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 September 1, 2006
Home Equity Mortgage Asset-Backed Pass-Through Certificates
Series 2006-EMX8
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS............................................................................................4
Section 1.01.
Definitions.......................................................................4
Section 1.02.
Determination of
LIBOR...........................................................57
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES......................................58
Section 2.01.
Conveyance of Mortgage
Loans.....................................................58
Section 2.02.
Acceptance by
Trustee............................................................61
Section 2.03.
Representations, Warranties and Covenants of the Master Servicer
and the
Depositor.
.....................................................................62
Section 2.04.
Representations and Warranties of
Sellers........................................64
Section 2.05.
Execution and Authentication of Certificates; Conveyance of REMIC-I
Regular
Interests.
.....................................................................66
Section 2.06.
Purposes and Powers of the
Trust.................................................66
Section 2.07.
Agreement Regarding Ability to
Disclose..........................................67
ARTICLE III ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS......................................................68
Section 3.01.
Master Servicer to Act as
Servicer...............................................68
Section 3.02.
Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of
Subservicers'
Obligations......................................................70
Section 3.03.
Successor
Subservicers...........................................................71
Section 3.04.
Liability of the Master
Servicer.................................................71
Section 3.05.
No Contractual Relationship Between Subservicer and Trustee or
Certificateholders72
Section 3.06.
Assumption or Termination of Subservicing Agreements by
Trustee..................72
Section 3.07.
Collection of Certain Mortgage Loan Payments; Deposits to Custodial
Account......72
Section 3.08.
Subservicing Accounts; Servicing
Accounts........................................75
Section 3.09.
Access to Certain Documentation and Information Regarding the
Mortgage Loans.....76
Section 3.10.
Permitted Withdrawals from the Custodial
Account.................................76
Section 3.11.
Maintenance of Primary Insurance
Coverage........................................78
Section 3.12.
Maintenance of Fire Insurance and Omissions and Fidelity
Coverage................78
Section 3.13.
Enforcement of Due-on-Sale Clauses; Assumption and Modification
Agreements; Certain
Assignments......................................................................79
Section 3.14.
Realization Upon Defaulted Mortgage
Loans........................................81
Section 3.15.
Trustee to Cooperate; Release of Custodial
Files.................................83
Section 3.16.
Servicing and Other Compensation; Compensating
Interest..........................84
Section 3.17.
Reports to the Trustee and the
Depositor.........................................85
Section 3.18.
Annual Statement as to Compliance and Servicing
Assessment.......................86
Section 3.19.
Annual Independent Public Accountants' Servicing
Report..........................86
Section 3.20.
Right of the Depositor in Respect of the Master
Servicer.........................86
Section 3.21.
[Reserved].......................................................................87
Section 3.22.
Advance
Facility.................................................................87
ARTICLE IV PAYMENTS TO
CERTIFICATEHOLDERS.......................................................................91
Section 4.01.
Certificate
Account..............................................................91
Section 4.02.
Distributions....................................................................91
Section 4.03.
Statements to Certificateholders; Statements to Rating Agencies;
Exchange Act
Reporting.
.....................................................................95
Section 4.04.
Distribution of Reports to the Trustee and the Depositor; Advances
by the Master
Servicer.
......................................................................99
Section 4.05.
Allocation of Realized
Losses...................................................100
Section 4.06.
Reports of Foreclosures and Abandonment of Mortgaged
Property...................102
Section 4.07.
Optional Purchase of Defaulted Mortgage
Loans...................................102
Section 4.08.
Limited Mortgage Loan Repurchase
Right..........................................102
Section 4.09.
Derivative
Contracts............................................................102
Section 4.10.
Yield Maintenance
Agreement.....................................................103
ARTICLE V THE
CERTIFICATES.....................................................................................105
Section 5.01.
The
Certificates................................................................105
Section 5.02.
Registration of Transfer and Exchange of
Certificates...........................107
Section 5.03.
Mutilated, Destroyed, Lost or Stolen
Certificates...............................111
Section 5.04.
Persons Deemed
Owners...........................................................111
Section 5.05.
Appointment of Paying
Agent.....................................................112
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.............................113
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.....................................114
ARTICLE VII
DEFAULT............................................................................................116
Section 7.01.
Events of
Default...............................................................116
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.....................................................119
ARTICLE VIII CONCERNING THE
TRUSTEE............................................................................120
Section 8.01.
Duties of
Trustee...............................................................120
Section 8.02.
Certain Matters Affecting the
Trustee...........................................121
Section 8.03.
Trustee Not Liable for Certificates or Mortgage
Loans...........................122
Section 8.04.
Trustee May Own
Certificates....................................................123
Section 8.05.
Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification.............123
Section 8.06.
Eligibility Requirements for
Trustee............................................123
Section 8.07.
Resignation and Removal of the
Trustee..........................................124
Section 8.08.
Successor
Trustee...............................................................125
Section 8.09.
Merger or Consolidation of
Trustee..............................................125
Section 8.10.
Appointment of Co-Trustee or Separate
Trustee...................................125
Section 8.11.
Appointment of the
Custodian....................................................126
Section 8.12.
Appointment of Office or
Agency.................................................127
Section 8.13.
DTC Letter of
Representations...................................................127
Section 8.14.
Yield Maintenance
Agreement.....................................................127
ARTICLE IX
TERMINATION.........................................................................................128
Section 9.01.
Termination Upon Purchase or Liquidation of All Mortgage
Loans..................128
Section 9.02.
Additional Termination
Requirements.............................................131
ARTICLE X REMIC
PROVISIONS.....................................................................................133
Section 10.01.
REMIC
Administration............................................................133
Section 10.02.
Master Servicer, REMIC Administrator and Trustee
Indemnification................136
ARTICLE XI MISCELLANEOUS
PROVISIONS............................................................................137
Section 11.01.
Amendment.......................................................................137
Section 11.02.
Recordation of Agreement;
Counterparts..........................................139
Section 11.03.
Limitation on Rights of
Certificateholders......................................139
Section 11.04.
Governing
Law...................................................................140
Section 11.05.
Notices.........................................................................140
Section 11.06.
Notices to Rating
Agencies......................................................141
Section 11.07.
Severability of
Provisions......................................................141
Section 11.08.
Supplemental Provisions for
Resecuritization....................................141
Section 11.09.
Third-Party
Beneficiary.........................................................142
ARTICLE XII COMPLIANCE WITH REGULATION
AB......................................................................142
Section 12.01.
Intent of Parties;
Reasonableness...............................................142
Section 12.02.
Additional Representations and Warranties of the
Trustee........................143
Section 12.03.
Information to be Provided by the
Trustee.......................................143
Section 12.04.
Report on Assessment of Compliance and
Attestation..............................144
Section 12.05.
Indemnification;
Remedies.......................................................144
EXHIBIT A
FORM OF CLASS A
CERTIFICATE..................................................................A-1
EXHIBIT B
FORM OF CLASS M
CERTIFICATE..................................................................B-1
EXHIBIT C
FORM OF CLASS SB
CERTIFICATE.................................................................C-1
EXHIBIT D
FORM OF CLASS R
CERTIFICATE..................................................................D-1
EXHIBIT E
FORM OF CUSTODIAL
AGREEMENT..................................................................E-1
EXHIBIT F-1
GROUP I LOAN
SCHEDULE........................................................................F-1
EXHIBIT F-2
GROUP II LOAN
SCHEDULE.......................................................................F-2
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
FORM OF RULE 144A INVESTMENT
REPRESENTATION..................................................N-1
EXHIBIT O
[RESERVED]...................................................................................O-1
EXHIBIT P
FORM OF ERISA
LETTER.........................................................................P-1
EXHIBIT Q
[RESERVED]...................................................................................Q-1
EXHIBIT R
ASSIGNMENT
AGREEMENT........................................................................R-1
EXHIBIT S
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
This Pooling and Servicing Agreement,
effective as of September 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 Yield
Maintenance
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."
Component I of the Class R
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
Y-1
Variable(1)
$
209,717.93
October 25, 2036
Y-2
Variable(1)
$
155,279.07
October 25, 2036
Z-1
Variable(1)
$ 419,226,149.00
October 25, 2036
Z-2
Variable(1)
$ 310,408,909.08
October 25, 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
subject to this Agreement as a REMIC for federal income tax
purposes,
and such
segregated
pool of assets
will be designated as "REMIC II."
Component II of the Class R 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 REMIC I
INITIAL UNCERTIFICATED REMIC I
LATEST POSSIBLE
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
MATURITY DATE
LT-1
Variable(1)
$
492,899,427.95
October 25, 2036
LT-2
Variable(1)
$
13,729.61
October 25, 2036
LT-3
0.00%
$
35,589.79
October 25, 2036
LT-4
Variable(1)
$
35,589.79
October 25, 2036
LT-5
Variable(1)
$
310,355,575.74
October 25, 2036
LT-6
Variable(1)
$
8,779.50
October 25, 2036
LT-7
0.00%
$
22,276.92
October 25, 2036
LT-8
Variable(1)
$
22,276.92
October 25, 2036
LT-Y1(2)
Variable(1)
$
209,717.93
October 25, 2036
LT-Y2(2)
Variable(1)
$
155,279.07
October 25, 2036
_______________
(1)
Calculated as provided in the definition of Uncertificated REMIC II
Pass-Through Rate.
(2)
LT-Y1 will have the same interest rate, principal balance,
Principal Reduction Amount and allocation of Realized Losses as the
REMIC I Regular Interest Y-1.
LT-Y2 will have the same interest rate, principal balance,
Principal Reduction Amount and allocation
of Realized Losses as the REMIC I Regular Interest Y-2.
REMIC III
As provided
herein,
the REMIC
Administrator
will elect to treat the segregated
pool of assets
consisting of the REMIC II
Regular
Interests as a REMIC for federal income tax purposes,
and such
segregated
pool of assets will be designated as "REMIC III."
Component
III of the Class R
Certificates
will
represent
the sole Class of "residual
interests"
in REMIC III for purposes of the
REMIC
Provisions
under
federal
income tax law. The following
table
irrevocably
sets forth the
designation,
Pass-Through
Rate,
aggregate Initial Certificate Principal Balance,
certain features,
month of Final Scheduled Distribution Date and initial ratings for
each Class of
Certificates
comprising the interests
representing
"regular
interests" in REMIC III. The "latest
possible
maturity
date"
(determined
solely for purposes of satisfying
Treasury
Regulation
Section
1.860G-1(a)(4)(iii))
for each Class of REMIC III
Regular Certificates shall be the Maturity Date.
MONTH OF
FINAL
AGGREGATE INITIAL
SCHEDULED
PASS-THROUGH
CERTIFICATE
DISTRIBUTION
DESIGNATION
TYPE
RATE
PRINCIPAL BALANCE
FEATURES
DATE
S&P
Moody's
Class A-I-1
Regular(1)
Adjustable(2)(3)$
152,460,000.00
Senior/Adjustable
May 2030
AAA
Aaa
Rate
Class A-I-2
Regular(1)
Adjustable(2)(3)$
68,628,000.00
Senior/Adjustable
April 2035
AAA
Aaa
Rate
Class A-I-3
Regular(1)
Adjustable(2)(3)$
73,325,000.00
Senior/Adjustable
August 2036
AAA
Aaa
Rate
Class A-I-4
Regular(1)
Adjustable(2)(3)$
25,406,000.00
Senior/Adjustable
October 2036
AAA
Aaa
Rate
Class A-II
Regular(1)
Adjustable
$
236,806,000.00
Senior/Adjustable
October 2036
AAA
Aaa
(2)(3)
Rate
Class M-1
Regular(1)
Adjustable(2)(3)$
30,660,000.00
Mezzanine/Adjustable
October 2036
AA+
Aa1
Rate
Class M-2
Regular(1)
Adjustable(2)(3)$
26,645,000.00
Mezzanine/Adjustable
October 2036
AA
Aa2
Rate
Class M-3
Regular(1)
Adjustable(2)(3)$
16,060,000.00
Mezzanine/Adjustable
October 2036
AA-
Aa3
Rate
Class M-4
Regular(1)
Adjustable(2)(3)$
14,235,000.00
Mezzanine/Adjustable
October 2036
A+
A1
Rate
Class M-5
Regular(1)
Adjustable(2)(3)$
13,870,000.00
Mezzanine/Adjustable
October 2036
A
A2
Rate
Class M-6
Regular(1)
Adjustable(2)(3)$
12,045,000.00
Mezzanine/Adjustable
October 2036
A-
A3
Rate
Class M-7
Regular(1)
Adjustable(2)(3)$
10,220,000.00
Mezzanine/Adjustable
October 2036
BBB+
Baa1
Rate
Class M-8
Regular(1)
Adjustable(2)(3)$
Mezzanine/Adjustable
October 2036
BBB
Baa2
7,665,000.00
Rate
Class M-9
Regular(1)
Adjustable(2)(3)$
10,585,000.00
Mezzanine/Adjustable
October 2036
BBB-
Baa3
Rate
Class SB
Regular
(4)
$
31,390,055.08
Subordinate
N/A
N/A
N/A
(4)
_______________
(1)
The Class A-I,
Class A-II and Class M
Certificates
will represent
ownership of REMIC III Regular
Interests
together with
certain rights to payments to be made from amounts
received under the Yield
Maintenance
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 Yield
Maintenance
Agreement.
(2)
The REMIC III Regular
Interests,
ownership of which is represented
by the Class A-I,
Class A II and 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-I,
Class A-II 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 Yield Maintenance 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 REMIC III Regular Interest SB PO and an interest only
regular interest
designated
REMIC III Regular
Interest 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 Yield
Maintenance
Agreement
shall be outside and apart
from its rights under the REMIC III Regular Interests SB IO and SB
PO.
In
consideration
of the mutual
agreements
herein
contained,
the Depositor,
the Master Servicer and the Trustee agree as
follows:
ARTICLE I
DEFINITIONS
Section 1.01
Definitions.
Whenever used in this
Agreement,
the following
words and phrases,
unless the context
otherwise
requires,
shall have the
meanings specified in this Article.
Accrued
Certificate
Interest:
With respect to each
Distribution
Date and each Class of
Class A
Certificates and Class M
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 by Relief Act Shortfalls on the related
Mortgage
Loans during the related Due Period.
The portion of
any
Prepayment
Interest
Shortfalls or Relief Act
Shortfalls
allocated to the Class A
Certificates
will be based upon the related
Senior
Percentage of all such reductions
with respect to the related
Mortgage Loans,
such
reducutions
will be allocated among the
related Class A Certificates,
on a pro-rata,
on the basis of Accrued
Certificate
Interest payable on such
Distribution Date absent
such reductions,
with the remainder of such reductions allocated among the Holders
of all Classes of Class M Certificatets,
pro rata,
on the basis of Accrued Certificate Interest payable 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 related
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
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.
Affiliate:
With respect to any Person,
any other Person
controlling,
controlled by or under common control with such first
Person.
For purposes of this definition,
"control" means the power to direct the management and policies of
such Person,
directly or
indirectly,
whether
through
the
ownership
of
voting
securities,
by
contract
or
otherwise;
and the terms
"controlling"
and
"controlled" have meanings correlative to the foregoing.
Agreement:
This Pooling and Servicing Agreement and all amendments hereof and
supplements hereto.
Amount Held for Future
Distribution:
With respect to any
Distribution
Date, the total of the amounts held in the Custodial
Account at the close of business on the preceding
Determination Date on account of (i) Liquidation
Proceeds,
Subsequent
Recoveries,
Insurance Proceeds,
REO Proceeds,
Principal
Prepayments,
Mortgage Loan purchases made pursuant to Section 2.02,
2.03, 2.04 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.
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,
and (y) amounts
permitted to be withdrawn by the Master
Servicer from the
Custodial Account in respect of the Mortgage Loans pursuant to
clauses (ii)-(x), inclusive, of Section 3.10(a).
Balloon Loan:
Each of the Mortgage
Loans having an original
term to maturity that is shorter than the related
amortization
term.
Balloon
Payment:
With respect to any Balloon Loan, the related
Monthly
Payment payable on the stated maturity date of such
Balloon Loan.
Bankruptcy Code:
The Bankruptcy Code of 1978, as amended.
Basis Risk Shortfalls:
The Group I Basis Risk
Shortfalls,
Group II Basis Risk Shortfalls and Class M Basis Risk Shortfalls,
as applicable.
Book-Entry Certificate:
Any Certificate registered in the name of the Depository or its
nominee.
Business
Day:
Any day other
than (i) a Saturday
or a Sunday or (ii) a day on which
banking
institutions
in the State of
California,
the State of
Minnesota,
the State of Texas,
the State of New York or the State of
Illinois
(and such
other
state or
states in which the
Custodial
Account or the
Certificate
Account are at the time
located)
are
required or
authorized
by law or
executive order to be closed.
Capitalization
Reimbursement
Amount:
With respect to any
Distribution
Date, the amount of Advances or Servicing
Advances
that were added to the Stated
Principal
Balance of the Mortgage
Loans during the prior
calendar
month and reimbursed to the Master
Servicer or Subservicer on or prior to such Distribution Date
pursuant to Section 3.10(a)(vii).
Cash
Liquidation:
With respect to any
defaulted
Mortgage
Loan other than a Mortgage
Loan as to which an REO
Acquisition
occurred,
a determination by the Master Servicer that it has received all
Insurance Proceeds,
Liquidation Proceeds and other payments
or cash
recoveries
which the Master
Servicer
reasonably
and in good faith expects to be finally
recoverable
with respect to such
Mortgage Loan.
Certificate:
Any Class A Certificate, Class M Certificate, Class 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-EMX8"
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.
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
or
Class
M
Certificate,
on
any
date
of
determination,
an amount equal to (i) the Initial Certificate
Principal Balance of such Certificate as specified on the face
thereof,
minus (ii) the sum of (x) the aggregate of all amounts
previously
distributed
with respect to such
Certificate
(or any predecessor
Certificate) and applied to reduce the Certificate
Principal
Balance thereof pursuant to Section 4.02(c) and (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 Balances of: (i) the Class A-I
Certificates and Class M
Certificates will be increased,
in each case to the extent to which a Realized Loss was
previously
allocated
thereto and remaining
unreimbursed,
by the Subsequent
Recovery
Allocation
Amount for Loan Group I in the following order of priority:
first to the Class A-I
Certificates,
pro rata, and
then to the Class M-1,
Class M-2,
Class M-3,
Class M-4,
Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9 Certificates, and
(ii) the Class A-II and Class M Certificates
will be increased,
in each case, to the extent of Realized Losses
previously
allocated
thereto
and
remaining
unreimbursed,
by the
Subsequent
Recovery
Allocation
Amount
for Loan Group II in the
following
order of
priority: to the Class A-II,
Class M-1,
Class M-2,
Class M-3,
Class M-4,
Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9
Certificates.
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
and Class M
Certificates then
outstanding,
which represents the sum of (i) the Initial Principal Balance of
the REMIC III Regular Interest SB-PO,
as reduced by Realized Losses
allocated
thereto and payments
deemed made thereon,
and (ii) accrued and unpaid interest on the REMIC
III Regular
Interest SB-IO, as reduced by Realized Losses
allocated
thereto.
The Class R
Certificates
will not have a Certificate
Principal Balance.
Certificate
Register
and
Certificate
Registrar:
The
register
maintained
and
the
registrar
appointed
pursuant
to
Section 5.02.
Class:
Collectively, all of the Certificates or uncertificated interests
bearing the same designation.
Class A
Certificates:
Collectively,
the
Class A-I-1
Certificates,
Class A-I-2
Certificates,
Class A-I-3
Certificates,
Class A-I-4 Certificates and Class A-II Certificates.
Class A Interest
Distribution
Priority:
With respect to each class of Class A Certificates and any
Distribution
Date, the
amount available for payment of Accrued
Certificate
Interest thereon for that
Distribution
Date plus Accrued
Certificate
Interest
thereon remaining unpaid from any prior Distribution Date, in the
amounts and priority as follows:
(i)
first, concurrently,
to the Class A-I Certificates,
pro rata, from the Class A-I Interest Remittance Amount and to the
Class
A-II Certificates, from the Class A-II Interest Remittance Amount;
(ii)
second, to the Class A-I Certificates,
pro rata, from the remaining Class A-II Interest
Remittance Amount or to the
Class A-II
Certificates,
from the
remaining
Class A-I
Interest
Remittance
Amount,
as needed after taking into
account any distributions in respect of interest on the Class A
Certificates made in first above;
(iii)
third, concurrently,
from the Principal Remittance Amount related to Loan Group I to the
Class A-I Certificates, pro
rata, and from the Principal Remittance Amount related to Loan
Group II to the Class A-II Certificates,
after taking
into account any distributions in respect of interest on the Class
A Certificates made in first and second above; and
(iv)
fourth,
from the remaining Principal
Remittance Amount related to Loan Group II to the Class A-I
Certificates,
pro
rata, or from the remaining
Principal
Remittance Amount related to Loan Group I to the Class A-II
Certificates,
as
needed after taking into account any
distributions in respect of interest on the Class A Certificates
made in first,
second and third above.
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-I-1
Certificate:
Any
one of
the
Class A-I-1
Certificates
executed
by
the
Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the
form
annexed
hereto
as
Exhibit A,
senior
to the
Class M
Certificates,
Class
SB
Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
in respect of Group I Loans
as set forth in Section 4.05,
and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the
REMIC
Provisions and (ii) the right to receive payments under the Yield
Maintenance Agreement.
Class A-I-1 Margin:
0.0800% per annum.
Class A-I-2
Certificate:
Any
one of
the
Class A-I-2
Certificates
executed
by
the
Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the
form
annexed
hereto
as
Exhibit A,
senior
to
the
Class M
Certificates,
Class SB
Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
in respect of Group I Loans
as set forth in Section 4.05,
and evidencing (i) an interest
designated as a "regular interest" in REMIC II for purposes of the
REMIC
Provisions and (ii) the right to receive payments under the Yield
Maintenance Agreement.
Class A-I-2 Margin:
0.1200% per annum.
Class A-I-3
Certificate:
Any
one of
the
Class A-I-3
Certificates
executed
by
the
Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed
hereto
as
Exhibit A,
senior
to the
Class M
Certificates,
Class
SB
Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
in respect of Group I Loans
as set forth in
Section 4.05,
and
evidencing
(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
Yield Maintenance Agreement.
Class A-I-3
Margin:
Initially,
0.1700% per annum, and on any Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.3400% per
annum.
Class A-I-4
Certificate:
Any
one of
the
Class A-I-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
SB
Certificates and Class R
Certificates
with respect to distributions and the allocation of Realized Losses
in respect of Group I Loans
as set forth in
Section 4.05,
and
evidencing
(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
Yield Maintenance Agreement.
Class A-I-4
Margin:
Initially,
0.2500% per annum, and on any Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.5000% per
annum.
Class A-I Certificates:
Collectively,
the Class A-I-1 Certificates,
Class A-I-2 Certificates,
Class A-I-3 Certificates and
Class A-I-4 Certificates.
Class A-I Interest
Remittance
Amount:
With respect to any
Distribution
Date,
the portion of the
Available
Distribution
Amount for that Distribution Date attributable to interest received
or advanced with respect to the Group I Loans.
Class A-II
Certificate:
Any one of the Class A-II
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
SB
Certificates
and
Class R
Certificates
with respect to distributions and the allocation of Realized Losses
in respect of Group II Loans as set forth in
Section 4.05,
and evidencing (i) an interest
designated as a "regular interest" in REMIC III for purposes of the
REMIC Provisions and
(ii) the right to receive payments under the Yield Maintenance
Agreement.
Class A-II Interest
Remittance
Amount:
With respect to any
Distribution
Date,
the portion of the Available
Distribution
Amount for that Distribution Date attributable to interest received
or advanced with respect to the Group II Loans.
Class A-II
Margin:
Initially,
0.1350% per annum, and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.2700% per
annum.
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
and
Class M-9
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,
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 Yield Maintenance Agreement.
Class M-1
Margin:
Initially,
0.3000% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.4500% 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:
(iii)
the
remaining
Principal
Distribution
Amount
for that
Distribution
Date
after
distribution
of the
Class A
Principal
Distribution Amount; and
(iv)
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,
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 Yield Maintenance Agreement.
Class M-2
Margin:
Initially,
0.3200% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.4800% 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,
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 Yield Maintenance Agreement.
Class M-3
Margin:
Initially,
0.3400% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.5100% 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,
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 Yield Maintenance Agreement.
Class M-4
Margin:
Initially,
0.3800% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.5700% 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,
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 Yield Maintenance Agreement.
Class M-5
Margin:
Initially,
0.4100% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.6150% 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,
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 Yield Maintenance Agreement.
Class M-6
Margin:
Initially,
0.4700% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 0.7050% 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:
(iii)
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
(iv)
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,
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 Yield Maintenance Agreement.
Class M-7
Margin:
Initially,
0.8000% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 1.2000% 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,
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 Yield Maintenance Agreement.
Class M-8
Margin:
Initially,
1.0500% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 1.5750% 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,
the 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, the 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,
the 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,
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 Yield Maintenance Agreement.
Class M-9
Margin:
Initially,
2.1000% per annum,
and on any
Distribution
Date on and after the second
Distribution
Date
after the first possible Optional Termination Date, 3.1500% 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,
the
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,
the 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, the Class M-6 Principal
Distribution
Amount, the 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 Basis Risk Shortfall:
With respect to any class of Class M Certificates
and any
Distribution
Date, an amount equal
to the excess of (i) Accrued
Certificate
Interest
for that class
calculated
at a rate (not to exceed
14.000%)
equal to One Month
LIBOR plus the
related
Margin,
over (ii)
Accrued
Certificate
Interest
if the Pass
Through
Rate for such
Distribution
Date is
calculated
using the Class M Net WAC Cap Rate;
plus any unpaid
Class M Basis Risk
Shortfall
from prior
Distribution
Dates,
plus
interest
thereon,
to the extent not previously paid from Excess Cash Flow, at a rate
(not to exceed 14.000%) equal to One Month LIBOR
plus the related Margin.
Class M Net WAC Cap Rate:
With
respect
to any
Distribution
Date and the Class M
Certificates,
a per annum rate equal to
the
weighted
average of (i) the Group I Net WAC Cap Rate and (ii)
Group II Net WAC Cap Rate,
weighted
on the basis of the
related
Subordinate Component.
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 a
REMIC for purposes of the REMIC Provisions.
Class SB
Certificate:
Any one of the Class SB
Certificates
executed by the Trustee and
authenticated
by the
Certificate
Registrar
substantially
in the form annexed hereto as Exhibit C,
subordinate
to the Class A
Certificates
and Class M Certificates
with
respect to
distributions
and the
allocation
of
Realized
Losses as set forth in Section
4.05,
and
evidencing
an interest
comprised of "regular
interests"
in REMIC III
together with certain
rights to payments
under the Yield
Maintenance
Agreement for
purposes of the REMIC Provisions.
Closing Date:
September 28, 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-EMX8.
Credit Repository:
Equifax, Transunion and Experian, or their successors in interest.
Curtailment:
Any Principal Prepayment made by a Mortgagor which is not a
Principal Prepayment in Full.
Custodial
Account:
The
custodial
account or accounts
created and
maintained
pursuant to
Section 3.07
in the name of a
depository
institution,
as custodian
for the holders of the
Certificates,
for the holders of certain
other
interests in mortgage
loans serviced or sold by the Master Servicer and for the Master
Servicer,
into which the amounts set forth in Section 3.07
shall be
deposited directly.
Any such account or accounts shall be an Eligible Account.
Custodial
Agreement:
An
agreement
that may be entered into among the
Depositor,
the Master
Servicer,
the Trustee and a
Custodian in substantially the form of Exhibit E hereto.
Custodial
File:
Any
mortgage
loan
document in the
Mortgage
File that is required to be
delivered to the Trustee or the
Custodian pursuant to Section 2.01(b) of this Agreement.
Custodian:
Wells Fargo Bank, N.A., or any successor custodian appointed
pursuant to a Custodial Agreement.
Cut-off Date:
September 1, 2006.
Cut-off Date Balance:
$730,000,055.08.
Cut-off Date Principal
Balance:
With respect to any Mortgage Loan, the unpaid principal
balance thereof at the Cut-off Date
after giving effect to all
installments
of principal due on or prior
thereto (or due in the month of the Cut-off
Date),
whether or
not received.
Debt Service
Reduction:
With respect to any Mortgage
Loan, a reduction in the scheduled
Monthly
Payment for such Mortgage
Loan by a court of competent
jurisdiction in a proceeding under the Bankruptcy Code, except such
a reduction
constituting a Deficient
Valuation or any reduction that results in a permanent forgiveness
of principal.
Deficient
Valuation:
With respect to any Mortgage
Loan, a valuation by a court of competent
jurisdiction
of the Mortgaged
Property
in an amount
less than the then
outstanding
indebtedness
under the
Mortgage
Loan,
or any
reduction
in the
amount of
principal to be paid in connection with any scheduled
Monthly
Payment that
constitutes a permanent
forgiveness of principal,
which
valuation or reduction results from a proceeding under the
Bankruptcy Code.
Definitive Certificate:
Any definitive, fully registered Certificate.
Deleted Mortgage Loan:
A Mortgage Loan replaced or to be replaced with a Qualified
Substitute Mortgage Loan.
Delinquent:
As used herein,
a Mortgage
Loan is
considered
to be: "30 to 59 days" or "30 or more days"
delinquent
when a
payment due on any
scheduled due date remains
unpaid as of the close of business on the next
following
monthly
scheduled due date;
"60 to 89 days" or "60 or more
days"
delinquent
when a
payment
due on any
scheduled
due date
remains
unpaid as of the close of
business on the second
following
monthly
scheduled due date; and so on. The
determination
as to whether a Mortgage Loan falls into
these
categories
is made as of the close of business on the last
business
day of each month.
For example,
a Mortgage
Loan with a
payment
due on July 1 that
remained
unpaid as of the close of
business
on August 31 would then be
considered
to be 30 to 59 days
delinquent.
Delinquency
information
as of the
Cut-off
Date is
determined
and
prepared
as of the close of
business on the last
business day immediately prior to the Cut-off Date.
Depositor:
As defined in the preamble hereto.
Depository:
The
Depository
Trust
Company,
or any
successor
Depository
hereafter
named.
The
nominee
of the
initial
Depository for purposes of registering
those
Certificates
that are to be Book-Entry
Certificates is Cede & Co. The Depository shall
at all times be a "clearing
corporation"
as defined in
Section 8-102(a)(5)
of the Uniform
Commercial Code of the State of New York
and a "clearing agency" registered pursuant to the provisions of
Section 17A of the Exchange Act.
Depository
Participant:
A broker,
dealer, bank or other financial
institution or other Person for whom from time to time a
Depository effects book-entry transfers and pledges of securities
deposited with the Depository.
Derivative
Contract:
Any ISDA Master
Agreement,
together with the related Schedule and
Confirmation,
entered into by the
Trustee and a Derivative Counterparty in accordance with Section
4.09.
Derivative Counterparty:
Any counterparty to a Derivative Contract as provided in Section
4.09
Destroyed Mortgage Note:
A Mortgage Note the original of which was permanently lost or
destroyed and has not been replaced.
Determination
Date:
With
respect to any
Distribution
Date,
the 20th day (or if such 20th day is not a Business
Day, the
Business Day immediately following such 20th day) of the month of
the related Distribution Date.
Disqualified
Organization:
Any organization defined as a "disqualified
organization" under
Section 860E(e)(5) of the Code,
including,
if not otherwise included,
any of the following:
(i) the United States, any State or political
subdivision
thereof, any
possession of the United States, or any agency or
instrumentality
of any of the foregoing (other than an
instrumentality
which is a
corporation
if all of its
activities
are subject to tax and,
except for Freddie
Mac, a majority of its board of
directors
is not
selected by such governmental unit), (ii) a foreign
government,
any international
organization,
or any agency or instrumentality of
any of the foregoing,
(iii) any organization (other than certain farmers' cooperatives
described in Section 521 of the Code) which is
exempt from the tax
imposed by Chapter 1 of the Code
(including
the tax imposed by
Section 511
of the Code on
unrelated
business
taxable
income) and (iv) rural
electric and telephone
cooperatives
described in
Section 1381(a)(2)(C)
of the Code. A Disqualified
Organization
also
includes
any
"electing
large
partnership,"
as defined in
Section 775(a)
of the Code and any other
Person so
designated by the Trustee based upon an Opinion of Counsel that the
holding of an Ownership
Interest in a Class R
Certificate by such
Person may cause any REMIC or any Person having an Ownership
Interest in any Class of
Certificates
(other than such Person) to incur
a liability
for any
federal
tax imposed
under the Code that would not
otherwise
be imposed but for the
Transfer of an
Ownership
Interest in a Class R
Certificate to such Person. The terms "United States," "State" and
"international
organization"
shall have the
meanings set forth in Section 7701 of the Code or successor
provisions.
Distribution
Date:
The 25th day of any month
beginning
in
October
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 September 27, 2006,
among the Trustee on behalf of the Trust Fund, U.S.
Bank National Association, in its individual capacity as agent
thereunder and the Depository.
Due Date:
With respect to any
Distribution
Date and any Mortgage
Loan,
the day during the related Due Period on which the
Monthly Payment is due.
Due Period:
With respect to any Distribution Date, the calendar month of such
Distribution Date.
Eligible
Account:
An
account
that
is any
of the
following:
(i)
maintained
with a
depository
institution
the
debt
obligations
of which have been rated by each
Rating
Agency in its
highest
rating
available,
or (ii) an account or
accounts in a
depository
institution in which such accounts are fully insured to the limits
established by the FDIC,
provided that any deposits not
so insured shall,
to the extent
acceptable to each Rating Agency,
as evidenced in writing,
be maintained such that (as evidenced by
an Opinion of Counsel
delivered
to the Trustee
and each Rating
Agency) the
registered
Holders of
Certificates
have a claim with
respect to the funds in such
account or a
perfected
first
security
interest
against
any
collateral
(which
shall be limited to
Permitted
Investments)
securing
such funds
that is
superior
to claims of any other
depositors
or
creditors
of the
depository
institution
with
which such
account is
maintained,
or (iii) in the case 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
department
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 and
each
Loan
Group,
the
lesser
of
(a) one-twelfth
of 0.125% of the Stated Principal Balance of the related Mortgage
Loans
immediately
preceding such Distribution Date
and (b) the sum of the Servicing Fee and all income and gain on
amounts held in the Custodial
Account and the Certificate
Account and
payable to the
Certificateholders
with
respect to such
Distribution
Date,
in each case with
respect to the
related
Loan Group;
provided that for purposes of this definition the amount of the
Servicing Fee will not be reduced
pursuant to
Section 7.02(a)
except
as may be required pursuant to the last sentence of such Section.
ERISA:
The Employee Retirement Income Security Act of 1974, as amended.
Event of Default:
As defined in Section 7.01.
Excess Cash Flow:
With respect to any
Distribution
Date,
an amount equal to the sum of (A) the excess of (i) the Available
Distribution
Amount for that
Distribution Date 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 and Class M
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
and Class M
Certificates on such
Distribution
Date, (B) the
Overcollateralization
Reduction
Amount,
if any,
for that
Distribution
Date and (C) any
Yield
Maintenance
Agreement
Payment
received
by the
Trustee
for that
Distribution Date.
Excess
Overcollateralization
Amount:
With
respect
to
any
Distribution
Date,
the
excess,
if
any,
of
(a)
the
Overcollateralization Amount on such Distribution Date over (b) the
Required Overcollateralization Amount for such Distribution Date.
Exchange Act:
The Securities Exchange Act of 1934, as amended.
Expense Fee Rate:
With respect to any Mortgage
Loan as of any date of
determination,
the sum of the
applicable
Servicing
Fee Rate and the per annum rate at which the applicable
Subservicing Fee accrues.
Fannie Mae:
Fannie Mae, a federally
chartered
and privately
owned
corporation
organized
and existing
under the Federal
National Mortgage Association Charter Act, or any successor
thereto.
FDIC:
Federal Deposit Insurance Corporation or any successor thereto.
Final
Distribution
Date: The Distribution
Date on which the final
distribution in respect of the Certificates will be made
pursuant
to
Section 9.01,
which Final
Distribution
Date shall in no event be later than the end of the 90-day
liquidation
period
described in Section 9.02.
Final
Scheduled
Distribution
Date:
Solely for purposes of the face of the
Certificates,
as follows:
with respect to the
Class A-I-1
Certificates,
the
Distribution
Date
occurring
in May 2030;
with respect to the
Class A-I-2
the
Distribution
Date
occurring in April 2035;
with respect to the
Class A-I-3
the
Distribution
Date
occurring in August 2036;
and with respect to the
Class A-I-4 and Class A-II
Certificates and each Class of Class M
Certificates,
the Distribution
Date occurring in October 2036. No
event of
default
under
this
Agreement
will
arise or
become
applicable
solely by reason of the
failure
to retire
the
entire
Certificate
Principal
Balance
of any
Class of
Class A
Certificates
or
Class M
Certificates
on or before
its Final
Scheduled
Distribution Date.
Fitch:
Fitch Ratings, or its successors in interest.
Foreclosure
Profits:
With respect to any Distribution Date or related
Determination Date and any Mortgage Loan, the excess,
if any,
of
Liquidation
Proceeds,
Insurance
Proceeds
and REO
Proceeds
(net of all
amounts
reimbursable
therefrom
pursuant to
Section 3.10(a)(ii))
in respect of each Mortgage Loan or REO Property for which a Cash
Liquidation or REO Disposition
occurred in the
related Prepayment Period over the sum of the unpaid principal
balance of such Mortgage Loan or REO Property
(determined,
in the case
of an REO
Disposition,
in
accordance
with
Section 3.14)
plus
accrued
and unpaid
interest at the
Mortgage
Rate on such unpaid
principal
balance from the Due Date to which
interest
was last paid by the
Mortgagor
to the first day of the month
following
the
month in which such Cash Liquidation or REO Disposition occurred.
Form 10-K Certification:
As defined in Section 4.03(e).
Freddie Mac:
Freddie
Mac, a corporate
instrumentality
of the United
States
created and
existing
under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor
thereto.
Group I Basis Risk
Shortfall:
With
respect to any class of Class A-I
Certificates
and any
Distribution
Date,
an amount
equal to the excess of (x) Accrued
Certificate
Interest for that class of
certificates
calculated at a rate (not to exceed
14.000%
per annum) equal to One Month LIBOR plus the related Margin over
(y) Accrued
Certificate
Interest for that class of
certificates
if
the Pass Through Rate for such
Distribution
Date is calculated using the Group I Net WAC Cap Rate; plus any
unpaid Group I Basis Risk
Shortfall from prior
Distribution
Dates, plus interest thereon to the extent
previously
unreimbursed by Excess Cash Flow calculated
at a rate (not to exceed 14.00% per annum) equal to One Month LIBOR
plus the related Margin.
Group I Loans:
The Mortgage
Loans
designated
on the Mortgage
Loan
Schedule
attached
hereto as Exhibit F-1. The Group I
Loans relate to the Class A-I Certificates, Class M Certificates
and Class SB Certificates.
Group I Net WAC Cap Rate:
With
respect to any
Distribution
Date, a per annum rate equal to the product of (a) the weighted
average of the Net
Mortgage
Rates of the
Mortgage
Loans in Loan Group I using the Net
Mortgage
Rates in effect for the
scheduled
payments due on such
Mortgage
Loans during the related due period,
and (b) a fraction
expressed
as a percentage
the
numerator of
which is 30 and the denominator of which is the actual number of
days in the related Interest Accrual Period.
Group I
Principal
Distribution
Amount:
On any
Distribution
Date,
the Class A
Principal
Distribution
Amount
for that
Distribution
Date multiplied by a fraction,
the numerator of which is the portion of the Principal
Allocation Amount related to Loan
Group I for that
Distribution
Date and the denominator of which is the Principal
Allocation Amount for all of the Mortgage Loans for
that Distribution Date.
Group I REMIC Net WAC Rate: For any
Distribution
Date, a per annum rate equal to the product of (i) the weighted
average of
the Net Mortgage
Rates (or, if
applicable,
the Modified Net
Mortgage
Rates) on the Group I
Loans using the Net Mortgage
Rates in
effect for the Monthly
Payments
due on such
Mortgage
Loans during the related Due Period,
weighted on the basis of the
respective
Stated Principal
Balances thereof for such
Distribution
Date and (ii) a fraction equal to 30 divided by the actual number
of days in
the related Interest Accrual Period.
Group II Basis Risk
Shortfall:
With respect to any class of Class A-II
Certificates
and any
Distribution
Date, an amount
equal to the excess of (x) Accrued
Certificate
Interest for that class of
certificates
calculated at a rate (not to exceed
14.000%
per annum) equal to One Month LIBOR plus the related Margin over
(y) Accrued
Certificate
Interest for that class of
certificates
if
the Pass Through Rate for such
Distribution
Date is
calculated
using the Group II Net WAC Cap Rate;
plus any unpaid Group II Basis
Risk
Shortfall
from prior
Distribution
Dates,
plus
interest
thereon to the extent
previously
unreimbursed
by Excess Cash Flow
calculated at a rate (not to exceed 14.00% per annum) equal to One
Month LIBOR plus the related Margin.
Group II Loans:
The Mortgage
Loans
designated on the Mortgage Loan
Schedule
attached
hereto as Exhibit F-2. The Group II
Loans relate to the Class A-II Certificates, Class M Certificates
and Class SB Certificates.
Group II 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 of the
mortgage
loans in Loan
Group II using the Net
Mortgage
Rates in effect for the
scheduled
payments due on such
Mortgage
Loans
during the related due period,
and (b) a fraction
expressed as a
percentage,
the
numerator
of which is 30 and the
denominator
of which is the actual
number of days in the related
Interest Accrual Period.
Group II
Principal
Distribution
Amount:
On any
Distribution
Date,
the Class A
Principal
Distribution
Amount for that
Distribution
Date multiplied by a fraction,
the numerator of which is the portion of the Principal
Allocation Amount related to Loan
Group II for that Distribution
Date and the denominator of which is the Principal
Allocation Amount for all of the Mortgage Loans for
that Distribution Date.
Group II
REMIC Net WAC Rate:
With
respect to any
Distribution
Date,
the Group II Net WAC Cap Rate for such
Distribution
Date.
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 October 2006, the period
commencing the Closing Date and
ending on the day preceding the
Distribution
Date in October 2006, and with respect to any
Distribution
Date after the Distribution
Date in October
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 and Class M 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.
Limited Repurchase Right Holder:
RFC Asset Holdings II, Inc., or its successor.
Liquidation
Proceeds:
Amounts (other than Insurance
Proceeds) received by the Master Servicer in connection with the
taking
of an entire
Mortgaged
Property by exercise of the power of eminent domain or condemnation
or in connection with the liquidation of a
defaulted Mortgage Loan through trustee's sale, foreclosure sale or
otherwise, other than REO Proceeds and Subsequent Recoveries.
Loan Group I:
The Mortgage Loans designated on the Mortgage Loan Schedule
attached hereto as Exhibit F-1.
Loan Group II:
The Mortgage Loans designated on the Mortgage Loan Schedule
attached hereto as Exhibit F-2.
Loan-to-Value
Ratio:
As of any date,
the
fraction,
expressed
as a
percentage,
the
numerator
of which is the
current
principal
balance of the related
Mortgage Loan at the date of
determination
and the
denominator of which is the Appraised Value of
the related Mortgaged Property.
Margin: The Class A-I-1 Margin,
Class A-I-2
Margin,
Class A-I-3 Margin,
Class A-I-4 Margin,
Class A-II 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
or Class M-9 Margin, as applicable.
Marker Rate: With respect to the Class SB
Certificates or the SB-IO REMIC III
Regular
Interest and any
Distribution
Date,
in relation to the REMIC II
Regular
Interests
LT1,
LT2,
LT3,
LT4 and LT-Y1,
a per annum rate equal to two (2) times the weighted
average of the
Uncertificated
REMIC II
Pass-Through
Rates for REMIC II Regular Interest LT2 and REMIC II Regular
Interest LT3. With
respect to the Class SB
Certificates or the SB-IO REMIC III
Regular Interest and any
Distribution
Date, in relation to the REMIC II
Regular
Interests
LT5, LT6, LT7, LT8 and LT-Y2,
a per annum rate equal to two (2) times the weighted
average of the
Uncertificated
REMIC II Pass-Through Rates for REMIC II Regular Interest LT6 and
REMIC II Regular Interest LT7.
Master Servicer:
As defined in the preamble hereto.
Maturity Date: With respect to each Class of
Certificates
representing
ownership of REMIC I,
REMIC II or REMIC III Regular
Interests or
Uncertificated
Regular
Interests 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,
October 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.
Maximum Net Mortgage
Rate:
With respect to any
adjustable-rate
Mortgage
Loan and any date of
determination,
the Maximum
Mortgage
Rate minus the
Expense
Fee Rate.
With
respect to any
fixed-rate
Mortgage
Loan and any date of
determination,
the Net
Mortgage Rate.
MERS:
Mortgage Electronic
Registration
Systems,
Inc., a corporation
organized and existing under the laws of the State of
Delaware, or any successor thereto.
MERS(R)System:
The system of recording transfers of Mortgages electronically
maintained by MERS.
MIN:
The Mortgage Identification Number for Mortgage Loans registered
with MERS on the MERS(R)System.
Minimum
Mortgage Rate:
With respect to any
adjustable-rate
Mortgage Loan, a per annum rate equal to the greater of (i) the
Note Margin and (ii) the rate
indicated
on the Mortgage
Loan
Schedule as the "NOTE
FLOOR,"
which rate may be
applicable
to such
Mortgage Loan at any time during the life of such Mortgage Loan.
Modified Mortgage Loan:
Any Mortgage Loan that has been the subject of a Servicing
Modification.
Modified
Net
Mortgage
Rate:
With respect to any
Mortgage
Loan that is the subject of a Servicing
Modification,
the Net
Mortgage Rate minus the rate per annum by which the Mortgage Rate
on such Mortgage Loan was reduced.
MOM Loan:
With respect to any Mortgage Loan,
MERS acting as the mortgagee of such Mortgage
Loan,
solely as nominee for the
originator of such Mortgage Loan and its successors and assigns, at
the origination thereof.
Monthly
Payment:
With respect to any Mortgage Loan
(including
any REO
Property)
and the Due Date in any Due Period,
the
payment of principal
and interest due thereon in accordance
with the
amortization
schedule at the time
applicable
thereto
(after
adjustment,
if any, for Curtailments and for Deficient
Valuations
occurring prior to such Due Date but before any adjustment to such
amortization
schedule by reason of any
bankruptcy,
other than a Deficient
Valuation,
or similar
proceeding
or any
moratorium or
similar
waiver or grace period and before any
Servicing
Modification
that
constitutes
a reduction
of the
interest
rate on such
Mortgage Loan).
Moody's:
Moody's Investors Service, Inc., or its successors in interest.
Mortgage:
With respect to each Mortgage Note, the mortgage,
deed of trust or other
comparable
instrument
creating a first
or junior lien on an estate in fee simple or leasehold interest in
real property securing a Mortgage Note.
Mortgage File:
The mortgage
documents
listed in
Section 2.01
pertaining to a particular
Mortgage Loan and any additional
documents required to be added to the Mortgage File pursuant to
this Agreement.
Mortgage Loans:
Such of the mortgage loans
transferred and assigned to the Trustee
pursuant to Section 2.01 as from time to
time are held or deemed to be held as a part of the Trust Fund, the
Mortgage Loans
originally so held being
identified in the initial
Mortgage Loan
Schedule,
and Qualified
Substitute
Mortgage
Loans held or deemed held as part of the Trust Fund
including,
without
limitation, each related Mortgage Note, Mortgage and Mortgage File
and all rights appertaining thereto.
Mortgage Loan
Schedule:
The lists of the Mortgage
Loans
attached
hereto as
Exhibit F-1
and Exhibit F-2 (as amended from
time to time to reflect the addition of Qualified
Substitute
Mortgage Loans),
which lists shall set forth at a minimum the following
information as to each Mortgage Loan:
(i)
the Mortgage Loan identifying number ("RFC LOAN #");
(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 WAC Cap Rate:
The Group I Net WAC Cap Rate, Group II Net WAC Cap Rate or Class M
Net WAC Cap Rate, as applicable.
Non-United States Person:
Any Person other than a United States Person.
Nonrecoverable
Advance:
Any Advance
previously made or proposed to be made by the Master Servicer or
Subservicer in respect
of a Mortgage Loan (other than a Deleted
Mortgage
Loan) which,
in the good faith judgment of the Master
Servicer,
will not, or, in
the case of a proposed Advance,
would not, be ultimately
recoverable by the Master Servicer from related Late Collections,
Insurance
Proceeds,
Liquidation
Proceeds or REO
Proceeds.
To the extent
that any
Mortgagor
is not
obligated
under the
related
Mortgage
documents to pay or reimburse any portion of any Servicing
Advances that are outstanding
with respect to the related Mortgage Loan as
a result of a
modification
of such
Mortgage
Loan by the Master
Servicer,
which
forgives
amounts
which the Master
Servicer
or
Subservicer had previously
advanced,
and the Master Servicer
determines
that no other source of payment or
reimbursement
for such
advances is available to it, such Servicing
Advances shall be deemed to be
Nonrecoverable
Advances.
The determination by the Master
Servicer that it has made a Nonrecoverable
Advance shall be evidenced by a certificate of a Servicing Officer,
Responsible Officer or
Vice President or its
equivalent or senior officer of the Master
Servicer,
delivered to the Depositor,
the Trustee,
and the Master
Servicer setting forth such
determination,
which shall include any other
information or reports obtained by the Master Servicer such
as
property
operating
statements,
rent
rolls,
property
inspection
reports
and
engineering
reports,
which may
support
such
determinations.
Notwithstanding
the above,
the Trustee shall be entitled to rely upon any
determination by the Master Servicer that
any Advance
previously made is a
Nonrecoverable
Advance or that any proposed
Advance,
if made,
would
constitute a Nonrecoverable
Advance.
Nonsubserviced
Mortgage
Loan:
Any Mortgage Loan that, at the time of reference
thereto,
is not subject to a
Subservicing
Agreement.
Note Margin:
With respect to each
adjustable-rate
Mortgage
Loan, the fixed
percentage
set forth in the related
Mortgage
Note and indicated on the Mortgage Loan Schedule as the "NOTE
MARGIN," which
percentage is added to the Index on each
Adjustment Date
to determine
(subject to rounding in accordance
with the related
Mortgage Note, the Periodic Cap, the Maximum
Mortgage Rate and the
Minimum Mortgage Rate) the interest rate to be borne by such
adjustable-rate Mortgage Loan until the next Adjustment Date.
Notional Amount:
With respect to the Class SB
Certificates or the REMIC II Regular Interest SB-IO,
immediately prior to any
Distribution Date, the aggregate of the Uncertificated Principal
Balances of the REMIC I Regular Interests.
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 and which counsel
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 and Class M 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 and Class M
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
and any
Distribution
Date or the REMIC III
Regular
Interest SB-IO, 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 (viii) below, and the denominator of which is
the aggregate
principal
balance of the REMIC II Regular
Interests.
For
purposes of
calculating
the
Pass-Through
Rate for the Class SB
Certificates
or the SB-IO
REMIC III
Regular
Interest,
the
numerator is equal to the sum of the following components:
(i)
the
Uncertificated
Pass-Through
Rate for REMIC II
Regular
Interest
LT1 minus the related
Marker Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT1;
(ii)
the
Uncertificated
Pass-Through
Rate for REMIC II
Regular
Interest
LT2 minus the related
Marker Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT2;
(iii)
the Uncertificated
Pass-Through Rate for REMIC II Regular Interest LT4 minus twice the
related Marker Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT4;
(iv)
the
Uncertificated
Pass-Through
Rate for REMIC II Regular
Interest
LT5 minus the related
Marker
Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT5;
(v)
the
Uncertificated
Pass-Through
Rate for REMIC II Regular
Interest
LT6 minus the related
Marker
Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT6;
(vi)
the Uncertificated
Pass-Through Rate for REMIC II Regular Interest LT8 minus twice the
related Marker Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT8;
(vii)
the
Uncertificated
Pass-Through
Rate for REMIC II Regular
Interest LT Y1 minus the related
Marker Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT-Y1; and
(viii)
the
Uncertificated
Pass-Through
Rate for REMIC II Regular
Interest LT Y2 minus the related
Marker Rate,
applied to a notional amount equal to the Uncertificated Principal
Balance of REMIC II Regular Interest LT-Y2.
Paying Agent:
U.S. Bank National Association or any successor Paying Agent
appointed by the Trustee.
Percentage
Interest:
With respect to any Class A
Certificate or Class M
Certificate,
the undivided
percentage
ownership
interest
in the related
Class evidenced
by such
Certificate,
which
percentage
ownership
interest
shall be equal to the Initial
Certificate
Principal
Balance thereof divided by the aggregate
Initial
Certificate
Principal Balance of all of the Certificates of
the same Class.
The
Percentage
Interest with respect to a Class SB
Certificate or Class R
Certificate
shall be stated on the face
thereof.
Periodic
Cap:
With respect to each
adjustable-rate
Mortgage
Loan,
the periodic
rate cap that limits the increase or the
decrease of the related Mortgage Rate on any Adjustment Date
pursuant to the terms of the related Mortgage Note.
Permitted Investments:
One or more of the following:
(i)
obligations
of or
guaranteed
as to principal
and interest by the United
States or any agency or
instrumentality
thereof when such obligations are backed by the full faith and
credit of the United States;
(ii)
repurchase
agreements
on
obligations
specified
in clause (i)
maturing
not more than one month from the date of
acquisition
thereof,
provided that the unsecured
obligations of the party agreeing to repurchase such
obligations
are at the time rated by each Rating Agency in its highest
short-term rating available;
(iii)
federal funds,
certificates of deposit,
demand deposits,
time deposits and bankers'
acceptances (which shall each
have an original maturity of not more than 90 days and, in the case
of bankers'
acceptances,
shall in no event have
an
original
maturity
of more than 365 days or a remaining
maturity
of more than 30 days)
denominated
in United
States dollars of any U.S. depository
institution or trust company
incorporated under the laws of the United States
or any state thereof or of any domestic branch of a foreign
depository
institution or trust company;
provided that
the debt
obligations of such
depository
institution or trust company at the date of acquisition
thereof have been
rated by each Rating Agency in its highest
short-term rating available;
and, provided further that, if the original
maturity of such
short-term
obligations of a domestic branch of a foreign
depository
institution or trust company
shall exceed 30 days, the
short-term
rating of such
institution
shall be A-1+ in the case of Standard & Poor's if
Standard & Poor's is a Rating Agency;
(iv)
commercial
paper and
demand
notes
(having
original
maturities
of not more
than 365
days) of any
corporation
incorporated
under the laws of the United
States 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 and Class M
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
and Class M
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
Allocation Amount:
With respect to any Distribution Date, the sum of (a) the Principal
Remittance Amount for that
Distribution
Date,
(b) any Realized
Losses covered by amounts
included in clause (iv) of the
definition of Principal
Distribution
Amount and (c) the aggregate
amount of the principal
portion of Realized Losses on the Mortgage Loans in the calendar
month preceding
that
Distribution
Date, to the extent covered by Excess Cash Flow included in clause
(v) of the definition of Principal
Distribution
Amount;
provided,
however, that on any Distribution Date on which there is (i)
insufficient Subsequent Recoveries to cover all unpaid
Realized Losses on the Mortgage Loans described in clause (b)
above, in determining the Group I Principal
Distribution
Amount and the
Group II
Principal
Distribution
Amount,
Subsequent
Recoveries
will be
allocated
to the Class A-I
Certificates
and Class
A-II
Certificates,
pro rata, based on the principal
portion of unpaid Realized Losses from prior
Distribution
Dates on the Group I Loans
and Group II Loans,
respectively,
and (ii) insufficient Excess Cash Flow to cover all Realized Losses
on the Mortgage Loans described
in clause (c) above, in determining
the Group I Principal
Distribution
Amount and the Group II Principal
Distribution
Amount,
the
Excess
Cash Flow
remaining
after the
allocation
described
in clause
(b) above or (i) of this
proviso,
as
applicable,
will be
allocated to the Class A-I
Certificates
and Class A-II
Certificates,
pro rata,
based on the principal
portion of Realized
Losses
incurred during the calendar month preceding that Distribution Date
on the Group I Loans and Group II Loans, respectively.
Principal
Distribution
Amount:
With respect to any
Distribution
Date,
the lesser of (a) the excess of (x) the sum of (A)
the Available
Distribution
Amount and (B) with respect to clauses (b)(v) and (vi) below, the
Yield Maintenance
Agreement Payment for
that Distribution Date, 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), 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
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;
(xiii) with respect to adjustable rate Mortgage
Loans,
have a next Adjustment Date no later than that of the
Deleted Mortgage Loan, and (xiv) be secured by a lien with the same
lien priority as the Deleted 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
primary hazard
insurance
policy and any related escrow
payments in respect of such
Mortgage Loan are being advanced on a current basis by the Master
Servicer or a
Subservicer,
in either case without giving effect to
any Debt Service Reduction.
Realized Losses
allocated to the Class SB
Certificates
shall be allocated first to the REMIC III
Regular Interest SB-IO in
reduction of the accrued but unpaid
interest
thereon until such accrued and unpaid
interest shall have been reduced to zero and then
to the REMIC III Regular Interest SB-PO in reduction of the
Principal Balance thereof.
To the extent the Master
Servicer
receives
Subsequent
Recoveries
with
respect to any
Mortgage
Loan,
the amount of the
Realized Loss with respect to that Mortgage Loan will be reduced to
the extent such
recoveries
are applied to reduce the
Certificate
Principal Balance of any Class of Certificates on any Distribution
Date.
Record Date: With respect to each Distribution Date and the LIBOR
Certificates,
the Business Day immediately
preceding such
Distribution
Date. With respect to each
Distribution
Date and the
Certificates
(other than the LIBOR
Certificates),
the close of
business on the last Business Day of the month next preceding the
month in which the related
Distribution
Date occurs,
except in the
case of the first Record Date which shall be the Closing Date.
Reference Bank Rate:
As defined in Section 1.02.
Regular Certificates:
The Class A Certificates, Class M Certificates and Class SB
Certificates.
Regulation AB: Subpart
229.1100 - Asset Backed
Securities
(Regulation
AB), 17 C.F.R.ss.ss.229.1100-229.1123,
as such may be
amended
from time to time,
and subject to such
clarification
and
interpretation
as have been
provided by the
Commission
in the
adopting release (Asset-Backed
Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531
(January 7, 2005)) or by the
staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act:
The Servicemembers Civil Relief Act, formerly known as the
Soldiers' and Sailors' Civil Relief Act of 1940.
Relief Act
Shortfalls:
Interest
shortfalls on the Mortgage Loans
resulting
from the Relief Act or similar
legislation or
regulations.
REMIC:
A "real estate
mortgage
investment
conduit"
within the meaning of
Section 860D
of the Code. As used herein,
the
term "REMIC" shall mean REMIC I, REMIC II or REMIC III.
REMIC
Administrator:
Residential
Funding
Corporation.
If Residential Funding Corporation is found by a court of competent
jurisdiction
to no longer be able to fulfill its
obligations
as REMIC
Administrator
under this
Agreement
the Master
Servicer or
Trustee
acting as successor
Master
Servicer
shall
appoint a successor
REMIC
Administrator,
subject to
assumption
of the REMIC
Administrator obligations under this Agreement.
REMIC I:
The segregated pool of assets subject
hereto,
constituting a portion of the primary trust created hereby and to
be
administered
hereunder,
exclusive of the Yield
Maintenance
Agreement,
which is not an asset of any REMIC,
with respect to which a
separate REMIC election is to be made, consisting of:
(i)
the Mortgage Loans and the related Mortgage Files;
(ii)
all
payments on and
collections
in respect of the
Mortgage
Loans due after the Cut-off Date (other than
Monthly
Payments due in the month of the Cut-off Date) as shall be on
deposit in the Custodial
Account or in the Certificate
Account and identified as belonging to the Trust Fund;
(iii)
property
which
secured
a
Mortgage
Loan
and
which
has
been
acquired
for
the
benefit
of
the
Certificateholders by foreclosure or deed in lieu of foreclosure;
(iv)
the hazard insurance policies and Primary Insurance Policies
pertaining to the Mortgage Loans, if any; and
(v)
all proceeds of clauses (i) through (iv) above.
REMIC I Available Distribution Amount:
The Available Distribution Amount.
REMIC I Distribution
Amount:
For any Distribution
Date, the REMIC I Available
Distribution
Amount shall be distributed to
the REMIC I Regular Interests and Component I of the Class R
Certificates in the following amounts and priority:
(a)
To the extent of the portion of the REMIC I Available Distribution
Amount related to Loan Group I:
(i)
first, to REMIC I Y-1 and REMIC I Z-1 Regular Interests,
concurrently,
the Uncertificated Accrued Interest
for such Regular
Interests
remaining unpaid from previous
Distribution
Dates, pro rata according to their respective shares of such
unpaid amounts;
(ii)
second,
to the REMIC I Y-1 and REMIC I Z-1 Regular
Interests,
concurrently,
the
Uncertificated
Accrued
Interest for such Classes for the current
Distribution Date, pro rata according to their respective
Uncertificated
Accrued Interest;
and
(iii)
third, to the REMIC I Y-1 and REMIC I Z-1 Regular Interests,
the REMIC I Y-1 Principal
Distribution Amount
and the REMIC I Z-1 Principal Distribution Amount, respectively.
(b)
To the extent of the portion of the REMIC I Available Distribution
Amount related to Loan Group II:
(i)
first,
to the
REMIC I Y-2 and REMIC I Z-2 Regular
Interests,
concurrently,
the
Uncertificated
Accrued
Interest for such Classes
remaining unpaid from previous
Distribution
Dates,
pro rata according to their respective
shares of such
unpaid amounts;
(ii)
second,
to the REMIC I Y-2 and REMIC I Z-2 Regular
Interests,
concurrently,
the
Uncertificated
Accrued
Interest for such Classes for the current
Distribution Date, pro rata according to their respective
Uncertificated
Accrued Interest;
and
(iii)
third, to the REMIC I Y-2 and REMIC I Z-2 Regular Interests,
the REMIC I Y-2 Principal
Distribution Amount
and the REMIC I Z-2 Principal Distribution Amount, respectively.
(c)
To the extent of the REMIC I
Available
Distribution
Amounts for Group I and
Group II for such
Distribution
Date
remaining after payment of the amounts pursuant to paragraphs (a)
and (b) of this definition of "REMIC I Distribution Amount:"
(i)
first,
to each
Class of
REMIC I Y and REMIC I Z Regular
Interests,
pro rata
according to the amount of
unreimbursed
Realized Losses allocable to principal
previously
allocated to each such Regular Interest,
the aggregate amount of any
distributions
to the
Certificates as
reimbursement
of such Realized Losses on such
Distribution
Date pursuant to clause (xiii) in
Section 4.02(c);
provided,
however,
that any amounts
distributed
pursuant to this paragraph
(c)(i) of this definition of "REMIC I
Distribution
Amount"
shall not cause a
reduction
in the
Uncertificated
Principal
Balances
of any of the REMIC I Y and REMIC I Z
Regular Interests; and
(ii)
second, to Component I of the Class R Certificates, any remaining
amount.
REMIC I Interests:
The REMIC I Regular Interests and the Class R I Certificates.
REMIC I Y
Principal Reduction Amounts:
For any Distribution Date the amounts by which the Uncertificated
Principal Balances
of the REMIC I Y-1 Regular
Interest and REMIC I Y-2 Regular Interest
respectively
will be reduced on such
Distribution
Date by the
allocation of Realized Losses and the distribution of principal,
determined as follows:
First, for each of Loan Group I and Loan Group II determine the
related Group REMIC Net WAC Cap Rate for distributions of
interest that will be made on the next succeeding Distribution Date
(the "Group Interest Rate").
The REMIC I Principal Reduction
Amount for each of the REMIC I Y Regular Interests will be
determined pursuant to the "Generic solution for the REMIC I Y
Regular
Interests" set forth below (the "Generic Solution") by making the
following identifications among the Loan Groups and their related
REMIC I Y Regular Interests and REMIC I Z Regular Interests:
A.
Determine which Loan Group has the lower Group REMIC Net WAC Cap
Rate.
That Loan Group will be identified
with Loan Group AA and the REMIC I Y Regular Interests and REMIC I
Z Regular Interests related to that Loan Group will be
respectively identified with the REMIC I YAA and REMIC I ZAA
Regular Interests.
The Group Interest Rate for that Loan Group will be
identified with J%.
If the two Loan Groups have the same Group Interest Rate pick one
for this purpose, subject to the restriction
that each Loan Group may be picked only once in the course of any
such selections pursuant to paragraphs A and B of this definition.
B.
Determine which Loan Group has the higher Group REMIC Net WAC Cap
Rate.
That Loan Group will be identified
with Loan Group BB and the REMIC I Y Regular Interests and REMIC I
Z Regular Interests related to that Group will be respectively
identified with the REMIC I YBB and REMIC I ZBB Regular Interests.
The Group Interest Rate for that Loan Group will be identified
with K%.
If the two Loan Groups have the same Group Interest Rate the Loan
Group not selected pursuant to paragraph A, above, will
be selected for purposes of this paragraph B.
Second,
apply the
Generic
Solution
set
forth
below to
determine
the
REMIC I Y
Principal
Reduction
Amounts
for the
Distribution Date using the identifications made above.
GENERIC
SOLUTION
FOR THE
REMIC I Y
PRINCIPAL
REDUCTION
AMOUNTS:
For any
Distribution
Date,
the
amounts by which the
Uncertificated
Principal
Balances of REMIC I YAA and REMIC I ZAA Regular Interests
respectively will be reduced on such Distribution
Date by the allocation of Realized Losses and the distribution of
principal, determined as follows:
J% and K% represent the interest rates on Loan Group AA and Loan
Group BB respectively.
J% less than K%.
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
PJB =
the Loan Group AA Subordinate Balance after the allocation of
Realized Losses and distributions of
principal on such Distribution Date.
PKB =
the Loan Group BB Subordinate Balance after the allocation of
Realized Losses and distributions of
principal on such Distribution Date.
R =
the Class CB Pass Through Rate = (J%PJB + K%PKB)/(PJB + PKB)
Yj =
the REMIC I YAA Principal Balance after distributions on the prior
Distribution Date.
Yk =
the REMIC I YBB Principal Balance after distributions on the prior
Distribution Date.
(DELTA)Yj =
the REMIC I YAA Principal Reduction Amount.
(DELTA)Yk =
the REMIC I YBB Principal Reduction Amount.
Zj =
the REMIC I ZAA Principal Balance after distributions on the prior
Distribution Date.
Zk =
the REMIC I ZBB Principal Balance after distributions on the prior
Distribution Date.
(DELTA)Zj =
the REMIC I ZAA Principal Reduction Amount.
=
(DELTA)Pj - (DELTA)Yj
(DELTA)Zk =
the REMIC I ZBB Principal Reduction Amount.
=
(DELTA)Pk - (DELTA)Yk
Pj =
the aggregate Uncertificated Principal Balance of the REMIC I YAA
and REMIC I ZAA Regular Interests after
distributions on the prior Distribution Date, which is equal to the
aggregate principal balance of the Group AA Loans.
Pk =
the aggregate Uncertificated Principal Balance of the REMIC I YBB
and REMIC I ZBB Regular Interests after
distributions on the prior Distribution Date, which is equal to the
aggregate principal balance of the Loan Group BB Mortgage Loans.
(DELTA)Pj =
the aggregate principal reduction resulting on such Distribution
Date on the Loan Group AA
Mortgage Loans as a result of principal distributions (exclusive of
any amounts distributed pursuant to clauses (c)(i) or (c)(ii) of
the definition of REMIC I Distribution Amount) to be made and
Realized Losses to be allocated on such Distribution Date, if
applicable, which is equal to the aggregate of the REMIC I YAA and
REMIC I ZAA Principal Reduction Amounts.
(DELTA)Pk=
the aggregate principal reduction resulting on such Distribution
Date on the Loan Group BB
Mortgage Loans as a result of principal distributions (exclusive of
any amounts distributed pursuant to clauses (c)(i) or (c)(ii) of
the definition of REMIC I Distribution Amount) to be made and
realized losses to be allocated on such Distribution Date, which is
equal to the aggregate of the REMIC I YBB and REMIC I ZBB Principal
Reduction Amounts.
(alpha) =
.0005
(gamma) =
(R - J%)/(K% - R).
(gamma) is a non-negative number unless its denominator is zero, in
which
event it is undefined.
If (gamma) is zero, (DELTA)Yk = Yk and (DELTA)Yj =
(Yj/Pj)(DELTA)Pj.
If (gamma) is undefined, (DELTA)Yj = Yj, (DELTA)Yk =
(Yk/Pk)(DELTA)Pk. if denominator
In the remaining situations, (DELTA)Yk and (DELTA)Yj shall be
defined as follows:
1.
If Yk - (alpha)(Pk - (DELTA)Pk) = greater than 0, Yj- (alpha)(Pj -
(DELTA)Pj) = greater than 0, and (gamma) (Pj - (DELTA)Pj) less than
(Pk - (DELTA)Pk),
(DELTA)Yk = Yk - (alpha)(gamma) (Pj - (DELTA)Pj) and (DELTA)Yj = Yj
- (alpha)(Pj - (DELTA)Pj).
2.
If Yk - (alpha)(Pk - (DELTA)Pk) = greater than 0, Yj - (alpha)(Pj -
(DELTA)Pj) = greater than 0, and (gamma) (Pj - (DELTA)Pj) = greater
than (Pk - (DELTA)Pk),
(DELTA)Yk = Yk - (alpha)(Pk - (DELTA)Pk) and (DELTA)Yj = Yj -
((alpha)/(gamma))(Pk - (DELTA)Pk).
3.
If Yk - (alpha)(Pk - (DELTA)Pk) less than 0, Yj - (alpha)(Pj -
(DELTA)Pj) = greater than 0, and Yj - (alpha)(Pj - (DELTA)Pj) =
greater than
Yj - (Yk/(gamma)), (DELTA)Yk = Yk - (alpha)(gamma) (Pj - (DELTA)Pj)
and (DELTA)Yj = Yj - (alpha)(Pj - (DELTA)Pj).
4.
If Yk - (alpha)(Pk - (DELTA)Pk) less than 0, Yj - (Yk/(gamma)) =
greater than 0, and Yj - (alpha)(Pj - (DELTA)Pj) less than = Yj -
(Yk/(gamma)),
(DELTA)Yk = 0 and (DELTA)Yj = Yj - (Yk/(gamma)).
5.
If Yj - (alpha)(Pj - (DELTA)Pj) less than 0, Yj - (Yk/(gamma)) less
than 0, and Yk - (alpha)(Pk - (DELTA)Pk) less than= Yk -
((gamma)Yj),
(DELTA)Yk = Yk - ((gamma)Yj) and (DELTA)Yj = 0.
6.
If Yj - (alpha)(Pj - (DELTA)Pj) less than 0, Yk - (alpha)(Pk -
(DELTA)Pk) = greater than 0, and Yk - (alpha)(Pk - (DELTA)Pk) =
greater than
Yk - ((gamma)Yj), (DELTA)Yk = Yk - (alpha)(Pk - (DELTA)Pk) and
(DELTA)Yj = Yj - ((alpha)/(gamma))(Pk - (DELTA)Pk).
The purpose of the foregoing
definitional
provisions
together with the related
provisions
allocating
Realized Losses and
defining the REMIC I Y and REMIC I Z Principal
Distribution
Amounts is to accomplish
the following
goals in the following
order of
priority:
1.
Making the ratio of Yk to Yj equal to (gamma) after taking account
of the
allocation
Realized
Losses and the
distributions
that will be made through end of the Distribution Date to which
such provisions
relate and assuring that the Principal
Reduction
Amount for each of the REMIC I YAA,
REMIC I YBB,
REMIC I ZAA and REMIC I ZBB Regular
Interests is greater than or equal to zero
for such Distribution Date;
2.
Making (i) the
REMIC I
YAA
Principal
Balance
less than or equal to 0.0005 of the sum of the
REMIC I
YAA and REMIC I ZAA
principal
balances
and (ii) the REMIC I YBB
principal
balances
less than or equal to 0.0005 of the sum of the REMIC I YBB and
REMIC I ZBB Principal
Balances in each case after giving effect to allocations of
Realized
Losses and
distributions
to be made
through the end of the Distribution Date to which such provisions
relate; and
3.
Making
the
larger
of (a) the
fraction
whose
numerator
is Yk and whose
denominator
is the sum of Yk and Zk and (b) the
fraction whose
numerator is Yj and whose
denominator is the sum of Yj, and Zj as large as possible while
remaining less than or
equal to 0.0005.
In the event of a failure of the foregoing portion of the
definition of REMIC I Y Principal Reduction Amount to
accomplish both of goals 1 and 2 above, the amounts thereof should
be adjusted so as to accomplish such goals within the requirement
that each REMIC I Y Principal Reduction Amount must be less than or
equal to the sum of (a) the principal Realized Losses to be
allocated on the related Distribution Date for the related Pool and
(b) the remainder of the Available Distribution Amount for the
related Pool or after reduction thereof by the distributions to be
made on such Distribution in respect of interest on the related
REMIC I Y and REMIC I Z Regular Interests, or, if both of such
goals cannot be accomplished within such requirement, such
adjustment
as is necessary shall be made to accomplish goal 1 within such
requirement.
In the event of any conflict among the provisions of the
definition of the REMIC I Y Principal Reduction Amounts, such
conflict shall be resolved on the basis of the goals and their
priorities set forth above within the requirement set forth in the
preceding sentence.
REMIC I
Realized
Losses:
Realized
Losses on Group I
Loans and Group II
Loans shall be
allocated to the REMIC I
Regular
Interests as follows:
(1) The interest
portion of Realized
Losses on Group I Loans, if any, shall be allocated among the REMIC
I Y-1
and REMIC I Z-1 Regular Interests pro rata according to the amount
of interest accrued but unpaid thereon,
in reduction
thereof;
and
(2) the
interest
portion of Realized
Losses on Group II
Loans,
if any,
shall be
allocated
among the REMIC I Y-2 and REMIC I Z-2
Regular
Interests
pro rata
according
to the amount of interest
accrued but unpaid
thereon,
in
reduction
thereof.
Any interest
portion of such Realized Losses in excess of the amount
allocated
pursuant to the preceding
sentence shall be treated as a principal
portion of Realized Losses not attributable to any specific
Mortgage Loan in such Loan Group and allocated
pursuant to the succeeding
sentences.
The principal
portion of Realized
Losses with respect to Loan Group I and Loan Group II shall be
allocated to the REMIC I
Regular Interests as follows:
(1) The principal portion of Realized Losses on Group I Loans shall
be allocated,
first, to the REMIC I
Y-1 Regular Interest to the extent of the REMIC I Y-1 Principal
Reduction Amount in reduction of the Uncertificated
Principal Balance
of such REMIC I
Regular
Interest and,
second,
the
remainder,
if any, of such principal
portion of such Realized
Losses shall be
allocated to the REMIC I Z-1 Regular
Interest in reduction of the
Uncertificated
Principal
Balance
thereof;
and (2) the principal
portion of
Realized
Losses on Group II
Loans shall be
allocated,
first,
to the REMIC I Y-2 Regular
Interest to the extent of the
REMIC I Y-2 Principal
Reduction Amount in reduction of the Uncertificated
Principal Balance of such Regular Interest and, second, the
remainder,
if any, of such
principal
portion of such
Realized
Losses
shall be
allocated
to the REMIC I Z-2 Regular
Interest in
reduction of the Uncertificated Principal Balance thereof.
REMIC I Regular Interests:
REMIC I Regular Interest Y-1, Y-2, Z-1 and Z-2.
REMIC I
Regular
Interest
Y-1: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance,
that bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest Y-1 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular Interest Y-1 Principal
Reduction Amount for such
Distribution
Date over the Realized Losses allocated to the REMIC I Regular
Interest Y-1 on such Distribution Date.
REMIC I
Regular
Interest
Y-2: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance,
that bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest Y-2 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular Interest Y-2 Principal
Reduction Amount for such
Distribution
Date over the Realized Losses allocated to the REMIC I Regular
Interest Y-2 on such Distribution Date.
REMIC I
Regular
Interest
Z-1: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance,
that bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest Z-1 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular Interest Z-1 Principal
Reduction Amount for such
Distribution
Date over the Realized Losses allocated to the REMIC I Regular
Interest Z-1 on such Distribution Date.
REMIC I
Regular
Interest
Z-2: A regular
interest
in
REMIC I
that is held as an asset of
REMIC II,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance,
that bears interest at the related
Uncertificated
REMIC I
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC I Regular Interest Z-2 Principal
Distribution
Amount:
For any Distribution
Date, the excess,
if any, of the REMIC I
Regular Interest Z-2 Principal
Reduction Amount for such
Distribution
Date over the Realized Losses allocated to the REMIC I Regular
Interest Z-2 on such Distribution Date.
REMIC I Z
Principal
Reduction
Amounts:
For any
Distribution
Date,
the
amounts
by which the
Uncertificated
Principal
Balances
of the
REMIC I
Z-1 and
REMIC I Z-2
Regular
Interests,
respectively,
will be reduced on such
Distribution
Date by the
allocation
of Realized
Losses and the
distribution
of
principal,
which shall be in each case the excess of (A) the sum of (x) the
excess of the REMIC I
Available
Distribution
Amount for the related Loan Group (i.e. the "related Group" for the
REMIC I Z-1 Regular
Interest is Group I and the
"related
Loan Group" for the REMIC I Z-2 Regular
Interest is Loan
Group II)
exclusive of any amount in
respect of
Subsequent
Recoveries
included
therein over the amount
thereof
distributable
in respect of interest on such REMIC I Z
Regular
Interest and the related
REMIC I Y Regular
Interest and (iv) to such
REMIC I Z Regular
Interest and the related
REMIC I Y
Regular
Interest
pursuant to the
definition
of "REMIC I
Distribution
Amount" and (y) the amount of Realized
Losses
allocable to
principal for the related Loan Group over (B) the REMIC I Y
Principal Reduction Amount for the related Loan Group.
REMIC II:
The
segregated
pool of assets subject
hereto,
constituting a portion of the primary trust created hereby and to
be administered hereunder, with respect to which a separate REMIC
election is to be made, consisting of the REMIC I Regular
Interests.
REMIC II
Available
Distribution
Amount:
For any Distribution Date, the amount distributed from REMIC I to
REMIC II on such
Distribution Date in respect of the REMIC I Regular Interests.
REMIC II Distribution Amount:
(a)
On each
Distribution
Date,
the following
amounts,
in the following
order of priority,
shall be
distributed by
REMIC II to REMIC III on account of the REMIC II Regular Interests
related to Loan Group I:
(i)
to the extent of the portion of the REMIC II Available
Distribution Amount related to Group I, to REMIC III
as the holder of REMIC II
Regular
Interests
LT1, LT2, LT3, LT4 and LT-Y1,
pro rata, in an amount equal to (A) their
Uncertificated
Accrued
Interest for such
Distribution
Date, plus (B) any amounts in respect
thereof
remaining
unpaid from previous
Distribution
Dates; and
(ii)
on each
Distribution
Date,
to
REMIC III as the holder of the REMIC II
Regular
Interests,
in an amount
equal to the remainder of such portion of the REMIC II Available
Distribution
Amount after the distributions
made pursuant to clause
(i) above, allocated as follows (except as provided below):
(A)
in respect of the REMIC II Regular
Interests LT2, LT3, LT4 and LT-Y1,
their respective
Principal
Distribution Amounts;
(B)
in respect of the REMIC II
Regular Interest LT1 any remainder until the
Uncertificated
Principal
Balance thereof is reduced to zero;
(C)
any remainder in respect of the REMIC II Regular
Interests LT2, LT3 and LT4, pro rata according to
their respective
Uncertificated
Principal
Balances as reduced by the
distributions
deemed made pursuant to (A) above,
until their
respective Uncertificated Principal Balances are reduced to zero;
and
(D)
any remaining amounts to the Holders of Component II of the Class R
Certificates.
(b)
On each
Distribution
Date,
the following
amounts,
in the following
order of priority,
shall be
distributed by
REMIC II to REMIC III on account of the REMIC II Regular Interests
related to Loan Group II:
(i)
to the
extent
of the
portion
of the
REMIC II
Available
Distribution
Amount
related
to Group II, to
REMIC III
as the holder of REMIC II
Regular
Interests
LT5,
LT6,
LT7,
LT8 and LT-Y2,
pro rata,
in an amount
equal to (A) their
Uncertificated
Accrued
Interest for such
Distribution
Date, plus (B) any amounts in respect thereof
remaining unpaid from previous
Distribution Dates; and
(ii)
on each
Distribution
Date,
to
REMIC III as the holder of the REMIC II
Regular
Interests,
in an amount
equal to the remainder of such portion of the REMIC II Available
Distribution
Amount after the distributions
made pursuant to clause
(i) above, allocated as follows (except as provided below):
(A)
in respect of the REMIC II Regular
Interests LT6, LT7, LT8 and LT-Y2,
their respective
Principal
Distribution Amounts;
(B)
in respect of the REMIC II
Regular Interest LT5 any remainder until the
Uncertificated
Principal
Balance thereof is reduced to zero;
(C)
any remainder in respect of the REMIC II Regular
Interests LT6, LT7 and LT8, pro rata according to
their respective
Uncertificated
Principal
Balances as reduced by the
distributions
deemed made pursuant to (A) above,
until their
respective Uncertificated Principal Balances are reduced to zero;
and
(D)
any remaining amounts to the Holders of Component II of the Class R
Certificates.
REMIC II
Principal
Reduction
Amounts:
For any
Distribution
Date,
the
amounts by which the
principal
balances
of the
REMIC II Regular Interests LT1, LT2, LT3, LT4, LT5, LT6, LT7, LT8,
LT-Y1 and LT-Y2, respectively,
will be reduced on such Distribution
Date by the allocation of Realized Losses and the distribution of
principal, determined as follows:
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y1 =
the aggregate
principal
balance of the REMIC II
Regular
Interests LT1 and LT-Y1 after
distributions on the prior
Distribution Date.
Y2 =
the principal balance of the REMIC II Regular Interest LT2 after
distributions on the prior Distribution Date.
Y3 =
the principal balance of the REMIC II Regular Interest LT3 after
distributions on the prior Distribution Date.
Y4 =
the
principal
balance of the REMIC II
Regular
Interest LT4 after
distributions
on the prior
Distribution
Date
(note:
Y3 = Y4).
AY1 =
the combined
REMIC II
Regular
Interest LT1 and LT-Y1 Principal
Reduction
Amount.
Such amount shall be allocated
first to LT-Y1 up to the Class Y1 Principal Reduction Amount and
thereafter the remainder shall be allocated to LT1.
AY2 =
the REMIC II Regular Interest LT2 Principal Reduction Amount.
AY3 =
the REMIC II Regular Interest LT3 Principal Reduction Amount.
AY4 =
the REMIC II Regular Interest LT4 Principal Reduction Amount.
P0 =
the aggregate
principal balance of the REMIC II Regular
Interests LT1, LT2, LT3, LT4 and LT-Y1 after
distributions
and the allocation of Realized Losses on the prior Distribution
Date.
P1 =
the aggregate
principal balance of the REMIC II Regular
Interests LT1, LT2, LT3, LT4 and LT-Y1 after
distributions
and the allocation of Realized Losses to be made on such
Distribution Date.
AP =
P0 - P1 = the aggregate of the REMIC I Regular Interests LT1, LT2,
LT3, LT4 and LT-Y1 Principal Reduction Amounts.
=
the aggregate of the principal portions of Realized Losses to be
allocated to, and the principal
distributions to be
made on, the Group I Certificates on such
Distribution
Date (including
distributions
of accrued and unpaid interest on the Class SB
Certificates for prior Distribution Dates).
R0 =
the Group I Net WAC Cap Rate
(stated as a monthly
rate) after
giving
effect to amounts
distributed
and Realized
Losses allocated on the prior Distribution Date.
R1 =
the Group I Net WAC Cap Rate
(stated
as a monthly
rate)
after
giving
effect to amounts
to be
distributed
and
Realized Losses to be allocated on such Distribution Date.
a =
(Y2 + Y3)/P0.
The initial value of a on the Closing Date for use on the first
Distribution Date shall be 0.0001.
a0 =
the lesser of (A) the sum of (1) for all Classes of Class A-I
Certificates
of the product for each Class of (i) the
monthly interest rate (as limited by the Group I REMIC Net WAC
Rate, if applicable) for such
Class applicable
for distributions to be
made on such
Distribution
Date and (ii) the
aggregate
Certificate
Principal
Balance for such
Class after
distributions
and the
allocation of Realized
Losses on the prior
Distribution
Date,
(2) for all Classes of Class M
Certificates
of the product for each
Class of (i) the monthly
interest rate (as limited by the Class M REMIC Net WAC Rate, if
applicable)
for such
Class applicable
for
distributions to be made on such Distribution Date and (ii) the
aggregate
Certificate
Principal Balance for such
Class multiplied by
a fraction
whose
numerator
is the
principal
balance of the REMIC I Regular
Interest Y-1 and whose
denominator
is the sum of the
principal
balances of the REMIC I Regular
Interests Y-1 and Y-2 after
distributions
and the
allocation
of Realized
Losses on the
prior
Distribution Date and (3) the amount,
if any, by which the sum of the amounts in clauses (A)(1),
(2) and (3) of the definition
of A0 exceeds S0*Q0 and (B) R0*P0.
a1
=
the lesser of (A) the sum of (1) for all Classes of Class A-I
Certificates
of the product for each Class of (i) the
monthly interest rate (as limited by the Group I REMIC Net WAC
Rate, if applicable) for such
Class applicable
for distributions to be
made on the next succeeding
Distribution Date and (ii) the aggregate Certificate Principal
Balance for such Class after
distributions
and the
allocation
of
Realized
Losses to be made on such
Distribution
Date,
(2) for all Classes of Class M
Certificates
of the
product
for each
Class of
(i) the
monthly
interest
rate (as limited by the Class M REMIC Net WAC Rate,
if
applicable)
for such
Class applicable
for distributions to be made on the next succeeding
Distribution Date and (ii) the aggregate
Certificate
Principal
Balance for such
Class multiplied
by a fraction
whose
numerator is the
principal
balance of the REMIC I Regular
Interest Y-1 and
whose
denominator
is the sum of the
principal
balances of the REMIC I
Regular
Interests Y-1 and Y-2 after
distributions
and the
allocation
of Realized
Losses to be made on such
Distribution
Date and (3) the
amount,
if any, by which the sum of the amounts in
clauses (A)(1), (2) and (3) of the definition of A1 exceeds S1*Q1
and (B) R1*P1.
Then, based on the foregoing definitions:
AY1 =
AP - AY2 - AY3 - AY4;
AY2 =
(a/2){( a0R1 - a1R0)/R0R1};
AY3 =
aAP - AY2; and
AY4 =
AY3.
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1)
If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
(2)
If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a0R1P1 - a1R0P0}/{2R1R0P1 -
a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
For purposes of the succeeding formulas the following symbols shall
have the meanings set forth below:
Y5 =
the aggregate
principal
balance of the REMIC II
Regular
Interests LT5 and LT-Y2 after
distributions on the prior
Distribution Date.
Y6 =
the principal balance of the REMIC II Regular Interest LT6 after
distributions on the prior Distribution Date.
Y7 =
the principal balance of the REMIC II Regular Interest LT7 after
distributions on the prior Distribution Date.
Y8 =
the
principal
balance of the REMIC II
Regular
Interest LT8 after
distributions
on the prior
Distribution
Date
(note:
Y7 = Y8).
AY5 =
the
aggregate of the REMIC II
Regular
Interest LT5 and LT-Y2
Principal
Reduction
Amounts.
Such amount shall be
allocated first to LT-Y2 up to the Class Y2 Principal Reduction
Amount and thereafter the remainder shall be allocated to LT5.
AY6 =
the REMIC II Regular Interest LT6 Principal Reduction Amount.
AY7 =
the REMIC II Regular Interest LT7 Principal Reduction Amount.
AY8 =
the REMIC II Regular Interest LT8 Principal Reduction Amount.
Q0 =
the aggregate
principal balance of the REMIC II Regular
Interests LT5, LT6, LT7, LT8 and LT-Y2 after
distributions
and the allocation of Realized Losses on the prior Distribution
Date.
Q1 =
the
aggregate
principal
balance of the REMIC II
Regular
Interests
LT5,
LT6,
LT7,
LT8,
LT-Y1 and LT-Y2 after
distributions and the allocation of Realized Losses to be made on
such Distribution Date.
AQ =
Q0 - Q1 = the aggregate of the REMIC II Regular Interests LT5, LT6,
LT7, LT8 and LT-Y2 Principal Reduction Amounts.
=
the aggregate of the principal portions of Realized Losses to be
allocated to, and the principal
distributions to be
made on, the Group II Certificates on such
Distribution
Date (including
distributions of accrued and unpaid interest on the Class SB
Certificates for prior Distribution Dates).
S0 =
the Group II Net WAC Rate (stated as a monthly rate) after giving
effect to amounts
distributed
and Realized Losses
allocated on the prior Distribution Date.
S1 =
the Group II Net WAC Rate (stated as a monthly
rate) after giving effect to amounts to be
distributed
and Realized
Losses to be allocated on such Distribution Date.
a =
(Y6 + Y7)/Q0.
The initial value of a on the Closing Date for use on the first
Distribution Date shall be 0.0001.
A0 =
the lesser of (A) the sum of (1) for all Classes of Class A-II
Certificates of the product for each Class of (i) the
monthly
interest rate (as limited by the Group II REMIC Net WAC Rate, if
applicable) for such
Class applicable
for
distributions to
be made on such
Distribution
Date and (ii) the aggregate
Certificate
Principal
Balance for such Class after
distributions and the
allocation of Realized
Losses on the prior
Distribution
Date,
(2) for all Classes of Class M
Certificates
of the product for each
Class of (i) the monthly
interest rate (as limited by the Class M REMIC Net WAC Rate, if
applicable)
for such
Class applicable
for
distributions to be made on such Distribution Date and (ii) the
aggregate
Certificate
Principal Balance for such
Class multiplied by
a fraction
whose
numerator
is the
principal
balance of the REMIC I Regular
Interest Y-2 and whose
denominator
is the sum of the
principal
balances of the REMIC I Regular
Interests Y-1 and Y-2 after
distributions
and the
allocation
of Realized
Losses on the
prior
Distribution Date and (3) the amount,
if any, by which the sum of the amounts in clauses (A)(1),
(2) and (3) of the definition
of a0 exceeds R0*P0 and (B) S0*Q0.
A1
=
the lesser of (A) the sum of (1) for all Classes of Class A-II
Certificates of the product for each Class of (i) the
monthly
interest rate (as limited by the Group II REMIC Net WAC Rate, if
applicable) for such
Class applicable
for
distributions to
be made on the
next
succeeding
Distribution
Date and
(ii)
the
aggregate
Certificate
Principal
Balance
for
such
Class after
distributions and the allocation of Realized Losses to be made on
such Distribution
Date, (2) for all Classes of Class M
Certificates
of the product for each Class of (i) the monthly
interest rate (as limited by the Class M REMIC Net WAC Rate, if
applicable)
for such
Class applicable
for distributions to be made on the next succeeding
Distribution Date and (ii) the aggregate
Certificate
Principal
Balance for such
Class multiplied
by a fraction
whose
numerator is the
principal
balance of the REMIC I Regular
Interest Y-2 and
whose
denominator
is the sum of the
principal
balances of the REMIC I
Regular
Interests Y-1 and Y-2 after
distributions
and the
allocation
of Realized
Losses to be made on such
Distribution
Date and (3) the
amount,
if any, by which the sum of the amounts in
clauses (A)(1), (2) and (3) of the definition of a1 exceeds R1*P1
and (B) S1*Q1.
Then, based on the foregoing definitions:
AY5 =
AQ - AY6 - AY7 - AY8;
AY6 =
(a/2){(A0S1 - A1S0)/S0S1};
AY7 =
aAQ - AY6; and
AY8 =
AY7.
if both AY6 and AY7, as so determined, are non-negative numbers.
Otherwise:
(1)
If AY6, as so determined, is negative, then
AY6 = 0;
AY7 = a{A1S0Q0 - A0S1Q1}/{A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
(2)
If AY7, as so determined, is negative, then
AY7 = 0;
AY6 = a{A0S1Q1 - A1S0Q0}/{2S1S0Q1 -
A1S0};
AY8 = AY7; and
AY5 = AQ - AY6 - AY7 - AY8.
REMIC II
Realized
Losses:
Realized
Losses on Group I Loans and Group II
Loans shall be allocated to the REMIC II
Regular
Interests as follows:
(1) The interest
portion of Realized
Losses on Group I Loans,
if any, shall be allocated
among the LT1, LT2,
LT4 and LT-Y1
REMIC II
Regular
Interests
pro rata
according
to the amount of interest
accrued but unpaid
thereon,
in reduction
thereof;
and (2) the interest
portion of Realized
Losses on Group II
Loans,
if any, shall be allocated among the LT5, LT6, LT8 and
LT-Y2 REMIC II Regular
Interests pro rata according to the amount of interest accrued but
unpaid thereon,
in reduction
thereof.
Any
interest
portion of such Realized Losses in excess of the amount
allocated
pursuant to the preceding
sentence shall be treated as a
principal
portion of Realized Losses not attributable to any specific
Mortgage Loan in such Loan Group and allocated
pursuant to the
succeeding
sentences.
The principal
portion of Realized
Losses with respect to Loan Group I and Loan Group II shall be
allocated to
the REMIC I Regular Interests as follows:
(1) The principal portion of Realized Losses on Group I Loans shall
be allocated,
first, to
the LT-Y1 REMIC II
Regular
Interest to the extent that such losses were allocated to the Y-1
REMIC I Regular Interest in reduction of
the Uncertificated
Principal Balance thereof,
second, to the LT 2, LT3 and LT4 REMIC II Regular Interests
pro-rata according to their
respective
REMIC II
Principal
Reduction Amounts to the extent thereof in reduction of the
Uncertificated
Principal Balance of such
REMIC II Regular
Interests and, third, the remainder,
if any, of such principal portion of such Realized Losses shall be
allocated to
the LT1 REMIC II Regular
Interest in reduction of the
Uncertificated
Principal
Balance
thereof;
and (2) the principal
portion of
Realized
Losses on Group II Loans shall be allocated,
first,
to the LT-Y2 REMIC II
Regular
Interest to the extent that such losses
were allocated to the Y-2 REMIC I Regular Interest in reduction of
the Uncertificated
Principal Balance thereof,
second, to the LT 6,
LT7 and LT8 REMIC II Regular
Interests
pro-rata
according to their respective
REMIC II
Principal
Reduction
Amounts to the extent
thereof in reduction of the Uncertificated
Principal Balance of such REMIC II Regular Interests and, third,
the remainder,
if any, of
such
principal
portion of such
Realized
Losses
shall be
allocated
to the LT5
REMIC II
Regular
Interest
in
reduction
of the
Uncertificated Principal Balance thereof.
REMIC II
Regular
Interests:
REMIC II Regular
Interest LT1,
REMIC II Regular Interest LT2,
REMIC II Regular Interest LT3,
REMIC II Regular Interest LT4,
REMIC II Regular Interest LT5,
REMIC II Regular Interest LT6,
REMIC II Regular Interest LT7, REMIC II
Regular Interest LT8, REMIC II Regular Interest LT-Y1 and REMIC II
Regular Interest LT-Y2.
REMIC II
Regular
Interest
LT1: A regular
interest in REMIC II
that is held as an asset of
REMIC II,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance, that bears interest at the related
Uncertificated
REMIC II
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC II Regular Interest LT1 Principal
Distribution
Amount:
For any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT1 Principal
Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT1 on such Distribution Date.
REMIC II
Regular
Interest
LT2: A regular
interest in REMIC II
that is held as an asset of
REMIC II,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance, that bears interest at the related
Uncertificated
REMIC II
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC II Regular Interest LT2 Principal
Distribution
Amount:
For any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT2 Principal
Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT2 on such Distribution Date.
REMIC II
Regular
Interest LT3: A regular
interest in REMIC II
that is held as an asset of
REMIC III,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance, that bears interest at the related
Uncertificated
REMIC II
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC II Regular Interest LT3 Principal
Distribution
Amount:
For any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT3 Principal
Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT3 on such Distribution Date.
REMIC II
Regular
Interest LT4: A regular
interest in REMIC II
that is held as an asset of
REMIC III,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance, that bears interest at the related
Uncertificated
REMIC II
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC II Regular Interest LT4 Principal
Distribution
Amount:
For any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT4 Principal
Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT4 on such Distribution Date.
REMIC II
Regular
Interest LT5: A regular
interest in REMIC II
that is held as an asset of
REMIC III,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance, that bears interest at the related
Uncertificated
REMIC II
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC II Regular Interest LT5 Principal
Distribution
Amount:
For any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT5 Principal
Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT5 on such Distribution Date.
REMIC II
Regular
Interest LT6: A regular
interest in REMIC II
that is held as an asset of
REMIC III,
that has an initial
principal balance equal to the related
Uncertificated
Principal Balance, that bears interest at the related
Uncertificated
REMIC II
Pass-Through Rate, and that has such other terms as are described
herein.
REMIC II Regular Interest LT6 Principal
Distribution
Amount:
For any Distribution Date, the excess, if any, of the REMIC II
Regular Interest LT6 Principal
Reduction Amount for such
Distribution Date over the Realized Losses allocated to the REMIC
II Regular
Interest LT6 on such Distribution Date.
REMIC II
Regular
Interest LT7: A regular
interest in REMIC II
