II.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans
attached
hereto as Exhibit One-I (with respect to
Loan Group I) and Exhibit One-II (with
respect to Loan Group II) (in each case, as
amended from time to time to reflect
the addition of Qualified Substitute Mortgage Loans), which
list or lists shall
set forth the following information as to
each Mortgage Loan in the related Loan
Group:
(i)
the Mortgage Loan identifying number ("RFC LOAN #");
14
<PAGE>
(ii)
the maturity of the Mortgage Note ("MATURITY DATE");
(iii)
the Mortgage Rate ("ORIG RATE");
(iv)
the Subservicer pass-through rate ("CURR NET");
(v)
the Net Mortgage Rate ("NET MTG RT");
(vi)
the Pool Strip Rate ("STRIP");
(vii)
the initial scheduled
monthly payment of
principal, if any,
and interest ("ORIGINAL P & I");
(viii)
the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix)
the Loan-to-Value Ratio at origination ("LTV");
(x)
the rate at which the Subservicing Fee accrues ("SUBSERV FEE")
and at which the Servicing Fee accrues ("MSTR SERV FEE");
(xi)
a code "T,"
"BT" or "CT"
under the column "LN FEATURE,"
indicating that the
Mortgage Loan is secured by a second or
vacation residence; and
(xii)
a code "N" under the column "OCCP CODE," indicating that the
Mortgage Loan is secured by a non-owner occupied residence.
Such schedule may consist of multiple
reports that collectively set forth all of
the information required.
Notional Amount: As of
any Distribution
Date, (i) with respect
to the
Class I-A-4 Certificates, an amount equal
to the aggregate Certificate Principal
Balance of the Class I-A-1, Class I-A-2, Class I-A-3 and Class I-A-5
Certificates immediately prior to the related
Distribution Date
divided by 12;
(ii) with respect to any Class I-A-V
Certificates
or Subclass
thereof issued
pursuant to Section 5.01(c), the aggregate
Stated Principal Balance of the Group
I Loans corresponding to the Uncertificated Class A-V REMIC Regular
Interests
represented by such Class or Subclass
immediately prior to
such date; and (iii)
with respect to any Class II-A-V Certificates or Subclass thereof issued
pursuant to Section 5.01(c), the aggregate
Stated Principal Balance of the Group
II Loans corresponding to the
Uncertificated Class
A-V REMIC Regular Interests
represented by such Class or Subclass
immediately prior to such date.
Pass-Through Rate: With respect to the Senior Certificates (other than
the Class A-V Certificates and Class A-P
Certificates), Class M Certificates and
Class B Certificates and any Distribution
Date, the per annum rates set forth in
the Preliminary Statement hereto.
With respect to each
Class of Class A-V
Certificates (other
than any
Subclass thereof) and any Distribution Date, a rate equal to the weighted
average, expressed as a percentage, of the Pool Strip Rates of all
Mortgage
Loans in the related Loan Group as of the Due Date in
the related Due
Period,
15
<PAGE>
weighted on the basis of the respective Stated Principal Balances of such
Mortgage Loans as of the day immediately
preceding such
Distribution Date
(or,
with respect to the initial Distribution Date, at the close of business on
the
Cut-off Date). With respect to the Class
I-A-V Certificates and the Class II-A-V
Certificates and the initial Distribution
Date the Pass-Through Rate is equal to
0.1672% and 0.4884% per annum, respectively. With respect to any Subclass of
Class A-V Certificates and any Distribution Date, a rate equal to the
weighted
average, expressed as a percentage, of the Pool Strip Rates of all
Mortgage
Loans in the related Loan Group
corresponding to the
Uncertificated
Class A-V
REMIC Regular Interests represented by such Subclass as of
the Due Date in the
related Due Period, weighted on the basis of the
respective
Stated Principal
Balances of such Mortgage Loans as of the day immediately preceding such
Distribution Date (or with respect to the initial
Distribution
Date, at the
close of business on the Cut-off Date). The Class A-P Certificates have no
Pass-Through Rate and are not entitled to
Accrued Certificate Interest.
Pool Strip Rate: With respect to each Mortgage Loan in any Loan
Group, a
per annum rate equal to the excess of (a)
the Net Mortgage Rate of such Mortgage
Loan over (b) the Discount Net Mortgage Rate for such Loan Group (but not
less
than 0.00%) per annum.
Permitted Investments:
One or more of the following:
(i) obligations
of or guaranteed as to timely payment of 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
short-term debt 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
short-term debt
obligations of such depository institution or trust company
(or,
if the only Rating
Agency is Standard & Poor's,
in the case of the
principal
depository
institution
in a depository institution holding
company, debt
obligations of the depository institution holding company) at
the date of
acquisition
thereof have been
rated by each Rating
Agency in
its highest
short-term rating available; and provided further that, if
the
only
Rating Agency is Standard & Poor's and if the
depository
or trust
company is a
principal subsidiary
of a bank holding
company and the
debt
obligations of
such subsidiary are
not separately
rated, the applicable
rating shall be
that of the bank holding company; and, provided further
that, if the
original maturity of
such short-term
debt obligations of a
domestic branch
of a foreign depository institution or trust company
shall
exceed 30 days,
the short-term rating
of such institution shall be A-1+ in
the case of
Standard & Poor's if Standard & Poor's is the Rating
Agency;
16
<PAGE>
(iv) commercial
paper and demand notes
(having original maturities of not
more than 365 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of
acquisition
has been rated by each Rating Agency in its highest short-term rating
available; provided
that such commercial
paper shall have a
remaining
maturity of not more than 30 days;
(v) any mutual fund,
money market fund, common trust fund or other
pooled
investment vehicle,
the assets of which are limited to instruments that
otherwise would constitute Permitted Investments hereunder and have
been
rated by each Rating Agency in its highest short-term rating available
(in the case of Standard & Poor's such rating shall be either AAAm or
AAAm-G), including
any such fund that is
managed by the Trustee or any
affiliate of
the Trustee or for which the Trustee or any of its
affiliates acts as an adviser; 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
(without giving
effect to any
Certificate
Policy (as
defined in the
Series Supplement) in
the case of Insured
Certificates (as
defined in
the Series Supplement) 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, 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 rating category available shall mean AAA in the case of
Standard &
Poor's and Fitch and Aaa in the case of
Moody's, and
references
herein to the
highest rating available on unsecured
commercial
paper and short-term
rating
category available obligations shall mean A-1 in the
case of Standard & Poor's,
P-1 in the case of Moody's and either A-+
by Standard &
Poor's, P-1 by
Moody's
or F-1 by Fitch in the case of Fitch; provided, further, 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.
Prepayment Assumption:
With respect to Loan Group I, the prepayment
assumption to be used for determining the
accrual of original issue discount and
premium and market discount on the related
Certificates
for federal income
tax
purposes, which assumes a constant prepayment rate of 10.0% per annum of the
then outstanding principal balance of the Group I Loans in
the first month of
the life of such Group I Loans and an
additional approximately 0.909090909% per
annum in each month thereafter until the twelfth month, and beginning in the
twelfth month and in each month thereafter
during the life of the Group I Loans,
a constant prepayment rate of 20.0% per annum.
With respect to Loan
Group II,
the prepayment assumption to be used for
determining
the accrual of
original
17
<PAGE>
issue discount and premium and market
discount on the related Certificates for
federal income tax purposes, which assumes a constant
prepayment
rate of 8.0%
per annum of the then outstanding principal
balance of the Group II Loans in the
first month of the life of such Group II
Loans and an
additional
approximately
0.909090909% per annum in each month
thereafter
until the twelfth
month, and
beginning in the twelfth month and in each
month thereafter
during the life of
the Group II Mortgage Loans, a constant
prepayment rate of 18.0% per annum.
Prepayment
Distribution
Percentage: With
respect to any
Distribution
Date and each Class of Subordinate
Certificates
in the Certificate Group for
each Loan Group, under the applicable circumstances set forth below, the
respective percentages set forth below:
(i) For
any Distribution
Date prior to the Distribution Date in
January 2010 (unless the Certificate Principal Balances of the
related Senior
Certificates
(other than the
related Class A-P
Certificates), have been reduced to zero), 0%.
(ii) For any
Distribution
Date not discussed in clause (i) above
on
which any Class of related Subordinate Certificates are
outstanding:
(a) in the
case of the Class of related Subordinate
Certificates then
outstanding with the Highest Priority and each
other Class of
Subordinate
Certificates
for which the
related
Prepayment
Distribution Trigger has been satisfied, a fraction,
expressed as
a percentage, the numerator of which is the
Certificate Principal
Balance of such Class immediately prior to
such date and the denominator of which is the sum of the
Certificate Principal
Balances immediately prior to such date of
(1) the Class of related Subordinate Certificates then
outstanding with the
Highest Priority and
(2) all other Classes
of related
Subordinate
Certificates
for which the
respective
Prepayment Distribution Triggers have been satisfied; and
(b) in the case of each other Class of related Subordinate
Certificates for which the Prepayment Distribution Triggers have
not been satisfied, 0%; and
(iii)Notwithstanding the foregoing, if the application of the foregoing
percentages
on any Distribution Date as provided in Section 4.02
of this
Series
Supplement
(determined
without regard to the proviso to the
definition of
"Subordinate Principal
Distribution Amount") would result in
a distribution in respect of principal of any Class or Classes of
Subordinate
Certificates
in an amount greater than the remaining
Certificate
Principal Balance thereof (any such class, a "Maturing Class"),
then:
(a) the Prepayment Distribution Percentage of each Maturing
Class
shall be reduced
to a level that, when
applied as described
above, would
exactly reduce
the Certificate Principal Balance of such Class to zero; (b)
the Prepayment
Distribution
Percentage of each
other Class of Subordinate
Certificates
(any such Class, a "Non-Maturing Class") shall be recalculated
in accordance with the provisions in paragraph (ii) above, as if the
Certificate
Principal Balance of each Maturing
Class had been reduced
to
zero (such percentage as
recalculated, the
"Recalculated Percentage"); (c)
the total amount of the reductions in the Prepayment Distribution
Percentages of
the Maturing Class or Classes pursuant to clause (a) of this
sentence,
expressed as an
aggregate percentage,
shall be allocated
among
the Non-Maturing Classes in proportion to their
respective
Recalculated
Percentages
(the portion of such
aggregate reduction so allocated to any
Non-Maturing
Class, the "Adjustment
Percentage"); and (d)
for purposes of
such
Distribution
Date, the Prepayment Distribution Percentage of each
18
<PAGE>
Non-Maturing
Class shall be equal to the sum of (1) the Prepayment
Distribution
Percentage
thereof, calculated in accordance with the
provisions in
paragraph (ii) above as if the Certificate Principal Balance
of each Maturing
Class had not been
reduced to zero, plus
(2) the related
Adjustment Percentage.
Prepayment
Distribution Trigger:
With respect to any Distribution Date
and any Class of related Subordinate Certificates (other than the Class I-M-1
Certificates and the Class II-M-1
Certificates), a test
that shall be satisfied
if the fraction (expressed as a percentage) equal
to the sum of the Certificate
Principal Balances of such Class and each Class of related Subordinate
Certificates with a Lower Priority than such Class
immediately
prior to such
Distribution Date divided by the aggregate
Stated Principal
Balance of all of
the Mortgage Loans (or related REO Properties) in the related Loan Group
immediately prior to such Distribution Date is
greater than or equal to the sum
of the related Initial Subordinate Class Percentages of
such Classes of related
Subordinate Certificates.
Principal Only Certificates: Any one of the Class A-P
Certificates.
Record Date: With
respect to each
Distribution Date and
each Class of
Certificates, the close of business on the last Business Day of the month
preceding the month in which the related
Distribution Date occurs.
Related Classes:
As to any Uncertificated REMIC I Regular Interest,
those classes of Certificates identified as
"Related Classes of Certificates" to
such Uncertificated REMIC I Regular
Interest in the definition of Uncertificated
REMIC I Regular Interest. As to any Uncertificated REMIC II Regular Interest,
those classes of Certificates identified as
"Related Classes of Certificates" to
such Uncertificated REMIC II Regular Interest in the definition of
Uncertificated REMIC II Regular
Interest.
REMIC I: The
segregated pool of
assets, with respect
to which a REMIC
election is to be made, consisting of:
(i) the
Group I Loans and the related Mortgage Files,
(ii) all
payments and collections in respect of the Group I
Loans due after the
Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date) as shall be
on deposit in the Custodial Account or in the Certificate
Account and identified
as belonging to the Trust Fund,
including the proceeds from the liquidation of Additional
Collateral for any
Additional
Collateral
Loan, but not
including amounts
on deposit in the Initial Monthly
Payment
Fund,
19
<PAGE>
(iii) property
which secured a Group I 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, if any, the
Pledged Assets with respect to each
Pledged Asset
Mortgage Loan, and the interest in the
Surety Bond transferred to the Trustee pursuant to Section
2.01 herein, in each case related to Group I Loans, and
(v) all
proceeds of clauses (i) through (iv) above.
REMIC I Certificates:
The Class R-I Certificates.
REMIC II:
The segregated pool of assets, with respect to which a REMIC
election is to be made, consisting of: (i) the Group II Loans and the
related
Mortgage Files,
(ii) all
payments and
collections
in respect of the
Group II
Loans due after the
Cut-off Date (other than Monthly
Payments due in the month of the Cut-off Date) as shall be
on deposit in the Custodial Account or in the Certificate
Account and identified
as belonging to the Trust Fund,
including the proceeds from the liquidation of Additional
Collateral for any
Additional
Collateral
Loan, but not
including amounts
on deposit in the Initial Monthly
Payment Fund,
(iii) property
which secured a Group
II 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, if any, the
Pledged Assets with respect to each
Pledged Asset
Mortgage Loan, and the interest in the
Surety Bond transferred to the Trustee pursuant to Section
2.01 herein, in each case related to Group II Loans, and
(v) all
proceeds of clauses (i) through (iv) above.
REMIC II Certificates:
The Class R-II Certificates.
REMIC III:
The segregated pool of assets consisting of the
Uncertificated REMIC I Regular Interests
and the Uncertificated REMIC II Regular
Interests conveyed in trust to the Trustee for the benefit of the holders
of
each Class of Certificates (other than the Class R-I
Certificates and the Class
R-II Certificates) pursuant to Section 2.06,
with respect to which
a separate
REMIC election is to be made.
20
<PAGE>
REMIC III Certificates: Any Class of Certificates (other
than the Class
R-I Certificates and the Class R-II
Certificates).
Senior Accelerated
Distribution
Percentage:
With
respect to any
Distribution Date occurring on or prior to the
60th Distribution
Date and any
Loan Group, 100%. With respect to any
Distribution Date thereafter and such Loan
Group, if applicable, as follows:
(i) for any
Distribution
Date after the 60th
Distribution
Date but on or
prior to the 72nd
Distribution Date, the
related Senior Percentage for
such Distribution Date
plus 70% of the related Subordinate Percentage
for such Distribution Date;
(ii) for any Distribution Date after the 72nd Distribution Date but on or
prior to the 84th
Distribution Date, the
related Senior Percentage for
such Distribution Date
plus 60% of the related Subordinate Percentage
for such Distribution Date;
(iii) for any Distribution Date after the 84th Distribution Date but on or
prior to the 96th
Distribution Date, the
related Senior Percentage for
such Distribution Date
plus 40% of the related Subordinate Percentage
for such Distribution Date;
(iv) for any Distribution Date after the 96th Distribution Date but on or
prior to the 108th
Distribution Date, the related Senior Percentage for
such Distribution Date
plus 20% of the related Subordinate Percentage
for such Distribution Date; and
(v) for any
Distribution Date thereafter, the related Senior Percentage
for
such Distribution Date;
provided, however,
(i) that any scheduled reduction to the Senior Accelerated
Distribution
Percentage described above shall not occur as
of any Distribution
Date unless
either:
(a)(1)(X) the outstanding principal balance of the Mortgage
Loans
in the related Loan Group delinquent 60 days or more (including
Mortgage
Loans which are in
foreclosure,
have been foreclosed or otherwise
liquidated, or with
respect to which the Mortgagor is in bankruptcy and
any REO Property)
averaged over the last six months, as a percentage of
the aggregate
outstanding
Certificate Principal Balance of the related
Subordinate
Certificates, is
less than 50% or (Y) the outstanding
principal balance of Mortgage Loans in the related Loan Group
delinquent
60 days or more (including Mortgage Loans which are in foreclosure,
have
been foreclosed or
otherwise liquidated,
or with respect to
which the
Mortgagor is in bankruptcy and any REO Property) averaged over the last
six months, as a
percentage
of the aggregate outstanding principal
balance of all Mortgage Loans in the related Loan Group
averaged over
the last six months,
does not exceed 2% and (2) Realized Losses on the
Mortgage Loans in the
related Loan Group to date for such Distribution
Date if occurring during the sixth, seventh, eighth, ninth or tenth
year
(or any year thereafter) after the Closing Date are less
than 30%, 35%,
40%, 45% or 50%,
respectively,
of the sum of the
Initial
Certificate
Principal Balances of the related Subordinate Certificates; or
21
<PAGE>
(b)(1) the outstanding
principal balance of Mortgage Loans in
the related Loan Group
delinquent 60 days or more (including Mortgage
Loans which are in
foreclosure,
have been foreclosed or otherwise
liquidated, or with
respect to which the Mortgagor is in bankruptcy and
any REO Property)
averaged over the last six months, as a percentage of
the aggregate outstanding principal balance of all Mortgage Loans
in the
related Loan Group averaged over the last six months, does not
exceed 4%
and (2) Realized
Losses on the Mortgage Loans in the related Loan Group
to date for such
Distribution Date,
if occurring during the sixth,
seventh, eighth, ninth
or tenth year (or any year thereafter) after the
Closing Date are less than 10%, 15%, 20%, 25% or 30%, respectively, of
the sum of the Initial
Certificate
Principal Balances of the related
Subordinate Certificates; and
(ii) that for any Distribution Date on which the related Senior
Percentage is greater than the related
Senior Percentage as of the Closing Date,
the Senior Accelerated Distribution Percentage for such
Distribution Date shall
be 100%.
Notwithstanding the
foregoing,
upon the reduction of
the Certificate
Principal Balances of the related Senior
Certificates
(other than the
related
Class A-P Certificates, if any) to zero, the related Senior Accelerated
Distribution Percentage shall thereafter be
0%.
Senior Certificate:
Any one of the Group I Senior Certificates or Group
II Senior Certificates, executed by the Trustee and authenticated by the
Certificate Registrar substantially in the
form annexed to the Standard Terms as
Exhibit A and Exhibit D.
Senior Percentage: The Class I-A Percentage or Class II-A
Percentage, as
applicable.
Senior Principal
Distribution Amount:
With respect to any Distribution
Date and Loan Group, the lesser of (a) the balance of the related Available
Distribution Amount remaining after the
distribution of all amounts required to
be distributed therefrom pursuant to Section 4.02(a)(i) and Section
4.02(a)(ii)(X) (excluding any amount
distributable pursuant to clause (E) of the
definition of "Class A-P Principal
Distribution Amount"), and (b) the sum of the
amounts required to be distributed to the Senior Certificateholders of the
related Certificate Group on such Distribution Date pursuant to Sections
4.02(a)(ii)(Y) and 4.02(a)(xvi).
Special Hazard Amount:
As of any Distribution
Date and Loan Group,
an
amount equal to (a) with respect to Loan Group I, $4,307,088 and (b) with
respect to Loan Group II, 1,775,576, in each case minus the sum of (i) the
aggregate amount of Special Hazard Losses allocated solely to one or more
specific Classes of Certificates in the
related Certificate
Group in accordance
with Section 4.05 of this Series
Supplement and (ii)
the Adjustment Amount
(as
defined below) as most recently calculated.
For each anniversary
of the Cut-off
Date, the Adjustment Amount shall be equal to the
amount, if any, by
which the
amount calculated in accordance
with the preceding
sentence (without giving
effect to the deduction of the Adjustment
Amount for such
anniversary)
exceeds
the greater of (A) the greater of (i) the
product of the related
Special Hazard
Percentage for such anniversary
multiplied by the
outstanding principal balance
of all the Mortgage Loans in the related Loan Group on
the Distribution
Date
immediately preceding such anniversary and
(ii) twice the outstanding principal
balance of the Mortgage Loan in the related Loan Group with the largest
outstanding principal balance as of the
Distribution Date immediately preceding
such anniversary and (B) the greater of
(i) the product of 0.50% multiplied by
the outstanding principal balance of all Mortgage Loans in the related Loan
Group on the Distribution Date immediately
preceding such anniversary multiplied
by a fraction, the numerator of which is equal to the
aggregate outstanding
22
<PAGE>
principal balance (as of the immediately
preceding Distribution
Date) of all of
the Mortgage Loans in the related Loan Group
secured by Mortgaged
Properties
located in the State of California divided by the aggregate outstanding
principal balance (as of the immediately
preceding Distribution
Date) of all of
the Mortgage Loans in the related Loan
Group, expressed as a percentage, and the
denominator of which is equal to 16.18%, in
the case of Loan Group I and 18.61%,
in the case of Loan Group II (which percentages are equal to the respective
percentages of Mortgage Loans in the related Loan Group by
aggregate
principal
balance initially secured by Mortgaged Properties located in the State of
California) and (ii) the aggregate outstanding principal balance (as of the
immediately preceding Distribution Date) of the largest Mortgage Loan in the
related Loan Group secured by a Mortgaged Property (or, with respect to a
Cooperative Loan, the related Cooperative Apartment) located in the State of
California.
The related Special
Hazard Amount may be further reduced by the Master
Servicer (including accelerating the manner in which coverage is reduced)
provided that prior to any such reduction,
the Master Servicer
shall (i) obtain
written confirmation from each Rating Agency that such reduction shall not
reduce the rating assigned to any Class of related
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 and (ii) provide a
copy of such written confirmation to the
Trustee.
Special Hazard
Percentage:
With respect to each
Loan Group as of each
anniversary of the Cut-off Date, the greater of (i) 1.0% and (ii)
the largest
percentage obtained by dividing the
aggregate outstanding
principal balance (as
of immediately preceding Distribution Date)
of the Mortgage Loans in the related
Loan Group secured by Mortgaged
Properties located in
a single, five-digit
zip
code area in the State of California by the
outstanding principal balance of all
the Mortgage Loans in the related Loan Group as
of the immediately
preceding
Distribution Date.
Subordinate
Certificate: With
respect to Loan Group
I, any one of the
Class I-M Certificates or Class I-B-1,
Class I-B-2 and Class I-B-3 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B and Exhibit C,
respectively. With respect to Loan Group II, any one of the Class II-M
Certificates or Class II-B-1, Class II-B-2 and Class II-B-3 Certificates,
executed by the Trustee and authenticated by the Certificate Registrar
substantially in the form annexed hereto as Exhibit B and Exhibit C,
respectively.
Subordinate Class Percentage: With respect to any Distribution
Date and
any Class of Subordinate Certificates, a fraction, expressed as a percentage,
the numerator of which is the aggregate
Certificate
Principal Balance of such
Class of Subordinate Certificates immediately prior to such date and the
denominator of which is the aggregate
Stated Principal Balance of all of the
Mortgage Loans in the related Loan Group
(or related REO Properties) (other than
the related Discount Fraction of each related Discount Mortgage Loan)
immediately prior to such Distribution
Date.
23
<PAGE>
Subordinate
Percentage: With
respect to either Loan
Group, as of any
date of determination a percentage equal to 100% minus the related Senior
Percentage as of that date.
Subordinate
Principal
Distribution
Amount: With
respect to any
Distribution Date and Loan Group and each Class of related Subordinate
Certificates, (a) the sum of the following: (i) such Class's pro rata share,
based on the Certificate Principal Balance of each Class of
related Subordinate
Certificates then outstanding, of the aggregate of the amounts calculated
(without giving effect to the related
Senior Percentages)
for such Distribution
Date for the related Loan Group under clauses (1), (2) and (3) of Section
4.02(a)(ii)(Y)(A) to the extent not payable to the
related Senior Certificates;
(ii) such Class's pro rata share, based on
the Certificate
Principal Balance of
each Class of related Subordinate Certificates then outstanding, of the
principal collections described in Section
4.02(a)(ii)(Y)(B)(b)
for the related
Loan Group (without giving effect to the
related Senior Accelerated Distribution
Percentages) to the extent such collections
are not otherwise distributed to the
related Senior Certificates; (iii) the product of (x) the
related Prepayment
Distribution Percentage and (y) the aggregate of all
Principal Prepayments
in
Full received in the related Prepayment
Period and Curtailments received in the
preceding calendar month for the related Loan Group (other than the related
Discount Fraction of such Principal
Prepayments in Full
and Curtailments
with
respect to a related Discount Mortgage Loan) to the extent not payable to
the
related Senior Certificates; (iv) if such Class is the Class of related
Subordinate Certificates with the Highest Priority, any related Excess
Subordinate Principal Amount for the related Loan Group
for such
Distribution
Date not paid to the related Senior
Certificates; and (v)
any amounts described
in clauses (i), (ii) and (iii) as
determined for any previous Distribution Date,
that remain undistributed to the extent that such amounts
are not attributable
to Realized Losses which have been allocated
to a Class of related
Subordinate
Certificates minus (b) the sum of (i) with
respect to the Class of Subordinate
Certificates with the Lowest Priority,
any related Excess
Subordinate Principal
Amount for such Distribution Date; and (ii) the related Capitalization
Reimbursement Amount for such Loan Group and
Distribution Date,
other than the
related Discount Fraction of any portion of that
amount related to each related
Discount Mortgage Loan in the related Loan
Group, multiplied by a
fraction, the
numerator of which is the Subordinate Principal Distribution Amount for such
Class of related Subordinate Certificates,
without giving effect
to this clause
(b)(ii), and the denominator of which is
the sum of the principal distribution
amounts for all Classes of Certificates in
the related
Certificate Group (other
than the Class A-P Certificates), without giving effect to any reductions
for
the Capitalization Reimbursement Amount. In addition to the foregoing, the
aggregate Subordinate Principal
Distribution Amount of
the Class B Certificates
of a Certificate Group will be reduced by any
Diverted Amount
required to be
paid to the Certificates of the other
Certificate Group on the Distribution Date
such Diverted Amount is required to be paid. Such Diverted Amount will be
applied to (i) first reduce the Subordinate Principal Distribution Amount
otherwise payable to the holders of the
Class I-B-3
Certificates or the
Class
II-B-3 Certificates, as applicable, (ii) second to reduce the Subordinate
Principal Distribution Amount otherwise payable to the holders of the Class
I-B-2 Certificates or the Class II-B-2
Certificates,
as applicable,
and (iii)
third to reduce the Subordinate Principal Distribution Amount payable to the
holders of the Class I-B-1 Certificates or the Class II-B-1 Certificates, as
applicable.
Unaffected Loan
Group: As to any Affected Loan Group, the other Loan Group.
24
<PAGE>
Uncertificated Accrued Interest: With respect to each Distribution
Date,
(i) as to each Uncertificated REMIC I Regular Interest other than each
Uncertificated REMIC I Regular Interest Z, an amount equal to the aggregate
amount of Accrued Certificate Interest that would result under
the terms of the
definition thereof on the Related Classes of Certificates (excluding any
Interest Only Certificates) if the Pass-Through
Rate on such Classes were equal
to the Uncertificated Pass-Through Rate on such
Uncertificated REMIC I
Regular
Interest, (ii) as to each Uncertificated REMIC I Regular Interest Z and each
Uncertificated REMIC III Regular Interest Z1, an amount equal to one month's
interest at the Pool Strip Rate of the
related Mortgage
Loan on the
principal
balance of such Mortgage Loan reduced by
such Interest's
pro-rata share of
any
prepayment interest shortfalls or other
reductions of interest allocable to the
Class I-A-V Certificates, (iii) as to each Uncertificated REMIC II Regular
Interest other than each Uncertificated REMIC II Regular Interest Z, an
amount
equal to the aggregate amount of Accrued
Certificate Interest
that would result
under the terms of the definition thereof
on the Related Classes of Certificates
(excluding any Interest Only Certificates) if the Pass-Through Rate on such
Classes were equal to the Uncertificated Pass-Through Rate on such
Uncertificated REMIC II Regular Interest and (iv) as to each Uncertificated
REMIC II Regular Interest Z and each
Uncertificated
REMIC III Regular
Interest
Z2, an amount equal to one month's interest at the Pool Strip Rate of the
related Mortgage Loan on the principal
balance of such
Mortgage Loan reduced by
such Interest's pro-rata share of any prepayment
interest shortfalls or other
reductions of interest allocable to the
Class II-A-V Certificates.
Uncertificated
Pass-Through
Rate: With
respect to each of the
Uncertificated REMIC I Regular Interests,
other than the
Uncertificated REMIC I
Regular Interests Z, the per annum rate specified in the definition of
Uncertificated REMIC I Regular Interests.
With respect to each
Uncertificated
REMIC I Regular Interest Z and each Uncertificated REMIC III Regular Interest
Z1, the Pool Strip Rate for the related
Mortgage Loan.
With respect to each
of
the Uncertificated REMIC II Regular Interests, other than the Uncertificated
REMIC II Regular Interests Z, the per annum rate
specified in the definition of
Uncertificated REMIC II Regular Interests.
With respect to each
Uncertificated
REMIC II Regular Interest Z and each
Uncertificated
REMIC III Regular
Interest
Z2, the Pool Strip Rate for the related
Mortgage Loan.
Uncertificated
Principal Balance:
With respect to each
Uncertificated
REMIC I Regular Interest, as defined in the
definition of Uncertificated REMIC I
Regular Interest. With respect to each
Uncertificated REMIC II Regular Interest,
as defined in the definition of
Uncertificated REMIC II Regular Interest.
Uncertificated REMIC I
Regular Interests: The
Uncertificated
REMIC I
Regular Interests Z together with the
interests identified
in the table below,
each representing an undivided
beneficial
ownership interest in REMIC I, and
having the following characteristics:
1. The principal balance from
time to time of each Uncertificated REMIC I
Regular Interest
identified
in the table
below shall be the
amount
identified as the
Initial Principal
Balance thereof in such table,
minus the sum of (x) the aggregate of all amounts
previously
deemed
distributed with
respect to such
interest and applied
to reduce the
Uncertificated
Principal
Balance thereof
pursuant
to Section
10.04(a)(ii) and (y)
the aggregate of all
reductions in
Certificate
Principal Balance
deemed to have occurred in connection with Realized
Losses that were
previously deemed
allocated to the
Uncertificated
Principal Balance
of such Uncertificated REMIC I Regular Interest
pursuant to Section
10.04(d), which equals
the aggregate
principal
balance of the Classes of Certificates identified as related to such
Uncertificated REMIC I Regular Interest in such table.
25
<PAGE>
2.
The Uncertificated Pass-Through Rate for each Uncertificated
REMIC I Regular Interest identified in the table below
shall be
the per annum rate set forth in the Pass-Through Rate column of
such table.
3. The
Uncertificated REMIC I
Distribution Amount for each REMIC I
Regular Interest identified in the table below shall be, for
any
Distribution Date, the amount deemed distributed with respect
to
such
Uncertificated
REMIC
I Regular Interest on such
Distribution
Date pursuant
to the provisions of Section
10.04(a).
<TABLE>
<CAPTION>
-----------------------
--------------------------------- ------------------
--------------------
Uncertificated REMIC Related Classes of
Certificates
Pass-Through Rate Initial Principal
I Regular Interest
Balance
-----------------------
--------------------------------- ------------------
--------------------
-----------------------
--------------------------------- ------------------
--------------------
<S>
<C>
<C>
<C>
<C>
W
Class I-A-1, Class I-A-2, Class 6.00%
$ 400,496,200.00
I-A-3, Class I-A-4, Class I-A-5
-----------------------
--------------------------------- ------------------
--------------------
-----------------------
--------------------------------- ------------------
--------------------
X
Class I-A-P
0.00%
$ 9,107,012.76
-----------------------
--------------------------------- ------------------
--------------------
-----------------------
--------------------------------- ------------------
--------------------
Y
Class I-R-I, Class I-M-1, Class 6.00%
$ 21,105,687.83
I-I-M-2, Class I-M-3,
Class
I-B-1, Class I-B-2, Class I-B-3
-----------------------
--------------------------------- ------------------
--------------------
</TABLE>
Uncertificated REMIC
II Regular Interests:
The Uncertificated REMIC II
Regular Interests Z together with the
interests identified
in the table below,
each representing an undivided beneficial ownership interest in REMIC II, and
having the following characteristics:
1. The
principal balance from time to time of each
Uncertificated
REMIC II Regular Interest identified in the table below
shall be
the amount identified as the Initial Principal Balance thereof
in
such table,
minus the sum of (x)
the aggregate
of all amounts
previously deemed
distributed with
respect to such interest and
applied to reduce the
Uncertificated
Principal Balance
thereof
pursuant to Section
[10.04(a)(ii)] and (y)
the aggregate of all
reductions in
Certificate
Principal Balance deemed to have
occurred in connection
with Realized Losses that were previously
deemed allocated to the Uncertificated Principal Balance of such
Uncertificated REMIC
II Regular
Interest pursuant to Section
[10.04(d)], which
equals the aggregate
principal balance of the
Classes of
Certificates
identified
as related to such
Uncertificated REMIC II Regular Interest in such table.
2. The
Uncertificated
Pass-Through
Rate for each
Uncertificated
REMIC II Regular Interest identified in the table below shall
be
the per annum rate set forth in the Pass-Through Rate column of
such table.
3. The
Uncertificated REMIC
II Distribution Amount
for each REMIC
II Regular Interest
identified in the table below shall be, for
any Distribution Date, the amount deemed distributed with
respect to such Uncertificated REMIC II Regular Interest on
such
Distribution
Date pursuant
to the provisions of Section
10.04(a).
26
<PAGE>
<TABLE>
<CAPTION>
-----------------------
--------------------------------- ------------------
--------------------
Uncertificated REMIC Related Classes of
Certificates
Pass-Through Rate Initial Principal
II Regular Interest
Balance
-----------------------
--------------------------------- ------------------
--------------------
-----------------------
--------------------------------- ------------------
--------------------
<S>
<C>
<C>
<C>
W
Class II-A-1
5.00%
$ 100,459,000.00
-----------------------
--------------------------------- ------------------
--------------------
-----------------------
--------------------------------- ------------------
--------------------
X
Class II-A-P
0.00%
$ 107,120.64
-----------------------
--------------------------------- ------------------
--------------------
-----------------------
--------------------------------- ------------------
--------------------
Y
Class R-II, Class II-M-1, Class 5.00%
$ 3,432,361.08
II-M-2, Class II-M-3, Class
II-B-1, Class II-B-2, Class
II-B-3
-----------------------
--------------------------------- ------------------
--------------------
</TABLE>
Uncertificated
REMIC I Regular Interests Z: Each of the 2,650
uncertificated partial undivided beneficial ownership interests in the Trust
Fund, numbered sequentially from 1 to 2,650, each relating to the
particular
Mortgage Loan identified by such sequential number on the Mortgage Loan
Schedule, each having no principal
balance, and each bearing interest at the
respective Pool Strip Rate on the Stated Principal Balance of the related
Mortgage Loan.
Uncertificated REMIC I
Regular Interests Z
Distribution Amount:
With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC I Regular Interests Z for such
Distribution Date pursuant to Section
10.04(a).
Uncertificated REMIC I
Regular Interest Distribution Amounts: With
respect to each Uncertificated REMIC I Regular Interest, other than the
Uncertificated REMIC I Regular Interests Z, the amount specified as the
Uncertificated REMIC I Regular Interest
Distribution Amount with respect thereto
in the definition of Uncertificated
REMIC I Regular
Interests. With
respect to
the Uncertificated REMIC I Regular Interests Z, the Uncertificated REMIC I
Regular Interests Z Distribution
Amount.
Uncertificated
REMIC II Regular Interests Z: Each of the 747
uncertificated partial undivided beneficial ownership interests in the Trust
Fund, numbered sequentially from 1 to 747, each relating to the particular
Mortgage Loan identified by such sequential number on the Mortgage Loan
Schedule, each having no principal
balance, and each bearing interest at the
respective Pool Strip Rate on the Stated Principal Balance of the related
Mortgage Loan.
Uncertificated REMIC
II Regular Interests Z Distribution Amount: With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC II Regular Interests Z for such
Distribution Date pursuant to Section
10.04(a).
Uncertificated REMIC
II Regular Interest
Distribution
Amounts: With
respect to each Uncertificated REMIC II Regular Interest, other than the
Uncertificated REMIC II Regular Interests Z, the amount specified as the
Uncertificated REMIC II Regular Interest Distribution Amount with respect
thereto in the definition of Uncertificated REMIC II Regular Interests. With
respect to the Uncertificated REMIC II Regular Interests Z, the
Uncertificated
REMIC II Regular Interests Z Distribution
Amount.
27
<PAGE>
Uncertificated REMIC
III Regular Interests Z1: Each of the 2,650
uncertificated partial undivided beneficial ownership interests in REMIC III
numbered sequentially from 1 through 2,650 each relating to the identically
numbered Uncertificated REMIC I Regular Interests Z, each having no
principal
balance and bearing interest at a rate equal to the
related Pool Strip
Rate on
the Stated Principal Balance of the Mortgage
Loan related to the
identically
numbered Uncertificated REMIC I Regular Interests Z, comprising such
Uncertificated REMIC III Regular Interests Z1's pro rata share of the
amount
distributed pursuant to Section
10.04(a).
Uncertificated
REMIC III Regular Interests Z2: Each of the 747
uncertificated partial undivided beneficial ownership interests in REMIC III
numbered sequentially from 1 through 747 each relating to the identically
numbered Uncertificated REMIC II Regular Interests Z, each
having no principal
balance and bearing interest at a rate equal to the
related Pool Strip
Rate on
the Stated Principal Balance of the Mortgage
Loan related to the
identically
numbered Uncertificated REMIC II Regular Interests Z, comprising such
Uncertificated REMIC III Regular Interests Z2's pro rata share of the
amount
distributed pursuant to Section
10.04(a).
Uncertificated REMIC
III Regular Interests
Distribution Amount:
With
respect to any Distribution Date, the sum of the amounts deemed to be
distributed on the Uncertificated REMIC I
Regular Interests Z and Uncertificated
REMIC II Regular Interests Z for such Distribution Date pursuant to Section
10.04(a).
Underwriters:
Greenwich Capital
Markets, Inc. and Citigroup Global Markets
Inc.
Section 1.02. Use of Words and Phrases.
"Herein," "hereby," "hereunder," "hereof," "hereinbefore,"
"hereinafter"
and other equivalent words refer to the Pooling and
Servicing Agreement as a
whole. All references herein to Articles,
Sections or Subsections shall mean the
corresponding Articles, Sections and Subsections in the Pooling and
Servicing
Agreement. The definitions set forth herein include both the
singular and the
plural.
28
<PAGE>
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01. Conveyance of Mortgage Loans.
(a) (See Section 2.01(a) of the Standard Terms).
(b) (See Section 2.01(b) of the Standard Terms).
(c) The Company may, in lieu of delivering the original of the
documents
set forth in Section 2.01(b)(I)(ii), (iii), (iv) and (v) and Section
(b)(II)(ii), (iv), (vii), (ix) and (x) (or copies thereof as permitted by
Section 2.01(b)) to the Trustee or the
Custodian or
Custodians,
deliver such
documents to the Master Servicer, and the Master Servicer shall hold such
documents in trust for the use and benefit of all present and future
Certificateholders until such time as is
set forth in the next sentence. Within
thirty Business Days following the earlier
of (i) the receipt of the original of
all of the documents or instruments set
forth in Section 2.01(b)(I)(ii), (iii),
(iv) and (v) and Section (b)(II)(ii), (iv), (vii), (ix) and (x) (or copies
thereof as permitted by such Section) for any Mortgage
Loan and (ii) a
written
request by the Trustee to deliver those
documents with respect
to any or all of
the Mortgage Loans then being held by the
Master Servicer,
the Master
Servicer
shall deliver a complete set of such
documents to the
Trustee or the Custodian
or Custodians that are the duly appointed
agent or agents of the Trustee.
The parties hereto
agree that it is not intended that any Mortgage Loan
be included in the Trust Fund that is either (i) a
"High-Cost
Home Loan" as
defined in the New Jersey Home Ownership
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 Loan Practices Act effective
November 7,
2004.
(d) (See Section 2.01(d) of the Standard Terms).
(e) (See Section 2.01(e) of the Standard Terms).
(f) (See Section
2.01(f) of the Standard Terms).
(g) (See Section 2.01(g) of the Standard Terms).
(h) (See Section 2.01(h) of the Standard Terms).
Section 2.02. Acceptance by Trustee.
(See Section 2.02 of
the Standard Terms)
Section 2.03. Representations, Warranties and
Covenants
of the Master Servicer and the Company.
(a) For representations, warranties and covenants of the
Master Servicer,
see Section 2.03(a) of the Standard Terms.
29
<PAGE>
(b) The Company hereby represents and warrants to the Trustee for the
benefit of
Certificateholders
that as of the
Closing Date (or, if
otherwise specified below, as of the date so specified):
(i) No Mortgage
Loan is 30 or more
days Delinquent in
payment of principal
and interest
as of the Cut-off
Date and no Mortgage
Loan has been so
Delinquent more than
once in the 12-month
period prior to the
Cut-off
Date;
(ii) The information set forth in Exhibit One hereto
with respect to each
Mortgage Loan or the
Mortgage Loans, as the case may be, is true
and
correct in all material respects at the date or dates
respecting which
such information is furnished;
(iii) The Mortgage Loans are fully-amortizing (subject to interest only
periods, if
applicable),
fixed-rate mortgage
loans with level Monthly
Payments due, with respect to a majority of the Mortgage
Loans, on the
first day of each
month and terms to maturity at origination or
modification of not
more than 15 years, in
the case of Group II Loans,
and 30 years, in the case of Group I Loans;
(iv) To the
best of the
Company's knowledge, except in the case of six
Group I Loans representing approximately 0.2% of the aggregate
principal balance of
the Group I Loans, if
a Group I Loan is secured
by a Mortgaged
Property with a Loan-to-Value Ratio at origination in
excess of 80%, such Mortgage Loan is the subject of a Primary
Insurance Policy that insures (a) at least 35% of the Stated
Principal
Balance of the Mortgage Loan at origination if the Loan-to-Value
Ratio
is between
100.00% and 95.01%, (b) at least 30% of the Stated
Principal
Balance of
the Mortgage Loan at origination if the
Loan-to-Value Ratio is
between 95.00% and 90.01%, (c) at least 25% of
such balance if the
Loan-to-Value Ratio is
between 90.00% and 85.01%
and (d) at least 12% of such balance if the Loan-to-Value Ratio is
between 85.00% and 80.01% and, except in the case of one Group II
Loan
representing
approximately 0.2% of the aggregate principal balance of
the Group II
Loans, if a Group II Loan is secured by a Mortgaged
Property with a
Loan-to-Value Ratio at
origination in excess of 80%,
such Mortgage Loan is the subject of a Primary Insurance Policy that
insures (a) at
least 30% of the Stated Principal Balance of the
Mortgage Loan at
origination if the
Loan-to-Value
Ratio is between
100.00% and 95.01%,
(b) at least 25% of
the Stated Principal
Balance
of the Mortgage Loan
at origination
if the Loan-to-Value Ratio is
between 95.00% and
90.01%, (c) at least 12% of such
balance if the
Loan-to-Value Ratio is
between 90.00% and
85.01% and (d) at least 6%
of such balance
if the Loan-to-Value Ratio is between 85.00% and
80.01%. To the best of
the Company's
knowledge,
each such Primary
Insurance Policy
is in full
force and effect and the Trustee is
entitled to the benefits thereunder;
(v) The issuers of
the Primary Insurance
Policies are insurance
companies
whose claims-paying
abilities are
currently acceptable
to each Rating
Agency;
(vi) No more
than 0.4% of the Group I Loans by aggregate Stated Principal
Balance as of the
Cut-off Date are
secured by Mortgaged
Properties
located in any one zip code area in Nevada, and no more than 0.4% of
the Group I Loans by
aggregate Stated
Principal Balance as of the
Cut-off Date are
secured by Mortgaged
Properties located in
any one
zip code area outside Nevada; no more than 0.9% of the Group II
Loans
by aggregate Stated Principal Balance as of the Cut-off Date are
30
<PAGE>
secured by Mortgaged
Properties
located in any one zip
code area in
Massachusetts, and no
more than 0.9% of the Group II Loans by
aggregate Stated Principal Balance as of the Cut-off Date are
secured
by Mortgaged
Properties
located in any one zip code area outside
Massachusetts;
(vii) The improvements upon the
Mortgaged Properties
are insured against loss
by fire and other
hazards as required by the Program Guide, including
flood insurance if
required under the National Flood Insurance Act of
1968, as amended. The
Mortgage requires the
Mortgagor to maintain such
casualty insurance at
the Mortgagor's
expense, and on the
Mortgagor's
failure to do so,
authorizes the holder
of the Mortgage to
obtain and
maintain such
insurance at the Mortgagor's expense and to seek
reimbursement therefor from the Mortgagor;
(viii) Immediately prior to the assignment of the Mortgage Loans to the
Trustee, the Company
had good title to, and was the sole owner of, each
Mortgage Loan
free and clear of any pledge, lien, encumbrance or
security
interest (other
than rights to servicing and related
compensation) and such
assignment validly
transfers ownership of the
Mortgage Loans to the
Trustee free and clear of any pledge, lien,
encumbrance or security interest;
(ix)
Approximately 43.3% of the Group I Loans by aggregate Stated
Principal
Balance as of the Cut-off Date were underwritten under a reduced loan
documentation
program, approximately 13.2% of the Group I Loans by
aggregate Stated
Principal Balance as of the Cut-off Date were
underwritten under a no-stated income program, and approximately 3.5%
of the Group I Loans by aggregate Stated Principal Balance as of the
Cut-off Date were underwritten under a no income/no asset program
and;
approximately 65.8%
of the Group II Loans by aggregate Stated
Principal Balance as
of the Cut-off Date
were underwritten
under a
reduced loan documentation program, approximately 21.1% of the
Group
II Loans by aggregate Stated Principal Balance as of the Cut-off Date
were underwritten under a no-stated income program, and approximately
3.8% of the Group II
Loans were
underwritten
under a no
income/no
asset program;
(x) Except
with respect to approximately 23.21% of the Group I Loans by
aggregate Stated
Principal
Balance
as of the Cut-off Date and
approximately 27.5% of
the Group II Loans by aggregate Stated Principal
Balance as of the Cut-off Date, the Mortgagor represented in its loan
application with respect to the related Mortgage Loan that the
Mortgaged
Property would be owner-occupied;
(xi) None of the Mortgage
Loans is a Buy-Down Mortgage Loan;
(xii) 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);
31
<PAGE>
(xiii) A policy of title insurance was effective as of the closing of each
Mortgage Loan and is
valid and binding
and remains in full force and
effect, unless the Mortgaged Properties are located in the State of
Iowa
and an attorney's
certificate
has been provided as described in the
Program Guide;
(xiv) None of the Mortgage Loans is a Cooperative Loan; with respect to a
Mortgage Loan that is a Cooperative Loan, the Cooperative Stock that
is
pledged as
security for the Mortgage Loan is held by a person
as a
tenant-stockholder (as
defined in Section 216 of the Code) in a
cooperative housing corporation (as defined in Section 216 of the
Code);
(xv) With
respect to each Mortgage Loan originated under a "streamlined"
Mortgage Loan program
(through which no new or updated appraisals of
Mortgaged Properties
are obtained in connection with the refinancing
thereof), the related Seller has represented that either (a) the
value
of the related Mortgaged Property as of the date the Mortgage Loan
was
originated was not
less than the appraised value of such property at
the time of
origination of the
refinanced
Mortgage Loan or (b)
the
Loan-to-Value Ratio of the Mortgage Loan as of the date of
origination
of the Mortgage
Loan generally meets the Company's underwriting
guidelines;
(xvi) Interest on each
Mortgage Loan is calculated on the basis of
a 360-day
year consisting of twelve 30-day months;
(xvii) None of the Mortgage Loans contain in the related Mortgage File a
Destroyed Mortgage Note;
(xviii) None of the Mortgage Loans has been
made to an
International
Borrower,
and no such Mortgagor is a member of a foreign diplomatic mission with
diplomatic rank;
(xix) No Mortgage Loan provides for payments that
are subject to reduction by
withholding taxes
levied by any foreign
(non-United States)
sovereign
government; and
(xx) None of the Mortgage
Loans are Additional
Collateral Loans and
none of
the Mortgage Loans are Pledged Asset Loans.
It is understood and agreed that the
representations and warranties set forth in
this Section 2.03(b) shall survive delivery
of the respective
Mortgage Files to
the Trustee or any Custodian.
Upon discovery by any of the Company, the Master Servicer, the Trustee
or any Custodian of a breach of any of the
representations
and warranties set
forth in this Section 2.03(b) that 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)(xii), the party discovering such breach shall give such notice
within
five days of discovery. Within 90 days of
its discovery or its receipt of notice
of breach, the Company shall either (i) cure such breach in all material
respects or (ii) purchase such Mortgage
Loan from the Trust Fund at the Purchase
Price and in the manner set forth in
Section 2.02;
provided that the Company
shall have the option to substitute a Qualified Substitute Mortgage Loan or
Loans for such Mortgage Loan if such substitution occurs within two years
32
<PAGE>
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 or repurchase must occur within 90 days
from the date such breach was discovered. Any such substitution shall be
effected by the Company under the same terms and
conditions
as provided in
Section 2.04 for substitutions by Residential Funding. It is understood and
agreed that the obligation of the Company to cure
such breach or to so purchase
or substitute for any Mortgage Loan as to which
such a breach has occurred and
is continuing shall constitute the sole
remedy respecting such
breach available
to the Certificateholders or the Trustee on behalf of the
Certificateholders.
Notwithstanding the foregoing, the Company 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.(See Section 2.04
of the Standard Terms)
Section 2.05.
Execution and
Authentication
of Certificates/Issuance of
Certificates Evidencing Interests in REMIC I and REMIC II.
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 and/or
the applicable REMIC,
receipt of which
is hereby acknowledged. Concurrently with such delivery and in exchange
therefor, the Trustee, pursuant to the written request of
the Company executed
by an officer of the Company, has executed and caused to be
authenticated
and
delivered to or upon the order of the
Company (i) the Class R-I Certificates in
authorized denominations which together with
the Uncertificated REMIC I Regular
Interests, evidence the beneficial
interest in REMIC I
and (ii) the Class R-II
Certificates in authorized denominations which together with
the Uncertificated
REMIC II Regular Interests, evidence the
beneficial interest in REMIC II.
Section
2.06. Conveyance
of Uncertificated REMIC I Regular
Interests and REMIC II
Regular Interests;
Acceptance by
the Trustee.
The Company, as of the Closing Date, and concurrently with the
execution
and delivery hereof, does hereby assign without
recourse all the
right, title
and interest of the Company in and to the Uncertificated REMIC I Regular
Interests and the Uncertificated REMIC II Regular Interests to the
Trustee for
the benefit of the Holders of each Class of
Certificates
(other than the
Class
R-I Certificates and the Class R-II Certificates). The Trustee acknowledges
receipt of the Uncertificated REMIC I Regular Interests and the
Uncertificated
REMIC II Regular Interests and declares that it
holds and will hold the same in
trust for the exclusive use and benefit of all
present and future
Holders of
each Class of Certificates (other than the Class R-I
Certificates and the Class
R-II Certificates). The rights of the Holders of each Class of Certificates
(other than the Class R-I Certificates and the Class R-II Certificates) to
receive distributions from the proceeds of
REMIC III in respect of such Classes,
and all ownership interests of the Holders of such Classes in such
distributions, shall be as set forth in
this Agreement.
33
<PAGE>
Section 2.07. Issuance of Certificates
Evidencing Interest in REMIC III.
The Trustee
acknowledges the
assignment
to it of the
Uncertificated
REMIC I Regular Interests and the
Uncertificated REMIC II Regular Interests and,
concurrently therewith and in exchange
therefor, pursuant to the written request
of the Company executed by an officer of the
Company, the Trustee
has executed
and caused to be authenticated and delivered to or upon the order of the
Company, all Classes of Certificates (other
than the Class R-I Certificates and
the Class R-II Certificates) in authorized denominations, which evidence the
beneficial interest in the entire REMIC
III.
Section 2.08. Purposes and Powers of the Trust. (See Section 2.08 of the
Standard
Terms).
34
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
(SEE ARTICLE III OF THE STANDARD TERMS)
35
<PAGE>
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
Section 4.01. Certificate Account. (See Section 4.01 of the Standard
Terms)
Section 4.02. Distributions.
(a) On each
Distribution
Date the Master
Servicer on behalf of the Trustee
(or the Paying Agent
appointed by the Trustee) shall distribute to the
Master Servicer,
in the case of a
distribution
pursuant to Section
4.02(a)(iii) below, and to each Certificateholder of record on the
next
preceding Record Date (other than as provided in Section 9.01
respecting
the final distribution) either in immediately available funds (by wire
transfer or otherwise)
to the account of such
Certificateholder
at a
bank or other entity having appropriate facilities therefor, if such
Certificateholder has
so notified
the Master
Servicer or the Paying
Agent, as the case may
be, or, if such Certificateholder has not so
notified the Master
Servicer or the Paying Agent by the Record Date, by
check mailed to such
Certificateholder
at the address of such Holder
appearing in the
Certificate Register
such
Certificateholder's
share
(which share (A) with respect to each Class of Certificates
(other than
any Subclass
of the Class A-V Certificates), shall be based on the
aggregate of the Percentage Interests represented by Certificates
of the
applicable Class held by such Holder or (B) with respect to any
Subclass
of the Class A-V
Certificates, shall be
equal to the amount
(if any)
distributed pursuant
to Section
4.02(a)(i)
below to each Holder
of a
Subclass thereof) of
the following amounts,
in the following order
of
priority (subject to
the provisions
of Section
4.02(b), (c) and (e)
below and further
subject to the
provisions of Section 4.05 in respect
of any Diverted
Amounts), in each case to the extent of the related
Available Distribution Amount remaining:
(i) (X) from the
Available Distribution
Amount related to the Loan Group I,
to the holders of the Group I Senior Certificates (other than the
Class
I-A-P Certificates)
Accrued Certificate Interest on such Class of
Certificates (or
Subclasses,
if any, with respect to the Class
I-A-V
Certificates) for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining unpaid from any previous Distribution Date
except as provided in the last paragraph of this Section 4.02(a);
and
(Y) from the Available
Distribution Amount related to the
Loan Group II, to the holders of the Group II Senior Certificates
(other
than the Class II-A-P Certificates) Accrued Certificate Interest on
such
Class of Certificates (or Subclasses, if any, with respect to the
Class
II-A-V Certificates)
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date
except as provided in the last paragraph of this
Section 4.02(a);
(ii) (X) to the Class I-A-P
Certificates and the
Class II-A-P
Certificates,
from the Available
Distribution Amount
for the related Loan Group, the
Class A-P Principal
Distribution
Amount for the related
