EXECUTION COPY
RESIDENTIAL ACCREDIT LOANS, INC.,
Company,
RESIDENTIAL FUNDING COMPANY, LLC,
Master Servicer,
and
DEUTSCHE BANK TRUST COMPANY AMERICAS,
Trustee
SERIES SUPPLEMENT,
Dated as of December 1, 2006,
TO
STANDARD TERMS OF
POOLING AND SERVICING AGREEMENT
dated as of December 1, 2006
Mortgage Asset-Backed Pass-Through Certificates
SERIES 2006-QO10
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS...............................................................5
Section 1.01.
Definitions.......................................................5
Section 1.02.
Additional Termination Requirements..............................36
Section 1.03.
Termination of Multiple REMICs...................................37
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF
CERTIFICATES..........37
Section 2.01.
Conveyance of Mortgage Loans.....................................37
Section 2.02.
Acceptance by Trustee............................................37
Section 2.03.
Representations, Warranties and Covenants of the Master
Servicer and the Company.........................................37
Section 2.04.
Representations and Warranties of Sellers........................40
Section 2.05.
Execution and Authentication of Certificates/Issuance of
Certificates Evidencing Interests in REMIC I Certificates........40
Section 2.06.
Conveyance of REMIC I Regular Interests; Acceptance by the
Trustee..........................................................41
Section 2.07.
Issuance of Certificates Evidencing Interest in REMIC II.........41
Section 2.08.
Purposes and Powers of the Trust.................................41
Section 2.09.
Agreement Regarding Ability to Disclose..........................41
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE
LOANS...........................43
Section 3.01.
Master Servicer to act as Servicer...............................43
Section 3.02.
Subservicing Agreements Between Master Servicer and
Subservicers; Enforcement of Subservicers' and Sellers'
Obligations.
(See Section 3.02 of the Standard Terms)...........43
Section 3.03.
Successor Subservicers...........................................43
Section 3.04.
Liability of the Master Servicer.................................43
Section 3.05.
No Contractual Relationship Between Subservicer and Trustee
or Certificateholders............................................43
Section 3.06.
Assumption or Termination of Subservicing Agreements by
Trustee..........................................................43
Section 3.07.
Collection of Certain Mortgage Loan Payments; Deposit to
Custodial Account................................................43
Section 3.08.
Subservicing Accounts; Servicing Accounts........................45
Section 3.09.
Access to Certain Documentation and
Information Regarding
the Mortgage Loans ..............................................45
Section 3.10.
Permitted withdrawals from the Custodial Account.................45
Section 3.11.
Maintenance of the Primary Insurance
Policies; Collections
Thereunder.......................................................45
Section 3.12.
Maintenance of Fire Insurance and
Omissions and Fidelity
Coverage.........................................................45
Section 3.13.
Enforcement of Due-on-Sale Clauses; Assumption and
Modification Agreements; Certain Assignments.....................45
Section 3.14.
Realization Upon Defaulted Mortgage Loans........................45
Section 3.15.
Trustee to Cooperate; Release of Mortgage Files..................45
Section 3.16.
Servicing and Other Compensation; Compensating Interest..........45
Section 3.17.
Reports to the Trustee and the Company...........................46
Section 3.18.
Annual Statement as to Compliance................................46
Section 3.19.
Annual Independent Public Accountants' Servicing Report..........46
Section 3.20.
Rights of the Company in Respect of the Master Servicer..........46
Section 3.21.
Administration of Buydown Funds..................................46
Section 3.22.
Advance Facility.................................................46
ARTICLE IV
PAYMENTS TO
CERTIFICATEHOLDERS...........................................47
Section 4.01.
Certificate Account..............................................47
Section 4.02.
Distributions....................................................47
Section 4.03.
Statements to Certificateholders; Statements to the Rating
Agencies; Exchange Act Reporting.................................52
Section 4.04.
Distribution of Reports to the Trustee and the Company;
Advances by the Master Servicer..................................52
Section 4.05.
Allocation of Realized Losses....................................54
Section 4.06.
Reports of Foreclosures and Abandonment of Mortgaged Property....55
Section 4.07.
Optional Purchase of Defaulted Mortgage Loans....................56
Section 4.08.
Surety Bond......................................................56
Section 4.09.
Basis Risk Shortfall Reserve Fund................................56
ARTICLE V
THE
CERTIFICATES.........................................................56
Section 5.01.
The Certificates.................................................58
Section 5.02.
Registration of Transfer and Exchange of Certificates............58
ARTICLE VI
THE COMPANY AND THE MASTER
SERVICER......................................64
Section 6.01.
Respective Liabilities of the Company and Master Servicer........64
Section 6.02.
Merger or Consolidation of the Company or Master Servicer;
Assignment of Rights and Delegation of Duties by the Master
Servicer.........................................................64
Section 6.03.
Limitation on Liability of the Company, Master Servicer and
Others...........................................................64
Section 6.04.
Company and Master Servicer Not to Resign........................64
ARTICLE VII
DEFAULT..................................................................65
ARTICLE VIII
CONCERNING THE
TRUSTEE...................................................66
Section 8.01.
Duties of the Trustee and Supplemental Interest Trust Trustee....66
Section 8.02.
Certain Matters Affecting the Trustee and Supplemental
Interest Trust Trustee...........................................68
Section 8.03.
Trustee and Supplemental Interest Trust Trustee Not Liable
for Certificates or Mortgage Loans...............................69
Section 8.04.
Trustee and Supplemental Interest Trust Trustee May Own
Certificates.....................................................70
Section 8.05.
Master Servicer to Pay Trustee's Fees and Expenses;
Indemnification..................................................70
Section 8.06.
Eligibility Requirements for Trustee.............................71
Section 8.07.
Resignation and Removal of the Trustee and Supplemental
Interest Trust Trustee...........................................71
Section 8.08.
Successor Trustee and Successor Supplemental Interest Trust
Trustee..........................................................73
Section 8.09.
Merger or Consolidation of Trustee ..............................73
Section 8.10.
Appointment of Co-Trustee or Separate Trustee....................74
Section 8.11.
Appointment of Custodians........................................74
Section 8.12.
Appointment of Office or Agency..................................74
ARTICLE IX
TERMINATION..............................................................75
Section 9.01.
Optional Purchase by the Master Servicer of All
Certificates; Termination Upon Purchase by the Master
Servicer or Liquidation of All Mortgage Loans....................75
Section 9.02.
Distributions....................................................77
Section 9.03.
Statements to Certificateholders; Statements to the Rating
Agencies; Exchange Act Reporting.................................77
ARTICLE X
REMIC
PROVISIONS.........................................................78
Section 10.01.
REMIC Administration.............................................78
Section 10.02.
Master Servicer; REMIC Administrator and Trustee
Indemnification..................................................78
Section 10.03.
Designation of REMIC.............................................78
Section 10.04.
Distributions on the REMIC I Regular Interests...................78
Section 10.05.
Compliance with Withholding Requirements.........................78
ARTICLE XI
MISCELLANEOUS
PROVISIONS.................................................80
Section 11.01.
Amendment........................................................80
Section 11.02.
Recordation of Agreement; Counterparts...........................80
Section 11.03.
Limitation on Rights of Certificateholders.......................80
Section 11.04.
Governing Laws...................................................80
Section 11.05.
Notices..........................................................80
Section 11.06.
Required Notices to Rating Agency and Subservicer................81
Section 11.07.
Severability of Provisions.......................................81
Section 11.08.
Supplemental Provisions for Resecuritization.....................81
Section 11.09.
Allocation of Voting Rights......................................81
Section 11.10.
No Petition......................................................81
ARTICLE XII
COMPLIANCE WITH REGULATION
AB............................................82
EXHIBITS AND SCHEDULES
Exhibit One:
Mortgage Loan Schedule
Exhibit Two:
Information to be Included in Monthly Distribution Date Statement
Exhibit Three:
Standard Terms of Pooling and Servicing Agreement, dated as of
December 1, 2006
Exhibit Four:
Form of Certificate to be Given by Certificate Owner
Exhibit Five:
Form of Certificate to be Given by Euroclear or Clearstream Banking
Exhibit Six:
Form of Transfer Certificate for Exchange or Transfer from 144A
Book-Entry Certificate to Regulation S Book-Entry Certificate
Exhibit Seven:
Form of Certificate to be Given by Transferree of Beneficial
Interest in a Regulation S Book-Entry Certificate
Exhibit Eight:
Form of Initial Purchaser Exchange Instructions
Exhibit Nine-A:
Form of Rule 144A Global Class [B/SB/P] Certificate
Exhibit Nine-B:
Form of Permanent Regulation S Global Class [B/SB/P] Certificate
Exhibit Nine-C:
Form of Temporary Regulation S Global Class [B/SB/P] Certificate
Schedule 1
This is a Series Supplement,
dated as of December 1, 2006 (the "Series
Supplement"),
to the Standard
Terms of Pooling and
Servicing
Agreement,
dated as of December 1, 2006 and
attached
as Exhibit
Three
hereto
(the
"Standard
Terms"
and,
together
with this Series
Supplement,
the
"Pooling
and
Servicing
Agreement"
or
"Agreement"),
among
RESIDENTIAL
ACCREDIT
LOANS,
INC., as the company
(together
with its permitted
successors and assigns,
the
"Company"),
RESIDENTIAL
FUNDING
COMPANY,
LLC, as master
servicer
(together with its
permitted
successors
and assigns,
the "Master
Servicer"),
and DEUTSCHE BANK TRUST COMPANY
AMERICAS,
as trustee and
supplemental
interest
trust trustee
(together with its permitted
successors and assigns, the "Trustee" and "Supplemental Interest
Trust Trustee").
PRELIMINARY STATEMENT:
The
Company
intends
to
sell
mortgage
asset-backed
pass-through
certificates
(collectively,
the "Certificates"),
to be issued hereunder in multiple classes, which in the
aggregate will evidence the entire beneficial ownership interest in
the Mortgage Loans.
The terms and
provisions of the Standard Terms are hereby
incorporated
by reference
herein as though set forth in full
herein.
If any term or provision
contained
herein shall
conflict with or be
inconsistent
with any
provision
contained in the Standard
Terms,
the
terms and
provisions
of this Series
Supplement
shall
govern.
All
capitalized
terms not
otherwise
defined
herein
shall
have the
meanings
set forth in the
Standard
Terms.
The
Pooling and Servicing Agreement shall be dated as of the date of
this Series Supplement.
REMIC I
As
provided
herein,
the
REMIC
Administrator
will make an
election
to treat the
segregated
pool of assets
consisting of the Mortgage
Loans and certain other related assets
subject to this Agreement
(but excluding the Basis Risk Shortfall
Reserve Fund and the Final
Maturity
Reserve
Account)
as a real estate
mortgage
investment
conduit (a
"REMIC")
for
federal income tax purposes,
and such
segregated pool of assets will be designated as "REMIC
I." The Class R-I
Certificates
will
represent
the sole Class of
"residual
interests"
in
REMIC I for purposes of the REMIC
Provisions
(as defined
herein) under
federal
income tax
law.
The
Class R-I
Certificates
will not bear
interest
or have a
Certificate
Principal
Balance.
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
DESIGNATION
PASS-THROUGH RATE
PRINCIPAL BALANCE
LT1
Variable(1)
$ 900,074,304.31
LT2
Variable(1)
$ 44,785.40
LT3
0.00%
$ 45,235.56
LT4
Variable(1)
$ 45,235.56
W
Variable(1)
N/A
____________
(1)
Calculated
as provided in the
definition
of
"Uncertificated
REMIC I Pass
Through
Rate".
REMIC II
As provided herein,
the REMIC
Administrator
will elect to treat the segregated pool
of assets
consisting
of the REMIC I Regular
Interests
as a REMIC for
federal
income
tax
purposes,
and such
segregated
pool of assets will be designated as REMIC II. The Class R-II
Certificates
will represent
ownership of the sole Class of "residual
interests" in REMIC II
for
purposes
of
the
REMIC
Provisions
under
federal
income
tax
law.
The
Class
R-II
Certificates
will not bear interest or have a Certificate
Principal
Balance.
The following
table sets forth the designation,
type,
Pass-Through
Rate,
aggregate
Initial
Certificate
Principal
Balance,
Maturity
Date,
initial
ratings and certain
features for each Class of
Certificates
that evidence
"regular
interests"
in REMIC II and REMIC II Regular
Interests
SB-IO and SB-PO (the
"REMIC II Regular
Interests")
and Class P
Certificates.
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.
REMIC II Regular Interests SB-IO and SB-PO will not be
certificated.
AGGREGATE
INITIAL
CERTIFICATE
PASS-THROUGH PRINCIPAL
MATURITY
S&P/
MINIMUM
DESIGNATION
RATE
BALANCE
FEATURES
DATE
MOODY'S
DENOMINATION
Class A-1
Adjustable$492,055,000.00Senior/Super
December 25,
AAA/Aaa
$100,000.00
Rate(1)(2)
Senior/Adjustable
2046
Rate
Class A-2
Adjustable$205,022,000.00Senior/Super
December 25,
AAA/Aaa
$100,000.00
Rate(1)(2)
Senior/Senior
2046
Support/Adjustable
Rate
Class A-3
Adjustable$123,013,000.00Senior/Senior
December 25,
AAA/Aaa
$100,000.00
Rate(1)(2)
Support/Adjustable
2046
Rate
Class M-1
Adjustable$18,455,000.00 Mezzanine/AdjustableDecember 25,
AA+/Aaa
$100,000.00
Rate(1)(2)
Rate
2046
Class M-2
Adjustable$15,753,000.00 Mezzanine/AdjustableDecember 25,
AA/Aa1
$100,000.00
Rate(1)(2)
Rate
2046
Class M-3
Adjustable $4,501,000.00 Mezzanine/AdjustableDecember 25,
AA-/Aa2
$100,000.00
Rate(1)(2)
Rate
2046
Class M-4
Adjustable $8,552,000.00 Mezzanine/AdjustableDecember 25,
A+/Aa3
$250,000.00
Rate(1)(2)
Rate
2046
Class M-5
Adjustable $4,501,000.00 Mezzanine/AdjustableDecember 25,
A/A1
$250,000.00
Rate(1)(2)
Rate
2046
Class M-6
Adjustable $4,502,000.00 Mezzanine/AdjustableDecember 25,
A-/A2
$250,000.00
Rate(1)(2)
Rate
2046
Class M-7
Adjustable $4,501,000.00 Mezzanine/AdjustableDecember 25,
BBB+/A3
$250,000.00
Rate(1)(2)
Rate
2046
Class M-8
Adjustable $4,501,000.00 Mezzanine/AdjustableDecember 25,
BBB/Baa1
$250,000.00
Rate(1)(2)
Rate
2046
Class M-9
Adjustable $4,501,000.00 Mezzanine/AdjustableDecember 25,
BBB-/Baa3
$250,000.00
Rate(1)(2)
Rate
2046
Class B
Adjustable $5,851,000.00 Subordinate/AdjustabDecember 25,
BB/NR
$250,000.00
Rate(1)(2)
Rate
2046
SB-IO(3)
(3)
N/A
Subordinate/InterestDecember 25,
N/R
N/A
Only
2046
SB-PO(4)
N/A
$4,501,560.83 Subordinate/PrincipaDecember 25,
N/R
N/A
Only
2046
Class P (5)
N/A
N/A
Prepayment Charge
December 25,
N/R
N/A
2046
(1)
The REMIC III
Regular
Interests,
ownership of which is
represented
by the Class A
Certificates and Class M
Certificates,
will accrue interest at a per annum rate equal to the
lesser of (i) LIBOR plus the applicable Margin and (ii) the Net
Rate Cap.
(2)
The Class A
Certificates and Class M
Certificates will also entitle their holders to
receive certain
payments from the Holder of the Class SB
Certificates
from amounts to which
the
Holder
of the
Class SB
Certificates
is
entitled,
which
will not be a part of their
ownership of the related REMIC III Regular Interests.
(3)
REMIC II Regular
Interest SB-IO shall have no entitlement to principal,
and shall be
entitled to distributions of interest subject to the terms and
conditions hereof.
(4)
REMIC II Regular
Interest SB-PO shall have no
entitlement to interest,
and shall be
entitled to
distributions
of principal
subject to the terms and
conditions
hereof,
in an
aggregate amount equal to the initial
Overcollateralization
Amount pursuant to the terms and
conditions hereof.
(5)
The Class P Certificates will not represent ownership of an
interest in any REMIC.
REMIC III
As provided herein,
the REMIC
Administrator
will elect to treat the segregated pool
of assets
consisting
of REMIC II Regular
Interests
SB-IO and SB-PO as a REMIC for
federal
income tax
purposes,
and such
segregated
pool of assets will be
designated
as REMIC III.
The
Class
R-X
Certificates
will
represent
ownership
of
the
sole
Class
of
"residual
interests" in REMIC III for purposes of the REMIC
Provisions
under
federal
income tax law.
The Class R-X
Certificates
will not bear interest or have a Certificate
Principal
Balance.
The following
table sets forth the
designation,
Pass-Through
Rate and Initial
Certificate
Principal
Balance
for
the
Class
SB
Certificates
which
evidence
the
single
"regular
interests"
in REMIC III (the "REMIC III Regular
Interest").
The "latest
possible
maturity
date"
(determined
solely
for
purposes
of
satisfying
Treasury
Regulation
Section
1.860G-1(a)(4)(iii)) for the REMIC III Regular Interest shall be
the Maturity Date.
AGGREGATE INITIAL
PASS-THROUGH
CERTIFICATE PRINCIPAL
DESIGNATION
RATE
BALANCE
Class S-B
Variable Rate(1)
$4,501,560.83
(1)
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 REMIC III
Regular Interest will not have a Pass-Through Rate, but will be
entitled to
100% of all amounts paid or deemed paid on REMIC II Regular
Interests SB-IO
and SB-PO.
The
Mortgage
Loans
have
an
aggregate
Cut-off
Date
Principal
Balance
equal
to
$900,209,560.83.
The Mortgage Loans are payment-option
adjustable-rate
first lien mortgage loans with
a negative
amortization
feature having terms to maturity at origination or
modification
of
generally not more than 40 years.
In consideration of the mutual agreements herein
contained,
the Company,
the Master
Servicer and the Trustee agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01.
DEFINITIONS.
Whenever used in this Agreement,
the following words and phrases,
unless the context
otherwise requires, shall have the meanings specified in this
Article.
Accrued
Certificate
Interest:
With
respect
to each
Distribution
Date
and
each
Class of
Class A,
Class M
and Class B
Certificates,
interest
accrued
during the related
Interest
Accrual Period on the Certificate
Principal
Balance thereof
immediately
prior to
such Distribution Date at the Pass-Through Rate for that
Distribution Date.
The amount of
Accrued
Certificate
Interest
on each
Class of
Class A, Class M and
Class B Certificates shall be reduced by the amount of Prepayment
Interest
Shortfalls on the
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 Mortgage Loans during
the
related
Due Period.
All such
reductions
with
respect to the
Mortgage
Loans will be
allocated
among the Class A, Class M and Class B Certificates
in proportion to the amount of
Accrued
Certificate
Interest payable on such
Certificates on such
Distribution Date absent
such reductions.
Accrued Certificate
Interest with respect to any Class of Class A-2, Class A-3, Class
M or Class B Certificates for any
Distribution
Date shall further be reduced by the interest
portion of
Realized
Losses
not
covered
by Excess
Cash Flow or the
Overcollateralization
Amount
allocated
to the Class A-2
Certificates
or Class A-3
Certificates
or any Class of
Class M Certificates or Class B Certificates pursuant to Section
4.05.
Accrued
Certificate
Interest
with
respect
to the
Class
A,
Class M and
Class B
Certificates
shall
accrue on the basis of a 360-day
year and the
actual
number of days in
the related Interest Accrual Period.
With
respect
to each
Distribution
Date
and the
Class SB
Certificates,
interest
accrued
during
the
preceding
Interest
Accrual
Period
at the
Pass-Through
Rate
on the
Notional
Amount as specified in the definition of
Pass-Through
Rate,
immediately
prior to
such
Distribution
Date,
reduced by any
interest
shortfalls
with
respect to the Mortgage
Loans,
including
Prepayment
Interest
Shortfalls to the extent not covered by
Compensating
Interest
pursuant to
Section 3.16
or by Excess Cash Flow
pursuant to
Section 4.02(c)(iii)
and (iv).
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.
Adjustment
Date:
With
respect
to each
Mortgage
Loan,
each date set forth in the
related
Mortgage
Note on which an
adjustment
to the interest
rate on such
Mortgage
Loan
becomes effective.
Available
Distribution
Amount:
As to any Distribution
Date, an amount equal to (a)
the sum of (i) the amount
relating to the Mortgage Loans on deposit in the Custodial
Account
as of the close of business on the immediately
preceding
Determination
Date,
including any
Subsequent
Recoveries,
and amounts deposited in the Custodial Account in connection with
the
substitution of Qualified
Substitute
Mortgage Loans,
(ii) the amount of any Advance made on
the immediately
preceding
Certificate
Account Deposit Date,
(iii) any amount
deposited in
the
Certificate
Account on the related
Certificate
Account
Deposit
Date
pursuant to the
second
paragraph of Section
3.12(a),
(iv) any amount
deposited in the Certificate
Account
pursuant
to Section
4.07 or Section
9.01,
(v) any amount
that the Master
Servicer is not
permitted
to withdraw
from the
Custodial
Account or the
Certificate
Account
pursuant to
Section
3.16(e),
(vi) any amount
received
by the
Trustee
pursuant
to the Surety Bond in
respect of such
Distribution
Date and (vii) the
proceeds of any Pledged Assets
received by
the Master
Servicer,
reduced by (b) the sum as of the close of business
on the
immediately
preceding
Determination
Date of (v) any payments or
collections
consisting
of
Prepayment
Charges on the Mortgage Loans that were received
during the related
Prepayment
Period;
(w)
aggregate
Foreclosure
Profits,
(x) the Amount
Held for Future
Distribution,
(y)
amounts
permitted to be
withdrawn by the Master
Servicer
from the
Custodial
Account in respect of
the Mortgage Loans pursuant to clauses
(ii)-(x),
inclusive,
of Section
3.10(a) and (z) the
Coupon Strip,
if any, for that
Distribution
Date from interest
collections on the Mortgage
Loans.
Available
Funds Rate: With respect to any
Distribution
Date, a per annum rate equal
to (i) the product of (x) the
Interest
Remittance
Amount
plus full and
partial
Principal
Prepayments
available to be distributed
on such
Distribution
Date and (y) a fraction,
the
numerator
of which is 12 and the
denominator
of which
is the
aggregate
Stated
Principal
Balance of the Mortgage Loans as of such Distribution Date,
adjusted to an actual/360 rate.
Basis Risk
Shortfall:
With
respect to the Class A, Class M or Class B
Certificates
and any
Distribution
Date,
the sum of (a) an amount
equal to the
excess,
if any,
of (x)
Accrued
Certificate
Interest for such Class of
Certificates
calculated at a per annum rate
equal
to
LIBOR
plus
the
related
Margin
for such
Distribution
Date,
over (y)
Accrued
Certificate
Interest
for such Class
calculated
assuming
the Net Rate Cap was equal to the
Net WAC Cap Rate for such
Distribution
Date,
(b) any
shortfalls for such
Class calculated
pursuant
to
clause
(a) above
remaining
unpaid
from
prior
Distribution
Dates,
and
(c) interest on the amount in clause (b) from the
Distribution
Date on which such amount was
incurred
at a per
annum
rate
equal
to LIBOR
plus
the
related
Margin
for the
current
Distribution Date.
Basis Risk Shortfall Reserve Fund:
The reserve fund created pursuant to Section 4.09.
Basis Risk Shortfall Reserve Fund Amount:
$289,435.
Book-Entry
Certificate:
The
Class
A,
Class
M,
Class
B,
Class
SB and
Class P
Certificates.
Capitalization
Reimbursement
Amount:
As 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),
plus the
Capitalization
Reimbursement
Shortfall
Amount
remaining
unreimbursed
from
any
prior
Distribution
Date and
reimbursed to the Master
Servicer or
Subservicer on or prior to such
Distribution Date.
Capitalization
Reimbursement
Shortfall
Amount:
As to any
Distribution
Date,
the
amount,
if any, by which the amount of Advances or Servicing
Advances that were added to the
Stated
Principal
Balance of the Mortgage
Loans during the preceding
calendar month exceeds
the
amount
of
principal
payments
on
the
Mortgage
Loans
included
in
the
Available
Distribution Amount for that Distribution Date.
Certificate:
Any Class A, Class M, Class B, Class SB, Class P or Class R
Certificate.
Certificate
Account:
The
separate
account
or
accounts
created
and
maintained
pursuant to Section 4.01 of the Standard Terms,
which shall be entitled
"DEUTSCHE BANK TRUST
COMPANY
AMERICAS,
as trustee,
in trust for the registered
holders of Residential
Accredit
Loans, Inc.,
Mortgage
Asset-Backed
Pass-Through
Certificates,
Series 2006-QO10" and which
must be an Eligible Account.
Certificate Policy:
None.
Certificate
Principal
Balance:
With
respect
to any
Class
A,
Class M or Class B
Certificate,
on any date of
determination,
an amount
equal to (i) the Initial
Certificate
Principal
Balance of such
Certificate as specified on the face thereof minus (ii) the sum of
(x) the aggregate of all amounts
previously
distributed with respect to such Certificate (or
any predecessor
Certificate) and applied to reduce the Certificate
Principal Balance thereof
pursuant to Section
4.02(c) and (y) in the case of the Class A-2
Certificates
and Class A-3
Certificates
and any Class of Class M Certificates
and Class B
Certificates,
the aggregate
of all
reductions
in
Certificate
Principal
Balance
deemed to have occurred in connection
with Realized Losses which were previously
allocated to such
Certificate (or any predecessor
Certificate)
pursuant to Section 4.05; provided,
that with respect to any Distribution Date,
the
Certificate
Principal
Balance of the Class A-2,
Class A-3, Class M-1, Class M-2, Class
M-3,
Class
M-4,
Class
M-5,
Class
M-6,
Class
M-7,
Class
M-8,
Class
M-9 and
Class B
Certificates,
in that order,
will be increased to the extent of Realized
Losses
previously
allocated
thereto
and
remaining
unreimbursed,
but
only
to
the
extent
of
Subsequent
Recoveries
received
during
the
preceding
calendar
month.
With
respect to each 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,
Class M and Class B
Certificates
then
outstanding,
which represents the sum of (i) the Initial Principal Balance of
the REMIC
II Regular
Interest
SB-PO,
as reduced by Realized
Losses
allocated
thereto and
payments
deemed made
thereon,
and (ii) accrued and unpaid
interest on the REMIC II Regular
Interest
SB-IO,
as reduced by Realized Losses
allocated
thereto.
The Class R Certificates
will not
have a Certificate Principal Balance.
Class A Certificate:
Any one of the Class A-1,
Class A-2 or Class A-3
Certificates,
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially in the
form
annexed to the
Standard
Terms as
Exhibit A,
senior to the Class M, Class B, Class SB
and Class R Certificates
with respect to distributions
and the allocation of Realized Losses
as set forth in
Section
4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in REMIC II for
purposes
of the REMIC
Provisions
and (ii) the right to
receive
Basis Risk Shortfalls and amounts payable from the Final Maturity
Reserve Account.
Class A Principal
Distribution
Amount:
With
respect to any
Distribution
Date (i)
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
(ii) on or after the Stepdown Date if a Trigger
Event is not in effect for that
Distribution
Date, the lesser of:
(i) the Principal Distribution Amount for that Distribution Date;
and
(ii)
the excess, if any, of (A) the aggregate
Certificate
Principal Balance of the
Class A Certificates
immediately
prior to that
Distribution Date over (B) the lesser of
(x) the
product of (1) the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated Principal
Balance of the Mortgage Loans after giving effect to distributions
to be
made on that
Distribution
Date and
(y) the
excess,
if any,
of the
aggregate
Stated
Principal
Balance of the Mortgage Loans after giving effect to
distributions
to be made
on that Distribution Date, over the Overcollateralization Floor.
Class A-1
Certificate:
The Class
A-1
Certificates,
executed
by the
Trustee
and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as Exhibit A.
Class
A-1
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.160% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.320% per annum.
Class A-2
Certificate:
The Class
A-2
Certificates,
executed
by the
Trustee
and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as Exhibit A.
Class
A-2
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.200% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.400% per annum.
Class A-3
Certificate:
The Class
A-3
Certificates,
executed
by the
Trustee
and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as Exhibit A.
Class
A-3
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.240% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.480% per annum.
Class A-P Certificates:
None.
Class
B
Certificate:
The
Class
B
Certificates,
executed
by
the
Trustee
and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as
Exhibit
C,
senior
to the Class SB
Certificates
and
Class R
Certificates
with
respect to
distributions
and the allocation of Realized Losses as set forth in Section 4.05,
and
evidencing
(i) an interest
designated as a "regular
interest" in REMIC II for purposes
of the REMIC
Provisions
and (ii) the right to receive
Basis
Risk
Shortfalls
and
amounts
payable from the Final Maturity Reserve Account.
Class
B
Margin:
With
respect
to
any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 1.500% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 2.250% per annum.
Class B Principal
Distribution
Amount:
With
respect to any
Distribution
Date (i)
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,
Class M-1
Principal Distribution Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal
Distribution
Amount,
Class M-4
Principal
Distribution
Amount,
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7
Principal
Distribution
Amount,
Class M-8
Principal
Distribution
Amount
and
Class M-9
Principal
Distribution
Amount
or (ii) 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,
Class M-1 Principal
Distribution
Amount,
Class M-2 Principal
Distribution
Amount,
Class M-3 Principal
Distribution Amount,
Class M-4 Principal Distribution Amount,
Class M-5 Principal
Distribution Amount,
Class M-6
Principal Distribution Amount,
Class M-7 Principal
Distribution Amount,
Class M-8 Principal
Distribution Amount and Class M-9 Principal Distribution Amount;
and
(ii)
the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A,
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
(after
taking into account the payment of
the
Class A
Principal
Distribution
Amount,
Class M-1
Principal
Distribution
Amount,
Class M-2 Principal Distribution Amount,
Class M-3 Principal
Distribution Amount,
Class M-4
Principal Distribution Amount,
Class M-5 Principal
Distribution Amount,
Class M-6 Principal
Distribution
Amount,
Class M-7
Principal
Distribution
Amount,
Class M-8
Principal
Distribution
Amount and Class M-9
Principal
Distribution Amount for that Distribution Date)
and (2) the
Certificate
Principal Balance of the Class B
Certificates
immediately prior to
that
Distribution
Date
over
(B) the
lesser
of (x)
the
product
of (1)
the
applicable
Subordination
Percentage
and (2) the
aggregate
Stated
Principal
Balance of the
Mortgage
Loans after giving effect to
distributions to be made on that
Distribution
Date and (y) the
excess,
if any, of the aggregate Stated Principal
Balance of the Mortgage Loans after giving
effect to distributions to be made on that Distribution
Date, over the
Overcollateralization
Floor.
Class M
Certificates:
Collectively,
the Class M-1, 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.
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 to the
Standard
Terms as Exhibit B, senior to the Class M-2,
Class M-3, Class M-4, Class M-5, Class
M-6,
Class M-7,
Class M-8,
Class M-9,
Class SB and Class R
Certificates
with
respect to
distributions
and the
allocation
of
Realized
Losses as set
forth in
Section
4.05,
and
evidencing
(i) an interest
designated
as a "regular
interest" in REMIC III for purposes of
the REMIC
Provisions and (ii) the right to receive Basis Risk
Shortfalls and amounts payable
from the Final Maturity Reserve Account.
Class
M-1
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.360% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.540% per annum.
Class M-1 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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 (ii) on
or after the Stepdown
Date if a Trigger
Event is not in effect for that
Distribution
Date,
the lesser of:
(i)
the remaining
Principal
Distribution
Amount for that Distribution Date after
distribution of the Class A Principal Distribution Amount; and
(ii)
the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance of the Class A
Certificates
(after
taking
into
account the payment of the Class A
Principal
Distribution Amount for that Distribution Date) and (2) the
Certificate
Principal
Balance
of the
Class M-1
Certificates
immediately
prior to that
Distribution
Date
over
(B) the lesser of (x) the product of (1) the applicable
Subordination
Percentage and (2) the
aggregate
Stated
Principal
Balance
of
the
Mortgage
Loans
after
giving
effect
to
distributions
to be made
on that
Distribution
Date
and
(y) the
excess,
if any,
of the
aggregate
Stated
Principal
Balance
of
the
Mortgage
Loans
after
giving
effect
to
distributions to be made on that Distribution Date, over the
Overcollateralization Floor.
Class M-2 Certificate:
Any one of the Class M-2 Certificates
executed by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed to the
Standard
Terms as Exhibit B, senior to the Class M-3,
Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9,
Class SB and Class R
Certificates
with respect to
distributions
and the
allocation of Realized
Losses as set forth in Section 4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in
REMIC
III
for
purposes
of
the
REMIC
Provisions and (ii) the right to receive Basis Risk
Shortfalls
and amounts
payable from the
Final Maturity Reserve Account.
Class
M-2
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.370% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.555% per annum.
Class M-2 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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
Class M-1
Principal
Distribution
Amount or (ii) 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 to the
Standard
Terms as Exhibit B, senior to the Class M-4,
Class M-5, Class M-6, Class M-7, Class
M-8, Class M-9, Class SB Certificates
and Class R Certificates
with respect to distributions
and the
allocation of Realized
Losses as set forth in Section 4.05,
and
evidencing
(i) an
interest
designated
as a
"regular
interest"
in
REMIC
III
for
purposes
of
the
REMIC
Provisions and (ii) the right to receive Basis Risk
Shortfalls
and amounts
payable from the
Final Maturity Reserve Account.
Class
M-3
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.380% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.570% per annum.
Class M-3 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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,
Class M-1
Principal
Distribution
Amount
and
Class M-2
Principal
Distribution
Amount or (ii) 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,
Class M-1 Principal
Distribution
Amount and 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,
Class M-1 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 to the
Standard
Terms as Exhibit B, senior to the Class M-5,
Class M-6, Class M-7, Class M-8, Class
M-9, Class SB
Certificates
and Class R Certificates
with respect to
distributions
and the
allocation of Realized
Losses as set forth in Section 4.05,
and
evidencing
(i) an interest
designated
as a "regular
interest"
in REMIC III for
purposes of the REMIC
Provisions
and
(ii) the right to receive Basis Risk
Shortfalls
and amounts
payable from the Final Maturity
Reserve Account.
Class
M-4
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.490% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.735% per annum.
Class M-4 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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,
Class M-1
Principal
Distribution
Amount,
Class M-2
Principal
Distribution
Amount
and
Class M-3
Principal
Distribution
Amount or (ii) 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,
Class M-1 Principal
Distribution
Amount,
Class M-2 Principal
Distribution Amount and 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,
Class M-1,
Class M-2 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 to the
Standard
Terms as Exhibit B, senior to the Class M-6,
Class M-7, Class M-8, Class M-9, Class
SB Certificates and Class R Certificates
with respect to distributions
and the allocation of
Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular
interest"
in REMIC III for purposes of the REMIC
Provisions
and (ii) the right to
receive Basis Risk Shortfalls and amounts payable from the Final
Maturity Reserve Account.
Class
M-5
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.530% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.795% per annum.
Class M-5 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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,
Class M-1
Principal Distribution Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal
Distribution
Amount
and
Class M-4
Principal
Distribution
Amount
or (ii) 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,
Class M-1 Principal
Distribution
Amount, the Class M-2 Principal
Distribution Amount,
Class M-3 Principal Distribution Amount
and 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,
Class M-1,
Class M-2,
Class M-3 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 to the
Standard
Terms as
Exhibit
B,
senior to the Class
M-7,
Class
M-8,
Class
M-9,
Class SB
Certificates
and Class R
Certificates
with respect to
distributions
and the allocation of
Realized
Losses as set forth in Section 4.05, and evidencing (i) an interest
designated as a
"regular
interest"
in REMIC III for purposes of the REMIC
Provisions
and (ii) the right to
receive Basis Risk Shortfalls and amounts payable from the Final
Maturity Reserve Account.
Class
M-6
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 0.580% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 0.870% per annum.
Class M-6 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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,
Class M-1
Principal Distribution Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal
Distribution
Amount,
Class M-4
Principal
Distribution
Amount
and
Class M-5
Principal
Distribution
Amount
or (ii) 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,
Class M-1 Principal
Distribution
Amount,
the
Class M-2
Principal
Distribution
Amount,
Class M-3
Principal
Distribution
Amount,
Class M-4 Principal
Distribution Amount and Class M-5 Principal Distribution Amount;
and
(ii)
the excess, if any, of (A) the sum of (1) the aggregate
Certificate
Principal
Balance
of
the
Class A,
Class M-1,
Class M-2,
Class M-3,
Class M-4
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 to the
Standard
Terms as Exhibit B, senior to the Class M-8, Class M-9,
Class SB
Certificates
and
Class R Certificates
with respect to
distributions
and the allocation of Realized Losses as
set forth in Section 4.05, and evidencing (i) an interest
designated as a "regular
interest"
in REMIC III for
purposes of the REMIC
Provisions
and (ii) the right to receive
Basis Risk
Shortfalls and amounts payable from the Final Maturity Reserve
Account.
Class
M-7
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 1.150% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 1.725% per annum.
Class M-7 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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,
Class M-1
Principal Distribution Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal
Distribution
Amount,
Class M-4
Principal
Distribution
Amount,
Class M-5
Principal
Distribution
Amount
and
Class M-6
Principal
Distribution
Amount or
(ii) 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,
Class M-1 Principal
Distribution
Amount,
Class M-2 Principal
Distribution
Amount,
Class M-3 Principal
Distribution Amount,
Class M-4
Principal
Distribution
Amount,
Class M-5
Principal
Distribution
Amount
and
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, Class M-1,
Class M-2,
Class M-3,
Class M-4, Class M 5 and Class M-6
Certificates
(after
taking into
account the payment of the Class A
Principal
Distribution
Amount,
Class M-1 Principal
Distribution
Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal Distribution Amount,
Class M-4 Principal
Distribution Amount,
Class M-5
Principal
Distribution
Amount
and
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 to the
Standard
Terms as
Exhibit
B,
senior to the Class M-9,
Class SB
Certificates
and Class R
Certificates
with
respect to
distributions
and the
allocation
of Realized
Losses as set
forth in Section 4.05, and evidencing
(i) an interest
designated as a "regular
interest" in
REMIC III for
purposes
of the REMIC
Provisions
and (ii) the right to
receive
Basis
Risk
Shortfalls and amounts payable from the Final Maturity Reserve
Account.
Class
M-8
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 1.500% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 2.250% per annum.
Class M-8 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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,
Class M-1
Principal Distribution Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal
Distribution
Amount,
Class M-4
Principal
Distribution
Amount,
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount
and
Class M-7
Principal
Distribution
Amount
or (ii) 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,
Class M-1 Principal
Distribution
Amount,
Class M-2 Principal
Distribution
Amount,
Class M-3 Principal
Distribution Amount,
Class M-4 Principal Distribution Amount,
Class M-5 Principal
Distribution Amount,
Class M-6
Principal Distribution Amount and 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, Class M-1,
Class M-2,
Class M-3, Class M-4, Class M 5, Class M-6 and
Class M-7
Certificates
(after
taking into
account
the
payment of the
Class A
Principal
Distribution
Amount,
Class M-1
Principal
Distribution
Amount,
Class M-2
Principal
Distribution
Amount,
Class M-3
Principal
Distribution
Amount,
Class M-4
Principal
Distribution
Amount,
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount and 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 to the
Standard
Terms as Exhibit B,
senior to the Class SB
Certificates
and Class R
Certificates
with respect to
distributions
and the allocation of Realized
Losses as set forth in Section
4.05,
and
evidencing
(i) an interest
designated
as a "regular
interest" in REMIC III for
purposes
of the REMIC
Provisions
and (ii) the right to receive
Basis Risk
Shortfalls
and
amounts payable from the Final Maturity Reserve Account.
Class
M-9
Margin:
With
respect
to any
Distribution
Date
prior
to
the
second
Distribution
Date after the first possible
Optional
Termination Date, 1.500% per annum, and
on any
Distribution
Date on or after the second
Distribution
Date after the first possible
Optional Termination Date, 2.250% per annum.
Class M-9 Principal
Distribution
Amount:
With respect to any Distribution
Date (i)
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,
Class M-1
Principal Distribution Amount,
Class M-2 Principal
Distribution Amount,
Class M-3 Principal
Distribution
Amount,
Class M-4
Principal
Distribution
Amount,
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7
Principal
Distribution
Amount
and
Class M-8
Principal
Distribution
Amount
or (ii) 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,
Class M-1 Principal
Distribution
Amount,
Class M-2 Principal
Distribution
Amount,
Class M-3 Principal
Distribution Amount,
Class M-4 Principal Distribution Amount,
Class M-5 Principal
Distribution Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7
Principal
Distribution
Amount
and
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,
Class M-1,
Class M-2,
Class M-3,
Class M-4,
Class M 5, Class M-6,
Class M-7 and
Class M-8
Certificates
(after
taking into account the payment of the Class A
Principal Distribution Amount,
Class M-1 Principal
Distribution Amount,
Class M-2 Principal
Distribution
Amount,
Class M-3
Principal
Distribution
Amount,
Class M-4
Principal
Distribution
Amount,
Class M-5
Principal
Distribution
Amount,
Class M-6
Principal
Distribution
Amount,
Class M-7
Principal
Distribution
Amount
and
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 P Certificate:
Any one of the Class P Certificates
executed by the Trustee and
authenticated by the Certificate
Registrar
substantially in the form annexed to the Standard
Terms as Exhibit C-I.
Class R Certificate:
Any one of the Class R-I, Class R-II or Class R-X Certificates.
Class R-I Certificate:
Any one of the Class R-I Certificates
executed by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed to the
Standard
Terms as Exhibit D and
evidencing an interest
designated as a "residual
interest"
in REMIC I for purposes of the REMIC Provisions.
Class
R-II
Certificate:
Any one of the
Class
R-II
Certificates
executed
by the
Trustee and
authenticated by the Certificate
Registrar
substantially in the form annexed to
the
Standard
Terms as
Exhibit
D and
evidencing
an
interest
designated
as a
"residual
interest" in REMIC II for purposes of the REMIC Provisions.
Class R-X Certificate:
Any one of the Class R-X Certificates
executed by the Trustee
and
authenticated
by the
Certificate
Registrar
substantially
in the form
annexed to the
Standard
Terms as Exhibit D and
evidencing an interest
designated as a "residual
interest"
in REMIC III for purposes of the REMIC Provisions.
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 to the
Standard
Terms
as
Exhibit
C-II,
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
ownership of an interest
designated as the "regular
interest"
in
REMIC
III
for
purposes
of
the
REMIC
Provisions,
together
with
certain
obligations
with respect to payments of Basis Risk Shortfall
amounts and rights with respect
to the Final Maturity Reserve Account.
Clearstream:
Clearstream Banking, societe anonyme.
Closing Date:
December 28, 2006.
Corporate
Trust
Office:
The
principal
office
of
the
Trustee
at
which
at any
particular
time
its
corporate
trust
business
with
respect
to this
Agreement
shall be
administered,
which
office at the date of the
execution
of this
instrument
is located at
1761 East St. Andrew Place, Santa Ana, California 92705-4934,
Attention:
Residential Funding
Company, LLC, RALI 2006-QO10.
Coupon Strip: On each
Distribution
Date on or after the Distribution Date in January
2017,
through and including the
Distribution
Date in December
2036, an amount equal to the
greater
of (I) the
product
of (i)
one-twelfth
of 0.9712%
and (ii) the
aggregate
Stated
Principal
Balance of the
Mortgage
Loans with
original
terms to
maturity
in excess of 30
years,
and (II) the product of (i)
one-twelfth
of 1.00% and (ii)
either (A) the
aggregate
Stated
Principal
Balance of the Mortgage
Loans with original terms to maturity in excess of
30 years if such aggregate Stated
Principal
Balance is greater than the scheduled amount set
forth in column A of Schedule 1 hereto for the related
Distribution
Date or (B) zero, if the
aggregate
Stated
Principal
Balance of the Mortgage Loans with original terms to maturity in
excess
of 30 years is less
than or equal to the
scheduled
amount
set forth in column A of
Schedule 1 hereto for the related Distribution Date.
Coupon Strip Rate: A per annum rate equal to the product of (i) the
Coupon
Strip,
if
any, payable to the Final Maturity
Reserve Account on any Distribution
Date and (ii) twelve,
divided
by
the
aggregate
Stated
Principal
Balance
of
the
Mortgage
Loans
as of
such
Distribution Date.
Cut-off Date Balance:
$900,209,560.83.
Cut-off Date:
December 1, 2006.
Deferred
Interest:
The
amount
of
interest
which
is
deferred
and
added to the
principal
balance of a Mortgage Loan due to negative
amortization.
For purposes of REMIC I,
Deferred
Interest
shall be
allocated
to REMIC I Regular
Interest
LT1 in reduction of the
portion
of
the
Uncertificated
Accrued
Interest
thereon
distributable
on
the
related
Distribution
Date and shall
result in an increase in the
principal
balance
thereof to the
extent of such reduction.
Determination Date:
With respect to any Distribution Date, the second Business Day
prior to each Distribution Date.
Discount Net Mortgage Rate:
Not applicable.
Due Period:
With respect to each Distribution
Date, the calendar month in which such
Distribution Date occurs.
Euroclear:
Euroclear Bank, S.A./N.A., as operator of The Euroclear System.
Excess Bankruptcy Loss:
Not applicable.
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,
Class M and Class B
Certificates
immediately prior to such
Distribution
Date and (2) the
Principal
Remittance
Amount for that
Distribution
Date to the extent not applied to pay
interest on the Class A,
Class M and Class B
Certificates on such Distribution Date and (B) the
Overcollateralization
Reduction Amount, if any, for that Distribution Date.
Excess Fraud Loss:
Not applicable.
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.
Excess Special Hazard Loss:
Not applicable.
Excess Subordinate Principal Amount:
Not applicable.
Expense Fee Rate:
With respect to any Mortgage Loan as of any date of
determination,
the sum of the
Servicing
Fee
Rate and the rate per
annum
at which
the
Subservicing
Fee
accrues.
Final Maturity
Reserve Account:
The separate
account
established and maintained by
the
Supplemental
Interest Trust Trustee pursuant to Section 4.10 hereof for the
distribution
of the Coupon
Strip.
Amounts on deposit in the Final
Maturity
Reserve
Account will not be
an asset of any REMIC.
Gross Margin:
With respect to each Mortgage Loan,
the fixed
percentage set forth in
the related
Mortgage Note and indicated on the Mortgage Loan Schedule
attached hereto as the
"NOTE
MARGIN,"
which
percentage
is added to the related Index on each
Adjustment
Date to
determine
(subject to rounding in accordance
with the related
Mortgage
Note,
the 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.
Index:
With respect to any Mortgage Loan and as to any Adjustment Date
therefor,
the
related index as stated in the related Mortgage Note.
Initial Subordinate Class Percentage:
Not applicable.
Interest Accrual Period:
(i) With respect to the
Distribution
Date in January 2007,
the period
commencing
on the Closing Date and ending on the day
immediately
preceding
the
Distribution
Date in
January
2007,
and with
respect
to any
Distribution
Date after the
Distribution
Date in January
2007,
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 immediately preceding such Distribution Date.
Interest
Carryforward
Amount:
With
respect
to any
Class of Class A,
Class M and
Class B Certificates
and any Distribution
Date, the sum of (a) on any
Distribution
Date on
which the Pass-Through
Rate is equal to the Available Funds Rate, the excess,
if any, of (i)
Accrued
Certificate
Interest
for such Class
assuming the Net Rate Cap was equal to the Net
WAC Cap Rate for such
Distribution
Date over (ii) Accrued
Certificate
Interest
calculated
based on such
Available
Funds Rate and (b)
interest
on the amount
calculated
pursuant to
clause (a) for any prior
Distribution
Date that remains
unreimbursed at a rate equal to the
lesser of (x)
One-Month
LIBOR plus the related
Margin and (y) the Net WAC Cap Rate for such
Distribution Date.
Interest
Distribution
Amount:
For
any
Distribution
Date,
the
aggregate
of the
amounts payable pursuant to Section 4.02(c)(i).
Interest Only Certificates:
None.
Interest
Remittance
Amount:
With respect to any
Distribution
Date, the portion of
the
Available
Distribution
Amount
for such
Distribution
Date
attributable
to
interest
received or advanced with respect to the Mortgage Loans, net of the
Expense Fee Rate.
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
to by law to be
closed.
LIBOR Certificates:
The Class A, Class M and Class B Certificates.
LIBOR Rate Adjustment Date: With respect to each
Distribution
Date, the second LIBOR
Business Day immediately preceding the commencement of the related
Interest Accrual Period.
Liquidation
Proceeds:
As
defined in the
Standard
Terms but
excluding
Subsequent
Recoveries.
Margin: The Class A-1 Margin,
Class A-2 Margin,
Class A-3 Margin,
Class M-1 Margin,
Class M-2 Margin,
Class M-3 Margin,
Class M-4
Margin,
Class M-5 Margin,
Class M-6 Margin,
Class M-7 Margin, Class M-8 Margin, Class M-9 Margin or Class B
Margin, as applicable.
Marker Rate: With respect to the Class SB
Certificates
or REMIC II Regular
Interest
SB-IO and any
Distribution
Date,
a per
annum
rate
equal to two (2)
times
the
weighted
average of the
Uncertificated
REMIC I
Pass-Through
Rates for REMIC I Regular
Interest LT2
and REMIC I Regular Interest LT3.
Maturity
Date:
December 25, 2046, the
Distribution
Date in the month of the latest
scheduled maturity date of any Mortgage Loan.
Maximum Coupon Strip:
An amount equal to the product of (i)
one-twelfth of 1.00% and
(ii) the aggregate
Stated
Principal
Balance of the Mortgage
Loans with
original
terms to
maturity in excess of 30 years.
Maximum
Coupon Strip Rate:
With respect to any
Distribution
Date, a per annum rate
equal to (i) if a Coupon
Strip is
payable
to the Final
Maturity
Reserve
Account
on such
Distribution
Date, the Coupon Strip Rate
calculated as if the Coupon Strip were equal to the
Maximum Coupon Strip or (ii) otherwise, 0.00%.
Maximum
Mortgage
Rate:
As to any
Mortgage
Loan,
the per annum rate
indicated in
Mortgage
Loan
Schedule
hereto
attached
hereto as the "NOTE
CEILING,"
which
rate is the
maximum
interest
rate that may be
applicable
to such
Mortgage Loan at any time during the
life of such Mortgage Loan.
Maximum Net
Mortgage
Rate:
As to any Mortgage
Loan and any date of
determination,
the Maximum Mortgage Rate minus the Expense Fee Rate.
Modified Net WAC Cap Rate:
With
respect to any
Distribution
Date,
the Net WAC Cap
Rate modified by replacing
the term "Coupon
Strip Rate" with the term "Maximum
Coupon Strip
Rate" wherever it appears in the definition of "Net WAC Cap Rate".
Mortgage Loan Schedule:
The list or lists of the Mortgage
Loans
attached
hereto as
Exhibit
One ( and as
amended
from
time
to time
to
reflect
the
addition
of
Qualified
Substitute Mortgage Loans),
which list or lists shall set forth the following
information as
to each Mortgage Loan:
(i)
the Mortgage Loan identifying number ("RFC LOAN #");
(ii)
the maturity of the Mortgage Note ("MATURITY DATE");
(iii)
the Mortgage Rate as of origination ("ORIG RATE");
(iv)
the Mortgage Rate as of the Cut-off Date ("CURR RATE");
(v)
the Net Mortgage Rate as of the Cut-off Date ("CURR NET");
(vi)
the
scheduled
monthly
payment of
principal,
if any, and interest as of the
Cut-off Date ("ORIGINAL P & I" or "CURRENT P & I");
(vii)
the Cut-off Date Principal Balance ("PRINCIPAL BAL");
(viii) the Maximum Mortgage Rate ("NOTE CEILING");
(ix)
the maximum Net Mortgage Rate ("NET CEILING");
(x)
the Note Margin ("NOTE MARGIN");
(xi)
the Note Margin ("NOTE MARGIN");
(xii)
the Periodic Cap ("PERIODIC DECR" or "PERIODIC INCR");
(xiii) the rounding of the
semi-annual
or annual
adjustment
to the
Mortgage
Rate
("NOTE METHOD");
(xiv)
the Loan-to-Value Ratio at origination ("LTV");
(xv)
the rate at which the
Subservicing
Fee accrues
("SUBSERV
FEE") and at which
the Servicing Fee accrues ("MSTR SERV FEE");
(xvi)
a code "T," "BT" or "CT"
under the column "LN
FEATURE,"
indicating
that the
Mortgage Loan is secured by a second or vacation residence; and
(xvii) a code "N" under the column "OCCP CODE,"
indicating
that the Mortgage Loan is
secured by a non-owner occupied residence.
Such schedule may consist of multiple
reports that
collectively set forth all of the
information required.
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 each
Mortgage
Loan 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 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.
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 Rate Cap:
With respect to any Class of Class A, Class M and Class B
Certificates
and any
Distribution
Date,
the
lesser
of (i) the Net WAC Cap Rate and (ii) the
Available
Funds Rate.
Net WAC Cap Rate:
With
respect to any
Distribution
Date,
a per annum rate
(which
will not be less than zero) equal to the
weighted
average of the Net
Mortgage
Rates of the
Mortgage
Loans
using the Net
Mortgage
Rates in effect on such
Mortgage
Loans
during the
related
Due Period less the Coupon
Strip
Rate,
if
applicable,
multiplied
by 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 for
such Certificates.
Note Margin:
With respect to each Mortgage
Loan,
the fixed
percentage set forth in
the related
Mortgage
Note and
indicated in Exhibit One hereto as the "NOTE
MARGIN,"
which
percentage
is added to the 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.
Notional
Amount:
With
respect
to the
Class SB
Certificates
or REMIC II
Regular
Interest SB-IO,
immediately
prior to any Distribution
Date is equal to the aggregate of the
Uncertificated Principal Balances of the REMIC I Regular Interests.
Offered Certificates:
The Class A Certificates and the Class M Certificates.
Optional
Termination
Date:
Any
Distribution
Date on or after which the
aggregate
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.
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,
Class M and Class B
Certificates
before taking into account distributions of principal to be made on
such Distribution 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
(b)(iv),
(v) and
(vi) 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.
Pass-Through
Rate: With respect to each class of
Certificates
(other than the Class
SB, the Class P and the Class R
Certificates),
and any
Distribution
Date, a per annum rate
equal to the lesser of (i) LIBOR plus the related Margin for such
Distribution
Date and (ii)
the Net Rate Cap for such Distribution Date.
With respect to the Class SB Certificates or REMIC II Regular
Interest SB-IO and any
Distribution
Date,
a rate per annum
equal to the sum of (a) the Maximum
Coupon
Strip Rate
and (b) the
percentage
equivalent
of a fraction,
the
numerator of which is the sum of the
amounts
calculated
pursuant to clauses (i) through (iii) below, and the denominator of
which
is the
aggregate
principal
balance
of the
REMIC I
Regular
Interests.
For
purposes
of
calculating
the
Pass-Through
Rate for the Class SB
Certificates
or the
REMIC II
Regular
Interest SB-IO, the numerator is equal to the sum of the following
components:
(i)
the
Uncertificated
REMIC I Pass-Through Rate for REMIC I Regular Interest LT1
minus the Marker
Rate,
applied to a notional
amount equal to the
Uncertificated
Principal
Balance of REMIC I Regular Interest LT1;
(ii)
the
Uncertificated
REMIC I Pass-Through Rate for REMIC I Regular Interest LT2
minus the Marker
Rate,
applied to a notional
amount equal to the
Uncertificated
Principal
Balance of REMIC I Regular Interest LT2; and
(iii)
the
Uncertificated
REMIC I Pass-Through Rate for REMIC I Regular Interest LT4
minus
twice the
Marker
Rate,
applied
to a
notional
amount
equal to the
Uncertificated
Principal Balance of REMIC I Regular Interest LT4.
Permanent Regulation S Global Offered Certificate:
Any one of the Class B, Class SB
and Class P Certificates substantially in the form of Exhibit
Nine-B hereto, and as more
fully described in Section 5.02(i) hereof.
Prepayment
Assumption:
The
prepayment
assumption
to be used for
determining
the
accrual of original issue
discount and premium and market
discount on the
Certificates
for
federal
income tax
purposes,
which assumes a constant
prepayment
rate of 25% per annum of
the then outstanding principal balance of the Mortgage Loans.
Prepayment
Charge:
With respect to any Mortgage
Loan,
the charges or premiums,
if
any,
received
in
connection
with a full or partial
prepayment
of such
Mortgage
Loan in
accordance with the terms thereof.
Prepayment
Charge
Loan:
Any
Mortgage
Loan for which a
Prepayment
Charge
may be
assessed
and to which
such
Prepayment
Charge the Class P
Certificates
are
entitled,
as
indicated on the Mortgage Loan Schedule.
Principal
Distribution
Amount:
With respect to any Distribution Date, the lesser of
(a) the
excess
of (x)
Available
Distribution
Amount
over (y) the
Interest
Distribution
Amount and (b) the sum of:
(i)
the
principal
portion of each
Monthly
Payment
received
or
Advanced
with
respect to the related Due Period on each Outstanding Mortgage
Loan;
(ii)
the
Stated
Principal
Balance of any
Mortgage
Loan
repurchased
during the
related
Prepayment
Period (or deemed to have been so repurchased in accordance
with Section
3.07(b))
pursuant
to
Section
2.02,
2.03,
2.04 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 prior calendar
month;
(iii)
the
principal
portion
of
all
other
unscheduled
collections,
other
than
Subsequent
Recoveries,
on the Mortgage
Loans
received (or deemed to have been so received)
during the prior calendar month or, in the case of Principal
Prepayments in Full,
during the
related Prepayment Period, including,
without limitation,
Curtailments,
Insurance Proceeds,
Liquidation
Proceeds,
REO
Proceeds
and,
except to the extent
applied to offset
Deferred
Interest,
Principal
Prepayments,
to the extent applied by the Master Servicer as recoveries
of principal 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 the Class A, Class M
and Class
B 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
that are
allocated to any Class of Certificates; and
(vi)
the
lesser of (a) the
Excess
Cash Flow for such
Distribution
Date,
to the
extent not used
pursuant
to clauses
(iv) and (v) of this
definition
on such
Distribution
Date, and (b) the amount of any
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 Only Certificates:
None.
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.
Record
Date:
With
respect
to each
Distribution
Date and each Class of Book Entry
Certificates,
the Business Day
immediately
preceding such
Distribution
Date. With respect
to each Class of
Definitive
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.
Regulation
S
Purchaser:
An entity that is not a U.S.
Person
within the meaning of
Regulation S under the 1933 Act.
Relief Act:
The Servicemembers Civil Relief Act, as amended.
Relief Act
Shortfalls:
Interest
shortfalls on the Mortgage Loans resulting from the
Relief Act or similar legislation or regulations.
REMIC I: The
segregated
pool of assets with respect to which a REMIC
election is to
be made, consisting of:
(i)
the Mortgage Loans and the related Mortgage Files,
(ii)
all payments
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, if
any,
and
(v)
all proceeds of clauses (i) through (iv) above.
Notwithstanding
the
foregoing,
the
REMIC
election
with
respect
to
REMIC
I
specifically excludes the Basis Risk Shortfall Reserve Fund.
REMIC
I Distribution
Amount: For any Distribution
Date, the Available
Distribution
Amount shall be
distributed to the REMIC I Regular
Interests and the Class R-I
Certificates
in the following amounts and priority:
(i)
to the extent of the Available
Distribution Amount, to REMIC II as the
holder of REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4, 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, in the case of REMIC I
Regular
Interest LT1 each such amount having first been reduced by any
Deferred
Interest for
the related Distribution Date; and
(ii)
to the extent of the Available
Distribution Amount remaining after the
distributions
made
pursuant
to clause (i)
above,
to REMIC II as the holder of the REMIC I
Regular Interests, in an amount equal to:
(A)
in respect of REMIC I Regular
Interests LT2, LT3 and LT4, their
respective Principal Distribution Amounts;
(B)
in respect of REMIC I Regular
Interest LT1 any remainder
until
the Uncertificated Principal Balance thereof is reduced to zero;
(C)
any remainder in respect of REMIC I 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
(iii)
any remaining amounts to the Holders of the Class R-I Certificates.
REMIC I Principal
Reduction Amounts:
For any Distribution Date, the amounts by which
the
principal
balances of REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4,
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
REMIC
I
Regular
Interest
LT1
after
distributions on the prior Distribution Date.
Y2 =
the principal
balance of REMIC I Regular
Interest LT2 after
distributions on
the prior Distribution Date.
Y3 =
the principal
balance of REMIC I Regular
Interest LT3 after
distributions on
the prior Distribution Date.
Y4 =
the principal
balance of REMIC I Regular
Interest LT4 after
distributions on
the prior Distribution Date (note:
Y3 = Y4).
AY1 =
the REMIC I Regular Interest LT1 Principal Reduction Amount.
AY2 =
the REMIC I Regular Interest LT2 Principal Reduction Amount.
AY3 =
the REMIC I Regular Interest LT3 Principal Reduction Amount.
AY4 =
the REMIC I Regular Interest LT4 Principal Reduction Amount.
P0 =
the
aggregate
principal
balance of REMIC I Regular
Interests
LT1, LT2, LT3
and LT4 after
distributions
and the allocation of Realized Losses on the prior
Distribution
Date.
P1 =
the
aggregate
principal
balance of REMIC I Regular
Interests
LT1, LT2, LT3
and
LT4
after
distributions
and
the
allocation
of
Realized
Losses
to be made on such
Distribution Date.
AP =
P0 - P1 = the
aggregate
of REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4
Principal Reduction Amounts.
=the
aggregate
of the
principal
portions of Realized
Losses to be allocated
to, and the
principal
distributions
to be made on, the
Certificates
on such
Distribution
Date
(including
distributions
of accrued and unpaid
interest on the Class SB
Certificates
for prior Distribution Dates).
R0 =
the Modified 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 Modified 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 for all
Classes
of
Certificates,
other
than the
Class SB
Certificates,
of the product for each Class of (i) the
monthly
interest
rate (as
limited
by the
Modified
Net WAC Cap Rate,
if
applicable)
for such Class
applicable
for
distributions
to be made
on such
Distribution
Date
and
(ii)
the
aggregate
Certificate
Principal
Balance for such Class after
distributions
and the allocation of Realized
Losses
on the prior Distribution Date and (B) R0*P0.
a1
=
the
lesser of (A) the sum for all
Classes
of
Certificates,
other
than the
Class SB
Certificates,
of the product for each Class of (i) the
monthly
interest
rate (as
limited
by the
Modified
Net WAC Cap Rate,
if
applicable)
for such Class
applicable
for
distributions
to be made on the next
succeeding
Distribution
Date
and (ii) the
aggregate
Certificate
Principal
Balance
for such Class
after
distributions
and the
allocation
of
Realized Losses to be made on such Distribution Date and (B) R1*P1.
Then, based on the foregoing definitions:
AY1 =
AP - AY2 - AY3 - AY4;
AY2 =
(a/2){( a0R1 - a1R0)/R0R1};
AY3 =
aAP - AY2; and
AY4 =
AY3
if both AY2 and AY3, as so determined, are non-negative numbers.
Otherwise:
(1)
If AY2, as so determined, is negative, then
AY2 = 0;
AY3 = a{a1R0P0 - a0R1P1}/{a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
(2)
If AY3, as so determined, is negative, then
AY3 = 0;
AY2 = a{a1R0P0 - a0R1P1}/{2R1R0P1 -
a1R0};
AY4 = AY3; and
AY1 = AP - AY2 - AY3 - AY4.
REMIC I Realized
Losses:
Realized Losses on the Mortgage Loans shall be allocated to
the REMIC I Regular
Interests
as follows:
The
interest
portion of Realized
Losses on the
Mortgage Loans,
if any, shall be allocated
among REMIC I Regular
Interests LT1, LT2 and LT4
pro rata
according
to the amount of
interest
accrued
but
unpaid
thereon,
in
reduction
thereof.
Any
interest
portion of such
Realized
Losses in excess of the
amount
allocated
pursuant
to the
preceding
sentence
shall be treated
as a
principal
portion of
Realized
Losses
not
attributable
to
any
specific
Mortgage
Loan
and
allocated
pursuant
to the
succeeding
sentences.
The principal
portion of Realized
Losses on the Mortgage
Loans,
if
any,
shall
be
allocated
first,
to REMIC I
Regular
Interests
LT2,
LT3 and LT4 pro rata
according to their respective
Principal
Reduction Amounts to the extent thereof in reduction
of the
Uncertificated
Principal Balance of such REMIC I Regular
Interests and, second,
the
remainder,
if any, of such
principal
portion of such Realized
Losses shall be allocated to
REMIC I Regular Interest LT1 in reduction of the Uncertificated
Principal Balance thereof.
REMIC I Regular Interests:
REMIC I Regular Interests LT1, LT2, LT3 and LT4.
REMIC I Regular
Interest LT1: 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 LT1
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT1 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT1 on such Distribution Date.
REMIC I Regular
Interest LT2: 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 LT2
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT2 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT2 on such Distribution Date.
REMIC I Regular
Interest LT3: 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 LT3
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT3 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT3 on such Distribution Date.
REMIC I Regular
Interest LT4: 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 LT4
Principal
Distribution
Amount:
For any
Distribution
Date, the excess,
if any, of the REMIC I Regular Interest LT4 Principal
Reduction Amount for
such
Distribution
Date over the Realized
Losses
allocated to the REMIC I Regular
Interest
LT4 on such Distribution Date.
REMIC I Regular
Interest W: 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 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.
The
REMIC
election
with
respect to REMIC II
specifically
excludes
the Basis
Risk
Shortfall
Reserve Fund.
REMIC II
Regular
Interest:
Any one of
REMIC
II
Regular
Interest
A-1,
REMIC II
Regular
Interest A-2, REMIC II Regular
Interest A-3, REMIC II Regular Interest M-1, REMIC II
Regular
Interest M-2, REMIC II Regular
Interest M-3, REMIC II Regular Interest M-4, REMIC II
Regular
Interest M-5, REMIC II Regular
Interest M-6, REMIC II Regular Interest M-7, REMIC II
Regular
Interest M-8,
REMIC II Regular
Interest
M-9,
REMIC II Regular
Interest
SB-IO or
REMIC II Regular Interest SB-PO.
REMIC II Regular
Interest
A-1: A regular
interest in REMIC II which has a principal
balance equal to the
principal
balance of the Class A-1
Certificates
and which is entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR
plus the Class A-1 Margin and (ii)
the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and not paid
on the related
Distribution
Date shall carry forward to each
succeeding
Distribution
Date
without interest until paid.
REMIC
II
Regular
Interest
A-2:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class A-2
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class A-2 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
A-3:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class A-3
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class A-3 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-1:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-1
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-1 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-2:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-2
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-2 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-3:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-3
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-3 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-4:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-4
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-4 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-5:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-5
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-5 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-6:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-6
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-6 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-7:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-7
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-7 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-8:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-8
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-8 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC
II
Regular
Interest
M-9:
A
regular
interest
in
REMIC
II which is has a
principal
balance equal to the principal
balance of the Class M-9
Certificates and which is
entitled
to
interest
at a rate
equal to the
lesser of (i) LIBOR plus the Class M-9 Margin
and (ii) the Modified Net WAC Cap Rate.
Interest
accrued in any Interest
Accrual Period and
not
paid
on
the
related
Distribution
Date
shall
carry
forward
to
each
succeeding
Distribution Date without interest until paid.
REMIC II Regular
Interest
SB-IO: A regular
interest in REMIC II that has no initial
principal,
that bears
interest at the
related
Pass-Through
Rate,
and that has such other
terms as are described herein.
REMIC II Regular
Interest
SB-PO: A regular
interest in REMIC II that has an initial
principal
balance equal to the initial
principal
balance for the Class SB Certificates,
as
set forth in the
Preliminary
Statement,
that
bears no
interest,
and that has such
other
terms as are described herein.
REMIC III: The
segregated
pool of assets subject
hereto,
constituting a portion of
the primary trust created
hereby and to be
administered
hereunder,
with respect to which a
separate
REMIC
election is to be made,
consisting of the REMIC II Regular
Interests
SB-IO
and SB-PO.
REMIC III Regular Interest:
The separate
beneficial
ownership interest in REMIC III
issued
hereunder and designated as a "regular
interest" in REMIC III, the ownership of which
is
evidenced by the Class SB
Certificates.
The REMIC III Regular
Interest
will not have a
Pass-Through
Rate,
but
will be
entitled
to 100% of all
amounts
distributed
on REMIC II
Regular Interests SB-IO and SB-PO.
Required
Overcollateralization
Amount:
With
respect to any
Distribution
Date (i)
prior to the
Stepdown
Date,
an
amount
equal to 0.50% of the
aggregate
Stated
Principal
Balance of the Mortgage
Loans as of the Cut-off Date;
(ii) on or after the Stepdown Date but
prior to the
Distribution
Date in January
2013,
provided a Trigger Event is not in effect,
the
greater
of (x)
1.25% of the
outstanding
aggregate
Stated
Principal
Balance
of the
Mortgage Loans after giving effect to
distributions
made on that
Distribution
Date and (y)
the
Overcollateralization
Floor;
(iii) on or after
the
Stepdown
Date and on or after the
Distribution Date in January 2013,
provided a Trigger Event is not in effect,
the greater of
(x) 1.00% of the outstanding
aggregate Stated
Principal
Balance of the Mortgage Loans after
giving
effect
to
distributions
made
on
that
Distribution
Date
and
(y)
the
Overcollateralization
Floor;
or (iv) on or after the Stepdown
Date if a Trigger Event is in
effect, the Required
Overcollateralization
Amount for the immediately preceding Distribution
Date;
provided
that the
Required
Overcollateralization
Amount
may be
reduced so long as
written
confirmation
is obtained from each rating agency that the reduction
will not reduce
the ratings
assigned to the Class A
Certificates
and
Class M
Certificates
by that rating
agency
below
the
lower
of the
then-current
ratings
or the
ratings
assigned
to
those
certificates as of the closing date by that rating agency.
Reserve
Fund:
The
separate
trust
account
created and
maintained
by the Trustee
pursuant to Section 4.09 hereof.
Rule 144A: Rule 144A under the Securities Act of 1933, as in effect
from time to time.
Rule 144A
Global
Offered
Certificate:
Any one of the Class B, Class SB and Class P
Certificates
substantially in the form of Exhibit Nine-A hereto,
and as more fully described
in Section 5.02(i) hereof.
Senior Certificate:
Any one of the Class A Certificates.
Senior Enhancement
Percentage:
With respect to any Distribution Date, the percentage
obtained by dividing (x) the sum of (i) the
aggregate
Certificate
Principal
Balance of the
Class M Certificates and Class B Certificates and (ii) the
Overcollateralization
Amount,
in
each
case
prior
to
the
distribution
of
the
Principal
Distribution
Amount
on
such
Distribution
Date,
by (y) the
aggregated
Stated
Principal
Balance of the Mortgage
Loans
after giving effect to distributions to be made on that
Distribution Date.
Sixty-Plus Delinquency
Percentage:
With respect to any Distribution Date on or after
the Stepdown Date,
the arithmetic
average,
for each of the three
consecutive
Distribution
Dates ending with such Distribution
Date, of the fraction,
expressed as a percentage,
equal
to (x) the aggregate Stated
Principal
Balance of the Mortgage Loans that are 60 or more days
delinquent in payment of principal and interest for the
applicable
Due Date
preceding
that
Distribution
Date,
including
Mortgage
Loans in
foreclosure,
REO
Properties and Mortgage
Loans in bankruptcy
over (y) the aggregate
Stated
Principal
Balance of all of the Mortgage
Loans immediately preceding that Distribution Date.
Stated Principal
Balance:
With respect to any Mortgage Loan or related REO Property,
as of any date of
determination,
(i) the sum of (a) the
Cut-off Date
Principal
Balance of
the Mortgage Loan plus (b) any
amount by which the Stated
Principal
Balance of the Mortgage
Loan has been increased
pursuant to a Servicing
Modification and (c) any amount by which the
Stated
Principal
Balance of the
Mortgage
Loan has been
increased
for
Deferred
Interest
pursuant
to the terms of the
related
Mortgage
Note on or prior to the
Distribution
Date,
minus (ii) the sum of (a) the
principal
portion of the Monthly
Payments due with respect to
such
Mortgage
Loan or REO
Property
during
each Due
Period
ending
with
the Due
Period
relating to the most recent
Distribution
Date which were
received or with
respect to which
an Advance was made,
(b) all Principal
Prepayments with respect to such Mortgage Loan or REO
Property,
and all Insurance Proceeds,
Liquidation
Proceeds and REO Proceeds,
to the extent
applied by the Master
Servicer as
recoveries of principal in
accordance
with
Section 3.14
with
respect to such
Mortgage
Loan or REO
Property,
in each case
which were
distributed
pursuant
to
Section 4.02
on any
previous
Distribution
Date,
and (c) any
Realized
Loss
incurred
with respect to such
Mortgage
Loan
allocated to
Certificateholders
with respect
thereto for any previous Distribution Date.
Stepdown
Date:
The
earlier
to
occur
of (1)
the
Distribution
Date
immediately
following the Distribution
Date on which the aggregate
Certificate
Principal Balance of the
Class A
Certificates
has
been
reduced
to
zero
and (2) the
later
to
occur
of (x) the
Distribution
Date in
January
2010 and (y) the first
Distribution
Date on which the Senior
Enhancement
Percentage is greater than or equal to (a) on any Distribution
Date prior to the
Distribution
Date in January 2013,
22.25% and (b) on any
Distribution
Date on or after the
Distribution Date in January 2013, 17.80%.
Subordination
Percentage:
With
respect
to each class of Class A
Certificates
and
Class M Certificates, the respective approximate percentage set
forth in the table below:
Class
Percentage (1)
Percentage (2)
A
77.750%
82.200%
M-1
82.875%
86.300%
M-2
87.250%
89.800%
M-3
88.500%
90.800%
M-4
90.875%
92.700%
M-5
92.125%
93.700%
M-6
93.375%
94.700%
M-7
94.625%
95.700%
M-8
95.875%
96.700%
M-9
97.125%
97.700%
B
98.750%
99.000%
(1)
For any Distribution Date prior to the Distribution Date in
January 2013.
(2)
For any Distribution Date in January 2013 or thereafter.
Supplemental
Interest Trust: The separate trust formed pursuant to this
Agreement and
maintained by the
Supplemental
Interest
Trust
Trustee,
the assets of which consist of the
Final Maturity Reserve
Account.
The primary
activities of the
Supplemental
Interest Trust
created pursuant to this Agreement shall be:
(i)
receiving
collections
in respect
of the
Mortgage
Loans or making
payments
from the Final Maturity Reserve Account; and
(ii)
engaging in other
activities
that are
necessary or
incidental to accomplish
these
limited
purposes,
which
activities
cannot
be
contrary
to
the
status
of
the
Supplemental
Interest Trust as a qualified
special purpose entity under existing
accounting
literature.
Supplemental
Interest
Trust
Trustee:
Deutsche Bank Trust Company
Americas,
a New
York
banking
corporation,
not in its
individual
capacity,
but solely in its
capacity as
trustee of the
Supplemental
Interest Trust, and any successor
thereto,
and any corporation
or national
banking
association
resulting from or surviving any
consolidation or merger to
which it or its successors
may be a party and any successor
trustee as may from time to time
be serving as successor trustee hereunder.
Temporary
Regulation S Global Offered
Certificate:
Any one of the Class B, Class SB
and Class P
Certificates
substantially
in the form of Exhibit
Nine-C
hereto,
and as more
fully described in Section 5.02(i) hereof.
Trigger Event: A Trigger Event is in effect with respect to any
Distribution
Date if
either
(a)
on
or
after
the
Stepdown
Date
the
Sixty-Plus
Delinquency
Percentage,
as
determined on that
Distribution
Date,
exceeds 40.00% of the Senior
Enhancement
Percentage
for that
Distribution
Date or (b) on or after
the
Distribution
Date in
January
2009 the
aggregate
amount of Realized
Losses on the
Mortgage
Loans as a
percentage
of the initial
aggregate
Stated Principal
Balance as of the Cut-off Date exceeds the applicable
amount set
forth below:
o
January 2009 to December 2009: 0.200% with respect to January 2009,
plus an
additional 1/12th of 0.250% for each month through December 2009.
o
January 2010 to December 2010: 0.450% with respect to January 2010,
plus an
additional 1/12th of 0.350% for each month through December 2010.
o
January 2011 to December 2011: 0.800% with respect to January 2011,
plus an
additional 1/12th of 0.350% for each month through December 2011.
o
January 2012 to December 2012: 1.150% with respect to January 2012,
plus an
additional 1/12th of 0.450% for each month through December 2012.
o
January 2013 to December 2013: 1.600% with respect to January 2013,
plus an
additional 1/12th of 0.150% for each month through December 2013.
o
January 2014 and thereafter: 1.750%.
2006-QO10 REMIC:
Any of REMIC I,
REMIC II or REMIC III as the case may be.
Uncertificated
Accrued Interest:
With respect to any Uncertificated Regular Interest
for any
Distribution
Date,
one
month's
interest
at the
related
Uncertificated
REMIC I
Pass-Through Rate or Pass-Through
Rate, as applicable,
for such Distribution
Date,
accrued
on its
Uncertificated
Principal
Balance or
Uncertificated
Notional Amount, as applicable,
immediately
prior
to
such
Distribution
Date.
Uncertificated
Accrued
Interest
for
Uncertificated
Regular
Interests
shall accrue on the basis of a 360-day year
consisting of
twelve
30-day
months.
For
purposes of
calculating
the amount of
Uncertificated
Accrued
Interest
for
the
REMIC I
Regular
Interests
for any
Distribution
Date,
any
Prepayment
Interest
Shortfalls
and Relief Act
Shortfalls
(to the extent not
covered by
Compensating
Interest)
relating to the Mortgage Loans for any
Distribution
Date shall be allocated among
REMIC I Regular
Interests
LT1,
LT2, LT3 and LT4, pro rata,
based on, and to the extent of,
Uncertificated
Accrued
Interest,
as
calculated
without
application
of
this
sentence.
Uncertificated
Accrued
Interest
on
REMIC
II
Regular
Interest
SB-PO
shall
be
zero.
Uncertificated
Accrued
Interest
on REMIC II Regular
Interest
SB-IO for each
Distribution
Date shall equal Accrued Certificate Interest for the Class SB
Certificates.
Uncertificated
Notional Amount:
With respect to REMIC II Regular Interest SB-IO, the
Notional Amount for such Class.
Uncertificated
Principal Balance: The principal amount of any Uncertificated
Regular
Interest
outstanding as of any date of determination.
The
Uncertificated
Principal Balance
of each REMIC I Regular Interest shall be reduced first by Realized
Losses
allocated
thereto
by the definition of REMIC I Realized
Losses,
and by all
distributions
of principal deemed
made on such REMIC I Regular
Interest on such
Distribution
Date.
With
respect to REMIC II
Regular
Interest SB-PO the initial amount set forth with respect
thereto in the
Preliminary
Statement
as reduced by
distributions
deemed
made in respect
thereof
pursuant to Section
4.02 and Realized
Losses
allocated
thereto
pursuant to Section
4.05.
The
Uncertificated
Principal Balance of each Uncertificated Regular Interest shall
never be less than zero.
Uncertificated
Regular Interests:
The REMIC I Regular Interests and REMIC II Regular
Interests SB-IO and SB-PO.
Uncertificated
REMIC I Pass-Through
Rate: With respect to any Distribution
Date and
(i) REMIC I Regular
Interests
LT1 and LT2,
the
Modified
Net WAC Cap
Rate,
(ii)
REMIC I
Regular
Interest LT3, zero (0.00%),
(iii) REMIC I Regular
Interest LT4,
twice the Modified
Net WAC Cap Rate and (iv) REMIC I Regular Interest W, the Maximum
Coupon Strip Rate.
Underwriter:
Goldman, Sachs & Co.
SECTION 1.02.
DETERMINATION OF LIBOR.
LIBOR
applicable
to
the
calculation
of
the
Pass-Through
Rate
on
the
LIBOR
Certificates
for any
Interest
Accrual
Period
will be
determined
as of each
LIBOR
Rate
Adjustment
Date. On each LIBOR Rate
Adjustment
Date, or if such LIBOR Rate
Adjustment Date
is not a Business Day, then on the next
succeeding
Business Day,
LIBOR shall be established
by the
Trustee
and, as to any
Interest
Accrual
Period,
will equal the rate for one month
United States dollar
deposits that appears on the Dow Jones
Telerate
Screen Page 3750 as of
11:00 a.m.,
London time,
on such LIBOR Rate
Adjustment
Date.
"Dow Jones
Telerate
Screen
Page 3750" means the display
designated
as page 3750 on the Telerate
Service (or such other
page as may replace page 3750 on that service for the purpose of
displaying
London
interbank
offered
rates of major
banks).
If such
rate does not
appear
on such page (or such
other
page as may
replace
that page on that
service,
or if such
service
is no longer
offered,
LIBOR
shall
be so
established
by use
of
such
other
service
for
displaying
LIBOR
or
comparable
rates as may be
selected
by the
Trustee
after
consultation
with
the
Master
Servicer),
the rate will be the
Reference
Bank
Rate.
The
"Reference
Bank
Rate" will be
determined
on the basis of the rates at which
deposits
in U.S.
Dollars
are offered by the
reference
banks
(which
shall be any three major banks that are engaged in
transactions
in
the London
interbank
market,
selected by the
Trustee
after
consultation
with the Master
Servicer) as of 11:00 a.m.,
London time, on the LIBOR Rate
Adjustment Date to prime banks in
the London
interbank market for a period of one month in amounts
approximately
equal to the
aggregate
Certificate
Principal
Balance of the LIBOR
Certificates
then
outstanding.
The
Trustee will request the principal
London office of each of the reference
banks to provide a
quotation of its rate.
If at least two such
quotations
are
provided,
the rate will be the
arithmetic
mean of the quotations
rounded up to the next multiple of 1/16%.
If on such date
fewer than two quotations are provided as requested,
the rate will be the arithmetic
mean of
the rates
quoted by one or more major banks in New York City,
selected by the Trustee
after
consultation
with the Master
Servicer,
as of 11:00 a.m.,
New York City time,
on such date
for loans in U.S.
Dollars
to
leading
European
banks for a period of one month in
amounts
approximately equal to the aggregate
Certificate
Principal Balance of the LIBOR Certificates
then
outstanding.
If no such
quotations
can be
obtained,
the rate
will be LIBOR for the
prior Distribution
Date;
provided however,
if, under the priorities
described above, LIBOR
for a
Distribution
Date would be based on LIBOR for the previous
Distribution
Date for the
third
consecutive
Distribution
Date,
the
Trustee,
after
consultation
with
the
Master
Servicer,
shall
select an
alternative
comparable
index
(over
which the
Trustee
has no
control),
used for
determining
one-month
Eurodollar
lending rates that is calculated
and
published (or otherwise made available) by an independent party.
The
establishment
of LIBOR by the Trustee and the Master
Servicer on any LIBOR Rate
Adjustment Date and the Master
Servicer's
subsequent
calculation of the
Pass-Through
Rate
applicable
to the
LIBOR
Certificates
for the
relevant
Interest
Accrual
Period,
in the
absence of manifest error, will be final and binding.
Promptly
following
each LIBOR Rate
Adjustment
Date the
Trustee
shall
supply the
Master
Servicer
with the results of its
determination
of LIBOR on such date.
Furthermore,
the Trustee will supply to any
Certificateholder
so requesting by telephone by calling (800)
735-7777 the Pass-Through
Rate on the LIBOR
Certificates for the current and the immediately
preceding Interest Accrual Period.
SECTION 1.03.
USE OF WORDS AND PHRASES.
"Herein," "hereby,"
"hereunder,"
"hereof,"
"hereinbefore,"
"hereinafter" and other
equivalent
words refer to the Pooling and
Servicing
Agreement
as a whole.
All
references
herein to Articles,
Sections or Subsections shall mean the corresponding
Articles,
Sections
and
Subsections
in the Pooling and Servicing
Agreement.
The
definitions
set forth herein
include both the singular and the plural.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
SECTION 2.01.
CONVEYANCE OF MORTGAGE LOANS.
(See Section 2.01 of the Standard Terms.)
SECTION 2.02.
ACCEPTANCE BY TRUSTEE.
(See Section 2.02 of the Standard Terms.)
SECTION 2.03.
REPRESENTATIONS,
WARRANTIES
AND
COVENANTS
OF THE MASTER
SERVICER
AND THE
COMPANY.
(A)
For
representations,
warranties
and covenants of the Master
Servicer,
see Section
2.03(a) of the Standard Terms.
(B)
The
Company
hereby
represents
and
warrants
to the
Trustee
for the
benefit
of
Certificateholders
that as of the Closing Date (or, if otherwise
specified
below, as of the
date so specified):
(i)
No Mortgage
Loan is 30 or more days
Delinquent
in payment of principal and interest
as of the Cut-off Date and no Mortgage
Loan has been so
Delinquent
more than
once in the 12-month period prior to the Cut-off Date;
(ii)
The
information set forth in Exhibit One hereto with respect to each
Mortgage Loan or
the
Mortgage
Loans,
as the case may be, is true and correct in all
material
respects at the date or dates respecting which such information is
furnished;
(iii)
The Mortgage Loans are payment-option
adjustable-rate
mortgage loans with a negative
amortization
feature with Monthly
Payments due, with respect to a majority of
the
Mortgage
Loans,
on the first day of each month and terms to
maturity at
origination or modification of not more than 40 years;
(iv)
To the best of the Company's
knowledge,
if a Mortgage Loan is secured by a Mortgaged
Property
with a
Loan-to-Value
Ratio at
origination
in excess of 80%,
such
Mortgage Loan is the subject of a Primary
Insurance Policy that insures (a) at
least 35% of the Stated
Principal
Balance of the Mortgage Loan at origination
if the Loan-to-Value
Ratio is between 100.00% and 95.01%,
(b) at least 30% of
the
Stated
Principal
Balance
of the
Mortgage
Loan at
origination
if the
Loan-to-Value
Ratio is
between
95.00% and
90.01%,
(c) at least 25% of such
balance
if the
Loan-to-Value
Ratio is
between
90.00% and 85.01% and (d) at
least 12% of such
balance if the
Loan-to-Value
Ratio is
between
85.00% and
80.01%.
To the best of the Company's
knowledge,
each such Primary
Insurance
Policy is in full force and effect and the Trustee is entitled to
the
benefits
thereunder;
(v)
The
issuers
of
the
Primary
Insurance
Policies
are
insurance
companies
whose
claims-paying abilities are currently acceptable to each Rating
Agency;
(vi)
No more than 0.7% of the Mortgage Loans by aggregate
Stated
Principal
Balance as of
the Cut-off
Date are secured by
Mortgaged
Properties
located in any one zip
code
area
in New
York,
and no
more
than
0.7% of the
Mortgage
Loans
by
aggregate
Stated
Principal
Balance
as of the
Cut-off
Date are
secured by
Mortgaged Properties located in any one zip code area outside New
York;
(vii)
The
improvements
upon the Mortgaged
Properties are insured against loss by fire and
other hazards as required by the Program Guide,
including
flood
insurance if
required
under the
National
Flood
Insurance
Act of 1968,
as amended.
The
Mortgage
requires the
Mortgagor to maintain
such
casualty
insurance at the
Mortgagor's
expense,
and on the Mortgagor's
failure to do so, authorizes the
holder
of
the
Mortgage
to
obtain
and
maintain
such
insurance
at
the
Mortgagor's expense and to seek reimbursement therefor from the
Mortgagor;
(viii)
Immediately prior to the assignment of the Mortgage Loans to the
Trustee,
the Company
had good
title to,
and was the sole
owner of,
each
Mortgage
Loan free and
clear of any pledge, lien,
encumbrance or security interest (other than rights
to servicing and related
compensation)
and such assignment
validly transfers
ownership
of the
Mortgage
Loans to the Trustee free and clear of any pledge,
lien, encumbrance or security interest;
(ix)
No more than 92.7% of the Mortgage Loans by aggregate Stated
Principal
Balance as of
the Cut-off Date were underwritten under a reduced loan
documentation
program,
no more than 1.1% of the Mortgage Loans by aggregate Stated
Principal
Balance
as of the Cut-off Date were underwritten under a no-stated income
program,
and
no more than 0.2% of the Mortgage Loans by aggregate Stated
Principal
Balance
as of the Cut-off Date were underwritten under a no income/no asset
program;
(x)
Except with
respect to no more than 9.2% of the Mortgage
Loans by
aggregate
Stated
Principal
Balance as of the Cut-off
Date,
the Mortgagor
represented
in its
loan
application
with respect to the related Mortgage Loan that the Mortgaged
Property would be owner-occupied;
(xi)
None of the Mortgage Loans is a Buy-Down Mortgage Loan;
(xii)
Each Mortgage Loan
constitutes a qualified
mortgage under Section
860G(a)(3)(A)
of
the Code and Treasury
Regulation Section
1.860G-2(a)(1),
(2), (4), (5), (6),
(7) and (9) without reliance on the provisions of Treasury
Regulation
Section
1.860G-2(a)(3)
or
Treasury
Regulation
Section
1.860G-2(f)(2)
or any other
provision
that
would
allow a Mortgage
Loan to be
treated
as a
"qualified
mortgage"
notwithstanding
its
failure
to meet the
requirements
of Section
860G(a)(3)(A) of the Code and Treasury Regulation Section
1.860G-2(a)(1),
(2),
(4), (5), (6), (7) and (9);
(xiii)
A policy of title
insurance was effective as of the closing of each Mortgage Loan and
is valid
and
binding
and
remains
in full
force
and
effect,
unless
the
Mortgaged
Properties
are
located
in the
State
of Iowa
and an
attorney's
certificate has been provided as described in the Program Guide;
(xiv)
No Mortgage Loan is a Cooperative Loan;
(xv)
With respect to each
Mortgage Loan
originated
under a
"streamlined"
Mortgage Loan
program
(through
which no new or updated
appraisals of Mortgaged
Properties
are obtained in connection
with the refinancing
thereof),
the related Seller
has represented that either (a) the value of the related Mortgaged
Property as
of the date the Mortgage
Loan was
originated
was not less than the appraised
value of such property at the time of origination
of the
refinanced
Mortgage
Loan or (b) the
Loan-to-Value
Ratio
of the
Mortgage
Loan as of the date of
origination
of the Mortgage Loan
generally
meets the Company's
underwriting
guidelines;
(xvi)
Interest
on
each
Mortgage
Loan
is
calculated
on the
basis
of a
360-day
year
consisting of twelve 30-day months;
(xvii)
None of the Mortgage Loans contain in the related
Mortgage File a Destroyed
Mortgage
Note;
(xviii) Nine of the Mortgage
Loans,
representing
no more than 0.2% of the Mortgage Loans by
aggregate Stated Principal Balance, have been made to International
Borrowers;
(xix)
No Mortgage Loan
provides for payments
that are subject to reduction by
withholding
taxes levied by any foreign (non-United States) sovereign
government; and
(xx)
None of the Mortgage
Loans are Additional
Collateral
Loans and none of the Mortgage
Loans are Pledged Asset Loans.
It is
understood
and
agreed
that the
representations
and
warranties
set
forth in this
Section
2.03(b) shall survive
delivery of the respective
Custodial
Files to the Trustee or
the Custodian.
Upon
discovery
by any of the
Company,
the
Master
Servicer,
the
Trustee
or any
Custodian of a breach of any of the
representations
and warranties set forth in this Section
2.03(b) that materially and adversely affects the interests of the
Certificateholders
in any
Mortgage
Loan,
the party
discovering
such breach shall give prompt
written
notice to the
other
parties (the
Custodian
being so
obligated
under a Custodial
Agreement);
provided,
however,
that in the
event of a breach
of the
representation
and
warranty
set
forth in
Section
2.03(b)(xii),
the party
discovering
such breach shall give such notice within five
days of
discovery.
Within 90 days of its
discovery or its receipt of notice of breach,
the
Company
shall
either (i) cure such breach in all
material
respects or (ii)
purchase
such
Mortgage
Loan from the
Trust
Fund at the
Purchase
Price
and in the
manner
set forth in
Section
2.02;
provided
that the
Company
shall have the option to
substitute
a Qualified
Substitute
Mortgage Loan or Loans for such Mortgage Loan if such
substitution
occurs within
two years
following
the Closing
Date;
provided
that if the omission or defect would cause
the
Mortgage
Loan to be other than a "qualified
mortgage" as defined in Section
860G(a)(3)
of the Code,
any such cure or repurchase
must occur within 90 days from the date such breach
was discovered.
Any such
substitution
shall be effected by the Company under the same terms
and conditions as provided in Section 2.04 for
substitutions
by Residential
Funding.
It is
understood
and
agreed
that the
obligation
of the
Company
to cure
such
breach or to so
purchase or
substitute
for any
Mortgage
Loan as to which such a breach has occurred and is
continuing
shall
constitute
the
sole
remedy
respecting
such
breach
available
to
the
Certificateholders or the Trustee on behalf of the
Certificateholders.
SECTION 2.04.
REPRESENTATIONS
AND WARRANTIES OF
SELLERS.(See
Section 2.04 of the Standard
Terms)
SECTION 2.05.
EXECUTION
AND
AUTHENTICATION
OF
CERTIFICATES/ISSUANCE
OF
CERTIFICATES
EVIDENCING INTERESTS IN REMIC I, REMIC II AND REMIC III.
The Trustee
acknowledges
the assignment to it of the Mortgage Loans and the delivery
of the
Custodial
Files to it, or the
Custodian
on its
behalf,
subject to any
exceptions
noted,
together
with the
assignment
to it of all other
assets
included in the Trust Fund
and/or the
applicable
REMIC,
receipt
of which is hereby
acknowledged.
Concurrently
with
such delivery and in exchange
therefor,
the Trustee,
pursuant to the written request of the
Company
executed by an officer of the Company,
has
executed and caused to be
authenticated
and
delivered to or upon the order of the Company the Class R-I
Certificates
in
authorized
denominations
which,
together with the REMIC I Regular
Interests,
evidence the
beneficial
interest in REMIC I, the Class R-II Certificates in authorized
denominations which,
together
with the REMIC II Regular
Interests,
evidence
the
beneficial
interest in REMIC II and the
Class
R-X
Certificates
in
authorized
denominations
which,
together
with the
REMIC III
Regular Interest, evidence the beneficial interest in REMIC III.
SECTION 2.06.
CONVEYANCE OF UNCERTIFICATED REGULAR INTERESTS; ACCEPTANCE BY THE
TRUSTEE.
The Company,
as of the Closing Date, and concurrently with the execution and
delivery
hereof,
does hereby assign without recourse all the right,
title and interest of the Company
in and to (i) the REMIC I Regular
Interests
to the Trustee for the benefit of the Holders of
each Class of Certificates
(other than the Class R-I
Certificates) and (ii) REMIC II Regular
Interests
SB-PO and SB-IO to the
Trustee
for the
benefit
of the
Holders
of the Class SB
Certificates
and Class R-X
Certificates.
The
Trustee
acknowledges
receipt of the REMIC I
Regular
Interests
and
declares
that it
holds
and will
hold
the
same in trust
for the
exclusive
use and
benefit of all present
and future
Holders of each Class of
Certificates
(other
than the
Class
R-I
Certificates).
The
Trustee
acknowledges
receipt
of REMIC II
Regular
Interests
SB-PO and SB-IO and declares that it holds and will hold the same
in trust
for the
exclusive
use and
benefit
of all
present
and
future
Holders
of the
Class
SB
Certificates
and the Class R-X
Certificates.
The
rights of the
Holders
of each
Class of
Certificates
(other
than the Class
R-I
Certificates)
to
receive
distributions
from the
proceeds
of REMIC II in respect of such
Classes
and the rights of the
Holders of the Class
SB
Certificates
and Class R-X
Certificates
to receive
distributions
from the proceeds of
REMIC III in respect of such
Classes,
and all
ownership
interests
of the
Holders of such
Classes in such distributions, shall be as set forth in this
Agreement.
SECTION 2.07.
ISSUANCE OF CERTIFICATES EVIDENCING INTERESTS IN REMIC II AND REMIC
III.
The Trustee acknowledges the assignment to it of the Uncertificated
Regular Interests
and, concurrently
therewith and in exchange therefor,
pursuant to the written request of the
Company
executed by an officer of the
Company,
the Trustee
has
executed
and caused to be
authenticated
and
delivered
to or
upon
the
order
of the
Company,
(i) all
Classes
of
Certificates
(other than the Class SB, Class R-I and Class R-X
Certificates)
in
authorized
denominations,
which,
together with REMIC II Regular Interests SB-IO and SB-PO, evidence
the
beneficial
interests in the entire REMIC II and (ii) the Class SB and Class
R-X
Certificates
which evidence the beneficial interests in the entire REMIC III.
SECTION 2.08.
PURPOSES AND POWERS OF THE TRUST.
(See Section 2.08 of the Standard Terms.)
SECTION 2.09.
AGREEMENT REGARDING ABILITY TO DISCLOSE.
The Company,
the Master
Servicer and the Trustee hereby agree,
notwithstanding
any
other
express or implied
agreement to the
contrary,
that any and all
Persons,
and any of
their respective employees,
representatives,
and other agents may disclose, immediately upon
commencement of discussions,
to any and all Persons,
without limitation of any kind, the tax
treatment
and tax
structure of the
transaction
and all
materials
of any kind
(including
opinions
or
other
tax
analyses)
that are
provided
to any of them
relating
to such tax
treatment and tax structure.
For purposes of this
paragraph,
the terms "tax
treatment" and
"tax structure" are defined under Treasury
Regulationss.1.6011-4(c).
ARTICLE III
ADMINISTRATION AND SERVICING OF MORTGAGE LOANS
Section 3.01
Master Servicer to Act as Servicer.
(See Section 3.01 of the Standard
Terms)
Section 3.02
Subservicing Agreements Between Master Servicer and Subservicers;
Enforcement of Subservicers' and Sellers' Obligations.
(See Section
3.02 of the Standard Terms)
Section 3.03
Successor Subservicers.
(See Section 3.03 of the Standard Terms)
Section 3.04
Liability of the Master Servicer.
(See Section 3.04 of the Standard
Terms)
Section 3.05
No Contractual Relationship Between Subservicer and Trustee or
Certificateholders.
(See Section 3.05 of the Standard Terms)
Section 3.06
Assumption or Termination of Subservicing Agreements by Trustee.
(See
Section 3.06 of the Standard Terms)
Section 3.07
Collection of Certain Mortgage Loan Payments; Deposit to Custodial
Account.
(a)
(See Section 3.07(a) of the Standard Terms)
(b)
The Master Servicer shall
establish and maintain a Custodial
Account in which
the
Master
Servicer
shall
deposit or cause to be
deposited
on a daily
basis,
except as
otherwise
specifically
provided herein, the following
payments and collections
remitted by
Subservicers
or received by it in respect of the
Mortgage
Loans
subsequent
to the Cut-off
Date (other than in respect of principal
and interest on the Mortgage
Loans due on or before
the Cut-off Date):
(i)
All payments on account of principal,
including
Principal
Prepayments
made
by
Mortgagors
on
the
Mortgage
Loans
and
the
principal
component
of any
Subservicer
Advance
or of any
REO
Proceeds
received
in
connection
with
an REO
Property for which an REO Disposition has occurred;
(ii)
All
payments on account of interest at the
Adjusted
Mortgage
Rate on
the Mortgage Loans,
including
Buydown Funds,
if any, and the interest
component of
any
Subservicer
Advance or of any REO Proceeds
received in
connection
with an REO
Property for which an REO Disposition has occurred;
(iii)
Insurance Proceeds,
Subsequent Recoveries and Liquidation Proceeds (net
of any related expenses of the Subservicer);
(iv)
All proceeds of any Mortgage Loans
purchased
pursuant to Section 2.02,
2.03, 2.04 or 4.07 (including
amounts received from
Residential
Funding pursuant to
the last
paragraph
of
Section
4 of the
Assignment
Agreement
in
respect
of any
liability,
penalty or expense that resulted from a breach of the Compliance
With Laws
Representation
and all
amounts
required
to be
deposited
in
connection
with the
substitution of a Qualified Substitute Mortgage Loan pursuant to
Section 2.03 or 2.04;
(v)
Any amounts
required
to be
deposited
pursuant to Section
3.07(c) or
3.21;
(vi)
All amounts
transferred
from the Certificate
Account to the Custodial
Account in accordance with Section 4.02(a);
(vii)
Any
amounts
realized
by the
Subservicer
and
received by the Master
Servicer in respect of any Additional Collateral;
(viii) Any
amounts
received
by the
Master
Servicer
in
respect of Pledged
Assets; and
(ix)
Any amounts
received
by the Master
Servicer
in
connection
with any
Prepayment Charges on the Prepayment Charge Loans.
The foregoing
requirements
for deposit in the Custodial
Account shall be exclusive,
it being
understood
and agreed that,
without
limiting
the
generality
of the
foregoing,
payments on the Mortgage
Loans which are not part of the Trust Fund
(consisting
of payments
in respect of
principal
and
interest
on the
Mortgage
Loans due on or before the
Cut-off
Date) and payments or
collections
in the nature of late payment
charges or assumption
fees
may but need not be deposited by the Master
Servicer in the Custodial
Account.
In the event
any amount not required to be deposited in the Custodial
Account is so deposited,
the Master
Servicer
may at any time
withdraw
such amount from the
Custodial
Account,
any
provision
herein to the contrary
notwithstanding.
The Custodial
Account may contain funds that belong
to one or more trust funds
created for
mortgage
pass-through
certificates
of other series
and may contain
other funds
respecting
payments on Mortgage
Loans
belonging to the Master
Servicer
or
serviced
or master
serviced
by it on behalf of others.
Notwithstanding
such
commingling
of funds,
the Master
Servicer
shall keep records that
accurately
reflect the
funds
on
deposit
in
the
Custodial
Account
that
have
been
identified
by it as
being
attributable to the Mortgage Loans.
With
respect to
Insurance
Proceeds,
Liquidation
Proceeds,
REO
Proceeds
and the
proceeds of the purchase of any Mortgage Loan pursuant to Sections
2.02,
2.03,
2.04 and 4.07
received
in any
calendar
month,
the Master
Servicer
may elect to treat
such
amounts as
included
in the
Available
Distribution
Amount
for the
Distribution
Date in the month of
receipt,
but is not obligated to do so. If the Master
Servicer so elects,
such amounts will
be
deemed
to have been
received
(and any
related
Realized
Loss
shall be deemed to have
occurred) on the last day of the month prior to the receipt
thereof.
(c)
(See Section 3.07(c) of the Standard Terms)
(d)
(See Section 3.07(d) of the Standard Terms)
(e)
Notwithstanding
Section
3.07(a),
The
Master
Servicer
shall
not waive (or
permit a Subservicer to waive) any Prepayment Charge unless:
(i) the
enforceability
thereof
shall
have
been
limited
by
bankruptcy,
insolvency,
moratorium,
receivership
and other
similar
laws
relating
to
creditors'
rights
generally,
(ii) the
enforcement
thereof is
illegal,
or any local,
state or federal agency has threatened legal action if the
prepayment
penalty
is
enforced,
(iii)
the
collectability
thereof
shall
have been
limited
due to
acceleration
in
connection
with a
foreclosure
or other
involuntary
payment or (iv) such
waiver is
standard
and
customary
in
servicing
similar
Mortgage
Loans and
relates to a
default or a
reasonably
foreseeable
default and would,
in the
reasonable
judgment of the
Master
Servicer,
maximize
recovery of total proceeds
taking into account the value of such
Prepayment
Charge and the related
Mortgage Loan. In no event will the Master
Servicer waive
a Prepayment
Charge in connection
with a refinancing
of a Mortgage Loan that is not related
to a default or a
reasonably
foreseeable
default.
If a
Prepayment
Charge is waived,
but
does not meet the standards
described above,
then the Master Servicer is required to deposit
into the Custodial
Account the amount of such waived
Prepayment
Charge at the time that the
amount
prepaid on the related
Mortgage
Loan is required to be deposited
into the Custodial
Account.
Notwithstanding
any other
provisions of this
Agreement,
any payments made by the
Master
Servicer in respect of any waived
Prepayment
Charges
pursuant to this Section shall
be deemed to be paid outside of the Trust Fund and not part of any
REMIC.
Section 3.08. Subservicing Accounts; Servicing Accounts. (See
Section
3.08
of
the
Standard Terms)
Section 3.09. Access to Certain
Documentation and Information Regarding the Mortgage
Loans. (See Section 3.09 of the Standard Terms)
Section 3.10. Permitted Withdrawals from the Custodial Account.
(See
Section
3.10 of
the Standard Terms)
Section 3.11. Maintenance of the Primary Insurance Policies;
Collections Thereunder.
(See Section 3.11 of the Standard Terms)
Section 3.12. Maintenance
of Fire
Insurance
and
Omissions
and Fidelity
Coverage.
(See Section 3.12 of the Standard Terms)
Section 3.13. Enforcement
of
Due-on-Sale
Clauses;
Assumption
and
Modification
Agreements; Certain Assignments.
(See
Section
3.13 of the
Standard
Terms)
Section 3.14. Realization
Upon
Defaulted
Mortgage
Loans.
(See Section 3.14 of the
Standard Terms)
Section 3.15. Trustee to Cooperate;
Release of Mortgage
Files.
(See Section 3.15 of
the Standard Terms)
Section 3.16. Servicing and Other Compensation; Compensating
Interest.
(a)
(See Section 3.16(a) of the Standard Terms)
(b)
Additional
servicing
compensation in the form of assumption fees, late
payment
charges,
investment
income
on
amounts
in the
Custodial
Account
or the
Certificate
Account or otherwise
(but not
including
Prepayment
Charges)
shall be
retained by the Master
Servicer or the
Subservicer
to the extent
provided
herein,
subject
to
clause
(e)
below.
Prepayment
Charges
shall
be
deposited
into
the
Certificate
Account and shall be paid on each Distribution Date to the Holders
of the
Class P Certificates.
(c)
(See Section 3.16(c) of the Standard Terms)
(d)
(See Section 3.16(d) of the Standard Terms)
(e)
(See Section 3.16(e) of the Standard Terms)
Section 3.17. Reports to the Trustee and the Company.
(See
Section
3.17
of
the
Standard Terms)
Section 3.18. Annual Statement as to Compliance.
(See
Section
3.18 of the
Standard
Terms)
Section 3.19. Annual Independent Public Accountants' Servicing
Report.
(See Section
3.19 of the Standard Terms)
Section 3.20. Rights of the Company in Respect of the Master
Servicer.
(See Section
3.20 of the Standard Terms)
Section 3.21. Administration of Buydown Funds.
(See Section 3.21 of the Standard
Terms)
Section 3.22
Advance Facility. (See Section 3.22 of the Standard Terms)
ARTICLE IV
PAYMENTS TO CERTIFICATEHOLDERS
SECTION 4.01.
CERTIFICATE ACCOUNT.
(See Section 4.01 of the Standard Terms.)
SECTION 4.02.
DISTRIBUTIONS.
(A)
On each Distribution
Date, the Trustee (or the Paying Agent on behalf of the Trustee)
shall allocate and distribute
the Available
Distribution
Amount to the extent on deposit in
the
Certificate
Account
for such date to the
interests
issued in
respect
of REMIC I and
REMIC II as specified in this Section.
(B)
(1)
On each
Distribution
Date,
the REMIC I
Distribution
Amount shall be
distributed
by
REMIC I to
REMIC II on
account
of the
REMIC I
Regular
Interests
in the
amounts and with the priorities set forth in the definition
thereof.
(2)
Notwithstanding
the
distributions
on
the
REMIC
I
Regular
Interests
described
in this
Se
