EXECUTION COPY
RESIDENTIAL ASSET SECURITIES CORPORATION,
Depositor,
RESIDENTIAL FUNDING CORPORATION,
Master Servicer,
and
U.S. BANK NATIONAL ASSOCIATION
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of May 1, 2006
Home Equity Mortgage Asset-Backed Pass-Through Certificates
Series 2006-KS4
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS..................................................................6
Section 1.01.
Definitions.......................................................6
Section 1.02.
Determination of LIBOR...........................................55
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES.............56
Section 2.01.
Conveyance of Mortgage Loans.....................................56
Section 2.02.
Acceptance by Trustee............................................59
Section 2.03.
Representations, Warranties and Covenants of the Master
Servicer and the Depositor.......................................60
Section 2.04.
Representations and Warranties of Sellers........................62
Section 2.05.
Execution and Authentication of Certificates; Conveyance of
Uncertificated REMIC Regular Interests...........................64
Section 2.06.
Purposes and Powers of the Trust.................................64
Section 2.07.
Agreement Regarding Ability to Disclose..........................65
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS..............................65
Section 3.01.
Master Servicer to Act as Servicer...............................65
Section 3.02.
Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' Obligations...........67
Section 3.03.
Successor Subservicers...........................................68
Section 3.04.
Liability of the Master Servicer.................................69
Section 3.05.
No Contractual Relationship Between Subservicer and Trustee
or Certificateholders............................................69
Section 3.06.
Assumption or Termination of Subservicing Agreements by
Trustee..........................................................69
Section 3.07.
Collection of Certain Mortgage Loan Payments; Deposits to
Custodial Account................................................69
Section 3.08.
Subservicing Accounts; Servicing Accounts........................72
Section 3.09.
Access to Certain Documentation and Information Regarding
the Mortgage Loans...............................................73
Section 3.10.
Permitted Withdrawals from the Custodial Account.................73
Section 3.11.
Maintenance of Primary Insurance Coverage........................75
Section 3.12.
Maintenance of Fire Insurance and Omissions and Fidelity
Coverage.........................................................75
Section 3.13.
Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.....................76
Section 3.14.
Realization Upon Defaulted Mortgage Loans........................78
Section 3.15.
Trustee to Cooperate; Release of Mortgage Files..................80
Section 3.16.
Servicing and Other Compensation; Compensating Interest..........81
Section 3.17.
Reports to the Trustee and the Depositor.........................82
Section 3.18.
Annual Statement as to Compliance and Servicing Assessment.......82
Section 3.19.
Annual Independent Public Accountants' Servicing Report..........83
Section 3.20.
Right of the Depositor in Respect of the Master Servicer.........83
Section 3.21.
[Reserved].......................................................84
Section 3.22.
Advance Facility.................................................84
Section 3.23.
Special Servicing................................................87
Section 3.24.
Credit Risk Manager..............................................88
Section 3.25.
Limitation Upon Liability of the Credit Risk Manager.............88
Section 3.26.
Removal of the Credit Risk Manager...............................89
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS..............................................89
Section 4.01.
Certificate Account..............................................89
Section 4.02.
Distributions....................................................90
Section 4.03.
Statements to Certificateholders; Statements to Rating
Agencies; Exchange Act Reporting.................................93
Section 4.04.
Distribution of Reports to the Trustee and the Depositor;
Advances by the Master Servicer..................................97
Section 4.05.
Allocation of Realized Losses....................................98
Section 4.06.
Reports of Foreclosures and Abandonment of Mortgaged
Property........................................................100
Section 4.07.
Optional Purchase of Defaulted Mortgage Loans...................100
Section 4.08.
[Reserved]......................................................101
Section 4.09.
[Reserved]......................................................101
Section 4.10.
Swap Agreement..................................................101
ARTICLE V
THE
CERTIFICATES...........................................................102
Section 5.01.
The Certificates................................................102
Section 5.02.
Registration of Transfer and Exchange of Certificates...........105
Section 5.03.
Mutilated, Destroyed, Lost or Stolen Certificates...............113
Section 5.04.
Persons Deemed Owners...........................................113
Section 5.05.
Appointment of Paying Agent.....................................113
ARTICLE
VI THE DEPOSITOR AND THE MASTER
SERVICER...................................113
Section 6.01.
Respective Liabilities of the Depositor and the Master
Servicer........................................................113
Section 6.02.
Merger or Consolidation of the Depositor or the Master
Servicer; Assignment of Rights and Delegation of Duties by
Master Servicer.................................................114
Section 6.03.
Limitation on Liability of the Depositor, the Master
Servicer and Others.............................................114
Section 6.04.
Depositor and Master Servicer Not to Resign.....................115
ARTICLE VII
DEFAULT....................................................................115
Section 7.01.
Events of Default...............................................115
Section 7.02.
Trustee or Depositor to Act; Appointment of Successor...........117
Section 7.03.
Notification to Certificateholders..............................118
Section 7.04.
Waiver of Events of Default.....................................118
ARTICLE VIII
CONCERNING THE
TRUSTEE.....................................................119
Section 8.01.
Duties of Trustee...............................................119
Section 8.02.
Certain Matters Affecting the Trustee...........................120
Section 8.03.
Trustee Not Liable for Certificates or Mortgage Loans...........121
Section 8.04.
Trustee May Own Certificates....................................122
Section 8.05.
Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification.................................................122
Section 8.06.
Eligibility Requirements for Trustee............................122
Section 8.07.
Resignation and Removal of the Trustee..........................123
Section 8.08.
Successor Trustee...............................................124
Section 8.09.
Merger or Consolidation of Trustee..............................124
Section 8.10.
Appointment of Co-Trustee or Separate Trustee...................124
Section 8.11.
Appointment of Custodians.......................................125
Section 8.12.
Appointment of Office or Agency.................................125
Section 8.13.
DTC Letter of Representations...................................126
Section 8.14.
Swap Agreements.................................................126
ARTICLE IX
TERMINATION................................................................126
Section 9.01.
Termination Upon Purchase or Liquidation of All Mortgage
Loans...........................................................126
Section 9.02.
Additional Termination Requirements.............................130
ARTICLE X
REMIC
PROVISIONS...........................................................131
Section 10.01.
REMIC Administration............................................131
Section 10.02.
Master Servicer, REMIC Administrator and Trustee
Indemnification.................................................134
ARTICLE XI
MISCELLANEOUS
PROVISIONS...................................................134
Section 11.01.
Amendment.......................................................134
Section 11.02.
Recordation of Agreement; Counterparts..........................137
Section 11.03.
Limitation on Rights of Certificateholders......................137
Section 11.04.
Governing Law...................................................138
Section 11.05.
Notices.........................................................138
Section 11.06.
Notices to Rating Agencies......................................138
Section 11.07.
Severability of Provisions......................................139
Section 11.08.
Supplemental Provisions for Resecuritization....................139
Section 11.09.
Third-Party Beneficiary.........................................140
Section 11.10.
Tax Treatment...................................................140
ARTICLE XII
COMPLIANCE WITH REGULATION
AB..............................................140
Section 12.01.
Intent of Parties; Reasonableness...............................140
Section 12.02.
Additional Representations and Warranties of the Trustee........140
Section 12.03.
Information to be Provided by the Trustee.......................141
Section 12.04.
Report on Assessment of Compliance and Attestation..............141
Section 12.05.
Indemnification; Remedies.......................................142
Exhibit A
Form of Class A
Certificate................................................A-1
Exhibit B-1
Form of Class M
Certificate..............................................B-1-1
Exhibit B-2
Form of Class B
Certificate..............................................B-2-1
Exhibit C
Form of Class SB
Certificate...............................................C-1
Exhibit D
Form of Class R
Certificate................................................D-1
Exhibit E
Form of Custodial
Agreement................................................E-1
Exhibit F
Mortgage Loan
Schedule.....................................................F-1
Exhibit G
Form of Request for
Release................................................G-1
Exhibit H-1
Form of Transfer Affidavit and
Agreement.................................H-1-1
Exhibit H-2
Form of Transferor
Certificate...........................................H-2-1
Exhibit I
Form of Investor Representation
Letter.....................................I-1
Exhibit J
Form of Transferor Representation
Letter...................................J-1
Exhibit K
Text of Amendment to Pooling and Servicing Agreement Pursuant to
Section 11.01(e) for a Limited
Guaranty....................................K-1
Exhibit L
Form of Limited
Guaranty...................................................L-1
Exhibit M
Form of Lender Certification for Assignment of Mortgage
Loan...............M-1
Exhibit N-1
Form of Rule 144A Investment Representation
Letter.......................N-1-1
Exhibit N-2
Form of Transferor Certificate (144A Transferor to 144A
Transferee)......N-2-1
Exhibit N-3
Form of Transferor Certificate (144A Transferor to Regulation S
Transferee)..............................................................N-3-1
Exhibit N-4
Form of Regulation S Transferee
Certificate..............................N-4-1
Exhibit N-5
Form of Accredited InvestorTransferee
Certificate........................N-4-1
Exhibit N-6
Form of Transferor Certificate (Regulation S
Transferor).................N-4-1
Exhibit O
Swap
Agreement.............................................................O-1
Exhibit P
Form of ERISA
Letter.......................................................P-1
Exhibit Q
SB-AM Swap
Agreement.......................................................Q-1
Exhibit R
Assignment
Agreement.......................................................R-1
Exhibit S
Servicing
Criteria.........................................................S-1
Exhibit T-1
Form of 10-K
Certification...............................................T-1-1
Exhibit T-2
Form of Back-Up
Certification............................................T-2-1
Exhibit U
Information to be Provided by the Master Servicer to the Rating
Agencies Relating to Reportable Modified Mortgage
Loans....................U-1
Exhibit V
Form of Certificate to be Given by Certificate
Owner.......................V-1
Exhibit W
Form of Certificate to be Given by Euroclear or
Cedel......................W-1
This Pooling and Servicing
Agreement,
effective as of May 1, 2006, among RESIDENTIAL
ASSET SECURITIES
CORPORATION,
as the depositor
(together with its permitted
successors and
assigns,
the "Depositor"),
RESIDENTIAL
FUNDING
CORPORATION,
as master servicer
(together
with its permitted
successors
and assigns,
the "Master
Servicer"),
and U.S. BANK NATIONAL
ASSOCIATION,
a banking association
organized under the laws of the United States, as trustee
(together with its permitted successors and assigns, the
"Trustee").
PRELIMINARY STATEMENT:
The
Depositor
intends
to
sell
mortgage
asset-backed
pass-through
certificates
(collectively,
the "Certificates"),
to be issued hereunder in sixteen Classes,
which in the
aggregate
will evidence the entire
beneficial
ownership
interest in the Mortgage Loans (as
defined herein) and certain other related assets.
REMIC I
As
provided
herein,
the
REMIC
Administrator
will make an
election
to treat the
segregated
pool of assets
consisting of the Mortgage
Loans and certain other related assets
(exclusive
of the Swap Account and the Swap
Agreement)
subject to this
Agreement as a real
estate
mortgage
investment
conduit (a "REMIC") for federal
income tax
purposes,
and such
segregated
pool of assets will be
designated as "REMIC I." The Class R-I
Certificates
will
represent
the sole
Class
of
"residual
interests"
in REMIC I for
purposes
of the
REMIC
Provisions
(as
defined
herein)
under
federal
income
tax
law.
The
following
table
irrevocably
sets forth the
designation,
remittance rate (the
"Uncertificated
REMIC I Pass
Through
Rate")
and
initial
Uncertificated
Principal
Balance
for
each
of the
"regular
interests"
in REMIC I (the
"REMIC I
Regular
Interests").
The
"latest
possible
maturity
date"
(determined
solely for
purposes of
satisfying
Treasury
regulation
Section
1.860G
1(a)(4)(iii))
for each
REMIC I Regular
Interest
shall be the
Maturity
Date.
None of the
REMIC I Regular Interests will be certificated.
UNCERTIFICATED
REMIC I
INITIAL UNCERTIFICATED REMIC I
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
I-1-A
Variable(1)
$
3,660,687.29
June 2036
I-2-A
Variable(1)
$
4,838,520.61
June 2036
I-3-A
Variable(1)
$
6,014,218.03
June 2036
I-4-A
Variable(1)
$
7,172,352.50
June 2036
I-5-A
Variable(1)
$
8,295,571.99
June 2036
I-6-A
Variable(1)
$
9,350,594.62
June 2036
I-7-A
Variable(1)
$
10,274,291.92
June 2036
I-8-A
Variable(1)
$
11,077,346.28
June 2036
I-9-A
Variable(1)
$
11,734,292.56
June 2036
I-10-A
Variable(1)
$
12,254,557.26
June 2036
I-11-A
Variable(1)
$
12,413,172.57
June 2036
I-12-A
Variable(1)
$
12,019,711.28
June 2036
I-13-A
Variable(1)
$
11,432,766.96
June 2036
I-14-A
Variable(1)
$
10,938,297.61
June 2036
I-15-A
Variable(1)
$
10,466,038.82
June 2036
I-16-A
Variable(1)
$
10,005,154.74
June 2036
I-17-A
Variable(1)
$
9,756,489.65
June 2036
I-18-A
Variable(1)
$
9,536,840.85
June 2036
I-19-A
Variable(1)
$
9,344,627.36
June 2036
I-20-A
Variable(1)
$
9,366,486.85
June 2036
I-21-A
Variable(1)
$
10,792,282.86
June 2036
I-22-A
Variable(1)
$
13,209,629.79
June 2036
I-23-A
Variable(1)
$
12,897,287.91
June 2036
I-24-A
Variable(1)
$
11,394,285.98
June 2036
I-25-A
Variable(1)
$
9,961,709.71
June 2036
I-26-A
Variable(1)
$
8,041,637.41
June 2036
I-27-A
Variable(1)
$
5,768,221.47
June 2036
I-28-A
Variable(1)
$
4,858,175.61
June 2036
I-29-A
Variable(1)
$
4,581,373.70
June 2036
I-30-A
Variable(1)
$
4,320,681.18
June 2036
I-31-A
Variable(1)
$
303,845.67
June 2036
I-32-A
Variable(1)
$
3,705,645.17
June 2036
I-33-A
Variable(1)
$
3,495,739.42
June 2036
I-34-A
Variable(1)
$
3,297,962.13
June 2036
I-35-A
Variable(1)
$
3,111,418.53
June 2036
I-36-A
Variable(1)
$
2,935,453.94
June 2036
I-37-A
Variable(1)
$
2,769,963.46
June 2036
I-38-A
Variable(1)
$
2,652,268.59
June 2036
I-39-A
Variable(1)
$
2,559,850.17
June 2036
I-40-A
Variable(1)
$
2,416,490.54
June 2036
I-41-A
Variable(1)
$
2,281,362.37
June 2036
I-42-A
Variable(1)
$
2,153,988.93
June 2036
I-43-A
Variable(1)
$
2,033,976.56
June 2036
I-44-A
Variable(1)
$
34,386,729.22
June 2036
I-1-B
Variable(1)
$
3,660,687.29
June 2036
I-2-B
Variable(1)
$
4,838,520.61
June 2036
I-3-B
Variable(1)
$
6,014,218.03
June 2036
I-4-B
Variable(1)
$
7,172,352.50
June 2036
I-5-B
Variable(1)
$
8,295,571.99
June 2036
I-6-B
Variable(1)
$
9,350,594.62
June 2036
I-7-B
Variable(1)
$
10,274,291.92
June 2036
I-8-B
Variable(1)
$
11,077,346.28
June 2036
I-9-B
Variable(1)
$
11,734,292.56
June 2036
I-10-B
Variable(1)
$
12,254,557.26
June 2036
I-11-B
Variable(1)
$
12,413,172.57
June 2036
I-12-B
Variable(1)
$
12,019,711.28
June 2036
I-13-B
Variable(1)
$
11,432,766.96
June 2036
I-14-B
Variable(1)
$
10,938,297.61
June 2036
I-15-B
Variable(1)
$
10,466,038.82
June 2036
I-16-B
Variable(1)
$
10,005,154.74
June 2036
I-17-B
Variable(1)
$
9,756,489.65
June 2036
I-18-B
Variable(1)
$
9,536,840.85
June 2036
I-19-B
Variable(1)
$
9,344,627.36
June 2036
I-20-B
Variable(1)
$
9,366,486.85
June 2036
I-21-B
Variable(1)
$
10,792,282.86
June 2036
I-22-B
Variable(1)
$
13,209,629.79
June 2036
I-23-B
Variable(1)
$
12,897,287.91
June 2036
I-24-B
Variable(1)
$
11,394,285.98
June 2036
I-25-B
Variable(1)
$
9,961,709.71
June 2036
I-26-B
Variable(1)
$
8,041,637.41
June 2036
I-27-B
Variable(1)
$
5,768,221.47
June 2036
I-28-B
Variable(1)
$
4,858,175.61
June 2036
I-29-B
Variable(1)
$
4,581,373.70
June 2036
I-30-B
Variable(1)
$
4,320,681.18
June 2036
I-31-B
Variable(1)
$
303,845.67
June 2036
I-32-B
Variable(1)
$
3,705,645.17
June 2036
I-33-B
Variable(1)
$
3,495,739.42
June 2036
I-34-B
Variable(1)
$
3,297,962.13
June 2036
I-35-B
Variable(1)
$
3,111,418.53
June 2036
I-36-B
Variable(1)
$
2,935,453.94
June 2036
I-37-B
Variable(1)
$
2,769,963.46
June 2036
I-38-B
Variable(1)
$
2,652,268.59
June 2036
I-39-B
Variable(1)
$
2,559,850.17
June 2036
I-40-B
Variable(1)
$
2,416,490.54
June 2036
I-41-B
Variable(1)
$
2,281,362.37
June 2036
I-42-B
Variable(1)
$
2,153,988.93
June 2036
I-43-B
Variable(1)
$
2,033,976.56
June 2036
I-44-B
Variable(1)
$
34,386,729.22
June 2036
A-I
Variable(1)
$
12,606,079.00
June 2036
_______________
(1) Calculated as provided in the definition of Uncertificated
REMIC I Pass-Through Rate.
REMIC II
As
provided
herein,
the
REMIC
Administrator
will make an
election
to treat the
segregated pool of assets
consisting of the REMIC I Regular
Interests as a REMIC for federal
income tax
purposes,
and such
segregated
pool of assets will be
designated as "REMIC II."
The Class R-II
Certificates
will
represent the sole Class of "residual
interests" in REMIC
II for purposes of the REMIC
Provisions
(as defined
herein) under
federal
income tax law.
The
following
table
irrevocably
sets
forth
the
designation,
remittance
rate
(the
"Uncertificated REMIC II Pass-Through Rate") and initial
Uncertificated
Principal Balance for
each of the "regular
interests" in REMIC II (the "REMIC II Regular
Interests").
The "latest
possible
maturity date"
(determined
solely for purposes of satisfying
Treasury
regulation
Section 1.860G
1(a)(4)(iii))
for each REMIC II Regular
Interest shall be the Maturity Date.
None of the REMIC II Regular Interests will be certificated.
UNCERTIFICATED
INITIAL UNCERTIFICATED
REMIC II
REMIC II
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
LT1
Variable(1)
$
700,250,721.22
June 2036
LT2
Variable(1)
$
20,716.24
June 2036
LT3
Variable(1)
$
49,320.77
June 2036
LT4
Variable(1)
$
49,320.77
June 2036
LT-IO
Variable(1)
(2)
June 2036
_______________
(1) Calculated as provided in the definition of Uncertificated
REMIC II Pass-Through Rate.
(2) REMIC II
Regular
Interest LT-IO will not have an
Uncertificated
Principal
Balance but
will accrue interest on its
uncertificated
notional amount calculated in accordance with
the definition of "Uncertificated Notional Amount" herein.
REMIC III
As provided herein,
the REMIC
Administrator
will elect to treat the segregated pool
of assets
consisting
of the REMIC II Regular
Interests
as a REMIC for
federal
income tax
purposes,
and such
segregated
pool of assets
will be
designated
as REMIC III.
The Class
R-III
Certificates
will
represent
the sole Class of "residual
interests" in REMIC III for
purposes
of
the
REMIC
Provisions
under
federal
income
tax
law.
The
following
table
irrevocably
sets forth the
designation,
Pass Through Rate,
aggregate
Initial
Certificate
Principal Balance,
certain features,
month of Final Scheduled
Distribution Date and initial
ratings
for
each
Class of
Certificates
comprising
the
interests
representing
"regular
interests"
in
REMIC
III.
The
"latest
possible
maturity
date"
(determined
solely
for
purposes of satisfying
Treasury
Regulation
Section 1.860G
1(a)(4)(iii))
for each of REMIC
III Regular Interest shall be the Maturity Date.
Month of
Final
Aggregate Initial
Scheduled
Pass-Through
Certificate
Distribution
Designation
Type
Rate
Principal Balance
Features
Date
S&P
Moody's
Class A-1
Regular(1)
Adjustable(2)(3)
$282,245,000.00
Senior/Adjustable
March 2028
AAA
Aaa
Rate
Class A-2
Regular(1)
Adjustable(2)(3)
$100,123,000.00
Senior/Adjustable
July 2031
AAA
Aaa
Rate
Class A-3
Regular(1)
Adjustable(2)(3)
$104,883,000.00
Senior/Adjustable
January 2035
AAA
Aaa
Rate
Class A-4
Regular(1)
Adjustable(2)(3)
$59,038,000.00
Senior/Adjustable
June 2036
AAA
Aaa
Rate
Class M-1
Regular(1)
Adjustable(2)(3)
$26,614,000.00
Mezzanine/Adjustable
June 2036
AA+
Aa1
Rate
Class M-2
Regular(1)
Adjustable(2)(3)
$24,863,000.00
Mezzanine/Adjustable
June 2036
AA
Aa2
Rate
Class M-3
Regular(1)
Adjustable(2)(3)
$14,358,000.00
Mezzanine/Adjustable
June 2036
AA-
Aa3
Rate
Class M-4
Regular(1)
Adjustable(2)(3)
$12,957,000.00
Mezzanine/Adjustable
June 2036
A+
A1
Rate
Class M-5
Regular(1)
Adjustable(2)(3)
$11,906,000.00
Mezzanine/Adjustable
June 2036
A
A2
Rate
Class M-6
Regular(1)
Adjustable(2)(3)
$11,556,000.00
Mezzanine/Adjustable
June 2036
A-
A3
Rate
Class M-7
Regular(1)
Adjustable(2)(3)
$10,506,000.00
Mezzanine/Adjustable
June 2036
BBB+
Baa1
Rate
Class M-8
Regular(1)
Adjustable(2)(3)
$ 9,805,000.00
Mezzanine/Adjustable
June 2036
BBB
Baa2
Rate
Class M-9
Regular(1)
Adjustable(2)(3)
$ 7,004,000.00
Mezzanine/Adjustable
June 2036
BBB-
Baa3
Rate
Class M-10
Regular(1)
Adjustable(2)(3)
$ 4,903,000.00
Mezzanine/Adjustable
June 2036
BBB-
Ba1
Rate
Class B
Regular(1)
Adjustable(2)(3)
$ 7,003,000.00
Mezzanine/Adjustable
June 2036
BB+
Ba2
Rate
Class SB
Regular
(4)
$12,606,078.78
Subordinate
N/R
N/R
(4)
IO
Regular
(6)
(7)
Interest Only
N/R
N/R
(5)
___________________
(1) This Class of Certificates
represents
ownership of a REMIC III Regular Interest together
with (i)
certain
rights to
payments
to be made from
amounts
received
under the Swap
Agreement
which will be deemed made for federal income tax purposes
outside of REMIC III
by the holder of the Class SB
Certificates
as the owner of the Swap
Agreement
and (ii)
the obligation to pay the Class IO
Distribution
Amount.
Any amount
distributed on this
Class of Certificates on any
Distribution
Date in excess of the amount
distributable on
the related
REMIC III
Regular
Interest on such
Distribution
Date shall be treated for
federal
income tax
purposes
as having
been paid from the Swap
Account
and any amount
distributable on such REMIC III
Regular Interest on such
Distribution
Date in excess of
the amount
distributable on such Class of Certificates on such Distribution
Date shall be
treated as having been paid to the Swap Account,
all pursuant to and as further
provided
in Section 4.10 hereof.
(2) The
REMIC III
Regular
Interests
ownership
of
which
is
represented
by the
Class A
Certificates and the Class M Certificates,
will accrue interest at a per annum rate equal
to LIBOR plus the
applicable
Margin,
each
subject to a payment cap as described in the
definition
of
"Pass-Through
Rate" and the
provisions
for the
payment
of Basis
Risk
Shortfalls
herein,
which
payments will not be part of the
entitlement of the REMIC III
Regular Interests related to such Certificates.
(3) The Class A
Certificates
and Class M
Certificates
will also entitle
their
holders to
certain
payments from the Holder of the Class SB
Certificates
from amounts to which the
related
REMIC III
Regular
Interest is entitled and from amounts received under the Swap
Agreement, which will not be a part of their ownership of the REMIC
III Regular Interests.
(4) The Class SB
Certificates
will accrue interest as described in the definition of Accrued
Certificate
Interest.
The
Class SB
Certificates
will
not
accrue
interest
on their
Certificate
Principal
Balance.
The
Class SB
Certificates
will
be
comprised
of two
REMIC III
regular
interests,
a principal only regular interest
designated SB-PO and an
interest only regular interest
designated SB-IO,
which will be entitled to distributions
as set forth
herein.
The rights of the Holder of the Class SB
Certificates
to payments
from the Swap
Agreement
shall be outside and apart from its rights
under the
REMIC III
Regular Interests SB-IO and SB-PO.
(5) REMIC III Regular Interest IO will be held as an asset of the
Swap Account
established by
the Trustee and will be treated for federal
income tax purposes as owned by the holder of
the Class SB Certificate.
(6) For
federal
income
tax
purposes,
REMIC III
Regular
Interest
IO
will
not
have
a
Pass-Through
Rate,
but will be entitled to 100% of the amounts
distributed
on REMIC II
Regular Interest LT-IO.
(7) For
federal
income
tax
purposes,
REMIC III
Regular
Interest
IO
will
not
have an
Uncertificated
Principal
Balance,
but
will
have
a
notional
amount
equal
to
the
Uncertificated Notional Amount of REMIC II Regular Interest LT-IO.
In consideration of the mutual agreements herein contained,
the Depositor, the Master
Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01.
Definitions.
Whenever used in this Agreement,
the following words and phrases,
unless the context
otherwise requires, shall have the meanings specified in this
Article.
Accredited Investor:
The meaning specified in Rule 501(a) of the Securities Act.
Accrued
Certificate
Interest:
With
respect
to each
Distribution
Date
and
each
Class of Class A Certificates,
Class M Certificates and Class B Certificates, an amount equal
to the
interest
accrued
during
the
related
Interest
Accrual
Period on the
Certificate
Principal
Balance
thereof
immediately
prior
to
such
Distribution
Date
at the
related
Pass-Through Rate for that Distribution Date.
The amount of Accrued
Certificate
Interest
on each Class of
Certificates
shall be
reduced by the amount of Prepayment
Interest
Shortfalls on the related Mortgage Loans during
the prior
calendar
month to the extent not
covered by
Compensating
Interest
pursuant
to
Section 3.16,
and Relief Act Shortfalls on the related
Mortgage Loans during the related Due
Period.
All such
reductions
with respect to the Mortgage Loans will be allocated
among the
Certificates
in
proportion
to the amount of Accrued
Certificate
Interest
payable on such
Certificates on such Distribution Date absent such reductions.
Accrued
Certificate
Interest for any
Distribution
Date shall further be reduced by
the interest
portion of Realized Losses
allocated to any Class of
Certificates
pursuant to
Section 4.05.
Accrued
Certificate
Interest
shall
accrue on the
basis of a 360-day
year and the
actual number of days in the related Interest Accrual Period.
With
respect
to each
Distribution
Date
and the
Class SB
Certificates,
interest
accrued
during
the
preceding
Interest
Accrual
Period
at the
Pass-Through
Rate
on the
Uncertificated
Notional
Amount
as
specified
in
the
definition
of
Pass-Through
Rate,
immediately prior to such Distribution Date,
reduced by any interest
shortfalls with respect
to the Mortgage Loans,
including
Prepayment Interest Shortfalls to the extent not covered by
Compensating
Interest
pursuant
to
Section 3.16
or
by
Excess
Cash
Flow
pursuant
to
Section 4.02(c)(v)
and (vi). Accrued Certificate Interest on the Class SB
Certificates shall
accrue on the basis of a 360-day year and the actual
number
of days in the related
Interest
Accrual Period.
Adjusted
Available
Distribution
Amount:
With respect to any Distribution Date, the
Available
Distribution
Amount increased by the excess,
if any, of the Net Swap Payment owed
to the Swap
Counterparty
over the amount
distributable on such Distribution Date in respect
of the REMIC III Regular Interest IO.
Adjusted
Mortgage
Rate:
With
respect
to
any
Mortgage
Loan
and
any
date
of
determination,
the Mortgage Rate borne by the related
Mortgage Note,
less the rate at which
the related Subservicing Fee accrues.
Adjustment
Date:
With respect to each
adjustable-rate
Mortgage Loan, each date set
forth in the
related
Mortgage
Note on
which an
adjustment
to the
interest
rate on such
Mortgage Loan becomes effective.
Advance:
With respect to any Mortgage Loan, any advance made by the Master
Servicer,
pursuant to Section 4.04.
Affected Party:
As defined in the Swap Agreement.
Affiliate:
With respect to any Person,
any other Person
controlling,
controlled by
or under
common
control
with
such
first
Person.
For the
purposes
of this
definition,
"control"
means the power to direct the management
and policies of such Person,
directly or
indirectly,
whether
through the
ownership of voting
securities,
by contract or otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
Agreement:
This
Pooling
and
Servicing
Agreement
and all
amendments
hereof
and
supplements hereto.
Amount
Held for Future
Distribution:
With
respect to any
Distribution
Date,
the
total of the amounts held in the
Custodial
Account at the close of business on the preceding
Determination Date on account of (i) Liquidation
Proceeds,
Subsequent Recoveries,
Insurance
Proceeds,
REO
Proceeds,
Principal
Prepayments,
Mortgage Loan
purchases
made pursuant to
Section 2.02,
2.03,
2.04
or
4.07
and
Mortgage
Loan
substitutions
made
pursuant
to
Section 2.03 or 2.04 received or made in the month of such
Distribution Date (other than such
Liquidation Proceeds,
Subsequent
Recoveries,
Insurance Proceeds, REO Proceeds and purchases
of Mortgage
Loans that the Master
Servicer has deemed to have been received in the preceding
month in accordance with
Section 3.07(b))
and (ii) payments which represent early receipt of
scheduled
payments of principal
and interest
due on a date or dates
subsequent
to the Due
Date in the related Due Period.
Applicable
Procedures:
The applicable rules,
regulations and procedures utilized or
imposed by any Clearance System or the Depository.
Appraised
Value:
With
respect
to any
Mortgaged
Property,
the
lesser of (i) the
appraised
value of such
Mortgaged
Property based upon the appraisal made at the time of the
origination of the related
Mortgage Loan, and (ii) the sales price of the Mortgaged
Property
at
such
time
of
origination,
except
in the
case
of a
Mortgaged
Property
securing
a
refinanced or modified
Mortgage Loan as to which it is either the appraised
value based upon
the appraisal
made at the time of
origination
of the loan which was
refinanced or modified
or
the
appraised
value
determined
in
an
appraisal
at
the
time
of
refinancing
or
modification, as the case may be.
Assignment:
An
assignment
of
the
Mortgage,
notice
of
transfer
or
equivalent
instrument,
in recordable form,
sufficient
under the laws of the
jurisdiction
wherein the
related
Mortgaged
Property is located to reflect of record the sale of the Mortgage
Loan to
the Trustee for the benefit of
Certificateholders,
which
assignment,
notice of transfer or
equivalent
instrument
may
be in
the
form
of one or
more
blanket
assignments
covering
Mortgages
secured by Mortgaged
Properties
located in the same
county,
if permitted by law
and accompanied by an Opinion of Counsel to that effect.
Assignment
Agreement:
The
Assignment and
Assumption
Agreement,
dated the Closing
Date,
between
Residential
Funding and the Depositor relating to the transfer and assignment
of the Mortgage Loans, attached hereto as Exhibit R.
Available
Distribution Amount: With respect to any Distribution Date, an
amount equal
to (a) the sum of (i) the
amount
relating to the Mortgage
Loans on deposit in the Custodial
Account
as of
the
close
of
business
on the
immediately
preceding
Determination
Date,
including
any
Subsequent
Recoveries,
and amounts
deposited
in the
Custodial
Account in
connection with the substitution of Qualified
Substitute
Mortgage Loans,
(ii) the amount of
any Advance made on the immediately
preceding
Certificate
Account Deposit Date with respect
to the Mortgage Loans,
(iii) any amount
deposited in the Certificate
Account on the related
Certificate
Account
Deposit
Date
pursuant to the second
paragraph of
Section 3.12(a)
in
respect of the Mortgage
Loans,
(iv) any amount that the Master
Servicer is not permitted to
withdraw from the Custodial
Account
pursuant to
Section 3.16(e)
in respect of the Mortgage
Loans,
and (v) any amount
deposited in the Certificate
Account
pursuant to Section 4.07 or
9.01 in respect of the Mortgage
Loans,
reduced by (b) the sum as of the close of business on
the immediately
preceding
Determination Date of (x) the Amount Held for Future
Distribution
with
respect to the
Mortgage
Loans,
(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) and (z) any Net Swap Payments required to be
made to
the Swap
Counterparty and Swap Termination
Payments not due to a Swap
Counterparty
Trigger
Event for such Distribution Date.
Balloon Loan:
Each of the Mortgage
Loans having an original term to maturity that is
shorter than the related amortization term.
Balloon
Payment:
With
respect to any
Balloon
Loan,
the related
Monthly
Payment
payable on the stated maturity date of such Balloon Loan.
Bankruptcy Code:
The Bankruptcy Code of 1978, as amended.
Basis
Risk
Shortfalls:
With
respect to each
Class of
the
Class A
Certificates,
Class M Certificates and Class B Certificates,
and any Distribution Date, the sum of (a) with
respect
to any
Distribution
Date on
which
the Net WAC Cap Rate is used to
determine
the
Pass-Through
Rate of such Class,
an amount
equal to the excess of
(x) Accrued
Certificate
Interest
for such
Class
calculated
at a per annum
rate
equal to LIBOR
plus the
related
Margin
for
such
Distribution
Date
(which
shall
not
exceed
14.000%
per
annum),
over
(y) Accrued
Certificate
Interest
for
such
Class calculated
using
the Net WAC Cap
Rate,
(b) any
shortfalls for such
Class calculated
pursuant to clause (a) above
remaining unpaid
from
prior
Distribution
Dates,
and
(c) one
month's
interest
on the
amount
in
clause
(b) (based on the number
of days in the
preceding
Interest
Accrual
Period) at a per annum
rate equal to the Pass-Through Rate for such period.
Book-Entry
Certificate:
Any Certificate
registered in the name of the Depository or
its nominee.
Business
Day:
Any day other than (i) a
Saturday
or a Sunday or (ii) a day on which
banking institutions in the State of California,
the State of Minnesota,
the State of Texas,
the State of New York or the State of
Illinois
(and such other
state or states in which the
Custodial
Account
or the
Certificate
Account
are at the time
located)
are
required
or
authorized by law or executive order to be closed.
Calendar
Quarter:
A Calendar
Quarter
shall
consist of one of the
following
time
periods
in any given
year:
January 1 through
March
31,
April 1 through
June 30,
July 1
through September 30, and October 1 through December 31.
Capitalization
Reimbursement
Amount:
With
respect to any
Distribution
Date,
the
amount of Advances or Servicing
Advances that were added to the Stated
Principal
Balance of
the Mortgage Loans during the prior
calendar
month and reimbursed to the Master
Servicer or
Subservicer on or prior to such Distribution Date pursuant to
Section 3.10(a)(vii).
Cash
Liquidation:
With respect to any defaulted
Mortgage Loan other than a Mortgage
Loan as to which an REO Acquisition
occurred,
a determination by the Master Servicer that it
has
received
all
Insurance
Proceeds,
Liquidation
Proceeds
and
other
payments
or cash
recoveries
which the
Master
Servicer
reasonably
and in good
faith
expects to be finally
recoverable with respect to such Mortgage Loan.
Certificate:
Any
Class A
Certificate,
Class M
Certificate,
Class B
Certificate,
Class SB Certificate or Class R Certificate.
Certificate
Account:
The account or
accounts
created
and
maintained
pursuant to
Section 4.01,
which shall be entitled "U.S. Bank National
Association,
as trustee, in trust
for the registered holders of Residential Asset Securities
Corporation,
Home Equity Mortgage
Asset-Backed Pass-Through
Certificates,
Series 2006-KS4" and which account shall be held for
the benefit of the Certificateholders and which must be an Eligible
Account.
Certificate
Account
Deposit
Date:
With
respect
to
any
Distribution
Date,
the
Business Day prior thereto.
Certificateholder
or Holder:
The Person in whose name a Certificate is registered in
the Certificate
Register,
except that neither a Disqualified
Organization
nor a Non-United
States Person shall be a holder of a Class R
Certificate for any purpose
hereof.
Solely for
the purpose of giving any consent or direction
pursuant to this Agreement,
any
Certificate,
other
than a
Class R
Certificate,
registered
in the
name of the
Depositor,
the
Master
Servicer or any
Subservicer
or any Affiliate
thereof shall be deemed not to be
outstanding
and the
Percentage
Interest
or Voting
Rights
evidenced
thereby
shall not be taken
into
account in determining
whether the requisite amount of Percentage
Interests or Voting Rights
necessary to effect any such consent or direction has been
obtained.
All
references
herein
to "Holders" or
"Certificateholders"
shall reflect the rights of Certificate
Owners as they
may
indirectly
exercise
such
rights
through
the
Depository
and
participating
members
thereof,
except as otherwise specified herein;
provided,
however, that the Trustee shall be
required to
recognize
as a "Holder" or
"Certificateholder"
only the Person in whose name a
Certificate is registered in the
Certificate
Register.
Unless
otherwise
indicated in this
Agreement,
the Custodial
Agreement or the Assignment
Agreement,
whenever reference is made
to the actions taken by the Trustee on behalf of the
Certificateholders.
Certificate
Owner:
With respect to a Book-Entry
Certificate,
the Person who is the
beneficial owner of such Certificate,
as reflected on the books of an indirect
participating
brokerage
firm for which a Depository
Participant
acts as agent,
if any, and
otherwise on
the books of a Depository Participant, if any, and otherwise on the
books of the Depository.
Certificate
Principal
Balance:
With
respect to any
Class A
Certificate,
Class M
Certificate or Class B Certificate,
on any date of determination,
an amount equal to (i) the
Initial
Certificate
Principal
Balance of such Certificate as specified on the face thereof,
minus (ii) the sum of (x) the
aggregate of all amounts
previously
distributed
with respect
to such
Certificate
(or any predecessor
Certificate)
and applied to reduce the Certificate
Principal
Balance
thereof
pursuant
to
Section 4.02(c)
and
(y) the
aggregate
of
all
reductions
in
Certificate
Principal
Balance
deemed to have
occurred in
connection
with
Realized
Losses which were
previously
allocated
to such
Certificate
(or any
predecessor
Certificate) pursuant to Section 4.05;
provided,
that with respect to any Distribution Date,
the Certificate
Principal Balance of any outstanding Class of Class A
Certificates,
Class M
Certificates
or Class B
Certificates
(with
respect to the Class A
Certificates,
on a pro
rata basis based on the amount of Realized
Loss
previously
allocated
thereto and remaining
unreimbursed)
to which a Realized
Loss was
previously
allocated
and remains
unreimbursed
will be
increased,
to the
extent
of
Realized
Losses
previously
allocated
thereto
and
remaining
unreimbursed,
but only to the extent of Subsequent
Recoveries received during the
preceding
calendar
month.
With
respect
to
any
Class SB
Certificate,
on
any
date
of
determination,
an amount equal to the
Percentage
Interest
evidenced
by such
Certificate,
multiplied
by an amount equal to (i) the
excess,
if any, of (A) the then
aggregate
Stated
Principal
Balance of the Mortgage
Loans over (B) the then
aggregate
Certificate
Principal
Balance of the
Class A
Certificates,
Class M
Certificates
and Class B
Certificates
then
outstanding,
which
represents the sum of (i) the Initial
Principal
Balance of the REMIC II
Regular
Interest SB-PO, as reduced by Realized Losses
allocated
thereto and payments deemed
made thereon,
and
(ii) accrued
and unpaid interest on the REMIC II
Regular Interest SB-IO,
as reduced by Realized Losses
allocated
thereto.
The Class R
Certificates
will not have a
Certificate Principal Balance.
Certificate
Register
and
Certificate
Registrar:
The register
maintained
and the
registrar appointed pursuant to Section 5.02.
Class:
Collectively,
all of the Certificates or uncertificated interests bearing the
same designation.
Class A
Certificates:
Collectively,
the
Class A-1
Certificates,
Class A-2
Certificates, Class A-3 Certificates and Class A-4 Certificates.
Class A
Principal
Distribution
Amount:
With
respect
to
any
Distribution
Date
(a) prior
to the
Stepdown
Date or on or after the
Stepdown
Date if a Trigger
Event is in
effect for that
Distribution
Date, the Principal
Distribution
Amount for that Distribution
Date or (b) on or
after
the
Stepdown
Date if a
Trigger
Event is not in
effect
for that
Distribution Date, the lesser of:
(i)....the Principal Distribution Amount for that Distribution
Date; and
(ii)...the excess, if any, of (A) the aggregate
Certificate
Principal Balance
of the Class A
Certificates
immediately
prior to that Distribution Date over (B) the lesser
of (x) the
product
of (1) the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be
made on that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the
Mortgage
Loans
after
giving
effect
to
distributions
to be made on that
Distribution Date, over the Overcollateralization Floor.
Class A-1
Certificate:
Any one of the Class A-1 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit A,
senior to the Class M Certificates,
Class B
Certificates,
Class SB Certificates
and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
as set
forth in
Section 4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in
REMIC III
for
purposes
of the REMIC
Provisions,
(ii) the right to
receive
payments under the Swap
Agreement and (iii) the
obligation to pay the Class IO
Distribution
Amount.
Class A-1
Margin:
Initially,
0.40% per annum,
and on any
Distribution
Date on or
after the second
Distribution Date after the first possible Optional
Termination Date, 0.80%
per annum.
Class A-2
Certificate:
Any one of the Class A-2 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit A,
senior to the Class M Certificates,
Class B
Certificates,
Class SB Certificates
and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
as set
forth in
Section 4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in
REMIC III
for
purposes
of the REMIC
Provisions,
(ii) the right to
receive
payments under the Swap
Agreement and (iii) the
obligation to pay the Class IO
Distribution
Amount.
Class A-2
Margin:
Initially,
0.100% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.200% per annum.
Class A-3
Certificate:
Any one of the Class A-3 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit A,
senior to the Class M Certificates,
Class B
Certificates,
Class SB Certificates
and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
as set
forth in
Section 4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in
REMIC III
for
purposes
of the REMIC
Provisions,
(ii) the right to
receive
payments under the Swap
Agreement and (iii) the
obligation to pay the Class IO
Distribution
Amount.
Class A-3
Margin:
Initially,
0.150% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.300% per annum.
Class A-4
Certificate:
Any one of the Class A-4 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit A,
senior to the Class M Certificates,
Class B
Certificates,
Class SB Certificates
and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
as set
forth in
Section 4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in
REMIC III
for
purposes
of the REMIC
Provisions,
(ii) the right to
receive
payments under the Swap
Agreement and (iii) the
obligation to pay the Class IO
Distribution
Amount.
Class A-4
Margin:
Initially,
0.240% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.480% per annum.
Class B Certificate:
Any one of the Class B Certificates
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed
hereto
as
Exhibit B-2,
senior to the Class SB
Certificates
and Class R
Certificates
with respect to
distributions
and the
allocation
of
Realized
Losses
as set
forth in
Section 4.05,
and
evidencing
(i) an interest
designated
as a "regular
interest" in REMIC III for purposes of
the REMIC Provisions and (ii) the right to receive payments under
the Swap Agreement.
Class B Margin:
Initially,
2.500%
per
annum,
and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
3.750% per annum.
Class B Principal
Distribution
Amount:
With
respect to any
Distribution
Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the Class A Principal
Distribution
Amount and the
Class M
Principal
Distribution
Amount
or (b) on or after
the
Stepdown
Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after
distribution
of the
Class
A
Principal
Distribution
Amount
and
the
Class
M
Principal
Distribution Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A Certificates
and Class M
Certificates
(after taking into account the
payment of the Class A Principal
Distribution
Amount and the Class M Principal
Distribution
Amount for that
Distribution
Date) and (2) the Certificate
Principal Balance of the Class B
Certificates
immediately
prior to that
Distribution
Date
over (B) the
lesser
of (x) the
product
of
(1)
the
applicable
Subordination
Percentage
and
(2)
the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be made on
that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the Mortgage
Loans after giving effect to
distributions
to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M
Certificates:
Collectively,
the
Class M-1
Certificates,
Class M-2
Certificates,
Class M-3
Certificates,
Class M-4
Certificates,
Class M-5
Certificates,
Class M-6
Certificates,
Class M-7
Certificates,
Class M-8
Certificates,
Class M-9
Certificates and Class M-10 Certificates.
Class M-1
Certificate:
Any one of the Class M-1 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-2
Certificates,
Class M-3
Certificates,
Class M-4
Certificates,
Class M-5
Certificates,
Class M-6
Certificates,
Class M-7
Certificates,
Class M-8
Certificates,
Class M-9
Certificates,
Class M-10
Certificates,
Class B
Certificates,
Class SB
Certificates and Class R
Certificates
with respect to distributions
and the
allocation of Realized
Losses as set forth in
Section 4.05,
and
evidencing (i) an
interest
designated
as
a
"regular
interest"
in
REMIC III
for
purposes
of
the
REMIC
Provisions,
(ii) the
right to
receive
payments
under
the Swap
Agreement
and
(iii) the
obligation to pay the Class IO Distribution Amount.
Class M-1
Margin:
Initially,
0.280% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.420% per annum.
Class M-1
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution Date after
distribution of the Class A Principal
Distribution
Amount or (b) on
or after the Stepdown
Date if a Trigger
Event is not in effect for that
Distribution
Date,
the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after distribution of the Class A Principal Distribution Amount;
and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance of the Class A
Certificates
(after taking into account the payment of the
Class A
Principal
Distribution
Amount for that
Distribution
Date) and (2) the Certificate
Principal
Balance of the Class M-1
Certificates
immediately prior to that Distribution Date
over (B) the lesser of (x) the
product of (1) the
applicable
Subordination
Percentage
and
(2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after
giving
effect to
distributions
to be made on that
Distribution
Date
and
(y)
the
excess,
if any,
of the
aggregate
Stated
Principal
Balance
of
the
Mortgage
Loans
after
giving
effect
to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-2
Certificate:
Any one of the Class M-2 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-3
Certificates,
Class M-4
Certificates,
Class M-5
Certificates,
Class M-6
Certificates,
Class M-7
Certificates,
Class M-8
Certificates,
Class M-9 Certificates,
Class M-10 Certificates, Class B Certificates,
Class SB Certificates
and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
as set
forth in
Section 4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in
REMIC III
for
purposes
of the REMIC
Provisions,
(ii) the right to
receive
payments
under the Swap Agreement and (iii) the
obligation to pay the Class IO
Distribution
Amount.
Class M-2
Margin:
Initially,
0.290% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.435% per annum.
Class M-2
Principal
Distribution
Amount:
With
respect
to any
Distribution
Date
(a) prior
to the
Stepdown
Date or on or after the
Stepdown
Date if a Trigger
Event is in
effect for that
Distribution
Date,
the
remaining
Principal
Distribution
Amount for that
Distribution
Date after
distribution of the Class A
Principal
Distribution
Amount and the
Class M-1
Principal
Distribution
Amount or (b) on or after the
Stepdown
Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after distribution of the Class A Principal
Distribution
Amount and the Class M-1
Principal
Distribution Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal Balance of the Class A
Certificates and Class M-1
Certificates
(after taking into
account the payment of the Class A Principal
Distribution
Amount and the Class M-1 Principal
Distribution
Amount for that Distribution Date) and (2) the Certificate
Principal Balance of
the Class M-2
Certificates
immediately
prior to that
Distribution Date over (B) the lesser
of (x) the
product
of (1) the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be
made on that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the
Mortgage
Loans
after
giving
effect
to
distributions
to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-3
Certificate:
Any one of the Class M-3 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-4
Certificates,
Class M-5
Certificates,
Class M-6
Certificates,
Class M-7
Certificates,
Class M-8
Certificates,
Class M-9
Certificates,
Class M-10 Certificates, Class B Certificates,
Class SB Certificates and Class R Certificates
with
respect
to
distributions
and the
allocation
of
Realized
Losses
as set
forth
in
Section 4.05,
and evidencing (i) an interest
designated as a "regular interest" in REMIC III
for
purposes
of the REMIC
Provisions,
(ii) the right to
receive
payments
under the Swap
Agreement and (iii) the obligation to pay the Class IO Distribution
Amount.
Class M-3
Margin:
Initially,
0.300% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.450% per annum.
Class M-3
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1 Principal
Distribution
Amount and the Class M-2
Principal
Distribution Amount or
(b) on or after the Stepdown
Date if a Trigger
Event is not in effect for that
Distribution
Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution Amount and the Class M-2 Principal Distribution
Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates
and
Class M-2
Certificates
(after
taking into
account the payment of the Class A
Principal
Distribution
Amount, the Class M-1 Principal
Distribution Amount and the Class M-2 Principal
Distribution
Amount
for
that
Distribution
Date)
and
(2)
the
Certificate
Principal
Balance
of the
Class M-3 Certificates
immediately prior to that Distribution Date over (B) the lesser of
(x)
the
product of (1) the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be made on
that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the Mortgage
Loans after giving effect to
distributions
to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M-4
Certificate:
Any one of the Class M-4 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-5
Certificates,
Class M-6
Certificates,
Class M-7
Certificates,
Class M-8
Certificates,
Class M-9
Certificates,
Class M-10
Certificates,
Class B
Certificates,
Class SB
Certificates
and
Class R
Certificates
with
respect
to
distributions
and the
allocation
of
Realized
Losses
as set
forth in
Section 4.05,
and
evidencing
(i) an interest
designated
as a "regular
interest" in REMIC III for purposes of
the REMIC
Provisions,
(ii) the right to receive
payments under the Swap Agreement and (iii)
the obligation to pay the Class IO Distribution Amount.
Class M-4
Margin:
Initially,
0.350% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.525% per annum.
Class M-4
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1 Principal
Distribution Amount, the Class M-2 Principal
Distribution Amount and the
Class M-3
Principal
Distribution
Amount or (b) on or after the
Stepdown
Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution Amount and the Class M-3 Principal
Distribution Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates,
Class M-2
Certificates
and
Class M-3
Certificates
(after
taking
into
account
the
payment of the
Class A Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount,
the
Class M-2 Principal
Distribution
Amount and the Class M-3 Principal
Distribution Amount for
that
Distribution
Date)
and
(2) the
Certificate
Principal
Balance
of
the
Class M-4
Certificates
immediately
prior to that
Distribution
Date
over (B) the
lesser
of (x) the
product
of
(1)
the
applicable
Subordination
Percentage
and
(2)
the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be made on
that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the Mortgage
Loans after giving effect to
distributions
to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M-5
Certificate:
Any one of the Class M-5 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-6
Certificates,
Class M-7
Certificates,
Class M-8
Certificates,
Class M-9
Certificates,
Class M-10
Certificates,
Class B
Certificates,
Class SB
Certificates
and
Class R
Certificates
with
respect
to
distributions
and
the
allocation of Realized
Losses as set forth in
Section 4.05,
and
evidencing (i) an interest
designated
as a "regular
interest" in REMIC III for purposes of the REMIC
Provisions,
(ii)
the right to receive
payments
under the Swap
Agreement and (iii) the
obligation to pay the
Class IO Distribution Amount.
Class M-5
Margin:
Initially,
0.390% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.585% per annum.
Class M-5
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution
Amount, the
Class M-3 Principal
Distribution
Amount and the Class M-4
Principal
Distribution Amount or
(b) on or after the Stepdown
Date if a Trigger
Event is not in effect for that
Distribution
Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution Amount and the Class M-4 Principal Distribution
Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates,
Class M-2
Certificates,
Class M-3
Certificates and Class M-4
Certificates
(after taking into account
the
payment
of
the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount and the Class M-4
Principal
Distribution
Amount for that
Distribution
Date) and (2) the
Certificate
Principal
Balance of the Class M-5
Certificates
immediately
prior to that
Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the
Mortgage
Loans after giving effect to
distributions to be made on that
Distribution
Date and (y) the
excess,
if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution
Date, over the
Overcollateralization
Floor.
Class M-6
Certificate:
Any one of the Class M-6 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-7
Certificates,
Class M-8
Certificates,
Class M-9
Certificates,
Class M-10
Certificates,
Class B
Certificates,
Class SB
Certificates
and
Class R
Certificates
with respect to distributions
and the allocation of Realized Losses as
set forth in Section 4.05,
and evidencing (i) an interest
designated as a "regular interest"
in REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive
payments under
the Swap Agreement and (iii) the obligation to pay the Class IO
Distribution Amount.
Class M-6
Margin:
Initially,
0.460% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
0.690% per annum.
Class M-6
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution
Amount, the
Class M-3 Principal
Distribution Amount, the Class M-4 Principal
Distribution Amount and the
Class M-5
Principal
Distribution
Amount or (b) on or after the
Stepdown
Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4 Principal
Distribution Amount and the Class M-5 Principal
Distribution Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates,
Class M-2
Certificates,
Class M-3
Certificates,
Class M-4
Certificates
and
Class M-5
Certificates
(after
taking into
account the payment of the Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution
Amount, the
Class M-3 Principal
Distribution Amount, the Class M-4 Principal
Distribution Amount and the
Class M-5
Principal
Distribution
Amount for that Distribution Date) and (2) the Certificate
Principal
Balance of the Class M-6
Certificates
immediately prior to that Distribution Date
over (B) the lesser of (x) the
product of (1) the
applicable
Subordination
Percentage
and
(2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after
giving
effect to
distributions
to be made
on that
Distribution
Date
and
(y) the
excess,
if any,
of the
aggregate
Stated
Principal
Balance
of
the
Mortgage
Loans
after
giving
effect
to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-7
Certificate:
Any one of the Class M-7 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-8
Certificates,
Class M-9
Certificates,
Class M-10
Certificates,
Class B
Certificates,
Class SB
Certificates
and Class R
Certificates
with
respect to
distributions
and the allocation of Realized Losses as set forth in Section 4.05,
and
evidencing (i) an interest
designated as a "regular
interest" in REMIC III for purposes
of the REMIC
Provisions,
(ii) the right to receive
payments
under the Swap
Agreement
and
(iii) the obligation to pay the Class IO Distribution Amount.
Class M-7
Margin:
Initially,
0.900% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
1.350% per annum.
Class M-7
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution
Amount, the
Class M-3
Principal
Distribution
Amount, the Class M-4 Principal
Distribution
Amount, the
Class M-5 Principal
Distribution
Amount and the Class M-6
Principal
Distribution Amount or
(b) on or after the Stepdown
Date if a Trigger
Event is not in effect for that
Distribution
Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5
Principal
Distribution Amount and the Class M-6 Principal Distribution
Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates,
Class M-2
Certificates,
Class M-3
Certificates,
Class M-4
Certificates,
Class M-5
Certificates and
Class M-6
Certificates
(after
taking into
account
the
payment of the
Class A
Principal
Distribution
Amount, the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5 Principal
Distribution Amount and the Class M-6 Principal
Distribution
Amount for that Distribution Date) and (2) the Certificate
Principal Balance of
the Class M-7
Certificates
immediately
prior to that
Distribution Date over (B) the lesser
of (x) the
product
of (1) the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be
made on that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the
Mortgage
Loans
after
giving
effect
to
distributions
to be made on that
Distribution Date, over the Overcollateralization Floor.
Class M-8
Certificate:
Any one of the Class M-8 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-9
Certificates,
Class M-10
Certificates,
Class B
Certificates,
Class SB
Certificates and Class R
Certificates
with respect to distributions
and the
allocation of Realized
Losses as set forth in
Section 4.05,
and
evidencing (i) an
interest
designated
as
a
"regular
interest"
in
REMIC III
for
purposes
of
the
REMIC
Provisions,
(ii) the
right to
receive
payments
under
the Swap
Agreement
and
(iii) the
obligation to pay the Class IO Distribution Amount.
Class M-8
Margin:
Initially,
1.100% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
1.650% per annum.
Class M-8
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution
Amount, the
Class M-3
Principal
Distribution
Amount, the Class M-4 Principal
Distribution
Amount, the
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution Amount and the
Class M-7
Principal
Distribution
Amount or (b) on or after the
Stepdown
Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount and the Class M-7
Principal
Distribution Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates,
Class M-2
Certificates,
Class M-3
Certificates,
Class M-4
Certificates,
Class M-5
Certificates,
Class M-6
Certificates and Class M-7
Certificates
(after taking into account the payment of
the Class A Principal
Distribution
Amount, the Class M-1 Principal
Distribution Amount, the
Class M-2
Principal
Distribution
Amount, the Class M-3 Principal
Distribution
Amount, the
Class M-4
Principal
Distribution
Amount,
the
Class M-5
Principal
Distribution
Amount,
Class M-6 Principal
Distribution
Amount and the Class M-7 Principal
Distribution Amount for
that
Distribution
Date)
and
(2)
the
Certificate
Principal
Balance
of
the
Class M-8
Certificates
immediately
prior to that
Distribution
Date
over (B) the
lesser
of (x) the
product
of
(1)
the
applicable
Subordination
Percentage
and
(2)
the
aggregate
Stated
Principal
Balance of the Mortgage
Loans after giving effect to
distributions
to be made on
that
Distribution
Date and (y) the excess, if any, of the aggregate Stated Principal
Balance
of the Mortgage
Loans after giving effect to
distributions
to be made on that
Distribution
Date, over the Overcollateralization Floor.
Class M-9
Certificate:
Any one of the Class M-9 Certificates executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit B-1,
senior
to
the
Class M-10
Certificates,
Class B
Certificates,
Class SB
Certificates
and Class R
Certificates
with respect to
distributions
and the allocation of
Realized Losses as set forth in Section 4.05,
and evidencing (i) an interest
designated as a
"regular
interest"
in
REMIC III
for
purposes of the REMIC
Provisions,
(ii) the right to
receive
payments
under
the Swap
Agreement
and (iii)
the
obligation
to pay the Class IO
Distribution Amount.
Class M-9
Margin:
Initially,
2.000% per annum, and on any
Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
3.000% per annum.
Class M-9
Principal
Distribution
Amount:
With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution
Amount, the
Class M-3
Principal
Distribution
Amount, the Class M-4 Principal
Distribution
Amount, the
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
the
Class M-7 Principal
Distribution
Amount and the Class M-8
Principal
Distribution Amount or
(b) on or after the Stepdown
Date if a Trigger
Event is not in effect for that
Distribution
Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7
Principal
Distribution Amount and the Class M-8 Principal Distribution
Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates,
Class M-2
Certificates,
Class M-3
Certificates,
Class M-4
Certificates,
Class M-5
Certificates,
Class M-6
Certificates,
Class M-7 Certificates and Class M-8 Certificates (after taking
into
account the payment of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7
Principal
Distribution
Amount and the Class M-8
Principal
Distribution
Amount for that
Distribution
Date) and (2) the
Certificate
Principal
Balance of the Class M-9
Certificates
immediately
prior to that
Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the
Mortgage
Loans after giving effect to
distributions to be made on that
Distribution
Date and (y) the
excess,
if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution
Date, over the
Overcollateralization
Floor.
Class M-10
Certificate:
Any
one
of
the
Class M-9
Certificates
executed
by the
Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed
hereto as Exhibit B-1,
senior to the Class B Certificates,
Class SB Certificates and Class R
Certificates
with
respect to
distributions
and the
allocation
of Realized
Losses as set
forth in Section 4.05,
and evidencing (i) an interest
designated as a "regular
interest" in
REMIC III for purposes of the REMIC
Provisions,
(ii) the right to receive payments under the
Swap Agreement and (iii) the obligation to pay the Class IO
Distribution Amount.
Class M-10
Margin:
Initially,
2.500% per annum, and on any Distribution
Date on or
after the
second
Distribution
Date
after the first
possible
Optional
Termination
Date,
3.750% per annum.
Class M-10
Principal
Distribution
Amount: With respect to any Distribution Date (a)
prior to the Stepdown
Date or on or after the Stepdown
Date if a Trigger
Event is in effect
for
that
Distribution
Date,
the
remaining
Principal
Distribution
Amount
for
that
Distribution
Date after
distribution
of the
Class A
Principal
Distribution
Amount,
the
Class M-1
Principal
Distribution
Amount, the Class M-2 Principal
Distribution
Amount, the
Class M-3
Principal
Distribution
Amount, the Class M-4 Principal
Distribution
Amount, the
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
the
Class M-7 Principal
Distribution Amount, the Class M-8 Principal
Distribution Amount and the
Class M-9
Principal
Distribution
Amount or (b) on or after the
Stepdown
Date if a Trigger
Event is not in effect for that Distribution Date, the lesser of:
(i)....the remaining
Principal
Distribution Amount for that Distribution Date
after
distribution of the Class A
Principal
Distribution
Amount,
the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount, the Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7
Principal
Distribution
Amount, the Class M-8 Principal
Distribution Amount and the Class M-9 Principal
Distribution Amount; and
(ii)...the
excess,
if any,
of (A) the sum of (1) the
aggregate
Certificate
Principal
Balance
of
the
Class A
Certificates,
Class M-1
Certificates,
Class M-2
Certificates,
Class M-3
Certificates,
Class M-4
Certificates,
Class M-5
Certificates,
Class M-6
Certificates,
Class M-7
Certificates,
Class M-8
Certificates
and
Class M-9
Certificates
(after
taking into
account the payment of the Class A
Principal
Distribution
Amount, the Class M-1
Principal
Distribution
Amount, the Class M-2
Principal
Distribution
Amount, the Class M-3
Principal
Distribution
Amount, the Class M-4
Principal
Distribution
Amount,
the
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7 Principal
Distribution Amount, the Class M-8 Principal Distribution Amount
and the
Class M-9
Principal
Distribution
Amount for that
Distribution
Date) and
(2) the
Certificate
Principal
Balance
of the
Class M-10
Certificates
immediately
prior
to that
Distribution
Date over (B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage and (2) the
aggregate Stated Principal
Balance of the Mortgage Loans after giving
effect to distributions to be made on that
Distribution
Date and (y) the excess,
if any, of
the
aggregate
Stated
Principal
Balance
of the
Mortgage
Loans
after
giving
effect
to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class R Certificate:
Any one of the Class R Certificates
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed
hereto
as
Exhibit D and
evidencing an interest
designated
as a "residual
interest" in the REMICs for
purposes
of the REMIC
Provisions.
The
Class R-I
Certificates
is
designated
as the sole
class of "residual
interest" in REMIC I, the Class R-II
Certificates
is
designated
as the
sole class of "residual
interest" in REMIC II and the Class R-III
Certificates is designated
as the sole class of "residual interest" in REMIC III .
Class SB
Certificate:
Any one of the Class SB
Certificates
executed by the Trustee
and
authenticated
by the Certificate
Registrar
substantially in the form annexed hereto as
Exhibit C,
subordinate to the Class A Certificates,
the Class M Certificates and the Class B
Certificates
with
respect to
distributions
and the
allocation
of Realized
Losses as set
forth in
Section 4.05,
and
evidencing
an
interest
comprised
of "regular
interests"
in
REMIC III
together with certain rights to payments under the Swap
Agreements for purposes of
the REMIC Provisions.
Clearance System:
The Euroclear, Clearstream or both, as applicable.
Clearstream:
Clearstream Banking, societe anonyme.
Closing Date:
May 30, 2006.
Code:
The Internal Revenue Code of 1986.
Commission:
The Securities and Exchange Commission.
Compensating
Interest:
With respect to any Distribution Date, any amount paid by the
Master Servicer in accordance with Section 3.16(f).
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
U.S. Bank National Association,
EP-MN-WS3D,
60 Livingston Avenue, St. Paul, Minnesota 55107,
Attn: Structured Finance/RASC 2006-KS4.
Credit Repository:
Equifax, Transunion and Experian, or their successors in interest.
Credit Risk
Management
Agreement:
The Credit Risk Management
Agreement,
dated May
30, 2006, between the Master Servicer and the Credit Risk Manager.
Credit Risk
Manager:
Clayton
Fixed
Income
Services
Inc.,
formerly
known as The
Murrayhill Company, a Colorado corporation, its successors and
assigns.
Credit Risk Manager Fee: With respect to any Mortgage Loan and
Distribution
Date, the
premium
payable to the Credit Risk Manager at the Credit Risk Manager Fee
Rate
multiplied by
the Stated
Principal
Balance of such
Mortgage
Loan as of the first day of the
related Due
Period,
divided by 12. With respect to each Mortgage
Loan,
the Credit Risk Manager Fee will
be paid monthly from the related Mortgage Rate in accordance with
this Agreement.
Credit Risk Manager Fee Rate: With respect to any
Distribution
Date, a rate equal to
0.014% per annum.
Curtailment:
Any Principal
Prepayment
made by a Mortgagor
which is not a Principal
Prepayment in Full.
Custodial Account:
The custodial account or accounts created and maintained
pursuant
to Section 3.07 in the name of a depository
institution,
as custodian for the holders of the
Certificates,
for the holders of certain other
interests in mortgage
loans serviced or sold
by the Master
Servicer
and for the Master
Servicer,
into
which the
amounts
set forth in
Section 3.07
shall be deposited
directly.
Any such account or accounts shall be an Eligible
Account.
Custodial
Agreement:
An agreement that may be entered into among the Depositor,
the
Master Servicer, the Trustee and the Custodian in substantially the
form of Exhibit E hereto.
Custodian:
Wells Fargo Bank, N.A., or any successor
custodian
appointed pursuant to
a Custodial Agreement.
Cut-off Date:
May 1, 2006.
Cut-off Date Balance:
$700,370,078.88
Cut-off
Date
Principal
Balance:
With
respect
to any
Mortgage
Loan,
the unpaid
principal
balance
thereof at the Cut-off Date after
giving
effect to all
installments
of
principal
due on or prior thereto (or due in the month of the Cut-off
Date),
whether or not
received.
Debt
Service
Reduction:
With
respect to any
Mortgage
Loan,
a
reduction
in the
scheduled
Monthly
Payment for such Mortgage Loan by a court of competent
jurisdiction
in a
proceeding
under the
Bankruptcy
Code,
except
such a
reduction
constituting
a Deficient
Valuation or any reduction that results in a permanent forgiveness
of principal.
Defaulting Party: As defined in the Swap Agreement.
Deficient
Valuation:
With
respect to any
Mortgage
Loan, a valuation by a court of
competent
jurisdiction of the Mortgaged
Property in an amount less than the then outstanding
indebtedness
under the Mortgage
Loan, or any reduction in the amount of principal to be paid
in connection with any scheduled
Monthly Payment that constitutes a permanent
forgiveness of
principal, which valuation or reduction results from a proceeding
under the Bankruptcy Code.
Definitive Certificate:
Any definitive, fully registered Certificate.
Definitive
Class B Certificate:
Any
Definitive
Regulation S Class B Certificate or
Definitive U.S. Class B Certificate.
Definitive
Regulation S Class B Certificate:
As defined in
Section 5.01(b).
A form
of
Definitive
Regulation S
Class B
Certificate
will be issued
substantially
in the form
attached as Exhibit B-2 hereto.
Definitive
U.S.
Class
B
Certificate:
As
defined
in
Section 5.01(b).
A form of
Definitive
U.S.
Class B
Certificate
will be issued
substantially
in the form attached as
Exhibit B-2 hereto.
Deleted
Mortgage
Loan: A Mortgage
Loan
replaced or to be replaced with a Qualified
Substitute Mortgage Loan.
Delinquent:
As used herein,
a Mortgage
Loan is considered to be: "30 to 59 days" or
"30 or more days"
delinquent
when a payment due on any scheduled due date remains
unpaid as
of the close of business on the next
following
monthly
scheduled due date;
"60 to 89 days"
or "60 or more days"
delinquent
when a payment due on any scheduled due date remains
unpaid
as of the close of business on the second
following
monthly
scheduled due date;
and so on.
The
determination
as to whether a Mortgage
Loan falls into these
categories
is made as of
the close of business on the last
business day of each month.
For example,
a Mortgage
Loan
with a payment
due on July 1 that
remained
unpaid as of the close of
business on August 31
would then be considered to be 30 to 59 days
delinquent.
Delinquency
information
as of the
Cut-off Date is
determined
and prepared as of the close of business on the last business day
immediately prior to the Cut-off Date.
Depositor:
As defined in the preamble hereto.
Depository:
The
Depository
Trust
Company,
or any successor
Depository
hereafter
named. The nominee of the initial
Depository for purposes of registering
those
Certificates
that are to be Book-Entry
Certificates
is Cede & Co. The Depository
shall at all times be a
"clearing
corporation" as defined in
Section 8-102(a)(5)
of the Uniform
Commercial Code of
the
State of New York and a
"clearing
agency"
registered
pursuant
to the
provisions
of
Section 17A of the Exchange Act.
Depository
Participant:
A broker,
dealer,
bank or other
financial
institution or
other
Person
for whom
from
time to time a
Depository
effects
book-entry
transfers
and
pledges of securities deposited with the Depository.
Destroyed
Mortgage Note: A Mortgage Note the original of which was
permanently
lost
or destroyed and has not been replaced.
Determination
Date: With respect to any
Distribution
Date, the 20th day (or if such
20th day is not a Business Day, the Business Day
immediately
following such 20th day) of the
month of the related Distribution Date.
Disqualified Organization:
Any organization defined as a "disqualified
organization"
under
Section 860E(e)(5)
of the
Code,
including,
if not
otherwise
included,
any of the
following:
(i)
the
United
States,
any
State
or
political
subdivision
thereof,
any
possession
of the United
States,
or any agency or
instrumentality
of any of the foregoing
(other than an
instrumentality
which is a corporation
if all of its
activities are subject
to tax and,
except for Freddie
Mac, a majority of its board of
directors is not selected by
such governmental unit), (ii) a foreign
government,
any international
organization,
or any
agency
or
instrumentality
of any of the
foregoing,
(iii)
any
organization
(other
than
certain farmers'
cooperatives
described in Section 521 of the Code) which is exempt from the
tax imposed by Chapter 1 of the Code
(including
the tax imposed by
Section 511
of the Code
on unrelated
business
taxable
income) and
(iv) rural
electric and telephone
cooperatives
described in
Section 1381(a)(2)(C)
of the Code. A
Disqualified
Organization
also includes
any
"electing
large
partnership,"
as defined in
Section 775(a)
of the Code and any other
Person so
designated
by the Trustee
based upon an Opinion of Counsel that the holding of an
Ownership
Interest in a Class R
Certificate by such Person may cause any REMIC or any Person
having an Ownership
Interest in any Class of
Certificates
(other than such Person) to incur
a liability
for any federal tax imposed
under the Code that would not
otherwise
be imposed
but for the Transfer of an Ownership
Interest in a Class R
Certificate
to such Person.
The
terms "United States," "State" and
"international
organization"
shall have the meanings set
forth in Section 7701 of the Code or successor provisions.
Distribution
Compliance
Period. The period ending on the 40th day after the later of
the conclusion of the offering of the Class B Certificates and the
Closing Date.
Distribution
Date: The 25th day of any month
beginning in June 2006 or, if such 25th
day is not a Business Day, the Business Day immediately following
such 25th day.
DTC Letter:
The Letter of
Representations,
dated May 26, 2006, between the Trustee,
on behalf of the Trust Fund, and the Depository.
Due Date:
With
respect
to any
Distribution
Date and any
Mortgage
Loan,
the day
during the related Due Period on which the Monthly Payment is due.
Due
Period:
With
respect
to any
Distribution
Date,
the
calendar
month of such
Distribution Date.
Early Termination Date:
Shall have the meaning set forth in the Swap Agreement.
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 U.S. Bank
National
Association,
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).
Eligible Master Servicing
Compensation:
With respect to any
Distribution
Date, the
lesser of
(a) one-twelfth
of 0.125% of the Stated Principal
Balance of the related Mortgage
Loans
immediately
preceding such
Distribution Date and (b) the sum of the Servicing Fee and
all income and gain on amounts held in the Custodial
Account and the Certificate
Account and
payable to the
Certificateholders
with respect to such Distribution Date;
provided that for
purposes of this
definition
the amount of the Servicing Fee will not be reduced
pursuant to
Section 7.02(a) except as may be required pursuant to the last
sentence of such Section.
ERISA:
The Employee Retirement Income Security Act of 1974, as amended.
Euroclear:
Euroclear Bank S.A./N.V.
Event of Default:
As defined in Section 7.01.
Excess Cash Flow:
With respect to any
Distribution
Date, an amount equal to the sum
of (A) the excess of (i) the
Available
Distribution
Amount for that
Distribution Date over
(ii) the sum of (a) the Interest
Distribution
Amount for that
Distribution Date and (b) the
lesser of
(1) the
aggregate
Certificate
Principal
Balance of
Class A
Certificates,
the
Class M Certificates and Class B Certificates
immediately prior to such Distribution Date and
(2) the
Principal
Remittance
Amount for that Distribution Date to the extent not applied to
pay interest on the Class A
Certificates,
Class M
Certificates and Class B
Certificates on
such
Distribution
Date,
(B) the
Overcollateralization
Reduction
Amount, if any, for that
Distribution
Date and
(C) any
Net Swap
Payments
received
by the
Trustee
under the Swap
Agreement
for
that
Distribution
Date
and
deposited
in
the
Swap
Account
pursuant
to
Section 4.10(c).
Excess
Overcollateralization
Amount:
With
respect to any
Distribution
Date,
the
excess,
if any,
of
(a) the
Overcollateralization
Amount
on such
Distribution
Date over
(b) the Required Overcollateralization Amount for such Distribution
Date.
Exchange Act:
The Securities Exchange Act of 1934, as amended.
Exchange
Date:
The
date
on
which
all
Temporary
Regulation
S
Global
Class
B
Certificates have been exchanged for Permanent Regulation S Class B
Certificates.
Expense Fee Rate:
With respect to any Mortgage Loan as of any date of
determination,
the sum of the (i)
applicable
Servicing
Fee
Rate,
(ii) the per
annum
rate at which
the
applicable Subservicing Fee accrues and (iii) and the related
Credit Risk Manager Fee Rate.
Fannie
Mae:
Fannie
Mae, a
federally
chartered
and
privately
owned
corporation
organized and existing under the Federal
National
Mortgage
Association
Charter Act, or any
successor thereto.
FDIC:
Federal Deposit Insurance Corporation or any successor thereto.
Final
Distribution
Date: The
Distribution
Date on which the final
distribution in
respect of the Certificates
will be made pursuant to Section 9.01,
which Final
Distribution
Date shall in no event be later than the end of the 90-day
liquidation
period
described
in
Section 9.02.
Final
Scheduled
Distribution
Date:
Solely
for
purposes
of
the
face
of
the
Certificates,
as follows: with respect to the Class A-1
Certificates,
the Distribution Date
occurring in March 2028;
with respect to the Class A-2
Certificates
the
Distribution
Date
occurring in
July 2031;
with respect to the Class A-3
Certificates
the
Distribution
Date
occurring
in
January 2035;
and
with
respect
to
the
Class A-4
Certificates,
Class M
Certificates and the Class B
Certificates,
the Distribution
Date occurring in June 2036. No
event of default
under this
Agreement
will arise or become
applicable
solely by reason of
the
failure to retire the
entire
Certificate
Principal
Balance
of any
Class of
Class A
Certificates,
Class M
Certificates or Class B
Certificates on or before its Final Scheduled
Distribution Date.
Fixed
Swap
Payment:
With
respect
to any
Distribution
Date
on or
prior
to the
distribution
date in January
2010,
an amount equal to the product of (x) a fixed rate equal
to 5.45% per annum,
(y) the Swap Agreement
Notional Balance for that
Distribution
Date and
(z) a fraction, the numerator of which is 30 and the denominator of
which is 360.
Floating
Swap
Payment:
With
respect
to any
Distribution
Date on or prior to the
Distribution
Date in January 2010, an amount equal to the product of (x) Swap
LIBOR,
(y) the
Swap Agreement
Notional Balance for that Distribution Date and (z) a fraction,
the numerator
of which is equal to the number of days in the related
calculation
period as provided in the
Swap Agreement and the denominator of which is 360.
Foreclosure
Profits:
With respect to any Distribution Date or related
Determination
Date and any Mortgage Loan, the excess, if any, of Liquidation
Proceeds,
Insurance
Proceeds
and REO Proceeds (net of all amounts reimbursable
therefrom pursuant to
Section 3.10(a)(ii))
in
respect
of each
Mortgage
Loan or REO
Property
for
which
a Cash
Liquidation
or REO
Disposition
occurred in the related
Prepayment
Period over the sum of the unpaid
principal
balance
of
such
Mortgage
Loan
or
REO
Property
(determined,
in
the
case
of
an
REO
Disposition,
in
accordance
with
Section 3.14)
plus
accrued
and unpaid
interest
at the
Mortgage Rate on such unpaid
principal
balance from the Due Date to which
interest was last
paid by the
Mortgagor
to the first day of the month
following
the month in which such Cash
Liquidation or REO Disposition occurred.
Form 10-K Certification:
As defined in Section 4.03(e).
Freddie Mac:
Freddie Mac, a corporate
instrumentality
of the United States
created
and existing
under Title III of the Emergency
Home Finance Act of 1970,
as amended,
or any
successor thereto.
Global Class B
Certificate:
A Regulation S Global Class B Certificate or a Rule 144A
Global Class B Certificate, as applicable.
Gross
Margin:
With
respect
to
each
adjustable-rate
Mortgage
Loan,
the
fixed
percentage
set
forth
in the
related
Mortgage
Note and
indicated
on the
Mortgage
Loan
Schedule
as the
"NOTE
MARGIN,"
which
percentage
is
added to the
related
Index on each
Adjustment
Date to determine
(subject to rounding in
accordance
with the related
Mortgage
Note,
the
Periodic
Cap,
the
Maximum
Mortgage
Rate and the
Minimum
Mortgage
Rate) the
interest rate to be borne by such Mortgage Loan until the next
Adjustment Date.
HUD:
The United States Department of Housing and Urban Development.
Independent:
When used with respect to any specified Person,
means such a Person who
(i) is in fact
independent
of the
Depositor,
the Master
Servicer and the Trustee,
or any
Affiliate
thereof,
(ii) does not have any direct financial interest or any material
indirect
financial
interest in the
Depositor,
the Master
Servicer or the Trustee or in an Affiliate
thereof,
and (iii) is not connected
with the Depositor,
the Master
Servicer or the Trustee
as
an
officer,
employee,
promoter,
underwriter,
trustee,
partner,
director
or
person
performing similar functions.
Index:
With respect to any
adjustable-rate
Mortgage
Loan and as to any
Adjustment
Date therefor, the related index as stated in the related Mortgage
Note.
Initial
Certificate
Principal
Balance:
With respect to each Class of
Certificates
(other than the Class R
Certificates),
the
Certificate
Principal
Balance of such Class of
Certificates as of the Closing Date as set forth in the Preliminary
Statement hereto.
Insurance
Proceeds:
Proceeds paid in respect of the Mortgage
Loans
pursuant to any
Primary
Insurance
Policy or any other related
insurance policy covering a Mortgage Loan, to
the extent such proceeds are payable to the mortgagee
under the
Mortgage,
any
Subservicer,
the Master
Servicer
or the Trustee
and are not
applied to the
restoration
of the related
Mortgaged
Property or released to the Mortgagor in accordance
with the
procedures
that the
Master Servicer would follow in servicing mortgage loans held for
its own account.
Interest
Accrual
Period:
With respect to the
Distribution
Date in June 2006,
the
period
commencing the Closing Date and ending on the day preceding the
Distribution
Date in
June 2006,
and with
respect to any
Distribution
Date after the
Distribution
Date in June
2006, the period commencing on the Distribution
Date in the month
immediately
preceding the
month
in
which
such
Distribution
Date
occurs
and
ending
on
the
day
preceding
such
Distribution Date.
Interest
Distribution
Amount:
For
any
Distribution
Date,
the
amounts
payable
pursuant to Section 4.02(c)(i) and (ii).
Interim Certification:
As defined in Section 2.02.
Late
Collections:
With respect to any Mortgage Loan, all amounts received during any
Due
Period,
whether
as
late
payments
of
Monthly
Payments
or
as
Insurance
Proceeds,
Liquidation
Proceeds or otherwise,
which
represent
late payments or collections of Monthly
Payments due but delinquent for a previous Due Period and not
previously recovered.
LIBOR:
With
respect to any
Distribution
Date,
the
arithmetic
mean of the London
interbank
offered rate
quotations for one-month
U.S.
Dollar
deposits,
expressed on a per
annum basis, determined in accordance with Section 1.02.
LIBOR
Business
Day:
Any day other
than (i) a
Saturday
or Sunday or (ii) a day on
which banking institutions in London, England are required or
authorized by law to be closed.
LIBOR Certificates:
Collectively, the Class A Certificates,
Class M Certificates and
Class B Certificates.
LIBOR Rate Adjustment Date: With respect to each
Distribution
Date, the second LIBOR
Business Day immediately preceding the commencement of the related
Interest Accrual Period.
Liquidation
Proceeds:
Amounts (other than Insurance Proceeds) received by the Master
Servicer
in
connection
with the taking of an entire
Mortgaged
Property by exercise of the
power of eminent domain or
condemnation
or in connection with the liquidation of a defaulted
Mortgage Loan through trustee's sale,
foreclosure sale or otherwise,
other than REO Proceeds
and Subsequent Recoveries.
Loan-to-Value
Ratio:
As of any date,
the fraction,
expressed as a percentage,
the
numerator of which is the current
principal
balance of the related Mortgage Loan at the date
of
determination
and
the
denominator
of
which
is the
Appraised
Value
of the
related
Mortgaged Property.
Margin: The Class A-1 Margin,
Class A-2 Margin,
Class A-3 Margin,
Class A-4 Margin,
Class M-1 Margin,
Class M-2 Margin,
Class M-3
Margin,
Class M-4 Margin,
Class M-5 Margin,
Class M-6 Margin, Class M-7 Margin,
Class M-8 Margin, Class M-9 Margin,
Class M-10 Margin or
Class B Margin, as applicable.
Marker Rate: With respect to the Class SB
Certificates or REMIC III
Regular Interest
SB-IO and any
Distribution
Date,
in relation to the REMIC II
Regular
Interests
LT1, LT2,
LT3,
and
LT4,
a per
annum
rate
equal
to two
(2)
times
the
weighted
average
of the
Uncertificated
REMIC II
Pass-Through
Rates for REMIC II
Regular
Interest LT2 and REMIC II
Regular Interest LT3.
Master Servicer:
As defined in the preamble hereto.
Maturity Date: With respect to each Class of
Certificates
representing
ownership of
regular interests or Uncertificated
Regular Interest issued by each of REMIC I,
REMIC II and
REMIC III
the
latest
possible
maturity
date,
solely
for
purposes
of
Section 1.860G-1(a)(4)(iii)
of the Treasury
Regulations,
by which the Certificate Principal
Balance of each such Class of
Certificates
representing a regular interest in the Trust Fund
would be reduced to zero, which is, for each such regular
interest,
June 25,
2036, which is
the Distribution
Date occurring in the month following the last scheduled
monthly payment of
the Mortgage Loans.
Maximum
Mortgage
Rate:
With respect to any
adjustable-rate
Mortgage Loan, the per
annum rate
indicated on the Mortgage Loan Schedule as the "NOTE
CEILING,"
which rate is the
maximum
interest
rate that may be
applicable
to such
Mortgage Loan at any time during the
life of such Mortgage Loan.
MERS:
Mortgage Electronic
Registration
Systems,
Inc., a corporation
organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS(R)System:
The
system
of
recording
transfers
of
Mortgages
electronically
maintained by MERS.
MIN: The Mortgage
Identification
Number for Mortgage Loans
registered
with MERS on
the MERS(R)System.
Minimum
Mortgage
Rate:
With
respect to any
adjustable-rate
Mortgage
Loan, a per
annum rate equal to the
greater of (i) the
Note
Margin and (ii) the rate
indicated
on the
Mortgage
Loan
Schedule as the "NOTE
FLOOR,"
which rate may be
applicable to such Mortgage
Loan at any time during the life of such Mortgage Loan.
Modified
Mortgage
Loan:
Any Mortgage
Loan that has been the subject of a Servicing
Modification.
Modified Net Mortgage
Rate:
With respect to any Mortgage Loan that is the subject of
a
Servicing
Modification,
the Net
Mortgage
Rate
minus
the rate per
annum by which
the
Mortgage Rate on such Mortgage Loan was reduced.
MOM Loan:
With respect to any
Mortgage
Loan,
MERS acting as the
mortgagee of such
Mortgage
Loan,
solely as nominee for the originator of such Mortgage Loan and its
successors
and assigns, at the origination thereof.
Monthly
Payment:
With respect to any Mortgage Loan
(including any REO Property) and
the Due Date in any Due
Period,
the
payment
of
principal
and
interest
due
thereon
in
accordance with the amortization
schedule at the time applicable
thereto (after
adjustment,
if any, for
Curtailments
and for Deficient
Valuations
occurring prior to such Due Date but
before any adjustment to such
amortization
schedule by reason of any bankruptcy,
other than
a Deficient
Valuation,
or similar
proceeding or any
moratorium or similar
waiver or grace
period and before any
Servicing
Modification
that
constitutes
a reduction of the interest
rate on such Mortgage Loan).
Moody's:
Moody's Investors Service, Inc., or its successors in interest.
Mortgage:
With respect to each Mortgage
Note,
the mortgage,
deed of trust or other
comparable
instrument
creating
a
first
or
junior
lien on an
estate
in fee
simple
or
leasehold interest in real property securing a Mortgage Note.
Mortgage
File:
The
mortgage
documents
listed
in
Section 2.01
pertaining
to
a
particular
Mortgage Loan and any
additional
documents
required to be added to the Mortgage
File pursuant to this Agreement.
Mortgage
Loans:
Such of the mortgage loans
transferred
and assigned to the Trustee
pursuant to
Section 2.01
as from time to time are held or deemed to be held as a part of the
Trust Fund, the Mortgage
Loans
originally so held being
identified in the initial
Mortgage
Loan
Schedule,
and Qualified
Substitute
Mortgage
Loans held or deemed held as part of the
Trust Fund including,
without
limitation,
each related Mortgage Note, Mortgage and Mortgage
File and all rights appertaining thereto.
Mortgage Loan Schedule:
The lists of the Mortgage Loans attached
hereto as Exhibit F
(as
amended
from time to time to reflect
the
addition
of
Qualified
Substitute
Mortgage
Loans),
which
lists
shall set
forth at a
minimum
the
following
information
as to each
Mortgage Loan:
(i)....the Mortgage Loan identifying number ("RFC LOAN #");
(ii)...[reserved];
(iii)..the maturity of the Mortgage Note ("MATURITY
DATE," or "MATURITY DT");
(iv)...for
the
adjustable-rate
Mortgage
Loans,
the
Mortgage
Rate
as
of
origination ("ORIG RATE");
(v)....the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(vi)...the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vii)..the scheduled
monthly payment of principal,
if any, and interest as of
the Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I");
(viii).the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(ix)...the Loan-to-Value Ratio at origination ("LTV");
(x)....a code "T," "BT" or "CT" under the column "LN FEATURE,"
indicating that
the Mortgage Loan is secured by a second or vacation
residence
(the absence of any such code
means the Mortgage Loan is secured by a primary residence);
(xi)...a code "N" under the column
"OCCP CODE,"
indicating
that the Mortgage
Loan is secured by a
non-owner
occupied
residence
(the
absence of any such code means the
Mortgage Loan is secured by an owner occupied residence);
(xii)..for the
adjustable-rate
Mortgage
Loans,
the
Maximum
Mortgage
Rate
("NOTE CEILING");
(xiii).for the
adjustable-rate
Mortgage Loans,
the maximum Net Mortgage Rate
("NET CEILING");
(xiv)..for the adjustable-rate Mortgage Loans, the Note Margin
("NOTE MARGIN");
(xv)...for the adjustable-rate
Mortgage Loans, the first Adjustment Date after
the Cut-off Date ("NXT INT CHG DT");
(xvi)..for the
adjustable-rate
Mortgage
Loans,
the Periodic Cap
("PERIODIC
DECR" or "PERIODIC INCR");
(xvii).[reserved]; and
(xviii)for the adjustable-rate
Mortgage Loans, the rounding of the semi-annual
or annual adjustment to the Mortgage Rate ("NOTE METHOD").
Such schedules may consist of multiple reports that
collectively set forth all of the
information required.
Mortgage
Note:
The
originally
executed
note or
other
evidence
of
indebtedness
evidencing
the
indebtedness
of a
Mortgagor
under
a
Mortgage
Loan,
together
with
any
modification thereto.
Mortgage
Rate:
With respect to any
Mortgage
Loan,
the interest
rate borne by the
related Mortgage Note, or any modification
thereto other than a Servicing
Modification.
The
Mortgage Rate on the
adjustable-rate
Mortgage Loans will adjust on each
Adjustment
Date to
equal the sum (rounded to the nearest
multiple of
one-eighth
of one percent
(0.125%) or up
to the nearest
one-eighth
of one percent,
which are indicated by a "U" on the Mortgage Loan
Schedule,
except in the case of the
adjustable-rate
Mortgage
Loans
indicated by an "X" on
the Mortgage Loan Schedule
under the heading
"NOTE
METHOD"),
of the related Index plus the
Note Margin,
in each case subject to the applicable
Periodic Cap,
Maximum Mortgage Rate and
Minimum Mortgage Rate.
Mortgaged Property:
The underlying real property securing a Mortgage Loan.
Mortgagor:
The obligor on a Mortgage Note.
Net
Mortgage
Rate:
With
respect
to
any
Mortgage
Loan
as
of
any
date
of
determination,
a per annum rate equal to the Mortgage
Rate for such Mortgage Loan as of such
date minus the related Expense Fee Rate.
Net Swap Payment:
With respect to each
Distribution
Date, the net payment
required
to be made
pursuant to the terms of the Swap
Agreement
by either the Swap
Counterparty
or
the Trustee,
on behalf of the Trust,
which net payment
shall not take into account any Swap
Termination Payment.
Net WAC Cap Rate:
With
respect to any
Distribution
Date,
a per annum rate
(which
will not be less than zero) equal to (i) the
product of (a) the
weighted
average of the Net
Mortgage
Rates (or, if
applicable,
the Modified Net Mortgage
Rates) on the Mortgage
Loans
using the Net Mortgage
Rates in effect for the Monthly
Payments due on such
Mortgage
Loans
during the related
Due
Period,
weighted
on the basis of the
respective
Stated
Principal
Balances thereof for such Distribution Date, and (b) a fraction
expressed as percentage,
the
numerator
of which is 30 and the
denominator
of which is the actual
number
of days in the
related
Interest
Accrual
Period minus
(ii) the
product of (a) a
fraction
expressed as a
percentage,
the
numerator
of
which
is the
amount
of
any
Net
Swap
Payments
or
Swap
Termination
Payment
not
due
to
a
Swap
Counterparty
Trigger
Event
owed
to
the
Swap
Counterparty
as of such
Distribution
Date and the
denominator
of
which is the
aggregate
Stated
Principal
Balance
of the
Mortgage
Loans
for such
Distribution
Date,
and
(b) a
fraction
expressed as percentage,
the numerator of which is 360 and the denominator of which
is the actual number of days in the related Interest Accrual
Period.
Non-Permitted
Holder:
A Holder or Beneficial
Owner of an interest in a Global Class
B
Certificate
or a Definitive
Class B
Certificate
that is a United
States Person and (i)
with
respect to a Global
Class B
Certificate,
is not a Qualified
Institutional
Buyer and
that becomes the
Beneficial
Owner of an interest in a Rule 144A Global Class B
Certificate,
(ii)
with
respect
to a
Definitive
U.S.
Class
B
Certificate,
is
not
(x) a
Qualified
Institutional
Buyer or (y) an Accredited
Investor and that becomes the
Beneficial
Owner of
an interest in a
Definitive
U.S.
Class B
Certificate
or (iii) does not have an
exemption
available under the Securities Act.
Non-United States Person:
Any Person other than a United States Person.
Nonrecoverable
Advance:
Any
Advance
previously
made or proposed to be made by the
Master
Servicer or Subservicer
in respect of a Mortgage Loan (other than a Deleted
Mortgage
Loan) which, in the good faith judgment of the Master
Servicer,
will not, or, in the case of
a proposed Advance,
would not, be ultimately
recoverable by the Master Servicer from related
Late Collections,
Insurance
Proceeds,
Liquidation
Proceeds or REO Proceeds.
To the extent
that any Mortgagor is not obligated under the related
Mortgage
documents to pay or reimburse
any
portion of any
Servicing
Advances
that are
outstanding
with
respect to the
related
Mortgage Loan as a result of a
modification
of such
Mortgage
Loan by the Master
Servicer,
which forgives amounts which the Master Servicer or Subservicer had
previously
advanced,
and
the Master
Servicer
determines
that no other
source of payment or
reimbursement
for such
advances is
available to it, such
Servicing
Advances
shall be deemed to be
Nonrecoverable
Advances.
The
determination
by
the
Master
Servicer
that
it has
made a
Nonrecoverable
Advance shall be evidenced by a certificate
of a Servicing
Officer,
Responsible
Officer or
Vice President or its equivalent or senior
officer of the Master
Servicer,
delivered to the
Depositor,
the Trustee,
and the Master
Servicer
setting
forth such
determination,
which
shall
include
any other
information
or reports
obtained
by the Master
Servicer
such as
property
operating
statements,
rent rolls,
property
inspection
reports
and
engineering
reports,
which may
support
such
determinations.
Notwithstanding
the above,
the
Trustee
shall be
entitled
to rely upon any
determination
by the Master
Servicer
that any Advance
previously
made is a
Nonrecoverable
Advance or that any proposed
Advance,
if made,
would
constitute a Nonrecoverable Advance.
Nonsubserviced
Mortgage
Loan:
Any
Mortgage
Loan
that,
at the time of
reference
thereto, is not subject to a Subservicing Agreement.
Non-United States Person:
A Person who is not a United States Person.
Note
Margin:
With
respect
to
each
adjustable-rate
Mortgage
Loan,
the
fixed
percentage
set
forth
in the
related
Mortgage
Note and
indicated
on the
Mortgage
Loan
Schedule
as the "NOTE
MARGIN,"
which
percentage
is added to the Index on each
Adjustment
Date to determine
(subject to rounding in
accordance
with the related
Mortgage
Note,
the
Periodic Cap, the Maximum
Mortgage Rate and the Minimum
Mortgage
Rate) the interest rate to
be borne by such adjustable-rate Mortgage Loan until the next
Adjustment Date.
Officers'
Certificate:
A
certificate
signed
by the
Chairman
of the
Board,
the
President,
a Vice
President,
Assistant Vice President,
Director,
Managing
Director,
the
Treasurer,
the Secretary,
an Assistant
Treasurer or an Assistant Secretary of the Depositor
or the Master
Servicer,
as the case may be, and
delivered
to the
Trustee,
as required by
this Agreement.
Opinion of Counsel:
A written
opinion of counsel
acceptable
to the Trustee and the
Master Servicer,
who may be counsel for the Depositor or the Master
Servicer,
provided that
any opinion of counsel (i) referred to in the
definition of
"Disqualified
Organization"
or
(ii) relating to the
qualification
of any REMIC
hereunder as a REMIC or compliance with the
REMIC Provisions must, unless otherwise specified, be an opinion of
Independent counsel.
Optional
Termination
Date:
Any
Distribution
Date on or
after
which
the
Stated
Principal
Balance
(after
giving
effect to
distributions
to be made on such
Distribution
Date) of the Mortgage Loans is less than 10.00% of the Cut-off Date
Balance.
Outstanding
Mortgage
Loan:
With
respect
to the
Due
Date in any
Due
Period,
a
Mortgage Loan
(including an REO Property) that was not the subject of a Principal
Prepayment
in
Full,
Cash
Liquidation
or REO
Disposition
and
that
was not
purchased,
deleted
or
substituted for prior to such Due Date pursuant to Section 2.02,
2.03, 2.04 or 4.07.
Overcollateralization
Amount:
With respect to any Distribution
Date, the excess, if
any, of (a) the
aggregate
Stated
Principal
Balance of the
Mortgage
Loans
before
giving
effect
to
distributions
of
principal
to be made on such
Distribution
Date
over (b) the
aggregate
Certificate
Principal Balance of the Class A
Certificates,
Class M
Certificates
and Class B Certificates immediately prior to such date.
Overcollateralization
Floor:
An amount equal to the product of 0.50% and the Cut-off
Date Balance.
Overcollateralization
Increase
Amount:
With respect to any
Distribution
Date, the
lesser of
(a) Excess
Cash Flow for that
Distribution
Date (to the extent not used to cover
the amounts
described in clauses
(iv) and (v) of the
definition
of Principal
Distribution
Amount
as
of
such
Distribution
Date),
and
(b) the
excess
of
(1) the
Required
Overcollateralization
Amount for such
Distribution
Date over (2) the
Overcollateralization
Amount for such Distribution Date.
Overcollateralization
Reduction
Amount:
With
respect to any
Distribution
Date on
which the
Excess
Overcollateralization
Amount
is,
after
taking
into
account
all other
distributions
to
be
made
on
such
Distribution
Date,
greater
than
zero,
the
Overcollateralization
Reduction
Amount
shall
be
equal
to the
lesser
of (i) the
Excess
Overcollateralization
Amount for that
Distribution
Date and (ii) the
Principal
Remittance
Amount on such Distribution Date.
Ownership
Interest:
With
respect to any
Certificate,
any
ownership
or
security
interest
in such
Certificate,
including
any
interest
in such
Certificate
as the Holder
thereof and any other interest therein,
whether direct or indirect,
legal or beneficial,
as
owner or as pledgee.
Pass-Through
Rate:
With
respect
to each
Class of
Class A
Certificates,
Class M
Certificates
and
Class B
Certificates
and any
Distribution
Date,
the least of (i) a per
annum rate equal to LIBOR plus the related
Margin for such
Distribution
Date,
(ii) 14.000%
per annum and (iii) the Net WAC Cap Rate for such Distribution
Date.
With respect to the Class SB
Certificates or the REMIC III Regular Interest SB-IO and
any
Distribution
Date, a per annum rate equal to the
percentage
equivalent
of a fraction,
the
numerator of which is the sum of the amounts
calculated
pursuant to clauses (i) through
(iii) below, and the denominator of which is the aggregate
principal
balance of the REMIC II
Regular
Interests.
For
purposes
of
calculating
the
Pass-Through
Rate for the
Class SB
Certificates or the REMIC III
Regular
Interest
SB-IO,
the numerator is equal to the sum of
the following components:
(i)....the
Uncertificated
Pass-Through Rate for REMIC II Regular Interest LT1
minus the
related
Marker
Rate,
applied to a notional
amount
equal to the
Uncertificated
Principal Balance of REMIC II Regular Interest LT1;
(ii)...the
Uncertificated
Pass-Through Rate for REMIC II Regular Interest LT2
minus the
related
Marker
Rate,
applied to a notional
amount
equal to the
Uncertificated
Principal Balance of REMIC II Regular Interest LT2; and
(iii)..the
Uncertificated
Pass-Through Rate for REMIC II Regular Interest LT4
minus
twice
the
related
Marker
Rate,
applied
to
a
notional
amount
equal
to
the
Uncertificated Principal Balance of REMIC II Regular Interest LT4.
Paying Agent:
U.S. Bank National
Association or any successor Paying Agent appointed
by the Trustee.
Percentage Interest:
With respect to any Class A Certificate,
Class M Certificate or
Class B
Certificate,
the
undivided
percentage
ownership
interest
in
the
related
Class evidenced
by such Certificate,
which percentage
ownership
interest shall be equal to
the
Initial
Certificate
Principal
Balance
thereof
divided
by
the
aggregate
Initial
Certificate
Principal
Balance of all of the
Certificates of the same Class.
The Percentage
Interest
with respect to a Class SB
Certificate
or Class R
Certificate
shall be stated on
the face thereof.
Periodic Cap: With respect to each
adjustable-rate
Mortgage
Loan, the periodic rate
cap that limits the increase or the decrease of the related
Mortgage
Rate on any
Adjustment
Date pursuant to the terms of the related Mortgage Note.
Permanent
Regulation S Global Class B Certificate:
As defined in Section 5.01(b).
A
form of Permanent
Regulation S Global Class B
Certificate
will be issued
substantially
in
the form attached as Exhibit B-2 hereto.
Permitted Investments:
One or more of the following:
(i) ...obligations
of or guaranteed as to principal and interest by the United
States or any agency or
instrumentality
thereof when such obligations are backed by the full
faith and credit of the United States;
(ii) ..repurchase
agreements on
obligations
specified in clause (i) maturing
not more than one month from the date of
acquisition
thereof,
provided
that the
unsecured
obligations
of the party
agreeing to repurchase
such
obligations
are at the time rated by
each Rating Agency in its highest short-term rating available;
(iii) .federal funds,
certificates of deposit,
demand deposits, time deposits
and
bankers'
acceptances
(which
shall
each
have an
original
maturity
of not more than
90 days and, in the case of bankers' acceptances,
shall in no event have an original maturity
of more than
365 days or a remaining
maturity of more than
30 days)
denominated
in United
States
dollars of any U.S.
depository
institution or trust company
incorporated
under the
laws of the
United
States
or any
state
thereof
or of any
domestic
branch
of a foreign
depository
institution
or
trust
company;
provided
that
the
debt
obligations
of
such
depository
institution
or trust company at the date of
acquisition
thereof have been rated
by each Rating
Agency in its highest
short-term
rating
available;
and,
provided
further
that,
if the
original
maturity of such
short-term
obligations
of a domestic
branch of a
foreign
depository
institution or trust company shall exceed 30 days,
the short-term rating
of such
institution
shall be A-1+ in the case of Standard & Poor's if Standard
& Poor's is a
Rating Agency;
(iv) ..commercial
paper and demand notes
(having
original
maturities of not
more than
365 days) of any
corporation
incorporated
under the laws of the United States or
any state
thereof
which on the date of
acquisition
has been rated by each Rating Agency in
its highest
short term
rating
available;
provided
that such
commercial
paper and demand
notes shall have a remaining maturity of not more than 30 days;
(v) ...a money market fund or a qualified
investment fund rated by each Rating
Agency in its highest
long-term
rating available (which may be managed by the Trustee or one
of its Affiliates); and
(vi) ..other
obligations
or
securities
that are
acceptable
to each Rating
Agency as a
Permitted
Investment
hereunder
and will not reduce the rating
assigned to any
Class of
Certificates
by such Rating Agency below the
then-current
rating 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 Aaa in
the case
of Moody's,
and for purposes of this Agreement,
any references
herein to the highest rating
available
on
unsecured
commercial
paper and
short-term
debt
obligations
shall mean the
following:
A-1 in the case of
Standard
& Poor's and P-1 in the case of
Moody's;
provided,
however,
that any Permitted
Investment
that is a short-term
debt
obligation
rated A-1 by
Standard & Poor's must satisfy the following
additional
conditions:
(i) the total amount of
debt from A-1 issuers
must be limited to the
investment
of monthly
principal
and interest
payments
(assuming
fully
amortizing
collateral);
(ii) the total amount of A-1 investments
must not represent more than 20% of the aggregate
outstanding
Certificate
Principal Balance
of the
Certificates
and each investment
must not mature beyond 30 days;
(iii) the terms of
the debt must have a
predetermined
fixed
dollar
amount of principal
due at maturity
that
cannot vary;
and (iv) if the
investments
may be liquidated
prior to their
maturity or are
being
relied on to meet a certain
yield,
interest
must be tied to a single
interest
rate
index plus a single
fixed
spread
(if any) and must move
proportionately
with that
index.
Any Permitted Investment may be purchased by or through the Trustee
or its Affiliates.
Permitted
Transferee:
Any
Transferee
of
a
Class R
Certificate,
other
than
a
Disqualified Organization or Non-United States Person.
Person: Any individual,
corporation,
limited liability company,
partnership,
joint
venture,
association,
joint-stock company, trust,
unincorporated organization or government
or any agency or political subdivision thereof.
Prepayment
Assumption:
With
respect
to
the
Class A
Certificates,
Class M
Certificates and Class B
Certificates,
the prepayment
assumption to be used for determining
the accrual of original
issue discount and premium and market
discount on such
Certificates
for federal
income tax purposes,
which (a) with respect to the
fixed-rate
Mortgage
Loans,
assumes a
constant
prepayment
rate of
one-tenth
of 23% per annum of the then
outstanding
Stated
Principal
Balance of the fixed-rate
Mortgage Loans in the first month of the life of
such
Mortgage
Loans and an
additional
one-tenth of 23% per annum in each month
thereafter
until the tenth month,
and beginning in the tenth month and in each month
thereafter
during
the life of the fixed-rate
Mortgage
Loans, a constant
prepayment rate of 23% per annum each
month
("23%
HEP") and (b) with
respect
to the
adjustable-rate
Mortgage
Loans
assumes a
prepayment
assumption
of 2% of the
constant
prepayment
rate in month one,
increasing
by
approximately
2.545%
from month 2 until
month 12,
a constant
prepayment
rate of 30% from
month 12 to month 22, a
constant
prepayment
rate of 50% from
month 23 to month
27,
and a
constant
prepayment
rate of 35%
thereafter,
used for
determining
the accrual of original
issue
discount
and
premium
and
market
discount
on
the
Class A
Certificates,
Class M
Certificates
and
Class B
Certificates
for
federal
income
tax
purposes.
The
constant
prepayment
rate
assumes
that the stated
percentage
of the
outstanding
Stated
Principal
Balance of the adjustable-rate Mortgage Loans is prepaid over the
course of a year.
Prepayment
Interest
Shortfall:
With
respect
to
any
Distribution
Date
and
any
Mortgage Loan (other than a Mortgage
Loan
relating to an REO Property)
that was the subject
of (a) a Principal
Prepayment in Full during the related
Prepayment
Period, an amount equal
to the excess of one
month's
interest
at the related Net
Mortgage
Rate (or
Modified
Net
Mortgage
Rate in the case of a Modified
Mortgage
Loan) on the Stated
Principal
Balance of
such
Mortgage
Loan over the amount of interest
(adjusted to the related Net
Mortgage
Rate
(or
Modified
Net
Mortgage
Rate
in the
case of a
Modified
Mortgage
Loan))
paid by the
Mortgagor for such Prepayment
Period to the date of such Principal
Prepayment in Full or (b)
a Curtailment
during the prior
calendar
month,
an amount equal to one month's
interest at
the
related
Net
Mortgage
Rate (or
Modified
Net
Mortgage
Rate in the case of a Modified
Mortgage Loan) on the amount of such Curtailment.
Prepayment
Period:
With
respect
to
any
Distribution
Date,
the
calendar
month
preceding the month of distribution.
Primary
Insurance
Policy:
Each
primary
policy of mortgage
guaranty
insurance as
indicated by a numeric code on the Mortgage
Loan
Schedule
with the exception of code "A23,"
"A34" or "A96" under the column "MI CO CODE."
Principal
Distribution
Amount:
With respect to any Distribution Date, the lesser of
(a) the
excess of (x) the Available
Distribution
Amount over (y) the Interest
Distribution
Amount, and (b) the sum of:
(i)....the principal
portion of each Monthly Payment received or Advanced with
respect to the related Due Period on each Outstanding Mortgage
Loan;
(ii)...the Stated
Principal
Balance of any Mortgage Loan
repurchased
during
the
related
Prepayment
Period (or deemed to have been so
repurchased
in
accordance
with
Section 3.07(b))
pursuant
to
Section 2.02,
2.03,
2.04
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
related Prepayment Period;
(iii)..the principal portion of all other unscheduled
collections,
other than
Subsequent
Recoveries,
on the
Mortgage
Loans
(including,
without
limitation,
Principal
Prepayments
in
Full,
Curtailments,
Insurance
Proceeds,
Liquidation
Proceeds
and
REO
Proceeds)
received during the related
Prepayment Period (or deemed to have been so received)
to the extent
applied by the Master
Servicer as
recoveries
of
principal
of the
Mortgage
Loans pursuant to Section 3.14;
(iv)...the lesser of (1) Subsequent
Recoveries for such
Distribution Date and
(2) the principal
portion of any Realized Losses
allocated to any Class of Certificates on a
prior Distribution Date and remaining unpaid;
(v)....the lesser of (1) the
Excess Cash Flow for such
Distribution
Date (to
the extent not used
pursuant to clause (iv) of this
definition
on such
Distribution
Date)
and (2) the
principal
portion
of any
Realized
Losses
incurred
(or
deemed
to have been
incurred) on any Mortgage Loans in the calendar month preceding
such Distribution Date; and
(vi)...the lesser of (1) the Excess
Cash Flow for that
Distribution
Date (to
the extent not used pursuant to clauses (iv) and (v) of this
definition on such
Distribution
Date) and (2) the Overcollateralization Increase Amount for such
Distribution Date;
minus
(vii)..(A) the amount of any
Overcollateralization
Reduction
Amount for such
Distribution
Date and (B) the
amount of any
Capitalization
Reimbursement
Amount
for such
Distribution Date.
Principal
Prepayment:
Any payment of principal or other recovery on a Mortgage Loan,
including
a recovery
that takes the form of
Liquidation
Proceeds
or
Insurance
Proceeds,
which is received in advance of its
scheduled
Due Date and is not
accompanied
by an amount
as to interest
representing
scheduled
interest on such
payment due on any date or dates in
any month or months subsequent to the month of prepayment.
Principal
Prepayment
in Full:
Any Principal
Prepayment
made by a Mortgagor of the
entire principal balance of a Mortgage Loan.
Principal
Remittance
Amount:
With
respect to any
Distribution
Date,
all amounts
described in clauses (b)(i) through (iii) of the definition of
Principal
Distribution
Amount
for that Distribution Date.
Program
Guide:
The
AlterNet
Seller
Guide as
incorporated
into
the
Residential
Funding
Seller
Guide
for
mortgage
collateral
sellers
that
participate
in
Residential
Funding's AlterNet Mortgage Program,
and Residential
Funding's Servicing Guide and any other
subservicing
arrangements
which
Residential
Funding
has
arranged
to
accommodate
the
servicing
of the
Mortgage
Loans and in each case all
supplements
and
amendments
thereto
published by Residential Funding.
Purchase
Price:
With respect to any Mortgage Loan (or REO
Property)
required to be
or otherwise
purchased on any date pursuant to
Section 2.02,
2.03,
2.04 or 4.07, an amount
equal
to the sum of (i) 100% of the
Stated
Principal
Balance
thereof
plus the
principal
portion of any related
unreimbursed
Advances and (ii) unpaid accrued
interest at either (a)
the Adjusted
Mortgage Rate (or Modified Net Mortgage Rate in the case of a
Modified
Mortgage
Loan) plus the rate per annum at which the
Servicing
Fee is
calculated,
or (b) in the case
of a
purchase
made by the
Master
Servicer,
at the Net
Mortgage
Rate
(or
Modified
Net
Mortgage
Rate in the case of a
Modified
Mortgage
Loan) plus the Credit
Risk
Manager
Fee
Rate,
in each case on the
Stated
Principal
Balance
thereof
to the first day of the month
following
the
month of
purchase
from the Due Date to which
interest
was last paid by the
Mortgagor.
With respect to any Mortgage
Loan (or REO
Property)
required to be or otherwise
purchased
on any date
pursuant to
Section 4.08,
an amount
equal to the greater of (i) the
sum of (a) 100% of the Stated
Principal
Balance
thereof plus the
principal
portion of any
related
unreimbursed
Advances of such Mortgage Loan (or REO Property) and (b) unpaid
accrued
interest at either (1) the Adjusted
Mortgage
Rate (or Modified Net Mortgage Rate in the case
of a
Modified
Mortgage
Loan)
plus the
rate
per
annum
at
which
the
Servicing
Fee is
calculated,
or (2) in the
case
of a
purchase
made
by the
Master
Servicer,
at the
Net
Mortgage
Rate (or Modified Net Mortgage
Rate in the case of a Modified
Mortgage
Loan),
in
each case on the Stated
Principal
Balance
thereof
to the first day of the month
following
the month of
purchase
from the Due Date to which
interest
was last paid by the
Mortgagor,
and (ii) the fair market value of such Mortgage Loan (or REO
Property).
Qualified
Institutional
Buyer:
The
meaning
specified
in
Rule
144A
under
the
Securities Act.
Qualified
Substitute
Mortgage
Loan:
A Mortgage
Loan
substituted
by
Residential
Funding
or the
Depositor
for a
Deleted
Mortgage
Loan
which
must,
on the
date of such
substitution,
as confirmed in an Officers'
Certificate delivered to the Trustee, (i) have an
outstanding
principal
balance,
after
deduction
of the
principal
portion of the
monthly
payment due in the month of
substitution
(or in the case of a substitution
of more than one
Mortgage Loan for a Deleted Mortgage Loan, an aggregate outstanding
principal balance,
after
such deduction),
not in excess of the Stated
Principal
Balance of the Deleted Mortgage Loan
(the
amount of any
shortfall
to be
deposited
by
Residential
Funding,
in the
Custodial
Account in the month of
substitution);
(ii) have a Mortgage
Rate and a Net Mortgage Rate no
lower
than and not more than 1% per annum
higher
than the
Mortgage
Rate and Net
Mortgage
Rate,
respectively,
of the Deleted Mortgage Loan as of the date of substitution;
(iii) have
a
Loan-to-Value
Ratio
at the
time of
substitution
no
higher
than
that of the
Deleted
Mortgage Loan at the time of
substitution;
(iv) have a remaining term to stated maturity not
greater
than (and not more than one year less than) that of the Deleted
Mortgage
Loan;
(v)
comply with each
representation
and warranty set forth in Sections
2.03 and 2.04 hereof and
Section 4 of the
Assignment
Agreement
(other than the
representations
and
warranties set
forth
therein
with
respect to the number of loans
(including
the related
percentage)
in
excess of zero which meet or do not meet a
specified
criteria);
(vi) not be 30 days or more
Delinquent;
(vii) not be subject to the
requirements
of HOEPA (as defined in the Assignment
Agreement);
(viii)
have a policy
of title
insurance,
in the
form and
amount
that is in
material
compliance
with the Program
Guide,
that was
effective
as of the closing of such
Mortgage
Loan,
is valid and
binding,
and
remains
in full
force and
effect,
unless the
Mortgage
Property is located in the State of Iowa where an
attorney's
certificate
has been
provided as described in the Program
Guide;
(ix) if the Deleted Loan is not a Balloon
Loan,
not be a Balloon Loan;
(x) with respect to adjustable
rate Mortgage
Loans,
have a Mortgage
Rate
that
adjusts
with the same
frequency
and
based
upon the same
Index as that of the
Deleted
Mortgage
Loan;
(xi) with respect to
adjustable
rate Mortgage
Loans,
have a Note
Margin not less than that of the
Deleted
Mortgage
Loan;
(xii) with
respect to
adjustable
rate Mortgage
Loans,
have a Periodic Rate Cap that is equal to that of the Deleted
Mortgage
Loan; and (xiii) with respect to adjustable rate Mortgage
Loans,
have a next Adjustment Date
no later than that of the Deleted Mortgage Loan.
Rating
Agency:
Each of Standard & Poor's and
Moody's.
If any agency or a successor
is no longer in existence,
"Rating
Agency" shall be such
statistical
credit rating agency,
or other comparable
Person,
designated by the Depositor,
notice of which
designation shall
be given to the Trustee and the Master Servicer.
Realized
Loss:
With respect to each
Mortgage
Loan (or REO
Property) as to which a
Cash
Liquidation
or REO
Disposition
has occurred,
an amount (not less than zero) equal to
(i) the Stated
Principal
Balance of the
Mortgage
Loan (or REO
Property) as of the date of
Cash Liquidation or REO
Disposition,
plus (ii) interest (and REO Imputed
Interest,
if any)
at the Net Mortgage
Rate from the Due Date as to which
interest was last paid or advanced to
Certificateholders
up to the last day of the
month in
which
the Cash
Liquidation
(or REO
Disposition)
occurred
on the
Stated
Principal
Balance
of
such
Mortgage
Loan
(or
REO
Property)
outstanding
during each Due Period that such
interest
was not paid or
advanced,
minus (iii) the proceeds,
if any,
received
during the month in which such Cash
Liquidation
(or REO
Disposition)
occurred,
to the extent
applied as
recoveries of interest at the Net
Mortgage Rate and to principal of the Mortgage Loan, net of the
portion
thereof
reimbursable
to the
Master
Servicer
or any
Subservicer
with
respect to
related
Advances,
Servicing
Advances or other
expenses
as to which the Master
Servicer
or
Subservicer
is entitled to
reimbursement
thereunder
but which
have not been
previously
reimbursed.
With
respect to
each
Mortgage
Loan which is the subject of a Servicing
Modification,
(a) (1) the amount by
which the interest
portion of a Monthly
Payment or the
principal
balance of such
Mortgage
Loan was reduced or (2) the sum of any other
amounts
owing under the Mortgage Loan that were
forgiven and that constitute
Servicing
Advances that are reimbursable to the Master Servicer
or a
Subservicer,
and (b) any such
amount
with
respect to a Monthly
Payment
that was or
would
have
been due in the
month
immediately
following
the
month
in which a
Principal
Prepayment
or the Purchase
Price of such Mortgage Loan is received or is deemed to have been
received.
With
respect to each
Mortgage
Loan which has become the
subject of a
Deficient
Valuation,
the
difference
between the principal
balance of the Mortgage
Loan
outstanding
immediately
prior to such Deficient
Valuation and the principal balance of the Mortgage Loan
as reduced by the
Deficient
Valuation.
With respect to each
Mortgage Loan which has become
the
object
of a
Debt
Service
Reduction,
the
amount
of
such
Debt
Service
Reduction.
Notwithstanding
the above,
neither a Deficient
Valuation nor a Debt Service Reduction shall
be deemed a Realized
Loss
hereunder so long as the Master
Servicer has notified the Trustee
in writing that the Master
Servicer is
diligently
pursuing
any remedies
that may exist in
connection with the
representations
and warranties made regarding the related
Mortgage Loan
and
either (A) the
related
Mortgage
Loan is not in default
with
regard to
payments
due
thereunder or (B)
delinquent
payments of principal and interest
under the related
Mortgage
Loan and any
premiums
on any
applicable
