Execution Copy
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
DATED AS OF SEPTEMBER 1, 2005
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of August 1, 2004
Mortgage Asset-Backed Pass-Through Certificates
Series 2005-QO2
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
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ARTICLE I
DEFINITIONS...............................................................6
Section 1.01
Definitions.......................................................6
Section 1.02 Use of
Words and Phrases..........................................26
Section 1.03
Determination of
MTA..............................................26
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..........27
Section 2.01 Conveyance
of Mortgage Loans.....................................27
Section 2.02 Acceptance
by Trustee............................................28
Section 2.03
Representations, Warranties and Covenants of the Master Servicer
and the
Company..........................................................28
Section 2.04
Representations and Warranties of
Sellers........................31
Section 2.05 Execution
and Authentication of Certificates/Issuance of Certificates
Evidencing Interests in REMIC I
Certificates.....................31
Section 2.06 Conveyance
of Uncertificated REMIC I and REMIC II Regular Interests;
Acceptance by the
Trustee........................................31
Section 2.07 Issuance
of Certificates Evidencing Interest in REMIC II.........31
Section 2.08 Purposes
and Powers of the Trust.................................32
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS...........................35
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS...........................................36
Section 4.01
Certificate
Account..............................................36
Section 4.02
Distributions....................................................36
Section 4.03 Statements
to Certificateholders; Statements to the Rating Agencies;
Exchange
Act
Reporting....................................................43
Section 4.04
Distribution of Reports to the Trustee and the Company; Advances by
the
Master
Servicer..................................................43
Section 4.05 Allocation
of Realized Losses....................................43
Section 4.06 Reports of
Foreclosures and Abandonment of Mortgaged Property....44
Section 4.07 Optional
Purchase of Defaulted Mortgage Loans....................44
Section 4.08 Surety
Bond......................................................44
Section 4.09 Carryover
Shortfall Reserve Fund.................................44
ARTICLE V
THE
CERTIFICATES.........................................................45
Section 5.01 The
Certificates.................................................45
Section 5.02
Registration of Transfer and Exchange of
Certificates............46
Section 5.03 Mutilated,
Destroyed, Lost or Stolen Certificates................46
Section 5.04 Persons
Deemed Owners............................................46
Section 5.05
Appointment of Paying
Agent......................................46
Section 5.06 U.S.A.
Patriot Act Compliance....................................46
ARTICLE VI
THE COMPANY AND THE MASTER
SERVICER......................................47
ARTICLE VII
DEFAULT..................................................................48
ARTICLE VIII CONCERNING
THE
TRUSTEE...................................................49
ARTICLE IX
TERMINATION..............................................................50
ARTICLE X
REMIC
PROVISIONS.........................................................51
Section 10.01 REMIC
Administration.............................................51
Section 10.02 Master Servicer;
REMIC Administrator and Trustee Indemnification.51
Section 10.03 Designation of
REMICs............................................51
Section 10.04 Distributions on
the Uncertificated REMIC I Regular Interests....51
Section 10.05 Compliance with
Withholding Requirements.........................52
ARTICLE XI
MISCELLANEOUS
PROVISIONS.................................................52
Section 11.01
Amendment........................................................52
Section 11.02 Recordation of
Agreement;
Counterparts..........................52
Section 11.03 Limitation on
Rights of Certificateholders.......................52
Section 11.04 Governing
Law....................................................52
Section 11.05
Notices..........................................................52
Section 11.06 Required Notices
to Rating Agency and Subservicer................53
Section 11.07 Severability of
Provisions.......................................53
Section 11.08 Supplemental
Provisions for Resecuritization.....................53
Section 11.09 Allocation of
Voting Rights......................................53
Section 11.10 No
Petition......................................................54
</TABLE>
<PAGE>
EXHIBITS
Exhibit One: Mortgage Loan
Schedule
Exhibit Two: Information to be
Included in
Monthly Distribution Date Statement
Exhibit Three: Standard Terms of Pooling and
Servicing Agreement dated as of August 1, 2004
<PAGE>
This is a Series Supplement, dated as of September 1, 2005 (the
"Series
Supplement"), to the Standard Terms of
Pooling and Servicing Agreement, dated as
of August 1, 2004 and attached as Exhibit Three 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 Trust Fund.
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.
REMIC I
As provided herein,
the REMIC Administrator will make an election to
treat the entire segregated pool of assets
described in the definition of REMIC
I (as defined herein) (including the Mortgage Loans but excluding
the Initial
Monthly Payment Fund and the Carryover
Shortfall Reserve Fund), and subject to
this Agreement, as a real estate mortgage
investment
conduit (a "REMIC")
for
federal income tax purposes and such segregated pool of assets will be
designated as "REMIC I." The Uncertificated REMIC I Regular Interests will be
"regular interests" in REMIC I and the
Class R-I Certificates
will represent
ownership of the sole class of "residual
interests"
in REMIC I for
purposes of
the REMIC Provisions (as defined
herein).
The following
table irrevocably sets forth the designation, the
Uncertificated REMIC I Pass-Through Rate,
the initial
Uncertificated
Principal
Balance, and solely for purposes of satisfying Treasury regulation Section
1.860G-1(a)(4)(iii), the "latest possible maturity date," for each of the
Uncertificated REMIC I Regular Interests.
None of the
Uncertificated
REMIC I
Regular Interests will be certificated.
<PAGE>
<TABLE>
<CAPTION>
Designation
Uncertificated
Initial
Latest
REMIC I
Uncertificated Possible
Maturity(1)
Pass-Through Principal
Balance
Rate
<S>
<C>
<C>
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<C> <C>
REMIC I Regular Interest LT1 Variable(2)
$424,997,973.74 September 25, 2045
REMIC I Regular Interest LT2 Variable(2)
$21,253.09
September 25, 2045
REMIC I Regular Interest LT3 Variable(2)
$21,253.09
September 25, 2045
REMIC I Regular Interest LT4 Variable(2)
$21,253.09
September 25, 2045
</TABLE>
________________
(1) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the
Distribution Date
immediately following
the maturity
date for the
Mortgage Loan with the latest maturity date has been
designated as
the "latest possible maturity date" for each
Uncertificated REMIC I
Regular Interest.
(2) Calculated in
accordance with the definition of "Uncertificated REMIC I
Pass-Through Rate"
herein.
<PAGE>
REMIC II
A segregated pool of
assets consisting of
the Uncertificated
REMIC I
Regular Interests will be designated as
"REMIC II" and the REMIC Administrator
will make a separate REMIC election with respect thereto. The Class A-1
Certificates, Class A-2 Certificates, Class A-3 Certificates, Class X
Certificates, Class M-1 Certificates, Class M-2 Certificates, Class M-3
Certificates, Class B-1 Certificates, Class B-2 Certificates and Class B-3
Certificates will be "regular interests" in REMIC II and the Class R-II
Certificates will represent ownership of
the sole class of "residual interests"
in REMIC II for purposes of the REMIC
Provisions.
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
CERTIFICATE
DESIGNATION PASS-THROUGH PRINCIPAL
MATURITY S&P/
MINIMUM
RATE
BALANCE
FEATURES(1)
DATE(2)
MOODY'S
DENOMINATIONS(3)
<S> <C>
<C>
<C>
Class A-1 Adjustable
$230,935,000.00
Super Senior/ September
AAA/Aaa
$100,000.00
Rate(4)
Adjustable Rate 25, 2045
Class A-2 Adjustable
$96,223,000.00
Super Senior/
September
AAA/Aaa
$100,000.00
Rate(4)
Adjustable Rate 25, 2045
Class A-3 Adjustable
$57,735,000.00
Senior Support/
September
AAA/Aaa
$100,000.00
Rate(4)
Adjustable Rate 25, 2045
Class X
Variable
$0(5)
Senior/Component/
September
AAA/Aaa
$2,000,000.00
Rate(5)
Prepayment 25,
2045
Charge/
Variable Rate(5)
Class R-I Variable
$50.00
Senior/Residual/
September
AAA/Aaa
(7)
Rate(6)
Variable Rate 25,
2045
Class R-II Variable
$50.00
Senior/Residual/
September
AAA/Aaa
(7)
Rate(6)
Variable Rate 25,
2045
Class M-1 Adjustable
$12,752,000.00
Mezzanine/ September
AA+/Aa2
$100,000
Rate(8)
Adjustable Rate 25, 2045
Class M-2 Adjustable
$9,776,000.00
Mezzanine/ September
A+/A2 $250,000.00
Rate(8)
Adjustable Rate 25, 2045
Class M-3 Adjustable
$7,226,000.00
Mezzanine/ September
BBB/Baa2
$250,000.00
Rate(8)
Adjustable Rate 25, 2045
Class B-1 Adjustable
$4,463,000.00
Subordinate/ September
BB/NA $250,000.00
Rate(8)
Adjustable Rate 25, 2045
Class B-2 Adjustable
$3,401,000.00
Subordinate/ September
B/NA
$250,000.00
Rate(8)
Adjustable Rate 25, 2045
Class B-3 Adjustable
$2,550,633.48
Subordinate/ September
NA/NA $250,000.00
Rate(8)
Adjustable Rate 25, 2045
</TABLE>
_________
(1) The Certificates, other than the Class B-1,
Class B-2,
Class B-3 and
Class R Certificates
shall be Book-Entry
Certificates. The
Class B-1,
Class B-2, Class B-3 and Class R Certificates shall be delivered to the
holders thereof in physical form.
(2) Solely for
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury
regulations, the
Distribution Date
immediately following
the maturity
date for the Mortgage
Loan with the latest maturity date has been
designated as
the "latest possible maturity date" for each
Uncertificated REMIC II Regular Interest.
(3) The
Certificates, other than the Class R Certificates, shall be
issuable
in minimum dollar
denominations
as indicated above (by Certificate
Principal Balance) and
integral multiples of
$1 (or $1,000 in the case
of the Class
B-1, Class B-2 and Class B-3 Certificates) in excess
thereof, except that
one Certificate of the Class B-3 Certificates that
contains an uneven
multiple of $1,000 shall be issued in a denomination
equal to the sum of the related minimum denomination set forth
above and
such uneven multiple for such Class or the sum of such denomination and
an integral multiple of $1,000.
(4) The Pass-Through Rate on the Class A-1, Class A-2, and Class A-3
Certificates will be
equal to the lesser
of (i) MTA plus the
related
Pass-Through Margin and (ii) the Net WAC Rate. The related
Pass-Through
Margin on the Class
A-1, Class A-2 and Class A-3 Certificates is
initially equal to 1.36%, 1.43% and 1.49%, respectively.
(5) The Class X
Certificates are comprised of two components: the Class X-IO
Component, an
interest-only
component, and the
Class X-P Component, a
principal and interest
component. Holders of
the Class X
Certificates
may not transfer the components separately. For the purpose of
calculating interest payments on the Class X-IO Component, interest
will
accrue on a
notional amount equal to the sum of the Certificate
Principal Balances of
the Class A-1, Class
A-2, Class A-3, Class M and
Class B Certificates,
which is initially equal to $425,061,633.48. The
principal balance of
the Class X-P Component will initially equal zero
and will increase in accordance with the amount of Net Deferred
Interest
allocated to the Class
X Certificates.
The principal balance of the
Class X Certificates will be equal to the principal balance of the
Class
X-P Component, if any. The Pass-Through Rate on the Class X-IO
Component
of the Class X
Certificates will be a
per annum rate equal
to the Net
WAC Rate less the weighted average Pass-Through Rate on the
Certificates
(other than the Class X Certificates and Class R Certificates),
weighted
by Certificate Principal Balance. The Pass-Through Rate on the
Class X-P
Component of the Class X Certificates will be a per annum rate equal
to
the Net WAC Rate. For REMIC purposes, the foregoing rate is equal to
a
rate per annum equal to the percentage equivalent of a fraction, the
numerator of which is
the sum of the amounts
calculated
pursuant to
clauses (1)
through (3) below, and the denominator of which is the
aggregate
Uncertificated Principal Balances of the Uncertificated REMIC
I Regular Interests.
For purposes of
calculating the Pass-Through Rate
for the Class X
Certificates, the
numerator is equal to the sum of the
following components:
(1) the Uncertificated REMIC I Pass-Through Rate for REMIC
I Regular Interest LT1 minus the related Marker Rate, applied to
a
notional amount equal to the Uncertificated Principal Balance of
REMIC I Regular Interest LT1;
(2) the Uncertificated REMIC I Pass-Through Rate for REMIC
I Regular Interest LT2 minus the related Marker Rate, applied to
a
notional amount equal to the Uncertificated Principal Balance of
REMIC I Regular Interest LT2; and
(3) the Uncertificated REMIC I Pass-Through Rate for REMIC
I Regular Interest
LT4 minus twice the related Marker Rate,
applied to a notional amount equal to the Uncertificated
Principal
Balance of REMIC I Regular Interest LT4.
The holders of the
Class X Certificates
will also be
entitled to all
Prepayment Charges received on Prepayment
Charge Loans, and
these amounts will
not be available for distribution on the other certificates. The Class X
Certificates will not be entitled to
interest on any amounts due with respect to
Prepayment Charges.
(6) The Pass-Through Rate on the Class R Certificates
will be a per
annum
rate equal to the Net WAC Rate. The pass-through rate for the Class R
Certificates is initially equal to approximately 1.4962%
(7) 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%. (8) The Pass-Through Rate on the Class M
Certificates and Class B Certificates will be a per annum rate equal
to
the lesser of (i) MTA plus the related Pass-Through Margin and (ii)
the
Net WAC Rate. The
related Pass-Through
Margin on the Class
M-1, Class
M-2, Class M-3,
Class B-1, Class B-2 and Class B-3
Certificates
is
initially
equal to 1.25%, 1.60%, 2.00%, 2.00%, 2.00% and 2.00%,
respectively.
The Mortgage Loans have an aggregate principal balance as of the
Cut-off
Date of $425,061,733.48
<PAGE>
In consideration of the mutual agreements herein contained, the Company, the
Master Servicer and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01...Definitions.
Whenever used in this Agreement, the following words and phrases,
unless
the context otherwise requires, shall have the meanings specified in this
Article.
Accrued Certificate Interest: With respect to each Distribution
Date, as
to any Class of 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.
In each case Accrued Certificate Interest on any Class of
Certificates will be
reduced by the amount of:
(i)
Prepayment Interest
Shortfalls
on all Mortgage Loans (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 (including
Excess
Special Hazard Losses,
Excess Fraud Losses,
Excess Bankruptcy
Losses and
Extraordinary Losses)
not allocated solely to one or
more specific Classes of Certificates pursuant to Section 4.05,
(iii) the interest
portion of Advances that were (A) previously made
with respect to a
Mortgage Loan or REO
Property on all Mortgage
Loans, 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,
(iv) any Net Deferred Interest on the Mortgage Loans for that
Distribution Date; and
(v) any
other interest
shortfalls not covered
by the
subordination
provided by the Class M Certificates and Class B Certificates,
including interest
that is not
collectible
from the Mortgagor
pursuant to the
Servicemembers
Civil Relief Act, or similar
legislation or regulations as in effect from time to time,
with all such
reductions under
clauses (i), (ii),
(iii) and (v) above
allocated among all of the Certificates in proportion to their respective
amounts of Accrued Certificate Interest
payable on such Distribution Date absent
such reductions. In addition to that portion of the
reductions described in the
preceding sentence that are allocated to any
Class of Class B
Certificates or
any Class of Class M Certificates, Accrued
Certificate Interest on such Class of
Class B Certificates or such Class of Class M
Certificates
will be reduced by
the interest portion (adjusted to the Net
Mortgage Rate) of Realized Losses that
are allocated solely to such Class of Class B Certificates or such Class of
Class M Certificates pursuant to Section 4.05. Reductions under clause (iv)
above, for Net Deferred Interest, will be allocated as described in
Section
4.02(j).
Accrued Certificate
Interest is
calculated
on the basis of a
360-day
year divided into twelve 30-day months.
Adjusted Cap Rate: For any Distribution Date, the excess, if any,
of the
Net WAC Rate over a fraction expressed as a percentage,
the numerator of
which
is equal to the product of (i) the Net
Deferred Interest for
that Distribution
Date and (ii) 12, and the denominator of
which is the aggregate Stated Principal
Balance of the Mortgage Loans immediately
prior to such Distribution Date.
Adjustable Rate
Certificates:
Any of the Class A,
Class M and Class B
Certificates.
Adjustment
Date: As to each
Mortgage Loan,
each date set forth in
the
related Mortgage Note on which an adjustment to the interest rate on such
Mortgage Loan becomes effective.
Available Distribution
Amount: As to any
Distribution Date, an
amount
equal to (a) the sum of (i) the amount
relating to the Mortgage Loans on deposit
in the Custodial Account as of the close of business on the immediately
preceding Determination Date, including any
Subsequent Recoveries,
and amounts
deposited in the Custodial Account in connection with the substitution of
Qualified Substitute Mortgage Loans, (ii)
the amount of any Advance made on the
immediately preceding Certificate Account Deposit Date, (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
and (vii) the proceeds of any Pledged
Assets received by the Master
Servicer,
reduced by (b) the sum as of the close of
business on the immediately preceding
Determination Date of (v) any payments or
collections consisting
of Prepayment
Charges on the Mortgage Loans that were
received during the
related Prepayment
Period; (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 pursuant to clauses
(ii)-(x), inclusive, of Section
3.10(a).
Bankruptcy Amount:
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)
$150,000 over (B) the aggregate amount of
Bankruptcy Losses
allocated solely to
one or more specific Classes of Certificates 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
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
(A) (i) if the
aggregate principal balance of the Non-Primary Residence
Loans as of the
Relevant Anniversary
is less than 10% of the Stated
Principal Balance of the Mortgage Loans as of the Relevant
Anniversary,
$0.00, or (ii) if the
aggregate principal
balance of the
Non-Primary
Residence Loans as of
the Relevant
Anniversary is equal
to or greater
than 10% of the Stated Principal Balance of the Mortgage Loans as
of the
Relevant Anniversary,
the sum of (I) the aggregate principal balance of
the Non-Primary
Residence Loans 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 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 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) 0.0006 times the aggregate principal balance of all
the Mortgage Loans in
the Mortgage Pool as of the Relevant Anniversary
having a Loan-to-Value Ratio (other than Additional Collateral
Loans) at
origination which exceeds 75% and (ii) $100,000,
over (2) the aggregate
amount of Bankruptcy Losses allocated
solely to one or more
specific Classes of
Certificates
in accordance
with Section 4.05 since the Relevant Anniversary.
The Bankruptcy
Amount 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
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.
Carryover Shortfall Amount: For the initial Distribution Date only, and
for the Class A, Class M and Class B Certificates, an amount equal to the
excess, if any, of (a) the amount of
Accrued Certificate
Interest that would
have accrued on such class at a
Pass-Through Rate
equal to MTA plus the related
Pass-Through Margin over (b) the amount of
Accrued Certificate
Interest on such
class for such Distribution Date (in each case prior to any
reduction for Net
Deferred Interest).
Carryover Shortfall
Reserve Fund: The
reserve fund created pursuant to
Section 4.09.
Carryover Shortfall Reserve Fund Amount: $988,649.
Certificate: Any Class
A, Class X, Class M, Class B or Class R.
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 2005-QO2" and which must be an Eligible
Account.
Certificate Policy:
None.
Certificate Principal
Balance: With respect to each Certificate (or, in
the case of a Class X Certificate, the
Class X-P Component thereof), on any date
of determination, an amount equal to:
(i) the Initial
Certificate Principal
Balance of such Certificate as
specified on the face thereof, plus
(ii) any Subsequent Recoveries added to the Certificate Principal
Balance of such Certificate pursuant to Section 4.02, plus
(iii) an amount equal
to the aggregate Net Deferred Interest added to
the Certificate
Principal Balance
thereof prior to such date of
determination, minus
(iv) the sum of (x) the aggregate of all amounts previously
distributed with
respect to such Certificate (or any predecessor
Certificate) and
applied to reduce the Certificate Principal
Balance thereof pursuant to Section 4.02(a) and (y) the
aggregate
of all reductions in Certificate Principal Balance deemed to
have
occurred in connection with Realized Losses which were
previously
allocated to such
Certificate (or any
predecessor
Certificate)
pursuant to Section 4.05;
provided, that the Certificate Principal Balance of 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 then
outstanding over (B) the then aggregate
Stated Principal Balance of the Mortgage
Loans.
In the case of any Class of Certificates other than the Class X
Certificates,
Net Deferred Interest allocated to such Certificates
will be added as principal
to the outstanding Certificate Principal Balance of
such Class of Certificates.
With respect to the Class X Certificates, Net Deferred Interest allocated to
either the X-IO Component or X-P Component shall be added as principal to
the
outstanding Certificate Principal Balance
of the Class X-P Component.
Class A Certificate:
Any one of the Class
A-1, Class A-2 and Class A-3
Certificates executed by the Trustee and authenticated by the Certificate
Registrar substantially in the form annexed
to the Standard Terms as Exhibit A.
Class M Certificate:
Any one of the Class
M-1, Class M-2 and Class M-3
Certificates.
Class R Certificate:
Any one of the Class
R-I Certificates
and Class
R-II Certificates.
Class R-I Certificate: Any one of the Class R-I Certificates
executed by
the Trustee and authenticated by the
Certificate Registrar
substantially in the
form annexed 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 X Certificate:
Any one of the Class X Certificates.
Class X-IO Component:
Solely for purposes of calculating distributions
of principal and interest and the
allocation of Realized
Losses on the Mortgage
Loans, the interest only component of the
Class X Certificates.
For the purpose
of calculating interest payments on the Class X-IO
Component, interest will accrue on the
Notional Amount.
Class X-P Component: Solely for purposes of calculating
distributions of
principal and interest and the allocation of Realized Losses on the Mortgage
Loans, the principal and interest component
of the Class X Certificates.
The principal balance
of the Class X-P Component will initially equal
zero and will increase in accordance
with the amount of Net
Deferred Interest
allocated to the Class X Certificates. The principal balance of the Class X
Certificates will be equal to the principal
balance of the Class X-P Component,
if any.
Closing Date:
September 29, 2005.
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 2005-QO2.
Cut-off Date:
September 1, 2005.
Deferred Interest: The amount of interest which is deferred and
added to
the principal balance of a Mortgage Loan
due to negative amortization.
Determination Date:
With respect to any
Distribution Date, the
second
Business Day prior to such Distribution
Date.
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
then-current rating assigned to such
Certificates by such Rating Agency).
Fraud Loss Amount:
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% of the aggregate
outstanding
principal balance of
all
of the Mortgage Loans as of the Cut-off
Date minus the aggregate amount of Fraud
Losses allocated solely to one or more specific Classes of 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 of the Cut-off Date, an
amount equal to (1) the lesser of (a)
the Fraud Loss Amount as of the most recent
anniversary of the
Cut-off Date and
(b) 2.00% of the aggregate outstanding principal balance of
all of the Mortgage
Loans 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 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 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 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
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 shall be
zero.
The Fraud Loss
Amount 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
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.
Fraud Losses: Realized
Losses on Mortgage
Loans as to which
there was
fraud in the origination of such Mortgage
Loan.
Interest Accrual Period: With respect to any Distribution
Date and any
Class of Certificates, the calendar month preceding the month in which such
Distribution Date occurs.
Interest Adjustment
Date: With respect to a Mortgage Loan, the date, if
any, specified in the related Mortgage
Note on which the Mortgage Interest Rate
is subject to adjustment.
Initial Monthly Payment Fund: $55,734 representing scheduled principal
amortization and interest at the Net Mortgage
Rate payable
during the October
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 X Certificates,
$425,061,633.48.
Initial Subordinate
Class Percentage: With respect to each Class of
Subordinate Certificates, an amount which is equal to the initial aggregate
Certificate Principal Balance of such Class
of Subordinate
Certificates divided
by the aggregate Stated Principal Balance of all the Mortgage Loans
as of the
Cut-off Date as follows:
Class M-1:
3.00%
Class B-1: 1.05%
Class M-2:
2.30%
Class B-2: 0.80%
Class M-3:
1.70%
Class B-3: 0.60%
Marker Rate:
With respect to the Class X Certificates and any
Distribution Date, in relation to REMIC I
Regular Interests LT1,
LT2, LT3, and
LT4, a per annum rate equal to two (2) times the weighted average of the
Uncertificated REMIC I Pass-Through Rates for REMIC I Regular Interest
LT2 and
REMIC I Regular Interest LT3.
Maturity Date:
September 25, 2045, the Distribution Date immediately
following the latest scheduled maturity
date of any Mortgage Loan.
Maximum Mortgage
Rate: As to any
Mortgage Loan, the
rate indicated in
Exhibit One hereto as the "NOTE
CEILING," which rate is the maximum interest
rate that may be applicable to such
Mortgage Loan at any time during the life of
such Mortgage Loan.
Maximum Net
Mortgage Rate: As to any Mortgage Loan and any date of
determination, the Maximum Mortgage Rate for such Mortgage Loan minus
the per
annum rate at which the Servicing Fee is
calculated.
Minimum Mortgage
Rate: As to any
Mortgage Loan, the greater of (i) the
Note Margin for such Mortgage Loan and (ii) the rate
indicated in Exhibit
One
hereto as the "NOTE FLOOR" for such
Mortgage Loan, which
rate may be applicable
to such Mortgage Loan at any time during
the life of such Mortgage Loan.
Mortgage Loan Schedule: The list or lists of the Mortgage Loans
attached
hereto as Exhibit One (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:
(a) the Mortgage Loan identifying number
("RFC LOAN #");
(b) the maturity of the Mortgage Note
("MATURITY DATE");
(c) the Mortgage Rate ("ORIG RATE");
(d) the Subservicer pass-through rate
("CURR NET");
(e) the Net Mortgage Rate ("NET MTG
RT");
(f) [RESERVED];
(g) the initial scheduled monthly payment of principal, if any, and interest
("ORIGINAL P & I");
(h) the Cut-off Date Principal Balance
("PRINCIPAL BAL");
(i) the Loan-to-Value Ratio at origination
("LTV");
(j) the rate at which the Subservicing Fee
accrues ("SUBSERV
FEE") and at which
the Servicing Fee accrues ("MSTR SERV
FEE");
(k) a code "T," "BT" or "CT" under the
column "LN FEATURE,"
indicating that the
Mortgage Loan is secured by a second or
vacation residence;
(l) a code "N" under the column "OCCP
CODE," indicating
that the Mortgage
Loan
is secured by a non-owner occupied
residence;
(m) the Maximum Mortgage Rate ("NOTE
CEILING");
(n) the maximum Adjusted Mortgage Rate
("NET CEILING");
(o) the Note Margin for the ("NOTE
MARGIN"); and
(p) the first Adjustment Date after the
Cut-off Date ("NXT INT CHG DT").
Such schedule may consist of multiple
reports that collectively set forth all of
the information required.
Mortgage Rate: As to
any Mortgage Loan, the
interest rate borne by the
related Mortgage Note, or any modification thereto other than a Servicing
Modification. The Mortgage Rate on the Mortgage Loans will adjust on each
Adjustment Date to equal the sum (rounded
to the nearest
multiple of one-eighth
of one percent (0.125%) or up to the nearest
one-eighth of one
percent, which
are indicated by a "U" on Exhibit One
hereto, except in the case of the Mortgage
Loans indicated by an "X" on Exhibit One hereto under the heading "NOTE
METHOD"), of the related Index plus the
Note Margin, in each case subject to the
applicable Initial Rate Cap, Periodic Cap, Maximum Mortgage Rate and Minimum
Mortgage Rate.
MTA: With respect to any Distribution Date, the twelve-month moving
average monthly yield on United States
Treasury securities,
expressed on a per
annum basis, determined in accordance with
Section 1.03.
MTA Determination
Date: For each Interest Accrual Period, fifteen days
prior to the commencement of that Interest
Accrual Period.
Net Deferred Interest:
On any Distribution
Date, Deferred
Interest on
the Mortgage Loans during the related Due
Period net of Principal Prepayments in
full, partial Principal Prepayments, Liquidation Proceeds and amounts
received
pursuant to Section 2.04 and 4.07, in that order, included in the Available
Distribution Amount for such Distribution Date and available to
make principal
distributions on the Certificates on that
Distribution Date.
Net Mortgage
Rate: As to each Mortgage Loan, a per annum rate of
interest equal to the Adjusted Mortgage Rate less the per annum rate at
which
the Servicing Fee is calculated; provided that, (i) the Net Mortgage Rate
becoming effective on any Adjustment Date
shall not be greater or less than the
Net Mortgage Rate immediately prior to such Adjustment Date plus or minus
the
Initial Rate Cap or Periodic Cap
applicable
to such Mortgage Loan
and (ii) the
Net Mortgage Rate for any Mortgage Loan shall not exceed a rate equal
to the
Maximum Net Mortgage Rate for such Mortgage
Loan.
Net WAC Rate: With
respect to any
Distribution Date, a
per annum rate
equal to the weighted average of the Net Mortgage
Rates of the Mortgage
Loans
weighted on the basis of the respective
Stated Principal Balance of each such
Mortgage Loan as of the beginning of the related Due Period, using the Net
Mortgage Rates in effect for the scheduled
payments due on those
Mortgage Loans
during such Due Period.
Note Margin: As to each Mortgage Loan, the fixed percentage set
forth in
the related Mortgage Note and indicated in Exhibit One hereto as the "NOTE
MARGIN," which percentage is added to the related
Index on each Adjustment Date
to determine (subject to rounding in accordance
with the related Mortgage Note,
the Initial Rate Cap, the Periodic Cap, the Maximum Mortgage Rate and the
Minimum Mortgage Rate) the interest rate to
be borne by such Mortgage Loan until
the next Adjustment Date.
Notional Amount: As of any Distribution Date, with respect to the
Class
X Certificates, an amount equal to the
Certificate
Principal Balance of the
Class A-1, Class A-2, Class A-3, Class M and Class B Certificates
immediately
prior to such date.
Pass-Through Margin: With respect each Distribution Date, as
follows:
Class A-1
1.36%
Class A-2
1.43%
Class A-3
1.49%
Class M-1
1.25%
Class M-2
1.60%
Class M-3
2.00%
Class B-1
2.00%
Class B-2
2.00%
Class B-3
2.00%
Pass-Through
Rate:
o
With respect to the Class A-1, Class A-2 and Class A-3 Certificates,
the lesser of (i) MTA plus the related Pass-Through Margin and (ii)
the Net WAC Rate;
o
With respect to the Class X-IO Component of the Class X
Certificates,
the Net WAC Rate less the weighted average Pass-Through Rate on the
Certificates (other
than the Class X Certificates and Class R
Certificates), weighted by Certificate Principal Balance;
o With respect to the Class X-P Component
of the Class X
Certificates, the
Net
WAC Rate;
o With
respect to the Class R Certificates, the Net WAC Rate;
o
With respect to the Class M Certificates, a per annum rate equal to
the lesser of (i) MTA plus the related Pass-Through Margin and (ii)
the Net WAC Rate;
o
With respect to the Class B Certificates, the lesser of (i) MTA plus
the related Pass-Through Margin and (ii) the Net WAC Rate;
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
debt obligations of such depository institution or trust company at
the
date of acquisition thereof have been rated by each Rating Agency
in its
highest short-term rating available; and, provided further that, if
the
original maturity of such short-term obligations of a domestic
branch of
a foreign depository
institution or trust company shall exceed 30 days,
the short-term rating
of such institution
shall be A-1+ in the case of
Standard & Poor's if Standard & Poor's is a Rating
Agency;
(iv) commercial
paper and demand notes
(having original maturities of not
more than 365 days) of any corporation incorporated under the laws of
the United States or any state thereof which on the date of
acquisition
has been rated by each Rating Agency in its highest short-term rating
available; provided
that such commercial
paper 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 (if any) in the
case of
Insured Certificates (if any)) below the then-current rating
assigned to
such Certificates by such Rating Agency, as evidenced in
writing;
provided, however, that no instrument shall be a Permitted
Investment if
it represents, either (1) the right to receive
only interest payments with
respect to the underlying debt instrument or (2) the right to receive both
principal and interest payments derived from obligations underlying such
instrument and the principal and interest payments with respect to such
instrument provide a yield to maturity greater than 120% of the yield to
maturity at par of such underlying
obligations. References herein to the highest
rating available on unsecured long-term debt shall mean AAA in the case of
Standard & Poor's and Fitch and Aaa in
the case of Moody's,
and for purposes of
this Agreement, any references herein to the highest rating available on
unsecured commercial paper and short-term debt obligations shall mean the
following: A-1 in the case of Standard &
Poor's, P-1 in the case of Moody's and
F-1 in the case of Fitch; provided,
however, that any
Permitted Investment that
is a short-term debt obligation
rated A-1 by Standard
& Poor's must satisfy the
following additional conditions: (i) the total amount of debt from
A-1 issuers
must be limited to the investment of monthly principal and interest payments
(assuming fully amortizing collateral);
(ii) the total amount of A-1 investments
must not represent more than 20% of the aggregate outstanding Certificate
Principal Balance of the Certificates and
each investment must not mature beyond
30 days; (iii) the terms of the debt must
have a predetermined fixed dollar
amount of principal due at maturity that cannot vary; and (iv) if the
investments may be liquidated prior to their maturity or are
being relied on to
meet a certain yield, interest must be tied
to a single interest rate index plus
a single fixed spread (if any) and must
move proportionately with that index.
Prepayment Assumption:
With respect to the Mortgage Loans, a prepayment
assumption of 20% CPR, used for determining the accrual of original issue
discount and market discount and premium on
the Certificates for
federal income
tax purposes.
Prepayment Charge:
With respect to any
Mortgage Loan,
the charges or
premiums, if any, received in connection with a full
or partial prepayment
of
such Mortgage Loan in accordance with the
terms thereof.
Prepayment Charge
Loan: Any Mortgage Loan for which a Prepayment Charge
may be assessed and to which such
Prepayment Charge the Class X Certificates are
entitled, as indicated on the Mortgage Loan
Schedule.
Prepayment
Distribution
Percentage: With
respect to any
Distribution
Date and each Class of Subordinate Certificates, under the applicable
circumstances set forth below, the
respective percentages set forth below:
(i) For any
Distribution Date prior to the Distribution Date in October
2015
(unless the Certificate Principal Balances of the Senior
Certificates
have been reduced to
zero or the
circumstances set
forth in the third
paragraph of
the definition of Senior Accelerated Distribution
Percentage exist), 0%.
(ii) For any Distribution
Date for which clause (i) above does not apply, and
on which any Class of Subordinate Certificates is outstanding:
(a) in the case of
the Class of 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 Subordinate
Certificates
then outstanding with the Highest
Priority and (2) all other Classes of Subordinate Certificates for
which
the respective Prepayment Distribution Triggers have been
satisfied; and
(b) in the case of
each other Class of
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 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.
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.
REMIC I: The segregated pool of assets related to this Series
(except as
provided below), with respect to which a REMIC
election is to be made pursuant
to this Agreement, consisting of:
(i) the Mortgage Loans and the related Mortgage Files and collateral
securing such Mortgage Loans,
(ii) all payments on and
collections
in respect of the
Mortgage Loans due
after the Cut-off Date (other than Monthly Payments due in the month of
the Cut-off Date) as shall be on deposit in the Custodial
Account or in
the Certificate
Account and identified
as belonging to the Trust Fund,
but not including
amounts on deposit in
the Initial
Monthly Payment
Fund,
(iii) property that secured a
Mortgage Loan and that has been acquired for the
benefit of the
Certificateholders
by foreclosure or deed in lieu of
foreclosure,
(iv) the hazard insurance
policies and Primary
Insurance Policies,
if any,
and
(v) all proceeds of
clauses (i) through (iv) above.
Notwithstanding the foregoing, the REMIC election with respect to
REMIC
I specifically excludes the Initial Monthly Payment Fund and the Carryover
Shortfall Reserve Fund.
REMIC I Certificates:
The Class R-I Certificates.
REMIC I Distribution
Amount: For any
Distribution Date, the
Available
Distribution Amount shall be distributed to the
Uncertificated REMIC I
Regular
Interests and the Class R-I Certificates in
the following amounts and priority:
(a) first,
to the Uncertificated
REMIC I Regular Interests pro rata,
in an amount equal to (x) their Uncertificated Accrued Interest
for such Distribution
Date, plus (y) any amounts in respect
thereof remaining unpaid from previous Distribution Dates; and
(b) an
amount equal to the
remainder of the
Available
Distribution
Amount after the distributions made pursuant to clause (a)
above,
allocated as follows (except as provided below):
(i) in
respect of REMIC I Regular Interests LT2, LT3 and LT4, their
respective Principal Distribution Amounts;
(ii) in respect
of REMIC I Regular
Interest LT1 any
remainder until
the Uncertificated Principal Balance thereof is reduced to
zero;
(iii) in respect of
REMIC I Regular
Interests LT2,
LT3 and LT4,
any
remainder pro rata according to their respective Uncertificated
Principal Balances as
reduced by the
distributions deemed
made
pursuant to (i) above,
until their respective Uncertificated
Principal Balances are reduced to zero;
(iv) first,
any remainder to the Uncertificated REMIC I Regular
Interests pro
rata according to the amount of unreimbursed
Realized Losses
allocable to principal
previously allocated
to
each such Uncertificated REMIC I Regular Interest, the aggregate
amount of any
distributions to the Certificates as reimbursement
of such Realized
Losses on such
Distribution
Date pursuant to
Section 4.02(e); provided, however, that any amounts
distributed
pursuant to this paragraph (b)(iv) shall not cause a reduction
in
the
Uncertificated
Principal
Balances of
any of the
Uncertificated REMIC I Regular Interests; and
(v)
second, any remaining amounts to the Class R-I Certificates.
REMIC I Realized Losses: For any Distribution Date, Realized Losses on
the Mortgage Loans shall be allocated
to the Uncertificated REMIC I Regular
Interests as follows: (1) the interest portion of such
Realized Losses, if any,
shall be allocated among the Uncertificated REMIC I Regular Interests pro
rata
according to the amount of interest
accrued but unpaid
thereon, in reduction
thereof. Any interest portion of such Realized
Losses in excess of
the amount
allocated pursuant to the preceding sentence shall be treated as a
principal
portion of Realized Losses not attributable to any specific Mortgage Loan and
allocated pursuant to the succeeding sentences. The principal portion of
Realized Losses on the Mortgage Loans shall
be allocated to the
Uncertificated
REMIC I Regular Interests as follows: (1)
the principal portion of such Realized
Losses shall be allocated, first, to REMIC I Regular
Interests LT2, LT3 and LT4
pro rata according to their respective REMIC I Principal
Reduction Amounts to
the extent thereof in reduction of the
Uncertificated
Principal Balance thereof
and, second, the remainder, if any, of such principal portion
of such Realized
Losses shall be allocated to REMIC I Regular Interest LT1 in reduction of
the
Uncertificated Principal Balance
thereof.
REMIC I Principal
Reduction Amounts:
For any Distribution Date, the
amounts by which the Uncertificated Principal Balances of the Uncertificated
REMIC I Regular Interests will be reduced on such Distribution Date by the
allocation of Realized Losses and the
distribution of
principal, determined
as
follows:
For purposes of the succeeding formulas the following symbols shall
have
the meanings set forth below:
Y1 = the principal
balance of the REMIC I
Regular Interest
LT1 after
distributions on the prior Distribution
Date.
Y2 = the principal
balance of the REMIC I
Regular Interest
LT2 after
distributions on the prior Distribution
Date.
Y3 = the principal
balance of the REMIC I
Regular Interest
LT3 after
distributions on the prior Distribution
Date.
Y4 = the principal
balance of the REMIC I
Regular Interest
LT4 after
distributions on the prior Distribution
Date (note: Y3 = Y4).
AY1 = the REMIC I Regular Interest LT1 Principal Reduction
Amount.
AY2 = the REMIC I Regular Interest LT2 Principal Reduction
Amount.
AY3 = the REMIC I Regular Interest LT3 Principal Reduction
Amount.
AY4 = the REMIC I Regular Interest LT4 Principal Reduction
Amount.
P0 = the aggregate
principal balance of the Uncertificated REMIC I
Regular Interests after distributions and the allocation
of Realized Losses on
the prior Distribution Date.
P1 = the aggregate
principal balance of the Uncertificated REMIC I
Regular Interests after distributions and the allocation
of Realized Losses to
be made on such Distribution Date.
AP = P0 - P1 = the aggregate of the REMIC I Regular Interests
Principal
Reduction Amounts.
=the aggregate of the principal portions of Realized Losses to
be
allocated to, and the principal
distributions
to be made on, the
Certificates
(other than the Class R Certificates) on such Distribution Date (including
distributes of accrued and unpaid interest
on the Class X Certificates for prior
Distributions Dates).
R0 = the Net WAC Rate (stated as a monthly rate) after giving effect to
amounts distributed and Realized Losses allocated on the prior
Distribution
Date.
R1 = the Net WAC Rate (stated as a monthly rate) after giving effect to
amounts to be distributed and Realized Losses to be allocated on such
Distribution Date.
a = (Y2 + Y3)/P0. The
initial value of a on the Closing Date for use on
the first Distribution Date shall be
0.0001.
a0 = the lesser
of (A) the sum of (x)
the sum for all Classes of
Certificates, other than the Class X
Certificates and Class R Certificates, of
the product for each Class of (i) the
monthly interest
rate (as limited by
the
Net WAC Rate, if applicable) for such Class
applicable for
distributions to
be
made on such Distribution Date and (ii) the aggregate Certificate Principal
Balance for such Class after distributions
and the allocation of Realized Losses
on the prior Distribution Date and (y) the
aggregate related Carryover Shortfall
Amounts for such Distribution Date and (B)
R0*P0.
a1 = the lesser
of (A) the sum of (x)
the sum for all Classes of
Certificates, other than the Class X
Certificates and Class R Certificates, of
the product for each Class of (i) the
monthly interest
rate (as limited by
the
Net WAC Rate, if applicable) for such Class
applicable for
distributions to
be
made on the next succeeding Distribution
Date and (ii) the aggregate Certificate
Principal Balance for such Class after distributions and the allocation of
Realized Losses to be made on such Distribution Date and (y) the aggregate
related Carryover Shortfall Amounts for the next succeeding
Distribution Date
and (B) R1*P1.
Then, based on the foregoing definitions:
AY1 = AP - AY2 - AY3 - AY4;
AY2 = (a/2){( a0R1 -
a1R0)/R0R1};
AY3 = aAP - AY2;
and
AY4 = AY3.
if both AY2 and AY3,
as so determined, are non negative numbers. Otherwise:
(1) If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 -
a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
(2) If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a1R0P0
a0R1P1}/{2R1R0P1 a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
REMIC I Regular
Interest LT1 Principal
Distribution
Amount: For any
Distribution Date, the excess, if any, of
the REMIC I Principal Reduction Amount
for REMIC I Regular Interest LT1 for such Distribution Date over the Realized
Losses allocated to REMIC I Regular
Interest LT1 on such
Distribution Date
in
reduction of the Uncertificated Principal
Balance thereof.
REMIC I Regular
Interest LT2 Principal
Distribution
Amount: For any
Distribution Date, the excess, if any, of
the REMIC I Principal Reduction Amount
for REMIC I Regular Interest LT2 for such Distribution Date over the Realized
Losses allocated to REMIC I Regular
Interest LT2 on such
Distribution Date
in
reduction of the Uncertificated Principal
Balance thereof.
REMIC I Regular
Interest LT3 Principal
Distribution
Amount: For any
Distribution Date, the excess, if any, of
the REMIC I Principal Reduction Amount
for REMIC I Regular Interest LT3 for such Distribution Date over the Realized
Losses allocated to REMIC I Regular
Interest LT3 on such
Distribution Date
in
reduction of the Uncertificated Principal
Balance thereof.
REMIC I Regular
Interest LT4 Principal
Distribution
Amount: For any
Distribution Date, the excess, if any, of
the REMIC I Principal Reduction Amount
for REMIC I Regular Interest LT4 for such Distribution Date over the Realized
Losses allocated to REMIC I Regular
Interest LT4 on such
Distribution Date
in
reduction of the Uncertificated Principal
Balance thereof.
REMIC II: The segregated pool of assets consisting of the
Uncertificated
REMIC I Regular Interests conveyed in trust to the Trustee
pursuant to Section
2.06 for the benefit of the holders of the Class A-1, Class A-2, Class A-3,
Class X, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates and the Class R-II
Certificates,
with respect to which
a separate
REMIC election is to be made. The REMIC election with respect to REMIC II
specifically excludes the Initial Monthly Payment Fund and the Carryover
Shortfall Reserve Fund.
REMIC II Certificates: Any of the Class A-1, Class A-2, Class A-3,
Class
X, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates and the Class R-II
Certificates.
REMIC II Regular
Interests: The Class
A-1, Class A-2, Class A-3, Class
X, Class M-1, Class M-2, Class M-3, Class B-1, Class B-2 and Class B-3
Certificates.
Senior Accelerated
Distribution
Percentage:
With
respect to any
Distribution Date occurring on or prior to the
120th Distribution
Date, 100%.
With respect to any Distribution Date
thereafter, as follows:
(i) for any
Distribution Date
after the 120th
Distribution Date but
on or
prior to the 132nd
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 132nd
Distribution
Date but on or
prior to the 144th
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 144th
Distribution
Date but on or
prior to the 156th
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 156th
Distribution
Date but on or
prior to the 168th
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.
Any scheduled reduction, as described in the preceding paragraph,
shall
not be made as of any Distribution Date
unless:
(a)
the outstanding
principal
balance
of the Mortgage Loans
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
Subordinate Certificates, is less than 50% and
(b)
Realized Losses
on the Mortgage Loans to date for such
Distribution Date, if
occurring during the
eleventh, twelfth,
thirteenth,
fourteenth and
fifteenth
year,
or any year
thereafter, after the
Closing Date, are less than 30%, 35%, 40%,
45% or 50%,
respectively, of the
sum of the Initial Certificate
Principal Balances of the Subordinate Certificates.
Notwithstanding the
foregoing,
if (a) the
Subordinate
Percentage is
equal to or in excess of twice the initial Subordinate Percentage, (b) the
outstanding principal balance of the Mortgage Loans
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 Subordinate
Certificates, does not exceed 50% and (c)(i)
prior to the Distribution Date in
October 2008, cumulative Realized Losses on
the Mortgage Loans do not exceed 20%
of the sum of the initial Certificate Principal Balances of the Subordinate
Certificates, and (ii) thereafter, cumulative Realized Losses on the
Mortgage
Loans do not exceed 30% of the sum of the
initial Certificate Principal Balances
of the Subordinate Certificates,
then (A) on any
Distribution Date prior to the
Distribution Date in October 2008, the Senior Accelerated Distribution
Percentage for such Distribution Date will equal the
Senior Percentage for that
Distribution Date plus 50% of the Subordinate
Percentage for such
Distribution
Date, and (B) on any Distribution Date on or after the Distribution Date in
October 2008, the Senior Accelerated Distribution Percentage for that
Distribution Date will equal the Senior
Percentage for that Distribution Date.
Notwithstanding the
foregoing, on any
Distribution
Date on which the
Senior Percentage exceeds the initial
Senior Percentage, the
Senior Accelerated
Distribution Percentages for such
Distribution Date will equal 100%.
Notwithstanding the
foregoing,
upon
reduction of the Certificate
Principal Balances of the Senior
Certificates to zero,
the Senior
Accelerated
Distribution Percentage will equal 0%.
Senior Certificate:
Any one of the Class A, Class X or Class R
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 Interest Distribution Amount: As defined in Section
4.02(a)(i).
Senior Percentage: As
of each 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 Senior
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)
immediately prior to such Distribution
Date.
Senior Principal
Distribution Amount:
As to any Distribution Date, the
lesser of (a) the balance of the Available
Distribution
Amount remaining
after
the distribution therefrom of all amounts required
to be distributed
therefrom
pursuant to Section 4.02(a)(i) of this
Series Supplement, and (b) the sum of the
amounts required to be distributed
therefrom to the Senior Certificateholders on
such Distribution Date pursuant to Sections 4.02(a)(ii), 4.02(a)(xvi) and
4.02(a)(xvii).
Senior Support Certificates: The Class A-3 Certificates.
Special Hazard Amount:
As of any Distribution
Date, an amount equal to
$6,154,672 minus the sum of (i) the aggregate
amount of Special
Hazard Losses
allocated solely to one or more specific
Classes of
Certificates 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 Special Hazard
Percentage for such anniversary
multiplied by the
outstanding principal balance
of all the Mortgage Loans on the
Distribution Date
immediately
preceding such
anniversary and (ii) twice the outstanding principal balance of the Mortgage
Loan with the largest outstanding
principal balance as
of the Distribution Date
immediately preceding such anniversary and (B) the greatest of (i) twice
the
outstanding principal balance of the Mortgage Loan in
the Trust Fund which has
the largest outstanding principal balance on the
Distribution Date immediately
preceding such anniversary, (ii) the product of 1.00% multiplied by the
outstanding principal balance of all Mortgage Loans on
the Distribution
Date
immediately preceding such anniversary and (iii) the aggregate outstanding
principal balance (as of the immediately
preceding Distribution Date) of the
Mortgage Loans in any single five-digit California zip code area with the
largest amount of Mortgage Loans by aggregate principal balance as of such
anniversary.
The 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
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: 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
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
as of the
immediately
preceding Distribution Date.
Stated Principal
Balance: With respect
to any Mortgage Loan or related
REO Property, as of any Distribution
Date, (i) the sum of
(a) the Cut-off Date
Principal Balance of the Mortgage
Loan plus (b) any
amount by which the Stated
Principal Balance of the Mortgage Loan has been increased pursuant to a
Servicing Modification and (c) any amount by
which the Stated Principal Balance
of the Mortgage Loan has been increased for Deferred
Interest pursuant to the
terms of the related Mortgage Note on or
prior to the
Distribution Date,
minus
(ii) the sum of (a) the principal portion of the Monthly Payments due with
respect to such Mortgage Loan or REO
Property during each Due Period ending with
the Due Period related to the previous
Distribution Date
which were received or
with respect to which an Advance was
made, and (b) all
Principal Prepayments
with respect to such Mortgage Loan or REO
Property, and all
Insurance Proceeds,
Liquidation Proceeds and REO Proceeds, to the extent applied by the Master
Servicer as recoveries of principal in
accordance with Section 3.14 with respect
to such Mortgage Loan or REO Property, in each case which were distributed
pursuant to Section 4.02 on any previous
Distribution Date, and (c) any Realized
Loss allocated to Certificateholders with respect thereto for any previous
Distribution Date.
Subordinate
Principal
Distribution
Amount: With
respect to any
Distribution Date and each Class of
Subordinate Certificates, (a) the sum of (i)
the product of (x) the Class's pro rata share, based on the Certificate
Principal Balance of each such Class then
outstanding, and (y)
the aggregate of
the amounts calculated for such
Distribution Date under clauses (1), (2) and (3)
of Section 4.02(a)(ii)(A) of this Series
Supplement
(without giving effect
to
the Senior Percentage) to the extent not
payable to the Senior
Certificates and
to the extent not applied to offset
Deferred Interest; (ii) such Class's pro
rata share, based on the Certificate Principal Balance of each Class of
Subordinate Certificates then outstanding, of the principal collections
described in Section 4.02(a)(ii)(B)(b) of
this Series Supplement (without giving
effect to the Senior Accelerated Distribution Percentage) to the extent such
collections are not otherwise distributed to the Senior
Certificates and to the
extent not applied to offset Deferred Interest; (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 to the extent not payable
to the Senior Certificates and to the extent not applied to offset Deferred
Interest; and (iv) 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 Subordinate Certificates; minus (b) the related
Capitalization Reimbursement Amount for such
Distribution Date, multiplied by a
fraction, the numerator of which is the Subordinate Principal Distribution
Amount for such Class of 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 each case to the extent
derived from the Available Distribution Amount without giving effect to any
reductions for the Capitalization
Reimbursement Amount.
Super Senior
Certificates:
The Class A-1
Certificates
and Class A-2
Certificates.
Trust Fund: REMIC I,
REMIC II, the Initial Monthly Payment Fund and the
Carryover Shortfall Reserve Fund.
Uncertificated Accrued
Interest: With respect to each Uncertificated
REMIC I Regular Interest on each Distribution Date, an amount equal to one
month's interest at the related
Uncertificated REMIC I
Pass-Through Rate on the
Uncertificated Principal Balance of such Uncertificated REMIC I Regular
Interest. Uncertificated Accrued Interest on
the Uncertificated REMIC I Regular
Interests will be reduced by any Prepayment
Interest Shortfalls and Relief Act
Interest Shortfalls, allocated among such Uncertificated REMIC I Regular
Interests pro rata.
Uncertificated
Principal
Balance: The
principal amount of any
Uncertificated REMIC I Regular Interest outstanding as of any date of
determination. The Uncertificated Principal
Balance of each Uncertificated REMIC
I Regular Interest shall be reduced by all
distributions of
principal made on,
and allocation of Realized Losses to, such Uncertificated REMIC I Regular
Interest on such Distribution Date. The
Uncertificated Principal Balance of each
Uncertificated REMIC I Regular Interest
shall never be less than zero.
Uncertificated REMIC I
Regular Interests: The
uncertificated
partial
undivided beneficial ownership interests in REMIC I, designated as REMIC I
Regular Interests LT1, LT2, LT3 and LT4,
each having an Uncertificated Principal
Balance as specified herein and bearing interest at a
rate equal to the related
Uncertificated REMIC I Pass-Through
Rate.
Uncertificated
REMIC I Pass-Through Rate: With respect to any
Distribution Date and: (i) REMIC I Regular
Interests LT1 and LT2, the Net WAC
Rate of the Mortgage Loans, (ii) REMIC I
Regular Interest LT3, zero (0.00%), and
(iii) REMIC I Regular Interest LT4, twice the Net WAC Rate of the
Mortgage
Loans.
Underwriter: Goldman,
Sachs & Co.
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
Section 1.03 Determination of MTA
MTA for any Interest
Accrual Period after the initial Interest Accrual
Period will be determined as described
below.
MTA shall be established by the Trustee for each Interest Accrual
Period
other than the initial Interest Accrual
Period. MTA is a per annum rate equal to
the twelve-month moving average monthly yield on United States Treasury
securities adjusted to a constant maturity of one year as published by the
Federal Reserve Board in statistical Release No. H.15(519), or the Release,
determined by averaging the monthly yield
for the most recent twelve months. The
MTA used for each Interest Accrual Period will be the most recent MTA
figure
available as of the related MTA Determination Date. If MTA is no longer
available, the new index for the Class A,
Class M and Class B Certificates will
be LIBOR. MTA for the first accrual period
for the first
Distribution Date will
be approximately 2.865%.
The establishment
of MTA by the
Trustee and the Master Servicer's
subsequent calculation of the Pass-Through Rates applicable to the Class A,
Class M and Class B Certificates for the
relevant Interest
Accrual Period,
in
the absence of manifest error, will be
final and binding.
Promptly following
each MTA Determination Date the Trustee shall supply
the Master Servicer with the results of its
determination of MTA on such date.
<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, (iii) a "High
Cost Home Mortgage Loan" as defined in
the Massachusetts Predatory Home Loan Practices Act
effective November 7,
2004
or (iv) a "High-Cost Home Loan" as defined
in the Indiana House Enrolled Act No.
1229, effective as of January 1, 2005.
(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).
(i) (See Section 2.01(i) 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.
(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 payment-option adjustable-rate mortgage loans
with a negative
amortization feature,
and 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 30 years;
(iv) To the best of the
Company's knowledge, except with respect to one
Mortgage Loan
representing
approximately 0.1% of
the aggregate Stated
Principal Balance of
the Mortgage Loans, if
a Mortgage 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%. 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 0.8% of
the Mortgage 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 0.8% of the
Mortgage Loans are
secured by Mortgaged
Properties located in
any one
zip code area outside Nevada;
(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 81.06%
of the Mortgage Loans by aggregate Stated Principal
Balance as of the Cut-off Date were underwritten under a reduced loan
documentation program,
approximately
0.41% of the
Mortgage Loans by
aggregate Stated
Principal Balance as of the Cut-off Date were
underwritten under a no-stated income program, and approximately 0.49%
of the Mortgage Loans by aggregate Stated Principal Balance as of the
Cut-off Date were underwritten under a no income/no asset
program;
(x) Except with
respect to
approximately 11.30%
of the Mortgage
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 Regulation
Section
1.860G-2(a)(1), (2),
(4), (5), (6), (7) and (9) without reliance on the
provisions of Treasury
Regulation Section
1.860G-2(a)(3)
or Treasury
Regulation Section
1.860G-2(f)(2)
or any other
provision that would
allow a Mortgage Loan to be treated as a "qualified mortgage"
notwithstanding
its failure
to meet the requirements of Section
860G(a)(3)(A) of
the Code and Treasury Regulation
Section
1.860G-2(a)(1), (2), (4), (5), (6), (7) and (9);
(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;
(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;
(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
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 Certificates.
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 the Class R-I Certificates in
authorized denominations which together with
the Uncertificated REMIC I Regular
Interests, evidence the beneficial interest
in REMIC I.
Section 2.06 Conveyance of Uncertificated
REMIC I 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 to the Trustee for the benefit of the Holders of each Class of
Certificates (other than the Class R-I
Certificates). The
Trustee
acknowledges
receipt of the Uncertificated REMIC I Regular Interests and declares that it
holds and will hold the same in trust for
the exclusive
use and benefit of
all
present and future Holders of each Class of
Certificates
(other than the
Class
R-I Certificates). The rights of the Holders of each Class of Certificates
(other than the Class R Certificates) to
receive distributions from the proceeds
of REMIC II 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.
Section 2.07 Issuance of Certificates
Evidencing Interest in REMIC II.
The Trustee
acknowledges the
assignment
to it of the
Uncertificated
REMIC I Regular Interests, 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 II.
Section 2.08 Purposes and Powers of the
Trust. (See Section 2.08 of the Standard
Terms).
<PAGE>
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Master Servicer to Act as Servicer. (See Section 3.01 of the
Standard Terms)
Section 3.02 Subservicing Agreements Between Master Servicer and
Subservicers;
Enforcement of Subservicers' and Sellers' Obligations. (See Section
3.02
of the Standard Terms)
Section 3.03 Successor Subservicers. (See
Section 3.03 of the Standard Terms)
Section 3.04 Liability of the Master
Servicer. (See Section 3.04 of the Standard
Terms)
Section 3.05 No Contractual Relationship Between Subservicer and Trustee or
Certificateholders. (See Section 3.05 of the Standard Terms)
Section 3.06 Assumption or Termination of
Subservicing
Agreements by
Trustee.
(See Section 3.06 of the Standard Terms)
Section 3.07 Collection of Certain Mortgage
Loan Payments; Deposit
to Custodial
Account.
(a)
(See Section 3.07(a) of the Standard Terms)
(b) The Master Servicer shall establish and maintain a Custodial
Account
in which the Master Servicer shall deposit or cause to be
deposited on a daily
basis, except as otherwise specifically provided herein, the
following payments
and collections remitted by Subservicers or received by it in respect of
the
Mortgage Loans subsequent to the Cut-off Date (other than in respect of
principal and interest on the Mortgage
Loans due on or before the Cut-off Date):
(i) All payments on
account of principal,
including Principal
Prepayments made by
Mortgagors on the Mortgage Loans and the principal
component of any Subservicer Advance or of any REO Proceeds
received in
connection with
an REO Property for which an REO Disposition has
occurred;
(ii) All payments on account of interest at the Adjusted
Mortgage
Rate on the Mortgage
Loans, including
Buydown Funds,
if any, and the
interest component
of any Subservicer Advance or of any REO Proceeds
received in connection with an REO Property for which an REO
Disposition
has occurred;
(iii) Insurance Proceeds, Subsequent Recoveries and Liquidation
Proceeds (net of any related expenses of the Subservicer);
(iv) All proceeds of any Mortgage Loans purchased pursuant to
Section 2.02,
2.03, 2.04 or 4.07 (including amounts received from
Residential Funding
pursuant to the last
paragraph of Section 4 of the
Assignment Agreement
in respect of any
liability,
penalty or expense
that resulted from a breach of the Compliance With Laws Representation
and all amounts required to be deposited in connection with the
substitution of a Qualified Substitute Mortgage Loan pursuant to
Section
2.03 or 2.04;
(v) Any amounts
required to be deposited pursuant to Section
3.07(c) or 3.21;
(vi) All amounts
transferred from the Certificate Account to the
Custodial Account in accordance with Section 4.02(a);
(vii) Any amounts realized by the Subservicer and received by
the
Master Servicer in respect of any Additional Collateral;
(viii) Any amounts
received by the Master Servicer in respect of
Pledged Assets; and
(ix) Any amounts
received by the Master
Servicer in
connection
with any Prepayment Charges on the Prepayment Charge Loans.
The foregoing requirements for deposit in the Custodial Account
shall be
exclusive, it being understood and agreed
that, without limiting the generality
of the foregoing, payments on the Mortgage
Loans which are not part of the Trust
Fund (consisting of payments in respect of principal and interest on the
Mortgage Loans due on or before the Cut-off
Date) and payments or collections in
the nature of late payment charges or assumption fees may but need not be
deposited by the Master Servicer in the Custodial Account. In the event any
amount not required to be deposited in the
Custodial Account is so deposited,
the Master Servicer may at any time withdraw such amount from the Custodial
Account, any provision herein to the contrary
notwithstanding.
The Custodial
Account may contain funds that belong to one or more trust funds
created for
mortgage pass-through certificates of other series and
may contain other funds
respecting payments on mortgage loans belonging to the Master Servicer or
serviced or master serviced by it on behalf of others.
Notwithstanding
such
commingling of funds, the Master Servicer shall keep records that
accurately
reflect the funds on deposit in the
Custodial Account that
have been identified
by it as being attributable to the Mortgage
Loans.
With respect to Insurance Proceeds, Liquidation Proceeds, REO Proceeds
and the proceeds of the purchase of any
Mortgage Loan pursuant to Sections 2.02,
2.03, 2.04 and 4.07 received in any calendar
month, the Master Servicer may
elect to treat such amounts as included in
the Available Distribution Amount for
the Distribution Date in the month of
receipt, but is not obligated to do so. If
the Master Servicer so elects, such amounts
will be deemed to have been received
(and any related Realized Loss shall be
deemed to have occurred) on the last day
of the month prior to the receipt
thereof.
(c)
(See Section 3.07(c) of the Standard Terms)
(d)
(See Section 3.07(d) of the Standard Terms)
(e) Notwithstanding Section 3.07(a), The Master Servicer shall not
waive
(or permit a Subservicer to waive) any Prepayment Charge unless: (i) the
enforceability thereof shall have been limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to
creditors' rights
generally, (ii) the enforcement thereof is illegal, or any local, state or
federal agency has threatened legal action if the prepayment penalty is
enforced, (iii) the collectability thereof shall have been limited due to
acceleration in connection with a foreclosure
or other involuntary
payment or
(iv) such waiver is standard and customary
in servicing similar
Mortgage Loans
and relates to a default or a reasonably
foreseeable
default and would, in
the
reasonable judgment of the Master Servicer,
maximize recovery of
total proceeds
taking into account the value of such
Prepayment Charge and the related Mortgage
Loan. In no event will the Master Servicer waive a Prepayment Charge in
connection with a refinancing of a Mortgage Loan that is not related to a
default or a reasonably foreseeable default. If a Prepayment Charge is
waived,
but does not meet the standards
described above, then the Master Servicer is
required to deposit into the Custodial Account the amount of such waived
Prepayment Charge at the time that the amount
prepaid on the related
Mortgage
Loan is required to be deposited into the
Custodial Account. Notwithstanding any
other provisions of this Agreement,
any payments made by
the Master Servicer in
respect of any waived Prepayment Charges pursuant to this Section shall be
deemed to be paid outside of the Trust Fund
and not part of any REMIC.
Section 3.08. Subservicing Accounts;
Servicing Accounts (See Section 3.08 of the
Standard Terms)
Section 3.09. Access to Certain Documentation and Information Regarding the
Mortgage Loans (See Section 3.09 of the Standard Terms)
Section 3.10. Permitted Withdrawals from
the Custodial Account (See Section 3.10
of the Standard Terms)
Section 3.11. Maintenance of the Primary Insurance Policies; Collections
Thereunder (See Section 3.011 of the Standard Terms)
Section 3.12. Maintenance of Fire Insurance and
Omissions and Fidelity Coverage
(See Section 3.12 of the Standard Terms)
Section 3.13. Enforcement of Due-on-Sale
Clauses; Assumption and Modification
Agreements; Certain Assignments (See Section 3.13 of the Standard
Terms)
Section 3.14. Realization Upon Defaulted
Mortgage Loans (See Section 3.14 of the
Standard Terms)
Section 3.15. Trustee to Cooperate;
Release of Mortgage
Files (See Section 3.15
of the Standard Terms)
Section 3.16. Servicing and Other
Compensation; Compensating Interest
(a) (See Section 3.16(a) of the Standard Terms)
(b) Additional
servicing compensation
in the form of assumption
fees, late
payment charges, investment income on amounts in the
Custodial Account
or the Certificate Account or otherwise (but not
including Prepayment
Charges) shall be
retained by the Master Servicer
or the Subservicer to the extent provided herein, subject to clause (e)
below.
(c) (See Section 3.16(c) of the Standard Terms)
(d) (See Section 3.16(d) of the Standard Terms)
(e) (See Section 3.16(e) of the Standard Terms)
Section 3.17. Reports to the Trustee and the
Company (See
Section 3.17 of
the
Standard Terms)
Section 3.18. Annual Statement as to Compliance (See Section 3.18 of the
Standard Terms)
Section 3.19. Annual Independent Public Accountants' Servicing Report (See
Section 3.19 of the Standard Terms)
Section 3.20. Rights of the Company in Respect of the Master Servicer (See
Section 3.20 of the Standard Terms)
Section 3.21. Administration of Buydown Funds
(See Section 3.21 of the Standard
Terms)
Section 3.22 Advance Facility (See Section
3.2 of the Standard Terms)
<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 (x) the
Master Servicer on behalf of the
Trustee or
(y) 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 (1) 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
(2) 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 shall
be based on the aggregate of the Percentage Interests represented by
Certificates of the
applicable
Class held by such Holder) of the
following amounts,
in the following order
of priority (subject
to the
provisions of Sections
4.02(b) and 4.02(c) below), in each case to the
extent of the Available Distribution Amount:
(i) to the Senior
Certificates,
on a pro rata basis
based on the
Accrued
Certificate Interest
payable on such Classes of Certificates with
respect to 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) (the "Senior
Interest Distribution Amount");
(ii) to the Senior
Certificates,
in the priorities and
amounts set forth in
Section 4.02(b) and (c), the sum of the following (applied to
reduce the
Certificate
Principal Balances
of such Senior Certificates, as
applicable):
(A) the Senior
Percentage for such
Distribution
Date times the sum of
the
following:
(1) the principal
portion of each Monthly Payment due during the related Due
Period on each Outstanding Mortgage Loan, whether or not
received on or
prior to the related
Determination Date, minus the principal portion of
any Debt Service
Reduction which together with other Bankruptcy Losses
exceeds the Bankruptcy Amount;
(2) except
to the extent applied to offset Deferred Interest on any
Distribution Date,
the Stated
Principal Balance of any Mortgage Loan
repurchased during the
preceding calendar month (or deemed to have been
so repurchased in accordance with Section 3.07(b)) pursuant to Section
2.02, 2.03,
2.04 or 4.07 and the
amount of any shortfall deposited in
the Custodial Account
in connection with the
substitution of a Deleted
Mortgage Loan
pursuant to Section
2.03 or 2.04
during the
preceding
calendar month; and
(3) except
to the extent applied to offset Deferred Interest on any
Distribution Date,
the principal portion of all other unscheduled
collections
(other than Principal
Prepayments in Full
and Curtailments
and amounts
received in connection with a Cash Liquidation or REO
Disposition of a
Mortgage Loan described in Section 4.02(a)(ii)(B) of
this Series
Supplement, including
without limitation any Insurance
Proceeds, Liquidation
Proceeds and REO Proceeds), including Subsequent
Recoveries, received
during the preceding
calendar month (or deemed to
have been so received in accordance with Section 3.07(b)) to the extent
applied by the Master Servicer as recoveries of principal of the
related
Mortgage Loan pursuant to Section 3.14 of the Standard Terms;
(B) except
to the extent applied to offset Deferred Interest on any
Distribution Date,
with respect to each
Mortgage Loan for which a Cash
Liquidation or a REO Disposition occurred during the preceding
calendar
month (or was deemed to have occurred during such period in
accordance
with Section 3.07(b))
and 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 (a) the Senior Percentage for
such Distribution
Date times the Stated Principal Balance of such
Mortgage Loan and (b) the Senior Accelerated Distribution
Percentage for
such Distribution
Date times the
unscheduled
collections
(including
without limitation
Insurance Proceeds, Liquidation Proceeds and REO
Proceeds) to the extent applied by the Master Servicer as recoveries of
principal of the related Mortgage Loan pursuant to Section 3.14 of
the
Standard Terms;
(C) the Senior
Accelerated
Distribution
Percentage for such
Distribution
Date times the aggregate of all Principal Prepayments in Full received
in the Prepayment
Period and
Curtailments
received in the
preceding
calendar month
not applied to offset Deferred Interest on any
Distribution Date;
(D) any amounts
described in
subsection (ii),
clauses (A), (B) and
(C) of
this Section 4.02(a), as determined for any previous Distribution Date,
which remain unpaid after application of amounts previously
distributed
pursuant to this
clause (D) to the
extent that such
amounts are not
attributable to
Realized Losses which have been allocated to the
Subordinate Certificates; minus
(E) the related
Capitalization
Reimbursement
Amount for such
Distribution
Date multiplied
by a fraction,
the numerator of which is the Senior
Principal Distribution Amount, without giving effect to this clause
(E),
and the denominator
of which is the sum of
the principal
distribution
amounts for all
Classes of
Certificates
derived from the Available
Distribution Amount
without giving effect to any reductions for the
Capitalization Reimbursement Amount;
(iii) if the Certificate
Principal Balances of the Subordinate
Certificates
have not been reduced to zero, to the Master Servicer or a
Sub-Servicer,
by remitting for deposit to the Custodial Account, to the extent of and
in reimbursement for
any Advances or Sub-Servicer Advances previously
made with respect to
any Mortgage
Loan or REO
Property which remain
unreimbursed in whole
or in part following the Cash Liquidation or REO
Disposition of such
Mortgage Loan or REO Property, minus any such
Advances that were made with respect to delinquencies that ultimately
constituted Excess
Special Hazard Losses,
Excess Fraud Losses,
Excess
Bankruptcy Losses or Extraordinary Losses;
(iv) to the Holders of the
Class M-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(v) to the
Holders of the Class
M-1 Certificates,
an amount equal to the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, applied in reduction of the Certificate
Principal Balance of the Class M-1 Certificates;
(vi) to the Holders of the
Class M-2
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(vii) to the Holders of the Class M-2
Certificates,
an amount equal to the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, applied in reduction of the Certificate
Principal Balance of the Class M-2 Certificates;
(viii) to the Holders of the Class M-3
Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(ix) to the Holders of the Class M-3
Certificates,
an amount equal to the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, applied in reduction of the Certificate
Principal Balance of the Class M-3 Certificates;
(x) to the Holders
of the Class B-1
Certificates, the
Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(xi) to the Holders of the Class B-1
Certificates,
an amount equal to the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, applied in reduction of the Certificate
Principal Balance of the Class B-1 Certificates;
(xii) to the Holders of the Class
B-2 Certificates,
the Accrued
Certificate
Interest thereon
for such Distribution Date, plus any Accrued
Certificate
Interest thereon
remaining
unpaid from any previous
Distribution Date, except as provided below;
(xiii) to the Holders of the Class B-2
Certificates,
an amount equal to the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, applied in reduction of the Certificate
Principal Balance of the Class B-2 Certificates;
(xiv) to the Holders of the Class B-3
Certificates,
an amount equal to the
Accrued Certificate
Interest thereon for
such Distribution
Date, plus
any Accrued
Certificate
Interest thereon remaining unpaid from any
previous Distribution Date, except as provided below;
(xv) to the Holders of the Class B-3
Certificates,
an amount equal to the
Subordinate Principal Distribution Amount for such Class of
Certificates
for such Distribution
Date, applied in reduction of the Certificate
Principal Balance of the Class B-3 Certificates;
(xvi) to the Senior Certificates,
in the priority set forth in Section 4.02(b)
of this Series Supplement, the portion, if any, of the Available
Distribution Amount remaining after the foregoing distributions,
applied
to reduce the Certificate Principal Balances of such Senior
Certificates, but in no event more than the aggregate of the
outstanding
Certificate
Principal
Balances of
each such Class of Senior
Certificates, and
thereafter, to each Class of Subordinate Certificates
then outstanding
beginning with such
Class with the Highest
Priority,
any portion of the Available Distribution Amount remaining after the
Senior Certificates have been retired, applied to reduce the
Certificate
Principal Balance of each such Class of Subordinate Certificates,
but in
no event more than the outstanding Certificate Principal Balance of
each
such Class of Subordinate Certificates; and
(xvii) to the Class R-I Certificates, the balance, if any, of the Available
Distribution Amount.
Notwithstanding the foregoing, on any Distribution Date, with
respect to
the Class of Subordinate Certificates
outstanding on such Distribution Date with
the Lowest Priority, or in the event the
Subordinate
Certificates are no longer
outstanding, the Senior Certificates, Accrued Certificate Interest thereon
remaining unpaid from any previous
Distribution Date will
be distributable only
to the extent that (1) a shortfall in the amounts available to pay Accrued
Certificate Interest on any Class of
Certificates results from an interest rate
reduction in connection with a Servicing Modification, or (2) such unpaid
Accrued Certificate Interest was
attributable to interest shortfalls relating to
the failure of the Master Servicer to make any required Advance, or the
determination by the Master Servicer that any proposed Advance would be a
Nonrecoverable Advance with respect to the related
Mortgage Loan where such
Mortgage Loan has not yet been the subject of a Cash Liquidation or REO
Disposition or the related Liquidation Proceeds, Insurance Proceeds and REO
Proceeds have not yet been distributed to
the Certificateholders.
(b) Distributions
of principal on the Senior Certificates on each
Distribution Date will be made as follows:
(i) the Senior
Principal Distribution
Amount shall be
distributed on a pro
rata basis in accordance with their respective Certificate Principal
Balances to the
Class R-I and Class R-II, until the Certificate
Principal Balances thereof have been reduced to zero;
(ii) any remaining amount shall be distributed on a pro rata basis in
accordance with their respective Certificate Principal Balances to the
Class A-1, Class A-2 and Class A-3 Certificates, until the Certificate
Principal Balances thereof have been reduced to zero; and
(iii) any remaining amount shall be distributed to the
Class X
Certificates,
until the Certificate
Principal Balance of
the Class X-P Component has
been reduced to
zero.
(c) On or after the
occurrence of the
Credit Support
Depletion Date, all
priorities relating to
distributions in Section 4.02(a)(i) and Section
4.02(b) relating to principal and interest among the Senior
Certificates
will be disregarded.
Instead, the Senior Principal Distribution Amount
will be distributed to the Senior Certificates, pro rata, in accordance
with their respective outstanding Certificate Principal
Balances.
(d) After the reduction of the
Certificate Principal
Balances of the Senior
Certificates to zero but prior to the Credit Support Depletion
Date, the
Senior Certificates
will be entitled to no further
distributions
of
principal thereon
and the Available Distribution Amount will be
distributed solely to
the holders of the Subordinate Certificates, in
each case as described herein.
(e) In addition to the foregoing distributions, with respect to any
Subsequent Recoveries, the Master Servicer shall deposit such funds
into
the Custodial Account pursuant to Section 3.07(b)(iii). If, after
taking
into account such Subsequent Recoveries, the amount of a Realized Loss
is reduced, the amount
of such Subsequent
Recoveries will be applied to
increase the Certificate Principal Balance of the Class of
Subordinate
Certificates with the
Highest Priority to which Realized Losses, other
than Excess Bankruptcy
Losses, Excess Fraud Losses, Excess Special
Hazard Losses and Extraordinary Losses, have been allocated,
but not by
more than the amount of Realized Losses previously allocated to that
Class of Certificates
pursuant to Section 4.05. The amount of any
remaining Subsequent
Recoveries
will be applied to increase the
Certificate Principal Balance of the Class of Certificates with the
next
Lower Priority,
up to the amount of
such Realized
Losses previously
allocated to that Class of Certificates pursuant to Section 4.05.
Any
remaining Subsequent
Recoveries will in turn be applied to increase the
Certificate Principal Balance of the Class of Certificates with the
next
Lower Priority
up to the amount of such Realized Losses previously
allocated to that Class of Certificates pursuant to Section 4.05,
and so
on. Holders of such
Certificates will not be entitled to any payment in
respect of Accrued Certificate Interest on the amount of such
increases
for any Interest Accrual Period preceding the Distribution Date on
which
such increase
occurs. Any such increases shall be applied to the
Certificate Principal
Balance of each Certificate of such Class in
accordance with its respective Percentage Interest.
(f) Each
distribution with respect to a Book-Entry Certificate shall be
paid
to the Depository, as Holder thereof, and the Depository shall be
solely
responsible for
crediting the amount of such distribution to the
accounts of its Depository Participants in accordance with its normal
procedures. Each
Depository
Participant
shall be responsible for
disbursing such
distribution
to the Certificate Owners that it
represents and
to each indirect participating brokerage firm (a
"brokerage firm") for
which it acts as agent. Each brokerage firm shall
be responsible for disbursing funds to the Certificate Owners that it
represents. None of
the Trustee, the Certificate Registrar, the Company
or the Master Servicer shall have any responsibility therefor.
(g) Except as
otherwise provided in
Section 9.01,
if the Master
Servicer
anticipates that a
final distribution
with respect to any Class of
Certificates will be
made on the next
Distribution Date,
the Master
Servicer shall,
no later than the
Determination
Date in the month
of
such final
distribution, notify
the Trustee and the Trustee shall, no
later than two (2) Business Days after such Determination
Date, mail on
such date to each Holder of such Class of Certificates a notice to the
effect that: (i) the
Trustee anticipates
that the final
distribution
with respect
to such Class of Certificates will be made on such
Distribution Date but
only upon presentation and surrender of such
Certificates at the
office of the
Trustee or as
otherwise specified
therein, and (ii) no interest shall accrue on such Certificates
from and
after the end of the related Interest Accrual Period. In the event that
Certificateholders
required to surrender their Certificates pursuant to
Section 9.01(c)
do not surrender their Certificates for final
cancellation, the
Trustee shall cause funds distributable with respect
to such Certificates
to be withdrawn from the Certificate Account and
credited to
a
