NOMURA HOME EQUITY LOAN, INC., Depositor NOMURA CREDIT & CAPITAL, INC., Sponsor WELLS FARGO BANK, NATIONAL ASSOCIATION, Master Servicer and Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION Trustee POOLING AND SERVICING AGREEMENT Dated...
NOMURA
HOME EQUITY LOAN, INC.,
Depositor
NOMURA
CREDIT & CAPITAL, INC.,
Sponsor
▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
Master
Servicer and Securities Administrator
and
HSBC
BANK
USA, NATIONAL ASSOCIATION
Trustee
Dated
as
of June 1, 2006
NOMURA
HOME EQUITY LOAN, INC.
ASSET-BACKED
CERTIFICATES, SERIES 2006-WF1
TABLE
OF CONTENTS
|
ARTICLE
I
|
DEFINITIONS
|
|
Section
1.01
|
Defined
Terms.
|
|
Section
1.02
|
Allocation
of Certain Interest Shortfalls.
|
|
ARTICLE
II
|
CONVEYANCE
OF TRUST FUND REPRESENTATIONS AND WARRANTIES
|
|
Section
2.01
|
Conveyance
of Trust Fund.
|
|
Section
2.02
|
Acceptance
of the Mortgage Loans.
|
|
Section
2.03
|
Representations,
Warranties and Covenants of the Sponsor and the Master
Servicer.
|
|
Section
2.04
|
Representations
and Warranties of the Depositor.
|
|
Section
2.05
|
Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
|
|
Section
2.06
|
Issuance
of the REMIC I Regular Interests and the Class R
Certificates.
|
|
Section
2.07
|
Conveyance
of the REMIC I Regular Interests; Issuance and Conveyance of the
REMIC II
Regular Interests.
|
|
Section
2.08
|
Issuance
of Class R Certificates.
|
|
Section
2.09
|
Establishment
of Trust.
|
|
Section
2.10
|
Purpose
and Powers of the Trust.
|
|
ARTICLE
III
|
ADMINISTRATION
AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
|
|
Section
3.01
|
Reserved.
|
|
Section
3.02
|
Reserved.
|
|
Section
3.03
|
Reserved.
|
|
Section
3.04
|
Reserved.
|
|
Section
3.05
|
Reserved.
|
|
Section
3.06
|
Reserved.
|
|
Section
3.07
|
Reserved.
|
|
Section
3.08
|
Reserved.
|
|
Section
3.09
|
Reserved.
|
|
Section
3.10
|
Reserved.
|
|
Section
3.11
|
Reserved.
|
|
Section
3.12
|
Reserved.
|
|
Section
3.13
|
Annual
Statement as to Compliance.
|
|
Section
3.14
|
Assessments
of Compliance and Attestation Reports.
|
|
Section
3.15
|
Reserved.
|
|
Section
3.16
|
The
Trustee.
|
|
Section
3.17
|
REMIC-Related
Covenants.
|
|
Section
3.18
|
Annual
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification; Additional Information.
|
|
Section
3.19
|
Release
of Mortgage Files.
|
|
Section
3.20
|
Reserved.
|
|
Section
3.21
|
Reserved.
|
|
Section
3.22
|
Reserved.
|
|
Section
3.23
|
UCC.
|
|
Section
3.24
|
Optional
Purchase of Defaulted Mortgage Loans.
|
|
Section
3.25
|
Obligations
Under Credit Risk Management Agreement.
|
|
Section
3.26
|
Reserved.
|
|
Section
3.27
|
Reserved.
|
|
Section
3.28
|
Reserved.
|
|
Section
3.29
|
Reserved.
|
|
Section
3.30
|
Reserved.
|
|
Section
3.31
|
Distribution
Account.
|
|
Section
3.32
|
Permitted
Withdrawals and Transfers from the Distribution
Account.
|
|
Section
3.33
|
Duties
of the Credit Risk Manager; Termination.
|
|
Section
3.34
|
Limitation
Upon Liability of the Credit Risk Manager.
|
|
ARTICLE
IV
|
ADMINISTRATION
AND MASTER SERVICING OF THE MORTGAGE LOANS
|
|
Section
4.01
|
The
Master Servicer.
|
|
Section
4.02
|
Monitoring
of the Servicer.
|
|
Section
4.03
|
Fidelity
Bond.
|
|
Section
4.04
|
Power
to Act; Procedures.
|
|
Section
4.05
|
Due-on-Sale
Clauses; Assumption Agreements.
|
|
Section
4.06
|
Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
|
|
Section
4.07
|
Standard
Hazard Insurance and Flood Insurance Policies.
|
|
Section
4.08
|
Presentment
of Claims and Collection of Proceeds.
|
|
Section
4.09
|
Maintenance
of the Primary Mortgage Insurance Policies.
|
|
Section
4.10
|
Trustee
to Retain Possession of Certain Insurance Policies and
Documents.
|
|
Section
4.11
|
Realization
Upon Defaulted Loans.
|
|
Section
4.12
|
Compensation
for the Master Servicer.
|
|
Section
4.13
|
REO
Property.
|
|
Section
4.14
|
Obligation
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
|
|
ARTICLE
V
|
ADVANCES
AND DISTRIBUTIONS
|
|
Section
5.01
|
Advances.
|
|
Section
5.02
|
Compensating
Interest Payments.
|
|
Section
5.03
|
REMIC
Distributions.
|
|
Section
5.04
|
Distributions.
|
|
Section
5.05
|
Allocation
of Realized Losses.
|
|
Section
5.06
|
Monthly
Statements to Certificateholders.
|
|
Section
5.07
|
REMIC
Designations, REMIC I and REMIC II Allocations.
|
|
Section
5.08
|
Prepayment
Charges.
|
|
Section
5.09
|
Class
P Certificate Account.
|
|
Section
5.10
|
Basis
Risk Shortfall Reserve Fund.
|
|
Section
5.11
|
Supplemental
Interest Trust.
|
|
Section
5.12
|
Tax
Treatment of Swap Payments and Swap Termination
Payments.
|
|
Section
5.13
|
Reports
Filed with Securities and Exchange Commission.
|
|
ARTICLE
VI
|
THE
CERTIFICATES
|
|
Section
6.01
|
The
Certificates.
|
|
Section
6.02
|
Certificate
Register; Registration of Transfer and Exchange of
Certificates.
|
|
Section
6.03
|
Mutilated,
Destroyed, Lost or Stolen Certificates.
|
|
Section
6.04
|
Persons
Deemed Owners.
|
|
Section
6.05
|
Access
to List of Certificateholders’ Names and Addresses.
|
|
Section
6.06
|
Book-Entry
Certificates.
|
|
Section
6.07
|
Notices
to Depository.
|
|
Section
6.08
|
Definitive
Certificates.
|
|
Section
6.09
|
Maintenance
of Office or Agency.
|
|
ARTICLE
VII
|
THE
DEPOSITOR AND the Master Servicer
|
|
Section
7.01
|
Liabilities
of the Depositor and the Master Servicer.
|
|
Section
7.02
|
Merger
or Consolidation of the Depositor or the Master
Servicer.
|
|
Section
7.03
|
Indemnification
of Depositor and Servicing Function Participants.
|
|
Section
7.04
|
Limitations
on Liability of the Depositor, the Securities Administrator, the
Master
Servicer, the Servicer and Others.
|
|
Section
7.05
|
Reserved.
|
|
Section
7.06
|
Appointment
of Special Servicer; Termination of the Servicer.
|
|
Section
7.07
|
Limitation
on Resignation of the Master Servicer.
|
|
Section
7.08
|
Assignment
of Master Servicing.
|
|
Section
7.09
|
Rights
of the Depositor in Respect of the Master Servicer.
|
|
ARTICLE
VIII
|
DEFAUlt;
TERMINATION OF ServiceR AND Master Servicer
|
|
Section
8.01
|
Events
of Default.
|
|
Section
8.02
|
Trustee
to Act; Appointment of Successor.
|
|
Section
8.03
|
Notification
to Certificateholders.
|
|
Section
8.04
|
Waiver
of Servicer Defaults and Master Servicer Defaults.
|
|
ARTICLE
IX
|
CONCERNING
THE TRUSTEE AND SECURITIES ADMINISTRATOR
|
|
Section
9.01
|
Duties
of Trustee and Securities Administrator.
|
|
Section
9.02
|
Certain
Matters Affecting the Trustee and Securities
Administrator.
|
|
Section
9.03
|
Trustee
and Securities Administrator not Liable for Certificates or Mortgage
Loans.
|
|
Section
9.04
|
Trustee
and Securities Administrator May Own Certificates.
|
|
Section
9.05
|
Fees
and Expenses of Trustee and Securities Administrator.
|
|
Section
9.06
|
Eligibility
Requirements for Trustee and Securities Administrator.
|
|
Section
9.07
|
Resignation
and Removal of Trustee and Securities Administrator.
|
|
Section
9.08
|
Successor
Trustee or Securities Administrator.
|
|
Section
9.09
|
Merger
or Consolidation of Trustee or Securities
Administrator.
|
|
Section
9.10
|
Appointment
of Co-Trustee or Separate Trustee.
|
|
Section
9.11
|
Appointment
of Office or Agency.
|
|
Section
9.12
|
Representations
and Warranties.
|
|
Section
9.13
|
Tax
Matters.
|
|
ARTICLE
X
|
TERMINATION
|
|
Section
10.01
|
Termination
upon Liquidation or Repurchase of all Mortgage Loans.
|
|
Section
10.02
|
Final
Distribution on the Certificates.
|
|
Section
10.03
|
Additional
Termination Requirements.
|
|
ARTICLE
XI
|
MISCELLANEOUS
PROVISIONS
|
|
Section
11.01
|
Amendment.
|
|
Section
11.02
|
Recordation
of Agreement; Counterparts.
|
|
Section
11.03
|
Governing
Law.
|
|
Section
11.04
|
Intention
of Parties.
|
|
Section
11.05
|
Notices.
|
|
Section
11.06
|
Severability
of Provisions.
|
|
Section
11.07
|
Assignment.
|
|
Section
11.08
|
Limitation
on Rights of Certificateholders.
|
|
Section
11.09
|
Certificates
Nonassessable and Fully Paid.
|
|
Section
11.10
|
Third
Party Beneficiaries.
|
|
Section
11.11
|
Intention
of the Parties and Interpretation.
|
|
Section
11.12
|
Early
Termination of Swap Agreement.
|
Exhibits
|
Exhibit
A-1
|
Form
of Class A-[1][2][3][4] Certificates
|
|
Exhibit
A-2
|
Form
of Class M-[1][2][3][4][5][6][7][8][9] Certificates
|
|
Exhibit
A-3
|
Form
of Class B-[1][2] Certificates
|
|
Exhibit
A-4
|
Form
of Class X Certificates
|
|
Exhibit
A-5
|
Form
of Class P Certificates
|
|
Exhibit
A-6
|
Form
of Class R Certificates
|
|
Exhibit
B
|
Mortgage
Loan Schedule
|
|
Exhibit
C
|
Mortgage
Loan Purchase Agreement
|
|
Exhibit
D
|
Form
of Transfer Affidavit
|
|
Exhibit
E
|
Form
of Transferor Certificate
|
|
Exhibit
F
|
Form
of Investment Letter (Non-Rule 144A)
|
|
Exhibit
G
|
Form
of Rule 144A Investment Letter
|
|
Exhibit
H
|
Form
of Additional Disclosure Notification
|
|
Exhibit
I
|
DTC
Letter of Representations
|
|
Exhibit
J
|
Schedule
of Mortgage Loans with Lost Notes
|
|
Exhibit
K
|
Prepayment
Charge Schedule
|
|
Exhibit
L
|
Relevant
Servicing Criteria
|
|
Exhibit
M
|
[Reserved]
|
|
Exhibit
N
|
Reporting
Responsibility
|
|
Exhibit
O
|
Appendix
E of the Standard & Poor's Glossary For File Format For LEVELS®
Version 5.6 Revised
|
|
Exhibit
P
|
Interest
Rate Swap Agreement
|
|
Exhibit
Q
|
Form
of Power of Attorney
|
|
Exhibit
R
|
Assignment,
Assumption and Recognition Agreement
|
|
Exhibit
X-1
|
Form
of Schedule of Default Loan Data
|
|
Exhibit
X-2
|
Form
of Schedule of Realized
Losses/Gains
|
POOLING
AND SERVICING AGREEMENT, dated as of June 1, 2006, among NOMURA HOME EQUITY
LOAN, INC., a Delaware corporation, as depositor (the “Depositor”), NOMURA
CREDIT & CAPITAL, INC., a Delaware corporation, as seller (in such capacity,
the “Sponsor”), ▇▇▇▇▇ FARGO BANK, NATIONAL ASSOCIATION, a national banking
association, as master servicer (the “Master Servicer”) and securities
administrator (the “Securities Administrator”) and HSBC BANK, USA, NATIONAL
ASSOCIATION, a national banking association, not in its individual capacity,
but
solely as trustee (the “Trustee”).
PRELIMINARY
STATEMENT
The
Depositor is the owner of the Trust Fund that is hereby conveyed to the Trustee
in return for the Certificates.
REMIC
I
As
provided herein, the Securities Administrator will make an election to treat
the
segregated pool of assets consisting of the Trust Fund (exclusive of the Basis
Risk Shortfall Reserve Fund and, for the avoidance of doubt, the Supplemental
Interest Trust and the Swap Agreement) as a REMIC for federal income tax
purposes, and such segregated pool of assets will be designated as “REMIC I”.
The Class R-I Interest will represent the sole class of “residual interests” in
REMIC I for purposes of the REMIC Provisions.
The
following table irrevocably sets forth the designation, the Uncertificated
REMIC
I Pass-Through Rate, the initial Uncertificated Principal Balance, and for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC I Regular Interests. None
of the REMIC I Regular Interests will be certificated.
|
Designation
|
Uncertificated
REMIC I
Pass-Through
Rate
|
Initial
Certificate
Principal
Balance
|
Assumed
Final
Maturity
Date(1)
|
||||
|
I
|
(2)
|
$
|
13,712,030.21
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
5,307,000.00
|
March
25, 2036
|
|||
|
I-1-B
|
(2)
|
$
|
5,307,000.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
5,782,000.00
|
March
25, 2036
|
|||
|
I-2-B
|
(2)
|
$
|
5,782,000.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
6,236,500.00
|
March
25, 2036
|
|||
|
I-3-B
|
(2)
|
$
|
6,236,500.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
6,670,500.00
|
March
25, 2036
|
|||
|
I-4-B
|
(2)
|
$
|
6,670,500.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
7,082,000.00
|
March
25, 2036
|
|||
|
I-5-B
|
(2)
|
$
|
7,082,000.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
7,467,000.00
|
March
25, 2036
|
|||
|
I-6-B
|
(2)
|
$
|
7,467,000.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
7,819,000.00
|
March
25, 2036
|
|||
|
I-7-B
|
(2)
|
$
|
7,819,000.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
7,595,000.00
|
March
25, 2036
|
|||
|
I-8-B
|
(2)
|
$
|
7,595,000.00
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
|||
|
▇-▇-▇
|
(2)
|
$
|
7,376,500.00
|
March
25, 2036
|
|||
|
I-9-B
|
(2)
|
$
|
7,376,500.00
|
March
25, 2036
|
|||
|
I-10-A
|
(2)
|
$
|
7,165,500.00
|
March
25, 2036
|
|||
|
I-10-B
|
(2)
|
$
|
7,165,500.00
|
March
25, 2036
|
|||
|
I-11-A
|
(2)
|
$
|
6,960,000.00
|
March
25, 2036
|
|||
|
I-11-B
|
(2)
|
$
|
6,960,000.00
|
March
25, 2036
|
|||
|
I-12-A
|
(2)
|
$
|
6,760,500.00
|
March
25, 2036
|
|||
|
I-12-B
|
(2)
|
$
|
6,760,500.00
|
March
25, 2036
|
|||
|
I-13-A
|
(2)
|
$
|
6,566,500.00
|
March
25, 2036
|
|||
|
I-13-B
|
(2)
|
$
|
6,566,500.00
|
March
25, 2036
|
|||
|
I-14-A
|
(2)
|
$
|
6,378,500.00
|
March
25, 2036
|
|||
|
I-14-B
|
(2)
|
$
|
6,378,500.00
|
March
25, 2036
|
|||
|
I-15-A
|
(2)
|
$
|
6,195,500.00
|
March
25, 2036
|
|||
|
I-15-B
|
(2)
|
$
|
6,195,500.00
|
March
25, 2036
|
|||
|
I-16-A
|
(2)
|
$
|
6,018,000.00
|
March
25, 2036
|
|||
|
I-16-B
|
(2)
|
$
|
6,018,000.00
|
March
25, 2036
|
|||
|
I-17-A
|
(2)
|
$
|
5,845,500.00
|
March
25, 2036
|
|||
|
I-17-B
|
(2)
|
$
|
5,845,500.00
|
March
25, 2036
|
|||
|
I-18-A
|
(2)
|
$
|
5,735,000.00
|
March
25, 2036
|
|||
|
I-18-B
|
(2)
|
$
|
5,735,000.00
|
March
25, 2036
|
|||
|
I-19-A
|
(2)
|
$
|
138,024,500.00
|
March
25, 2036
|
|||
|
I-19-B
|
(2)
|
$
|
138,024,500.00
|
March
25, 2036
|
|||
|
I-20-A
|
(2)
|
$
|
1,336,000.00
|
March
25, 2036
|
|||
|
I-20-B
|
(2)
|
$
|
1,336,000.00
|
March
25, 2036
|
|||
|
I-21-A
|
(2)
|
$
|
1,292,000.00
|
March
25, 2036
|
|||
|
I-21-B
|
(2)
|
$
|
1,292,000.00
|
March
25, 2036
|
|||
|
I-22-A
|
(2)
|
$
|
1,250,500.00
|
March
25, 2036
|
|||
|
I-22-B
|
(2)
|
$
|
1,250,500.00
|
March
25, 2036
|
|||
|
I-23-A
|
(2)
|
$
|
1,211,000.00
|
March
25, 2036
|
|||
|
I-23-B
|
(2)
|
$
|
1,211,000.00
|
March
25, 2036
|
|||
|
I-24-A
|
(2)
|
$
|
1,080,000.00
|
March
25, 2036
|
|||
|
I-24-B
|
(2)
|
$
|
1,080,000.00
|
March
25, 2036
|
|||
|
I-25-A
|
(2)
|
$
|
1,052,500.00
|
March
25, 2036
|
|||
|
I-25-B
|
(2)
|
$
|
1,052,500.00
|
March
25, 2036
|
|||
|
I-26-A
|
(2)
|
$
|
1,025,500.00
|
March
25, 2036
|
|||
|
I-26-B
|
(2)
|
$
|
1,025,500.00
|
March
25, 2036
|
|||
|
I-27-A
|
(2)
|
$
|
999,500.00
|
March
25, 2036
|
|||
|
I-27-B
|
(2)
|
$
|
999,500.00
|
March
25, 2036
|
|||
|
I-28-A
|
(2)
|
$
|
974,000.00
|
March
25, 2036
|
|||
|
I-28-B
|
(2)
|
$
|
974,000.00
|
March
25, 2036
|
|||
|
I-29-A
|
(2)
|
$
|
949,500.00
|
March
25, 2036
|
|||
|
I-29-B
|
(2)
|
$
|
949,500.00
|
March
25, 2036
|
|||
|
I-30-A
|
(2)
|
$
|
925,000.00
|
March
25, 2036
|
|||
|
I-30-B
|
(2)
|
$
|
925,000.00
|
March
25, 2036
|
|||
|
I-31-A
|
(2)
|
$
|
3,274,000.00
|
March
25, 2036
|
|||
|
I-31-B
|
(2)
|
$
|
3,274,000.00
|
March
25, 2036
|
|||
|
I-32-A
|
(2)
|
$
|
793,500.00
|
March
25, 2036
|
|||
|
I-32-B
|
(2)
|
$
|
793,500.00
|
March
25, 2036
|
|||
|
I-33-A
|
(2)
|
$
|
774,500.00
|
March
25, 2036
|
|||
|
I-33-B
|
(2)
|
$
|
774,500.00
|
March
25, 2036
|
|||
|
I-34-A
|
(2)
|
$
|
755,500.00
|
March
25, 2036
|
|||
|
I-34-B
|
(2)
|
$
|
755,500.00
|
March
25, 2036
|
|||
|
I-35-A
|
(2)
|
$
|
737,000.00
|
March
25, 2036
|
|||
|
I-35-B
|
(2)
|
$
|
737,000.00
|
March
25, 2036
|
|||
|
I-36-A
|
(2)
|
$
|
719,000.00
|
March
25, 2036
|
|||
|
I-36-B
|
(2)
|
$
|
719,000.00
|
March
25, 2036
|
|||
|
I-37-A
|
(2)
|
$
|
702,000.00
|
March
25, 2036
|
|||
|
I-37-B
|
(2)
|
$
|
702,000.00
|
March
25, 2036
|
|||
|
I-38-A
|
(2)
|
$
|
684,500.00
|
March
25, 2036
|
|||
|
I-38-B
|
(2)
|
$
|
684,500.00
|
March
25, 2036
|
|||
|
I-39-A
|
(2)
|
$
|
668,000.00
|
March
25, 2036
|
|||
|
I-39-B
|
(2)
|
$
|
668,000.00
|
March
25, 2036
|
|||
|
I-40-A
|
(2)
|
$
|
651,500.00
|
March
25, 2036
|
|||
|
I-40-B
|
(2)
|
$
|
651,500.00
|
March
25, 2036
|
|||
|
I-41-A
|
(2)
|
$
|
636,000.00
|
March
25, 2036
|
|||
|
I-41-B
|
(2)
|
$
|
636,000.00
|
March
25, 2036
|
|||
|
I-42-A
|
(2)
|
$
|
620,500.00
|
March
25, 2036
|
|||
|
I-42-B
|
(2)
|
$
|
620,500.00
|
March
25, 2036
|
|||
|
I-43-A
|
(2)
|
$
|
605,000.00
|
March
25, 2036
|
|||
|
I-43-B
|
(2)
|
$
|
605,000.00
|
March
25, 2036
|
|||
|
I-44-A
|
(2)
|
$
|
591,000.00
|
March
25, 2036
|
|||
|
I-44-B
|
(2)
|
$
|
591,000.00
|
March
25, 2036
|
|||
|
I-45-A
|
(2)
|
$
|
576,000.00
|
March
25, 2036
|
|||
|
I-45-B
|
(2)
|
$
|
576,000.00
|
March
25, 2036
|
|||
|
I-46-A
|
(2)
|
$
|
562,000.00
|
March
25, 2036
|
|||
|
I-46-B
|
(2)
|
$
|
562,000.00
|
March
25, 2036
|
|||
|
I-47-A
|
(2)
|
$
|
548,500.00
|
March
25, 2036
|
|||
|
I-47-B
|
(2)
|
$
|
548,500.00
|
March
25, 2036
|
|||
|
I-48-A
|
(2)
|
$
|
535,000.00
|
March
25, 2036
|
|||
|
I-48-B
|
(2)
|
$
|
535,000.00
|
March
25, 2036
|
|||
|
I-49-A
|
(2)
|
$
|
522,000.00
|
March
25, 2036
|
|||
|
I-49-B
|
(2)
|
$
|
522,000.00
|
March
25, 2036
|
|||
|
I-50-A
|
(2)
|
$
|
509,000.00
|
March
25, 2036
|
|||
|
I-50-B
|
(2)
|
$
|
509,000.00
|
March
25, 2036
|
|||
|
I-51-A
|
(2)
|
$
|
497,000.00
|
March
25, 2036
|
|||
|
I-51-B
|
(2)
|
$
|
497,000.00
|
March
25, 2036
|
|||
|
I-52-A
|
(2)
|
$
|
484,500.00
|
March
25, 2036
|
|||
|
I-52-B
|
(2)
|
$
|
484,500.00
|
March
25, 2036
|
|||
|
I-53-A
|
(2)
|
$
|
473,000.00
|
March
25, 2036
|
|||
|
I-53-B
|
(2)
|
$
|
473,000.00
|
March
25, 2036
|
|||
|
I-54-A
|
(2)
|
$
|
462,000.00
|
March
25, 2036
|
|||
|
I-54-B
|
(2)
|
$
|
462,000.00
|
March
25, 2036
|
|||
|
I-55-A
|
(2)
|
$
|
450,000.00
|
March
25, 2036
|
|||
|
I-55-B
|
(2)
|
$
|
450,000.00
|
March
25, 2036
|
|||
|
I-56-A
|
(2)
|
$
|
439,500.00
|
March
25, 2036
|
|||
|
I-56-B
|
(2)
|
$
|
439,500.00
|
March
25, 2036
|
|||
|
I-57-A
|
(2)
|
$
|
429,000.00
|
March
25, 2036
|
|||
|
I-57-B
|
(2)
|
$
|
429,000.00
|
March
25, 2036
|
|||
|
I-58-A
|
(2)
|
$
|
418,000.00
|
March
25, 2036
|
|||
|
I-58-B
|
(2)
|
$
|
418,000.00
|
March
25, 2036
|
|||
|
I-59-A
|
(2)
|
$
|
408,000.00
|
March
25, 2036
|
|||
|
I-59-B
|
(2)
|
$
|
408,000.00
|
March
25, 2036
|
|||
|
I-60-A
|
(2)
|
$
|
16,020,000.00
|
March
25, 2036
|
|||
|
I-60-B
|
(2)
|
$
|
16,020,000.00
|
March
25, 2036
|
|||
|
P
|
(3)
|
$
|
100.00
|
March
25, 2036
|
|||
___________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the
Distribution Date in the month following the maturity date for the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each REMIC I Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “Uncertificated REMIC I Pass-Through
Rate” herein.
|
|
(3)
|
The
REMIC I Regular Interest LT-P will not be entitled to distributions
of
interest.
|
REMIC
II
As
provided herein, the Securities Administrator will make an election to treat
the
segregated pool of assets consisting of the REMIC I Regular Interest) for
federal income tax purposes, and such segregated pool of assets will be
designated as “REMIC II.” The R-II Interest will represent the sole class of
“residual interests” in REMIC II for purposes of the REMIC Provisions. The
following table irrevocably sets forth the designation, the Uncertificated
REMIC
II Pass-Through Rate, the Initial Uncertificated Principal Balance, and for
purposes of satisfying Treasury regulation Section 1.860G-1(a)(4)(iii), the
“latest possible maturity date” for each of the REMIC II Regular Interests. None
of the REMIC II Regular Interests will be certificated.
|
Designation
|
Initial
Uncertificated
Principal
Balance
|
Uncertificated
REMIC
II
Pass-Through
Rate
|
Assumed
Final
Distribution
Date(1)
|
||||
|
LT-AA
|
$
|
610,504,749.61
|
(2)
|
March
25, 2036
|
|||
|
LT-A1
|
$
|
3,168,810.00
|
(2)
|
March
25, 2036
|
|||
|
LT-A2
|
$
|
408,070.00
|
(2)
|
March
25, 2036
|
|||
|
LT-A3
|
$
|
933,570.00
|
(2)
|
March
25, 2036
|
|||
|
LT-A4
|
$
|
460,800.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M1
|
$
|
211,800.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M2
|
$
|
196,230.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M3
|
$
|
115,240.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M4
|
$
|
102,780.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M5
|
$
|
93,440.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M6
|
$
|
90,320.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M7
|
$
|
87,210.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M8
|
$
|
71,640.00
|
(2)
|
March
25, 2036
|
|||
|
LT-M9
|
$
|
46,720.00
|
(2)
|
March
25, 2036
|
|||
|
LT-B1
|
$
|
49,830.00
|
(2)
|
March
25, 2036
|
|||
|
LT-B2
|
$
|
56,060.00
|
(2)
|
March
25, 2036
|
|||
|
LT-ZZ
|
$
|
6,366,760.60
|
(2)
|
March
25, 2036
|
|||
|
LT-IO
|
(4)
|
(2)
|
▇▇▇▇▇
▇▇, ▇▇▇▇
|
||||
|
▇▇-▇
|
$
|
100.00
|
(3)
|
March
25, 2036
|
|||
___________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the month following the maturity date for
the
Mortgage Loan with the latest maturity date has been designated as
the
“latest possible maturity date” for each REMIC II Regular
Interest.
|
|
(2)
|
Calculated
in accordance with the definition of “Uncertificated REMIC II Pass-Through
Rate” herein.
|
|
(3)
|
The
REMIC II Regular Interest LT-P will not be entitled to distributions
of
interest.
|
|
(4)
|
REMIC
II Regular Interest LT-IO will not have an Uncertificated Principal
Balance, but will accrue interest on its Uncertificated Notional
Amount,
as defined herein.
|
REMIC
III
As
provided herein, the Securities Administrator will make an election to treat
the
segregated pool of assets consisting of the REMIC II Regular Interests as a
REMIC for federal income tax purposes, and such segregated pool of assets will
be designated as “REMIC III”. The R-III Interest will represent the sole class
of “residual interests” in REMIC III for purposes of the REMIC Provisions. The
following table irrevocably sets forth the Class designation, Pass-Through
Rate
and Initial Certificate Principal Balance for each Class of Certificates that
represents one or more of the “regular interests” in REMIC III created
hereunder:
|
Class
Designation
|
Initial
Certificate
Principal
Balance
|
Pass-Through
Rate
|
Assumed
Final
Distribution
Date(1)
|
||||
|
Class
A-1
|
$
|
316,881,000.00
|
Class
A-1 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
A-2
|
$
|
40,807,000.00
|
Class
A-2 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
A-3
|
$
|
93,357,000.00
|
Class
A-3 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
A-4
|
$
|
46,080,000.00
|
Class
A-4 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-1
|
$
|
21,180,000.00
|
Class
M-1 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-2
|
$
|
19,623,000.00
|
Class
M-2 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-3
|
$
|
11,524,000.00
|
Class
M-3 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-4
|
$
|
10,278,000.00
|
Class
M-4 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-5
|
$
|
9,344,000.00
|
Class
M-5 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-6
|
$
|
9,032,000.00
|
Class
M-6 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-7
|
$
|
8,721,000.00
|
Class
M-7 Pass-Through Rate
|
March
25, 2036
|
|||
|
Class
M-8
|
$
|
7,164,000.00
|
Class
M-8 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
M-9
|
$
|
4,672,000.00
|
Class
M-9 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
B-1
|
$
|
4,983,000.00
|
Class
B-1 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
B-2
|
$
|
5,606,000.00
|
Class
B-2 Pass Through Rate
|
March
25, 2036
|
|||
|
Class
X(2)
|
$
|
13,712,030.21
|
Class
X Pass Through Rate
|
March
25, 2036
|
|||
|
Class
P
|
$
|
100.00
|
N/A(3)
|
March
25, 2036
|
|||
|
Class
IO Interest
|
(4)
|
(5)
|
March
25, 2036
|
||||
___________________
|
(1)
|
For
purposes of Section 1.860G-1(a)(4)(iii) of the Treasury regulations,
the Distribution Date in the second month following the maturity
date for
the Mortgage Loan with the latest maturity date has been designated
as the
“latest possible maturity date” for each Class of
Certificates.
|
|
(2)
|
The
Class X Certificates will not accrue interest on their Certificate
Principal Balance, but will accrue interest at the Class X Pass-Through
Rate on the Certificate Notional Balance of the Class X Certificates
outstanding from time to time which shall equal the aggregate of
the
Uncertificated Principal Balances of the REMIC II Regular Interests
(other
than REMIC II Regular Interest LT-P).
|
|
(3)
|
The
Class P Certificates will not be entitled to distributions of
interest.
|
|
(4)
|
For
federal income tax purposes, the Class IO Interest will not have
a
Pass-Through Rate, but will be entitled to 100% of the amounts distributed
on REMIC II Regular Interest LT-IO.
|
|
(5)
|
For
federal income tax purposes, the Class IO Interest will not have
an
Uncertificated Principal Balance, but will have a notional amount
equal to
the Uncertificated Notional Amount of REMIC II Regular Interest
IO.
|
In
consideration of the mutual agreements herein contained, the Depositor, the
Master Servicer, the Securities Administrator, the Sponsor and the Trustee
agree
as follows:
ARTICLE
I
DEFINITIONS
Section
1.01 Defined
Terms.
In
addition to those terms defined in Section 1.02, whenever used in this
Agreement, the following words and phrases, unless the context otherwise
requires, shall have the following meanings:
Accepted
Master Servicing Practices:
With
respect to any Mortgage Loan, as applicable, either (x) those customary mortgage
master servicing practices of prudent mortgage servicing institutions that
master service mortgage loans of the same type and quality as such Mortgage
Loan
in the jurisdiction where the related Mortgaged Property is located, to the
extent applicable to the Master Servicer, or (y) as provided in
Section 3.01 hereof, but in no event below the standard set forth in clause
(x).
Account:
Either
the Distribution Account or the Protected Account.
Accrual
Period:
With
respect to the Senior Certificates, the Subordinate Certificates and the Class
X
Certificates and any Distribution Date, the period commencing on the immediately
preceding Distribution Date (or with respect to the first Accrual Period, the
Closing Date) and ending on the day immediately preceding the related
Distribution Date. All calculations of interest on the Senior Certificates
and
Subordinate Certificates will be based on a 360-day year and the actual number
of days elapsed in the related Accrual Period. All calculations of interest
on
the Class X Certificates, REMIC I Regular Interests and REMIC II Regular
Interests will be based on a 360-day year consisting of twelve 30-day
months.
Additional
Form 10-D Disclosure:
Has the
meaning set forth in Section 5.13(a) of this Agreement.
Additional
Form 10-K Disclosure:
Has the
meaning set forth in Section 5.13(d) of this Agreement.
Additional
Servicer:
Shall
mean each affiliate of each Servicer that Services any of the Mortgage Loans
and
each Person who is not an affiliate of any Servicer, who services 10% or more
of
the Mortgage Loans. For clarification purposes, the Master Servicer and the
Securities Administrator are Additional Servicers.
Adjustment
Date:
With
respect to each adjustable rate Mortgage Loan, the first day of the month in
which the Mortgage Rate of such Mortgage Loan changes pursuant to the related
Mortgage Note. The first Adjustment Date following the Cut-Off Date as to each
adjustable rate Mortgage Loan is set forth in the Loan Schedule.
Advance:
Either
(i) a Monthly Advance made by the Servicer as such term is defined in and
pursuant to the Servicing Agreement or (ii) an advance made by the Trustee
pursuant to Section 5.01.
Affected
Party:
As
defined in the Swap Agreement.
Agreement:
This
Pooling and Servicing Agreement and any and all amendments or supplements hereto
made in accordance with the terms herein.
Aggregate
Loan Balance:
With
respect to the Mortgage Loans and any Distribution Date, the aggregate of the
Stated Principal Balances of the Mortgage Loans as of the last day of the
related Due Period.
Applied
Loss Amount:
With
respect to the Publicly Offered Certificates and the Class B Certificates and
any Distribution Date, the excess of the aggregate Certificate Principal Balance
of the Publicly Offered Certificates and the Class B Certificates over the
Aggregate Loan Balance of the Mortgage Loans after giving effect to all Realized
Losses incurred with respect to the Mortgage Loans during the related Due Period
and payments of principal to the Publicly Offered Certificates and Class B
Certificates on such Distribution Date.
Appraised
Value:
With
respect to any Mortgage Loan originated in connection with a refinancing, the
appraised value of the Mortgaged Property based upon the appraisal made at
the
time of such refinancing or, with respect to any other Mortgage Loan, the lesser
of (x) the appraised value of the Mortgaged Property based upon the appraisal
made by a fee appraiser at the time of the origination of the Mortgage Loan,
and
(y) the sales price of the Mortgaged Property at the time of such
origination.
Assignment
Agreement:
Shall
mean the Assignment, Assumption and Recognition Agreement, dated as of June
30,
2006, among the Sponsor, the Depositor and the Servicer, pursuant to which
the
Servicing Agreement was assigned to the Depositor, a copy of which is attached
hereto as Exhibit R.
Assumed
Final Distribution Date:
The
Distribution Date in March 2036.
Authorized
Servicer Representative:
Any
officer of the Servicer involved in, or responsible for, the administration
and
servicing of the Mortgage Loans whose name and facsimile signature appear on
a
list of servicing officers furnished to the Trustee and the Master Servicer
by
the Servicer on the Closing Date, as such list may from time to time be
amended.
Available
Distribution Amount:
The sum
of the Interest Remittance Amount and Principal Remittance Amount, exclusive
of
amounts pursuant to Section 5.04.
Balloon
Mortgage Loan:
A
Mortgage Loan that provides for the payment of the unamortized principal balance
of such Mortgage Loan in a single payment, that is substantially greater than
the preceding monthly payment at the maturity of such Mortgage
Loan.
Balloon
Payment:
A
payment of the unamortized principal balance of a Mortgage Loan in a single
payment, that is substantially greater than the preceding Monthly Payment at
the
maturity of such Mortgage Loan.
Bankruptcy
Code:
Title
11 of the United States Code.
Basis
Risk Shortfall Reserve Fund:
The
segregated non-interest bearing trust account created and maintained by the
Securities Administrator pursuant to Section 5.10 hereof.
Basis
Risk Shortfall:
With
respect to any Class of Senior Certificates or Subordinate Certificates and
any
Distribution Date, the sum of (i) the excess, if any, of the related Current
Interest (calculated without regard to the Net Funds Cap) over the related
Current Interest (as it may have been limited by the Net Funds Cap) for the
applicable Distribution Date; (ii) any amount described in clause (i) remaining
unpaid from prior Distribution Dates; and (iii) interest on the amount in clause
(ii) for the related Accrual Period calculated on the basis of the lesser of
(x)
One Month LIBOR plus the applicable Certificate Margin and (y) the applicable
Maximum Interest Rate.
Book-Entry
Certificates:
Any of
the Certificates that shall be registered in the name of the Depository or
its
nominee, the ownership of which is reflected on the books of the Depository
or
on the books of a person maintaining an account with the Depository (directly,
as a “Depository Participant”, or indirectly, as an indirect participant in
accordance with the rules of the Depository and as described in
Section 6.06). As of the Closing Date, each Class of Senior Certificates
and Subordinate Certificates constitutes a Class of Book-Entry
Certificates.
Business
Day:
Any day
other than (i) a Saturday or a Sunday, or (ii) a day on which banking
institutions in the State of New York, the State of Delaware, the State of
Maryland, the State of Minnesota, the city in which any Corporate Trust Office
of the Securities Administrator is located or the States in which the Servicer’s
servicing operations are located are authorized or obligated by law or executive
order to be closed.
Carryforward
Interest:
With
respect to any Class of Publicly Offered Certificates and any Class of Class
B
Certificates and any Distribution Date, the sum of (i) the amount, if any,
by
which (x) the sum of (A) Current Interest for that Class of Certificates for
the
immediately preceding Distribution Date and (B) any unpaid Carryforward Interest
for such Class from previous Distribution Dates exceeds (y) the actual amount
distributed on such Class in respect of interest on the immediately preceding
Distribution Date and (ii) interest on such amount for the related Accrual
Period at the applicable Pass-Through Rate.
Certificate:
Any one
of the certificates of any Class executed and authenticated by the Securities
Administrator in substantially the forms attached hereto as Exhibits A-1 through
A-6.
Certificate
Margin:
With
respect to each Distribution Date on or prior to the first possible Optional
Termination Date with respect to the Mortgage Loans, the Certificate Margins
for
the Class A-1, Class A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇, 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, Class B-1
and
Class B-2 Certificates are 0.065%, 0.100%, 0.140%, 0.240%, 0.270%, 0.290%,
0.320%, 0.370%, 0.390%, 0.460%, 0.900%, 1.000%, 1.850%, 2.500% and 2.500%,
respectively. With respect to each Distribution Date following the first
possible optional termination date with respect to the Mortgage Loans, the
Certificate Margins for the Class A-1, Class A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇, 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, Class B-1 and Class B-2 Certificates are 0.130%, 0.200%, 0.280%,
0.480%, 0.405%, 0.435%, 0.480%, 0.555%, 0.585%, 0.690%, 1.350%, 1.500%, 2.775%,
3.750% and 3.750%, respectively.
Certificate
Notional Balance:
With
respect to the Class X Certificates and any Distribution Date, the
Uncertificated Principal Balance of the REMIC II Regular Interests (other than
REMIC II Regular Interest LT-P) for such Distribution Date. As of the Closing
Date, the Certificate Notional Balance of the Class X Certificates is equal
to
$622,964,030.21.
Certificate
Owner:
With
respect to a Book-Entry Certificate, the Person that is the beneficial owner
of
such Book-Entry Certificate.
Certificate
Principal Balance:
As to
any Publicly Offered Certificate, Class B Certificate or Class P Certificate
and
as of any Distribution Date, the Initial Certificate Principal Balance of such
Certificate plus any Subsequent Recoveries added to the Certificate Principal
Balance pursuant to Section 5.05(f) less (i) the sum of (a) all amounts
distributed with respect to such Certificate in reduction of the Certificate
Principal Balance thereof on previous Distribution Dates pursuant to
Section 5.04 and (b) with respect to any Class of Subordinate Certificates,
any reductions in the Certificate Principal Balance of such Certificate deemed
to have occurred in connection with the allocations of Realized Losses, if
any,
plus (ii) with respect to the Subordinate Certificates, any Subsequent
Recoveries added to the Certificate Principal Balance of any such Certificate
pursuant to Section 5.05(d), in each case up to the amount of Applied Loss
Amounts but only to the extent that any such Applied Loss Amount has not been
paid to any Class of Certificates as a Deferred Amount. With respect to the
Class X Certificates and any date of determination, the excess, if any, of
(i)
the then Aggregate Loan Balance over (ii) the then aggregate Certificate
Principal Balance of the Publicly Offered Certificates and the Class B
Certificates. References herein to the Certificate Principal Balance of a Class
of Certificates shall mean the Certificate Principal Balances of all
Certificates in such Class.
Certificate
Register:
The
register maintained pursuant to Section 6.02.
Certificateholder
or Holder:
The
person in whose name a Certificate is registered in the Certificate Register
(initially, Cede & Co., as nominee for the Depository, in the case of any
Book-Entry Certificates).
Certification
Parties:
Has the
meaning set forth in Section 3.18 of this Agreement.
Certifying
Person:
Has the
meaning set forth in Section 3.18 of this Agreement.
Class:
All
Certificates bearing the same Class designation as set forth in
Section 6.01.
Class
A-1 Certificate:
Any
Certificate designated as a “Class A-1 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-1 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
A-1 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.065% or (B) after the first
possible Optional Termination Date, 0.130% and (ii) the Net Funds
Cap.
Class
A-2 Certificate:
Any
Certificate designated as a “Class A-2 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-2 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
A-2 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.100% or (B) after the first
possible Optional Termination Date, 0.200% and (ii) the Net Funds
Cap.
Class
A-3 Certificate:
Any
Certificate designated as a “Class A-3 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-3 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
A-3 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.140% or (B) after the first
possible Optional Termination Date, 0.280% and (ii) the Net Funds
Cap.
Class
A-4 Certificate:
Any
Certificate designated as a “Class A-4 Certificate” on the face thereof, in the
form of Exhibit A-1 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class A-4 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
A-4 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.240% or (B) after the first
possible Optional Termination Date, 0.480% and (ii) the Net Funds
Cap.
Class
B Certificates:
The
Class B-1 Certificates and Class B-2 Certificates.
Class
B-1 Certificate:
Any
Certificate designated as a “Class B-1 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class B-1 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
B-1 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 2.500% or (B) after the first
possible Optional Termination Date, 3.750% and (ii) the Net Funds
Cap.
Class
B-1 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, will
be
the amount, if any, by which (x) the sum of (i) the Certificate Principal
Balances of the Senior Certificates and the Mezzanine Certificates, in each
case, after giving effect to payments on such Distribution Date and (ii) the
Certificate Principal Balance of the Class B-1 Certificates immediately prior
to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 93.80%
and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Distribution
Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date.
Class
B-2 Certificate:
Any
Certificate designated as a “Class B-2 Certificate” on the face thereof, in the
form of Exhibit A-3 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class B-2 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
B-2 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 2.500% or (B) after the first
possible Optional Termination Date, 3.750% and (ii) the Net Funds
Cap.
Class
B-2 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, will
be
the amount, if any, by which (x) the sum of (i) the Certificate Principal
Balances of the Senior Certificates, the Mezzanine Certificates and the Class
B-1 Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Certificate Principal Balance of the Class B-2
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) 95.60% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan
Balance as of the Cut-off Date.
Class
IO Distribution Amount:
As defined in Section 5.11 hereof. For
purposes of clarity, the Class IO Distribution Amount for any Distribution
Date
shall equal the amount payable to the Supplemental Interest Trust on such
Distribution Date in excess of the amount payable on the Class IO Interest
on
such Distribution Date, all as further provided in Section 5.11
hereof.
Class
IO Interest:
An
uncertificated interest in the Trust Fund held by the Trustee, evidencing a
REMIC Regular Interest in REMIC III for purposes of the REMIC
Provisions.
Class
M-1 Certificate:
Any
Certificate designated as a “Class M-1 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-1 Certificates as set forth herein and
(i) a REMIC Regular Interest in REMIC III, (ii) the right to receive the related
Basis Risk Shortfall and (iii) the obligation to pay any Class IO Distribution
Amount.
Class
M-1 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.270% or (B) after the first
possible Optional Termination Date, 0.405% and (ii) the Net Funds
Cap.
Class
M-1 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior Certificates, in each case, after giving effect to payments on
such Distribution Date and (ii) the Certificate Principal Balance of the Class
M-1 Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 66.40% and (ii) the Aggregate Loan Balance
for
such Distribution Date and (B) the amount, if any, by which (i) the Aggregate
Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate
Loan
Balance as of the Cut-off Date.
Class
M-2 Certificate:
Any
Certificate designated as a “Class M-2 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-2 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-2 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.290% or (B) after the first
possible Optional Termination Date, 0.435% and (ii) the Net Funds
Cap.
Class
M-2 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior Certificates and the Class M-1 Certificates, in each case, after
giving effect to payments on such Distribution Date and (ii) the Certificate
Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date exceeds (y) the lesser of (A) the product of (i) 72.70% and
(ii) the Aggregate Loan Balance for such Distribution Date and (B) the amount,
if any, by which (i) the Aggregate Loan Balance for such Distribution Date
exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date.
Class
M-3 Certificate:
Any
Certificate designated as a “Class M-3 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-3 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-3 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.320% or (B) after the first
possible Optional Termination Date, 0.480% and (ii) the Net Funds
Cap.
Class
M-3 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1 Certificates and Class M-2 Certificates, in each case,
after giving effect to payments on such Distribution Date and (ii) the
Certificate Principal Balance of the Class M-3 Certificates immediately prior
to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 76.40%
and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Distribution
Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date.
Class
M-4 Certificate:
Any
Certificate designated as a “Class M-4 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-4 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-4 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.370% or (B) after the first
possible Optional Termination Date, 0.555% and (ii) the Net Funds
Cap.
Class
M-4 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2 and Class M-3 Certificates, in each case,
after giving effect to payments on such Distribution Date and (ii) the
Certificate Principal Balance of the Class M-4 Certificates immediately prior
to
such Distribution Date exceeds (y) the lesser of (A) the product of (i) 79.70%
and (ii) the Aggregate Loan Balance for such Distribution Date and (B) the
amount, if any, by which (i) the Aggregate Loan Balance for such Distribution
Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date.
Class
M-5 Certificate:
Any
Certificate designated as a “Class M-5 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-5 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-5 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.390% or (B) after the first
possible Optional Termination Date, 0.585% and (ii) the Net Funds
Cap.
Class
M-5 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3 and Class M-4 Certificates,
in
each case, after giving effect to payments on such Distribution Date and (ii)
the Certificate Principal Balance of the Class M-5 Certificates immediately
prior to such Distribution Date exceeds (y) the lesser of (A) the product of
(i)
82.70% and (ii) the Aggregate Loan Balance for such Distribution Date and (B)
the amount, if any, by which (i) the Aggregate Loan Balance for such
Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as of the
Cut-off Date.
Class
M-6 Certificate:
Any
Certificate designated as a “Class M-6 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-6 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-6 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.460% or (B) after the first
possible Optional Termination Date, 0.690% and (ii) the Net Funds
Cap.
Class
M-6 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2, Class M-3, Class M-4 and Class M-5
Certificates, in each case, after giving effect to payments on such Distribution
Date and (ii) the Certificate Principal Balance of the Class M-6 Certificates
immediately prior to such Distribution Date exceeds (y) the lesser of (A) the
product of (i) 85.60% and (ii) the Aggregate Loan Balance for such Distribution
Date and (B) the amount, if any, by which (i) the Aggregate Loan Balance for
such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan Balance as
of
the Cut-off Date.
Class
M-7 Certificate:
Any
Certificate designated as a “Class M-7 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-7 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-7 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 0.900% or (B) after the first
possible Optional Termination Date, 1.350%% and (ii) the Net Funds
Cap.
Class
M-7 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5 and Class
M-6 Certificates, in each case, after giving effect to payments on such
Distribution Date and (ii) the Certificate Principal Balance of the Class M-7
Certificates immediately prior to such Distribution Date exceeds (y) the lesser
of (A) the product of (i) 88.40% and (ii) the Aggregate Loan Balance for such
Distribution Date and (B) the amount, if any, by which (i) the Aggregate Loan
Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate Loan
Balance as of the Cut-off Date.
Class
M-8 Certificate:
Any
Certificate designated as a “Class M-8 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-8 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-8 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 1.000% or (B) after the first
possible Optional Termination Date, 1.500% and (ii) the Net Funds
Cap.
Class
M-8 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class
M-6
and Class M-7 Certificates, in each case, after giving effect to payments on
such Distribution Date and (ii) the Certificate Principal Balance of the Class
M-8 Certificates immediately prior to such Distribution Date exceeds (y) the
lesser of (A) the product of (i) 90.70% and (ii) the Aggregate Loan Balance
for
such Distribution Date and (B) the amount, if any, by which (i) the Aggregate
Loan Balance for such Distribution Date exceeds (ii) 0.50% of the Aggregate
Loan
Balance as of the Cut-off Date.
Class
M-9 Certificate:
Any
Certificate designated as a “Class M-9 Certificate” on the face thereof, in the
form of Exhibit A-2 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class M-9 Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
M-9 Pass-Through Rate:
With
respect to each Distribution Date, a per annum rate equal to the lesser of
(i)
the sum of One-Month LIBOR for that Distribution Date plus (A) on or prior
to
the first possible Optional Termination Date, 1.850% or (B) after the first
possible Optional Termination Date, 2.775% and (ii) the Net Funds
Cap.
Class
M-9 Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the sum of (i) the Certificate Principal Balances
of the Senior, 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, in each case, after giving effect to
payments on such Distribution Date and (ii) the Certificate Principal Balance
of
the Class M-9 Certificates immediately prior to such Distribution Date exceeds
(y) the lesser of (A) the product of (i) 92.20% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i) the
Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
Class
P Certificate:
Any
Certificate designated as a “Class P Certificate” on the face thereof, in the
form of Exhibit A-5 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class P Certificates as set forth herein and
evidencing
a REMIC
Regular Interest in REMIC III.
Class
P Certificate Account:
The
Eligible Account established and maintained by the Securities Administrator
pursuant to Section 5.09.
Class
R Certificate:
Any
Certificate designated as a “Class R” Certificate on the face thereof in the
form of Exhibit A-6 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class R Certificates as set forth herein and
evidencing the Class R-I Interest, Class R-II Interest and Class R-III
Interest.
Class
R-I Interest:
The
uncertificated residual interest in REMIC I.
Class
R-II Interest:
The
uncertificated residual interest in REMIC II.
Class
R-III Interest:
The
uncertificated residual interest in REMIC III.
Class
X Certificate:
Any
Certificate designated as a “Class X Certificate” on the face thereof, in the
form of Exhibit A-4 hereto, representing the right to its Percentage Interest
of
distributions provided for the Class X Certificates as set forth herein and
evidencing (i) a REMIC Regular Interest in REMIC III, (ii) the right to receive
the related Basis Risk Shortfall and (iii) the obligation to pay any Class
IO
Distribution Amount.
Class
X Distribution Amount:
With
respect to any Distribution Date and the Class X Certificates, the sum of (i)
the Current Interest and Carryforward Interest and (ii) any
Overcollateralization Release Amount for such Distribution Date remaining after
payments pursuant to items 1 through 25 of Section 5.04(iii); provided,
however that on and after the Distribution Date on which the Certificate
Principal Balances of the Publicly Offered Certificates and the Class B
Certificates have been reduced to zero, the Class X Distribution Amount shall
include the Overcollateralization Amount.
Class
X Pass-Through Rate:
On any
Distribution Date, a per annum rate equal to the percentage equivalent of a
fraction, the numerator of which is the sum of the amounts calculated pursuant
to clauses (A) through (Q) below, and the denominator of which is the aggregate
of the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA,
REMIC II Regular Interest LT-A1, REMIC II Regular Interest LT-A2, REMIC II
Regular Interest LT-A3, REMIC II Regular Interest LT-A4, REMIC II Regular
Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular Interest
LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC
II Regular Interest LT-M6, REMIC II Regular Interest LT-M7, REMIC II Regular
Interest LT-M8, REMIC II Regular Interest LT-M9, REMIC II Regular Interest
LT-B1, REMIC II Regular Interest LT-B2 and REMIC II Regular Interest LT-ZZ.
For
purposes of calculating the Pass-Through Rate for the Class X Certificates,
the numerator is equal to the sum of the following components:
(A) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-AA
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-AA;
(B) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-A1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A1;
(C) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-A2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A2;
(D) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇,
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A3;
(E) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇,
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-A4;
(F) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M1;
(G) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M2;
(H) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M3
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M3;
(I) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M4
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M4;
(J) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M5
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M5; and
(K) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M6
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M6;
(L) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M7
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M7;
(M) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M8
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M8;
(N) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-M9
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-M9;
(O) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-B1
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-B1;
(P) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-B2
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-B2; and
(Q) the
Uncertificated REMIC II Pass-Through Rate for REMIC II Regular Interest LT-ZZ
minus the Marker Rate, applied to an amount equal to the Uncertificated
Principal Balance of REMIC II Regular Interest LT-ZZ.
Cleanup
Call:
As
defined in Section 10.01.
Closing
Date:
June
30, 2006.
Code:
The
Internal Revenue Code of 1986, including any successor or amendatory
provisions.
Combined
Loan-to-Value Ratio:
With
respect to any Mortgage Loan as of any Determination Date, the ratio on such
Determination Date of the Stated Principal Balance of the Mortgage Loan and
any
other mortgage loan which is secured by a lien on the related Mortgaged Property
to the Appraised Value of the Mortgaged Property.
Commission:
Shall
mean the United States Securities and Exchange Commission.
Compensating
Interest:
With
respect to any Distribution Date, an amount to be deposited in the Distribution
Account by the Servicer pursuant to the Servicing Agreement or the Master
Servicer pursuant to this Agreement to offset a Prepayment Interest Shortfall
on
a Mortgage Loan in accordance with this Agreement; provided, however that the
amount of Compensating Interest required to be paid in respect of the Mortgage
Loans by the Servicer pursuant to the Servicing Agreement shall not exceed
the
Servicing Fee payable to the Servicer on such Distribution Date or, in the
case
of the Master Servicer, shall not exceed the Master Servicing Compensation
payable to the Master Servicer with respect to the related Prepayment
Period.
Corporate
Trust Office:
The
principal corporate trust office of the Trustee which office at the date of
the
execution of this instrument is located at ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇
▇▇▇▇▇, Attention: Nomura Home Equity Loan, Inc., 2006-WF1 or at such other
address as the Trustee may designate from time to time by notice to the
Certificateholders, the Depositor, the Master Servicer, the Securities
Administrator and the Servicer. The office of the Securities Administrator,
which for purposes of Certificate transfers and surrender is located at ▇▇▇▇▇
Fargo Bank, N.A., ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, Attention: Corporate Trust Services - Client Manager (NHEL 2006-WF1),
and
for all other purposes is located at ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇, ▇.▇., ▇.▇. ▇▇▇ ▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - Client Manager
(NHEL 2006-WF1) (or for overnight deliveries, at ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attention: Corporate Trust Services - Client Manager
(NHEL 2006-WF1)).
Corresponding
Certificate:
With
respect to:
|
(i)
|
REMIC
II Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, the Class A-1 Certificates;
|
|
(ii)
|
REMIC
II Regular Interest LT-A2, the Class A-2 Certificates;
|
|
(iii)
|
REMIC
II Regular ▇▇▇▇▇▇▇▇ ▇▇-▇▇, the Class A-3 Certificates;
|
|
(iv)
|
REMIC
II Regular Interest LT-A4, the Class A-4 Certificates;
|
|
(v)
|
REMIC
II Regular Interest LT-M1, the Class M-1 Certificates;
|
|
(vi)
|
REMIC
II Regular Interest LT-M2, the Class M-2 Certificates;
|
|
(vii)
|
REMIC
II Regular Interest LT-M3, the Class M-3 Certificates;
|
|
(viii)
|
REMIC
II Regular Interest LT-M4, the Class M-4 Certificates;
|
|
(ix)
|
REMIC
II Regular Interest LT-M5, the Class M-5 Certificates;
|
|
(x)
|
REMIC
II Regular Interest LT-M6, the Class M-6 Certificates;
|
|
(xi)
|
REMIC
II Regular Interest LT-M7, the Class M-7 Certificates;
|
|
(xii)
|
REMIC
II Regular Interest LT-M8, the Class M-8 Certificates;
|
|
(xiii)
|
REMIC
II Regular Interest LT-M9, the Class M-9 Certificates;
|
|
(xiv)
|
REMIC
II Regular Interest LT-B1, the Class B-1 Certificates;
|
|
(xv)
|
REMIC
II Regular Interest LT-B2, the Class B-2 Certificates;
|
|
(xvi)
|
REMIC
II Regular Interest LT-P, the Class P
Certificates.
|
Credit
Risk Management Agreement:
Each of
the agreements between the Credit Risk Manager and the Servicer and/or Master
Servicer, dated as of June 30, 2006.
Credit
Risk Management Fee:
As to
each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of
the
Credit Risk Management Fee Rate multiplied by the Stated Principal Balance
of
such Mortgage Loan as of the last day of the related Due Period. The Credit
Risk
Management Fee shall be payable to the Credit Risk Manager and/or the Sponsor
pursuant to Section 3.32(a)(vii) and 3.33(b).
Credit
Risk Management Fee Rate:
0.005%
per annum.
Credit
Risk Manager:
Portfolio Surveillance Analytics, LLC, a New York limited liability company,
and
its successors and assigns.
Current
Interest:
With
respect to any Class of Publicly Offered Certificates and Class B Certificates
and any Distribution Date, the amount of interest accruing at the applicable
Pass-Through Rate on the related Certificate Principal Balance during the
related Accrual Period; provided, that as to each Class of Publicly Offered
Certificates and Class B Certificates, the Current Interest will be reduced
by a
pro rata portion of any Net Interest Shortfalls to the extent not covered by
excess interest. No Current Interest will be payable with respect to any Class
of Publicly Offered Certificates or Class B Certificate after the Distribution
Date on which the outstanding Certificate Principal Balance of such Certificate
has been reduced to zero.
Custodial
Agreement:
The
Custodial Agreement dated as of June 1, 2006 among ▇▇▇▇▇ Fargo, in its capacity
as Custodian, the Servicer and the Trustee.
Custodian:
▇▇▇▇▇
Fargo Bank, N.A.
Cut-off
Date:
June 1,
2006.
Cut-off
Date Principal Balance:
As to
any Mortgage Loan, the unpaid principal balance thereof as of the close of
business on the Cut-off Date after application of all Principal Prepayments
received prior to the Cut-off Date and scheduled payments of principal due
on or
before the Cut-off Date, whether or not received, but without giving effect
to
any installments of principal received in respect of Due Dates after the Cut-off
Date.
DBRS:
Dominion Bond Rating Service.
Debt
Service Reduction:
With
respect to any Mortgage Loan, a reduction by a court of competent jurisdiction
in a proceeding under the Bankruptcy Code in the Scheduled Payment for such
Mortgage Loan that became final and non-appealable, except such a reduction
resulting from a Deficient Valuation or any other reduction that results in
a
permanent forgiveness of principal.
Defaulting
Party:
As
defined in the Swap Agreement.
Deferred
Amount:
With
respect to any Class of Subordinate Certificates and any Distribution Date,
the
amount by which (x) the aggregate of the Applied Loss Amounts previously applied
in reduction of the Certificate Principal Balance thereof exceeds (y) the
aggregate of amounts previously paid in reimbursement thereof and the amount
by
which the Certificate Principal Balance of any such Class has been increased
due
to the collection of Subsequent Recoveries.
Deficient
Valuation:
With
respect to any Mortgage Loan, a valuation by a court of competent jurisdiction
of the Mortgaged Property in an amount less than the then outstanding
indebtedness under such Mortgage Loan, or any reduction in the amount of
principal to be paid in connection with any Scheduled Payment that results
in a
permanent forgiveness of principal, which valuation or reduction results from
an
order of such court that is final and non-appealable in a proceeding under
the
Bankruptcy Code.
Definitive
Certificates:
As
defined in Section 6.06.
Deleted
Mortgage Loan:
A
Mortgage Loan replaced or to be replaced by a Replacement Mortgage
Loan.
Delinquency
Rate:
With
respect to the Mortgage Loans and any calendar month will be, generally, the
fraction, expressed as a percentage, the numerator of which is the Aggregate
Loan Balance of all Mortgage Loans sixty (60) or more days delinquent (not
including any Liquidated Mortgage Loans as of the end of the related Prepayment
Period, but including all Mortgage Loans in bankruptcy or foreclosure and all
REO Properties) as of the close of business on the last day of such month,
and
the denominator of which is the Aggregate Loan Balance of all Mortgage Loans
as
of the close of the last day of the related Due Period.
Delinquent:
A
Mortgage Loan is “delinquent” if any payment due thereon is not made pursuant to
the terms of such Mortgage Loan by the close of business on the day such payment
is scheduled to be due. A Mortgage Loan is “30 days delinquent” if such payment
has not been received by the close of business on the corresponding day of
the
month immediately succeeding the month in which such payment was due, or, if
there is no such corresponding day (e.g., as when a 30-day month follows a
31-day month in which a payment was due on the 31st day of such month), then
on
the last day of such immediately succeeding month. Similarly for “60 days
delinquent,” “90 days delinquent” and so on.
Denomination:
With
respect to each Certificate, the amount set forth on the face thereof as the
“Initial Certificate Principal Balance of this Certificate”.
Depositor:
Nomura
Home Equity Loan, Inc., a Delaware corporation, or its successor in
interest.
Depository:
The
initial Depository shall be The Depository Trust Company (“DTC”), the nominee of
which is Cede & Co., or any other organization registered as a “clearing
agency” pursuant to Section 17A of the Exchange Act. The Depository shall
initially be the registered Holder of the Book-Entry Certificates. The
Depository shall at all times be a “clearing corporation” as defined in
Section 8-102(a)(5) of the Uniform Commercial Code of the State of New
York.
Depository
Agreement:
With
respect to the Class of Book-Entry Certificates, the agreement among the
Depositor, the Trustee and the initial Depository, dated as of the Closing
Date,
substantially in the form of Exhibit I.
Depository
Participant:
A
broker, dealer, bank or other financial institution or other Person for whom
from time to time a Depository effects book-entry transfers and pledges of
securities deposited with the Depository.
Determination
Date:
With
respect to any Distribution Date, the fifteenth (15th)
day of
the month of such Distribution Date or, if such day is not a Business Day,
the
immediately preceding Business Day.
Distribution
Account:
The
separate Eligible Account created and maintained by the Securities Administrator
pursuant to Section 3.31 in the name of the Trustee for the benefit of the
Certificateholders and designated “HSBC Bank USA, National Association, in trust
for registered holders of Nomura Home Equity Loan, Inc., Asset-Backed
Certificates, Series 2006-WF1”. Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in
this
Agreement.
Distribution
Date:
The
twenty-fifth (25th)
day of
each calendar month after the initial issuance of the Certificates, or if such
twenty-fifth (25th)
day is
not a Business Day, the next succeeding Business Day, commencing in July
2006.
Due
Date:
As to
any Mortgage Loan, the date in each month on which the related Scheduled Payment
is due, as set forth in the related Mortgage Note.
Due
Period:
With
respect to any Distribution Date, the period from the second day of the calendar
month preceding the calendar month in which such Distribution Date occurs
through the close of business on the first day of the calendar month in which
such Distribution Date occurs.
Eligible
Account:
Any of
(i) an account or accounts maintained with a federal or state chartered
depository institution or trust company, the long-term unsecured debt
obligations and short-term unsecured debt obligations of which are rated by
each
Rating Agency in one of its two highest long-term and its highest short-term
rating categories respectively, at the time any amounts are held on deposit
therein, or (ii) an account or accounts in a depository institution or trust
company in which such accounts are insured by the FDIC (to the limits
established by the FDIC) and the uninsured deposits in which accounts are
otherwise secured such that, as evidenced by an Opinion of Counsel delivered
to
the Trustee and to each Rating Agency, the Certificateholders have a claim
with
respect to the funds in such account or a perfected first priority security
interest against any collateral (which shall be limited to Permitted
Investments) securing such funds that is superior to claims of any other
depositors or creditors of the depository institution or trust company in which
such account is maintained, or (iii) a segregated, non-interest bearing trust
account or accounts maintained with the corporate trust department of a federal
or state chartered depository institution or trust company having capital and
surplus of not less than $50,000,000, acting in its fiduciary capacity or (iv)
any other account acceptable to the Rating Agencies as evidenced in writing
by
the Rating Agencies. Eligible Accounts may bear interest, and may include,
if
otherwise qualified under this definition, accounts maintained with the Trustee
or Securities Administrator.
ERISA:
The
Employee Retirement Income Security Act of 1974, as amended.
ERISA
Restricted Certificate:
Each of
the Class X, Class P and Residual Certificates.
Excess
Liquidation Proceeds:
To the
extent not required by law to be paid to the related Mortgagor, the excess,
if
any, of any Liquidation Proceeds with respect to a Mortgage Loan over the Stated
Principal Balance of such Mortgage Loan and accrued and unpaid interest at
the
related Mortgage Rate through the last day of the month in which the Mortgage
Loan has been liquidated.
Exchange
Act:
Securities and Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder.
Exemption:
Prohibited Transaction Exemption 93-32, as amended from time to
time.
Expense
Fee Rate:
The sum
of the Credit Risk Management Fee Rate, Master Servicer Fee Rate and Servicing
Fee Rate attributable to the Mortgage Loans.
Extra
Principal Distribution Amount:
With
respect to any Distribution Date, is the lesser of (x) the Overcollateralization
Deficiency Amount for such Distribution Date and (y) the sum of (i) the Monthly
Excess Cashflow for such Distribution Date and (ii) amounts available from
the
Supplemental Interest Trust to pay principal as provided in Section
5.04(b)(ii).
▇▇▇▇▇▇
▇▇▇:
▇▇▇▇▇▇
▇▇▇ (formerly, Federal National Mortgage Association), or any successor
thereto.
FDIC:
The
Federal Deposit Insurance Corporation, or any successor thereto.
Final
Recovery Determination:
With
respect to any defaulted Mortgage Loan or any REO Property (other than a
Mortgage Loan or REO Property purchased by the Sponsor or the Master Servicer
pursuant to or as contemplated by Section 2.03(c) or Section 10.01), a
determination made by the Servicer pursuant to the Servicing Agreement that
all
Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which
the Servicer, in its reasonable good faith judgment, expects to be finally
recoverable in respect thereof have been so recovered. The Servicer shall
maintain records of each Final Recovery Determination made thereby.
FIRREA:
The
Financial Institutions Reform, Recovery, and Enforcement Act of 1989, as
amended.
Fitch:
Fitch
Ratings.
Form
8-K Disclosure Information:
Has the
meaning set forth in Section 5.13(b) of this Agreement.
▇▇▇▇▇▇▇
Mac:
Federal
Home Loan Mortgage Corporation, or any successor thereto.
Gross
Margin:
With
respect to each adjustable rate Mortgage Loan, the fixed percentage set forth
in
the related Mortgage Note that is added to the Index on each Adjustment Date
in
accordance with the terms of the related Mortgage Note used to determine the
Mortgage Rate for such Mortgage Loan.
Indemnified
Persons:
The
Trustee, the Master Servicer, the Securities Administrator, the Custodian,
the
Trust Fund and their officers, directors, agents and employees and, with respect
to the Trustee, any separate co-trustee and its officers, directors, agents
and
employees.
Independent:
When
used with respect to any specified Person, any such Person who (a) is in fact
independent of the Depositor, the Master Servicer, the Securities Administrator,
the Servicer, the Sponsor, any originator and their respective Affiliates,
(b)
does not have any direct financial interest in or any material indirect
financial interest in the Depositor, the Master Servicer, the Securities
Administrator, the Servicer, the Sponsor, any originator or any Affiliate
thereof, and (c) is not connected with the Depositor, the Master Servicer,
the
Securities Administrator, the Servicer, the Sponsor, any originator or any
Affiliate thereof as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Master
Servicer, the Securities Administrator, the Servicer, the Sponsor, any
originator or any Affiliate thereof merely because such Person is the beneficial
owner of one percent (1%) or less of any class of securities issued by the
Depositor, the Master Servicer, the Securities Administrator, the Servicer,
the
Sponsor, any originator or any Affiliate thereof, as the case may be. When
used
with respect to any accountants, a Person who is “independent” within the
meaning of Rule 2-01(B) of the Securities and Exchange Commission’s Regulation
S-X. Independent means, when used with respect to any other Person, a Person
who
(A) is in fact independent of another specified Person and any affiliate of
such
other Person, (B) does not have any material direct or indirect financial
interest in such other Person or any affiliate of such other Person, (C) is
not
connected with such other Person or any affiliate of such other Person as an
officer, employee, promoter, underwriter, Securities Administrator, partner,
director or Person performing similar functions and (D) is not a member of
the
immediate family of a Person defined in clause (B) or (C) above.
Index:
As of
any Adjustment Date, the index applicable to the determination of the Mortgage
Rate on each adjustable rate Mortgage Loan which will generally be based on
Six-Month LIBOR or One-Year LIBOR.
Initial
Certificate Principal Balance:
With
respect to any Certificate, the Certificate Principal Balance of such
Certificate or any predecessor Certificate on the Closing Date.
Insurance
Policy:
With
respect to any Mortgage Loan included in the Trust Fund, any insurance policy,
including all riders and endorsements thereto in effect with respect to such
Mortgage Loan, including any replacement policy or policies for any Insurance
Policies.
Insurance
Proceeds:
Proceeds paid in respect of the Mortgage Loans pursuant to any Insurance Policy
or any other insurance policy covering a Mortgage Loan, to the extent such
proceeds are payable to the mortgagee under the Mortgage, the Servicer or the
trustee under the deed of trust and are not applied to the restoration of the
related Mortgaged Property or released to the Mortgagor in accordance with
the
servicing standard set forth in the Servicing Agreement, other than any amount
included in such Insurance Proceeds in respect of Insured Expenses.
Insured
Expenses:
Expenses covered by any Insurance Policy with respect to the Mortgage
Loans.
Interest
Determination Date:
Shall
mean the second LIBOR Business Day preceding the commencement of each Accrual
Period.
Interest
Remittance Amount:
With
respect to any Distribution Date, an amount generally equal to (i) the sum,
without duplication, of (a) all scheduled interest received during the related
Due Period with respect to the Mortgage Loans less the Servicing Fee, the Credit
Risk Management Fee and the fee payable to any provider of lender-paid mortgage
insurance, if any, (b) all Advances relating to interest with respect to the
related Mortgage Loans made on or prior to the related Remittance Date, (c)
all
Compensating Interest with respect to the related Mortgage Loans and required
to
be remitted by the Servicer pursuant to the Servicing Agreement or the Master
Servicer pursuant to this Agreement with respect to such Distribution Date,
(d)
Liquidation Proceeds and Subsequent Recoveries with respect to the related
Mortgage Loans collected during the related Prepayment Period (to the extent
such Liquidation Proceeds and Subsequent Recoveries relate to interest), (e)
all
amounts relating to interest with respect to each related Mortgage Loan
repurchased by the Sponsor pursuant to Sections 2.02 and 2.03 and (f) all
amounts in respect of interest paid by the Master Servicer pursuant to
Section 10.01 to the extent remitted by the Master Servicer to the
Distribution Account pursuant to this Agreement, minus (ii) all amounts required
to be reimbursed by the Trust pursuant to Section 3.32 or as otherwise set
forth in this Agreement, the Servicing Agreement or the Custodial
Agreement.
Interest
Shortfall:
With
respect to any Distribution Date, the aggregate shortfall, if any, in
collections of interest (adjusted to the related Net Mortgage Rates) on Mortgage
Loans resulting from (a) Principal Prepayments in full received during the
portion of the related Prepayment Period occurring in the month prior to the
month in which Distribution Date occurs, (b) partial Principal Prepayments
received during the related Prepayment Period to the extent applied prior to
the
Due Date in the month of the Distribution Date and (c) interest payments on
certain of the Mortgage Loans being limited pursuant to the provisions of the
Relief Act.
ISDA
Master Agreement:
The
ISDA Master Agreement dated as of June 30, 2006, as amended and supplemented
from time to time, between the Swap Provider and the Trustee, as trustee on
behalf of the Supplemental Interest Trust.
Last
Scheduled Distribution Date:
With
respect to the Certificates, the Distribution Date in March 2036.
Latest
Possible Maturity Date:
The
second Distribution Date following the final scheduled maturity date of the
Mortgage Loan in the Trust Fund having the latest scheduled maturity date as
of
the Cut-off Date. For purposes of the Treasury Regulations under Code
Section 860A through 860G, the latest possible maturity date of each
regular interest issued by each REMIC shall be the Latest Possible Maturity
Date.
LIBOR
Business Day:
Shall
mean any day other than a Saturday or a Sunday or a day on which banking
institutions in the State of New York or in the city of London, England are
required or authorized by law to be closed.
LIBOR
Determination Date:
The
second LIBOR Business Day before the first day of the related Accrual
Period.
Liquidated
Loan:
With
respect to any Distribution Date, a defaulted Mortgage Loan that has been
liquidated through deed-in-lieu of foreclosure, foreclosure sale, trustee’s sale
or other realization as provided by applicable law governing the real property
subject to the related Mortgage and any security agreements and as to which
the
Servicer has certified in the related Prepayment Period in writing to the
Securities Administrator that it has made a Final Recovery
Determination.
Liquidation
Proceeds:
Amounts, other than Insurance Proceeds, received in connection with the partial
or complete liquidation of a Mortgage Loan, whether through trustee’s sale,
foreclosure sale or otherwise, or in connection with any condemnation or partial
release of a Mortgaged Property and any other proceeds received with respect
to
an REO Property, less the sum of related unreimbursed Advances, Servicing Fees
and Servicing Advances and all expenses of liquidation, including property
protection expenses and foreclosure and sale costs, including court and
reasonable attorneys fees.
Loan-to-Value
Ratio:
The
fraction, expressed as a percentage, the numerator of which is the original
principal balance of the Mortgage Loan and the denominator of which is the
Appraised Value of the related Mortgaged Property.
Majority
Class X Certificateholder:
The
Holder of a 50.01% or greater Percentage Interest in the Class X
Certificates.
Marker
Rate:
With
respect to the Publicly Offered Certificates and the Class B Certificates and
any Distribution Date, a per annum rate equal to two (2) times the weighted
average of the Uncertificated REMIC II Pass-Through Rates for REMIC II Regular
Interest LT-A1, REMIC II Regular Interest LT-A2, REMIC II Regular Interest
LT-A3, REMIC II Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC
II Regular Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular
Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest
LT-M6, REMIC II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC
II Regular Interest LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular
Interest LT-B2 and REMIC II Regular Interest LT-ZZ, with the per annum rate
on
each such REMIC II Regular Interest (other than REMIC II Regular Interest LT-ZZ)
subject to a cap equal to the Pass-Through Rate on the Corresponding Certificate
for the purpose of this calculation; and with the per annum rate on REMIC II
Regular Interest LT-ZZ subject to a cap of zero for the purpose of this
calculation; provided, however, that for this purpose, the calculation of the
Uncertificated REMIC II Pass-Through Rate and the related cap with respect
to
each such REMIC II Regular Interest (other than REMIC II Regular Interest LT-ZZ)
shall be multiplied by a fraction, the numerator of which is the actual number
of days in the Accrual Period and the denominator of which is thirty
(30).
Master
Servicer:
As of
the Closing Date, ▇▇▇▇▇ Fargo Bank, N.A. and thereafter, its respective
successors in interest who meet the qualifications of this Agreement. The Master
Servicer and the Securities Administrator shall at all times be the same Person
or Affiliates.
Master
Servicer Default:
One or
more of the events described in Section 8.01(b).
Master
Servicing Fee Rate:
0 basis
points.
Master
Servicing Compensation:
The
Master Servicing Fee plus all income and gain realized from any investment
of
funds in the Distribution Account.
Maximum
Interest Rate:
With
respect to any Distribution Date and the related Accrual Period, an annual
rate
equal to the weighted average of the Maximum Mortgage Interest Rates of the
Mortgage Loans as stated on the Mortgage Loan Schedule minus the weighted
average Expense Fee Rate of the Mortgage Loans. The calculation of the Maximum
Interest Rate will be based on a 360-day year and the actual number of days
elapsed during the related Accrual Period.
Maximum
Mortgage Interest Rate:
With
respect to each adjustable rate Mortgage Loan, the percentage set forth in
the
related Mortgage Note as the maximum interest rate.
MERS:
Mortgage Electronic Registration Systems, Inc., a corporation organized and
existing under the laws of the State of Delaware, or any successor
thereto.
MERS®
System:
The
system of recording transfers of Mortgages electronically maintained by
MERS.
Mezzanine
Certificates:
The
Class M-1, Class ▇-▇, ▇▇▇▇▇, ▇-▇, Class M-4, Class M-5, Class M-6, Class M-7,
Class M-8 and Class M-9 Certificates.
MIN:
The
Mortgage Identification Number for Mortgage Loans registered with MERS on the
MERS® System.
Minimum
Mortgage Interest Rate:
With
respect to each adjustable rate Mortgage Loan, the percentage set forth in
the
related Mortgage Note as the minimum Mortgage Rate thereunder.
Minimum
Servicing Requirements:
With
respect to a successor Servicer appointed pursuant to Section 7.06(b)
hereunder:
(i) the
proposed Successor Servicer is (1) an affiliate of the Master Servicer that
services mortgage loans similar to the Mortgage Loans in the jurisdictions
in
which the related Mortgaged Properties are located or (2) the proposed Successor
Servicer has a rating of at least “Above Average” by S&P and either a rating
of at least “RPS2” by Fitch or a rating of at least “SQ2” by Moody’s;
and
(ii) the
proposed Successor Servicer has a net worth of at least
$25,000,000.
MOM
Loan:
Any
Mortgage Loan as to which MERS is acting as the mortgagee of such Mortgage
Loan,
solely as nominee for the originator of such Mortgage Loan and its successors
and assigns, at the origination thereof.
Monthly
Excess Cashflow:
With
respect to any Distribution Date, means the sum of (a) the Monthly Excess
Interest, (b) the Overcollateralization Release Amount, if any, for such
Distribution Date, and (c) the Principal Remittance Amount remaining following
payments of the Principal Payment Amount to the Senior Certificates and
Subordinate Certificates.
Monthly
Excess Interest:
With
respect to any Distribution Date, the excess of (x) the Interest Remittance
Amount for such Distribution Date over (y) the sum of Current Interest and
Carryforward Interest on the Senior Certificates and Subordinate Certificates
for such Distribution Date.
Monthly
Statement:
The
statement delivered to the Certificateholders pursuant to
Section 5.06.
Moody’s:
▇▇▇▇▇’▇
Investors Service, Inc. or its successor in interest.
Mortgage:
The
mortgage, deed of trust or other instrument creating a first or second lien
on,
or first or second priority security interest in, a Mortgaged Property securing
a Mortgage Note.
Mortgage
File:
The
Mortgage Loan Documents pertaining to a particular Mortgage Loan and any
additional documents delivered to the Trustee to be added to the Mortgage File
pursuant to this Agreement.
Mortgage
Loan Documents:
As
defined in Section 2.01.
Mortgage
Loans:
Each of
the Mortgage Loans transferred and assigned to the Trustee pursuant to the
provisions hereof, as from time to time are held as a part of the Trust Fund
(including any REO Property), the mortgage loans so held being identified in
the
Mortgage Loan Schedule, notwithstanding foreclosure or other acquisition of
title of the related Mortgaged Property.
Mortgage
Loan Purchase Agreement:
The
Mortgage Loan Purchase Agreement dated as of June 30, 2006, between the Sponsor,
as seller and the Depositor, as purchaser, a form of which is attached hereto
as
Exhibit
C.
Mortgage
Loan Purchase Price:
The
price, calculated as set forth in Section 10.01, to be paid in connection
with the purchase of the Mortgage Loans pursuant to
Section 10.01.
Mortgage
Loan Schedule:
The
list of Mortgage Loans (as from time to time amended by the Servicer to reflect
the deletion of Deleted Mortgage Loans and the addition of Replacement Mortgage
Loans pursuant to the provisions of this Agreement) transferred to the Trustee
as part of the Trust Fund and from time to time subject to this Agreement,
setting forth the following information with respect to each Mortgage
Loan:
(i) the
Mortgage Loan identifying number;
(ii) a
code
indicating whether the Mortgaged Property is owner-occupied;
(iii) the
type
of Residential Dwelling constituting the Mortgaged Property;
(iv) the
original months to maturity;
(v) the
original date of the Mortgage Loan and the remaining months to maturity from
the
Cut-off Date, based on the original amortization schedule;
(vi) the
Loan-to-Value Ratio or Combined Loan-to-Value Ratio, as applicable, at
origination;
(vii) the
Mortgage Rate in effect immediately following the Cut-off Date;
(viii) the
date
on which the first Monthly Payment was due on the Mortgage Loan;
(ix) the
stated maturity date;
(x) the
amount of the Monthly Payment at origination;
(xi) the
amount of the Monthly Payment as of the Cut-off Date;
(xii) the
last
Due Date on which a Monthly Payment was actually applied to the unpaid Stated
Principal Balance;
(xiii) the
original principal amount of the Mortgage Loan;
(xiv) the
Stated Principal Balance of the Mortgage Loan as of the close of business on
the
Cut-off Date;
(xv) with
respect to each adjustable rate Mortgage Loan, the first Adjustment
Date;
(xvi) with
respect to each adjustable rate Mortgage Loan, the Gross Margin;
(xvii) a
code
indicating the purpose of the loan (i.e., purchase financing, rate/term
refinancing, cash-out refinancing);
(xviii) with
respect to each adjustable rate Mortgage Loan, the Maximum Mortgage Rate under
the terms of the Mortgage Note;
(xix) with
respect to each adjustable rate Mortgage Loan, the Minimum Mortgage Rate under
the terms of the Mortgage Note;
(xx) the
Mortgage Rate at origination;
(xxi) with
respect to each adjustable rate Mortgage Loan, the Periodic Rate
Cap;
(xxii) with
respect to each adjustable rate Mortgage Loan, the first Adjustment Date
immediately following the Cut-off Date;
(xxiii) with
respect to each adjustable rate Mortgage Loan, the Index;
(xxiv) the
date
on which the first Monthly Payment was due on the Mortgage Loan and, if such
date is not consistent with the Due Date currently in effect, such Due
Date;
(xxv) a
code
indicating whether the Mortgage Loan is an Adjustable Rate Mortgage Loan or
a
fixed rate Mortgage Loan;
(xxvi) a
code
indicating the documentation style (i.e., full, stated or limited);
(xxvii) a
code
indicating if the Mortgage Loan is subject to a primary insurance policy or
lender paid mortgage insurance policy and the name of the insurer;
(xxviii) the
Appraised Value of the Mortgaged Property;
(xxix) the
sale
price of the Mortgaged Property, if applicable;
(xxx) a
code
indicating whether the Mortgage Loan is subject to a Prepayment Charge, the
term
of such Prepayment Charge and the amount of such Prepayment Charge;
(xxxi) the
product type (e.g., 2/28, 15 year fixed, 30 year fixed, 15/30 balloon,
etc.);
(xxxii) the
Mortgagor’s debt to income ratio;
(xxxiii) the
FICO
score at origination; and
(xxxiv) the
initial seller who sold such Mortgage Loan to the Sponsor.
Such
schedule shall also set forth the aggregate Cut-off Date Principal Balance
for
all of the Mortgage Loans.
Mortgage
Note:
The
original executed note or other evidence of indebtedness of a Mortgagor under
a
Mortgage Loan.
Mortgage
Rate:
With
respect to each Mortgage Loan, the annual rate at which interest accrues on
such
Mortgage Loan from time to time in accordance with the provisions of the related
Mortgage Note, which rate with respect to each adjustable rate Mortgage Loan
(A)
as of any date of determination until the first Adjustment Date following the
Cut-off Date shall be the rate set forth in the Mortgage Loan Schedule as the
Mortgage Rate in effect immediately following the Cut-off Date and (B) as of
any
date of determination thereafter shall be the rate as adjusted on the most
recent Adjustment Date equal to the sum, rounded to the nearest 0.125% as
provided in the Mortgage Note, of the Index, as most recently available as
of a
date prior to the Adjustment Date as set forth in the related Mortgage Note,
plus the related Gross Margin; provided that the Mortgage Rate on such
adjustable rate Mortgage Loan on any Adjustment Date shall never be more than
the lesser of (i) the sum of the Mortgage Rate in effect immediately prior
to
the Adjustment Date plus the related Periodic Rate Cap, if any, and (ii) the
related Maximum Mortgage Rate, and shall never be less than the greater of
(i)
the Mortgage Rate in effect immediately prior to the Adjustment Date less the
Periodic Rate Cap, if any, and (ii) the related Minimum Mortgage Rate. With
respect to each Mortgage Loan that becomes an REO Property, as of any date
of
determination, the annual rate determined in accordance with the immediately
preceding sentence as of the date such Mortgage Loan became an REO
Property.
Mortgaged
Property:
The
underlying property securing a Mortgage Loan.
Mortgagor:
The
obligor on a Mortgage Note.
Net
Funds Cap:
With
respect to any Distribution Date, a per annum rate equal to the product of
(I)(a) a fraction, expressed as a percentage, the numerator of which is the
Optimal Interest Remittance Amount for such Distribution Date and the
denominator of which is the aggregate Stated Principal Balance of the Mortgage
Loans for the immediately preceding Distribution Date, minus (b) the sum of
(1)
any Net Swap Payment payable to the Swap Provider on such Distribution Date,
divided by the outstanding Stated Principal Balance of the Mortgage Loans for
the immediately preceding Distribution Date, and (2) any Swap Termination
Payment (unless such payment is the result of a Swap Provider Trigger Event
and
to the extent not paid by the securities administrator from any upfront payment
received pursuant to any replacement Interest Rate Swap Agreement that may
be
entered into by the Supplemental Interest Trust Trustee) payable to the Swap
Provider on such Distribution Date, divided by the outstanding aggregate Stated
Principal Balance of the Mortgage Loans for the immediately preceding
Distribution Date and (II) 12.
The Net
Funds Cap will be adjusted to an effective rate reflecting the accrual of
interest on an actual/360 basis.
With
respect to any Distribution Date and the REMIC III Regular Interests the
ownership of which is represented by the Class A Certificates, Mezzanine
Certificates and Class B Certificates, the weighted average (adjusted for the
actual number of days elapsed in the related Accrual Period) of the
Uncertificated REMIC II Pass-Through Rate on the REMIC II Regular Interests
(other than REMIC II Regular Interest LT-IO and REMIC II Regular Interest LT-P),
weighted on the basis of the Uncertificated Principal Balance of each such
REMIC
II Regular Interest immediately prior to such Distribution Date.
Net
Interest Shortfalls:
Shall
mean Interest Shortfalls net of payments by the Servicer or the Master Servicer
in respect of Compensating Interest.
Net
Mortgage Rate:
As to
each Mortgage Loan, and at any time, the per annum rate equal to the related
Mortgage Rate less the sum of (i) the Servicing Fee Rate, (ii) the Master
Servicing Fee Rate, (iii) the Credit Risk Management Fee Rate and (iv) the
rate
at which the fee payable to any provider of lender-paid mortgage insurance
is
calculated, if applicable.
Net
Swap Payment:
With
respect to each Distribution Date, the net payment required to be made pursuant
to the terms of the Swap Agreement by either the Swap Provider or the
Supplemental Interest Trust, which net payment shall not take into account
any
Swap Termination Payment.
Non-Book-Entry
Certificate:
Any
Certificate other than a Book-Entry Certificate.
Nonrecoverable
Advance:
With
respect any Mortgage Loan, any portion of an Advance or Servicing Advance
previously made or proposed to be made by the Servicer pursuant to the Servicing
Agreement or the Trustee as Successor Servicer, that, in the good faith judgment
of the Servicer or the Trustee as Successor Servicer, will not or, in the case
of a proposed Advance or Servicing Advance, would not, be ultimately recoverable
by it from the related Mortgagor, related Liquidation Proceeds, Insurance
Proceeds or otherwise.
Notional
Amount:
For
each Distribution Date shall be equal to the lesser of (a) the Aggregate Loan
Balance of the Mortgage Loans on the Business Day immediately preceding such
Distribution Date and (b) the Swap Notional Amount for such Distribution Date
as
set forth in the Swap Agreement.
Officer’s
Certificate:
A
certificate (i) signed by the Chairman of the Board, the Vice Chairman of the
Board, the President, a Vice President (however denominated), an Assistant
Vice
President, the Treasurer, the Secretary, or one of the assistant treasurers
or
assistant secretaries of the Depositor or the Trustee (or any other officer
customarily performing functions similar to those performed by any of the above
designated officers and also to whom, with respect to a particular matter,
such
matter is referred because of such officer’s knowledge of and familiarity with a
particular subject) or (ii), if provided for in the Servicing Agreement, signed
by an Authorized Servicer Representative, as the case may be, and delivered
to
the Depositor, the Sponsor, the Master Servicer, the Securities Administrator
and/or the Trustee, as the case may be, as required by the Servicing
Agreement.
One-Month
LIBOR:
With
respect to any Accrual Period (other than the first Accrual Period), the rate
determined by the Securities Administrator on the related Interest Determination
Date on the basis of the rate for U.S. dollar deposits for one month that
appears on Telerate Screen Page 3750 as of 11:00 a.m. (London time) on such
Interest Determination Date. 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, such other service for displaying One-Month LIBOR or comparable
rates as may be reasonably selected by the Securities Administrator), One-Month
LIBOR for the applicable Accrual Period will be the Reference Bank Rate. If
no
such quotations can be obtained by the Securities Administrator and no Reference
Bank Rate is available, One-Month LIBOR will be One-Month LIBOR applicable
to
the preceding Accrual Period. The establishment of One-Month LIBOR on each
Interest Determination Date by the Securities Administrator and the Securities
Administrator’s calculation of the rate of interest applicable to the Senior
Certificates and the Subordinate Certificates for the related Accrual Period
shall, in the absence of manifest error, be final and binding. With respect
to
the first Accrual period, One-Month LIBOR shall equal 5.341% per
annum.
One-Year
LIBOR:
The per
annum rate equal to the average of interbank offered rates for one-year U.S.
dollar-denominated deposits in the London market based on quotations of major
banks as published in The Wall Street Journal and most recently available as
of
the time specified in the related Mortgage Note.
Opinion
of Counsel:
A
written opinion of counsel, who may be counsel for the Sponsor, the Master
Servicer, the Depositor or the Servicer, reasonably acceptable to each addressee
of such opinion; provided that with respect to Section 2.05, 7.05 or 11.01,
or the interpretation or application of the REMIC Provisions, such counsel
must
(i) in fact be independent of the Sponsor, the Master Servicer Depositor and
the
Servicer, (ii) not have any direct financial interest in the Sponsor, the
Depositor, the Master Servicer or the Servicer or in any affiliate of any of
them, and (iii) not be connected with the Sponsor, the Depositor, the Master
Servicer or the Servicer as an officer, employee, promoter, underwriter,
trustee, partner, director or person performing similar functions.
Optimal
Interest Remittance Amount:
With
respect to any Distribution Date, will be equal to the excess of (i) the product
of (1)(x) the weighted average Net Mortgage Rates of the Mortgage Loans as
of
the first day of the related Due Period divided by (y) 12 and (2) the Aggregate
Loan Balance of the Mortgage Loans for the immediately preceding Distribution
Date, over (ii) any expenses that reduce the Interest Remittance Amount that
did
not arise as a result of a default or delinquency of the Mortgage Loans or
were
not taken into account in computing the expense fee rate.
Optional
Termination:
The
termination of the Trust Fund created hereunder as a result of the purchase
of
all of the Mortgage Loans and any related REO Property pursuant to
Section 10.01.
Optional
Termination Date:
The
first Distribution Date on which the Master Servicer may purchase, at its
option, the Mortgage Loans and related REO Properties as described in
Section 10.01.
OTS:
The
Office of Thrift Supervision or any successor thereto.
Outstanding:
With
respect to the Certificates as of any date of determination, all Certificates
theretofore executed and authenticated under this Agreement except:
(a) Certificates
theretofore canceled by the Securities Administrator or delivered to the
Securities Administrator for cancellation; and
(b) Certificates
in exchange for which or in lieu of which other Certificates have been executed
and delivered by the Securities Administrator pursuant to this
Agreement.
Outstanding
Mortgage Loan:
As of
any date of determination, a Mortgage Loan with a Stated Principal Balance
greater than zero that was not the subject of a Principal Prepayment in full,
and that did not become a Liquidated Loan, prior to the end of the related
Prepayment Period.
Overcollateralization
Amount:
With
respect to any Distribution Date, the excess, if any, of (a) the Aggregate
Loan
Balance for such Distribution Date over (b) the aggregate Certificate Principal
Balance of the Publicly Offered Certificates and the Class B Certificates on
such Distribution Date (after taking into account the payment of 100% of the
Principal Remittance Amount (without regard to any payments made pursuant to
the
Swap Agreement with respect to Realized Losses) on such Distribution
Date).
Overcollateralization
Deficiency Amount:
With
respect to any Distribution Date, the amount, if any, by which (x) the Targeted
Overcollateralization Amount for such Distribution Date exceeds (y) the
Overcollateralization Amount for such Distribution Date, calculated for this
purpose after giving effect to the reduction on such Distribution Date of the
aggregate Certificate Principal Balance of the Publicly Offered Certificates
and
the Class B Certificates resulting from the payment of the Principal Remittance
Amount (without regard to any payments made pursuant to the Swap Agreement
with
respect to Realized Losses) on such Distribution Date, but prior to allocation
of any Applied Loss Amount on such Distribution Date.
Overcollateralization
Release Amount:
With
respect to any Distribution Date, the lesser of (x) the Principal Remittance
Amount (without regard to any payments made pursuant to the Swap Agreement
with
respect to Realized Losses) for such Distribution Date and (y) the amount,
if
any, by which (1) the Overcollateralization Amount for such date exceeds (2)
the
Targeted Overcollateralization Amount for such Distribution Date.
Ownership
Interest:
As to
any Certificate, any ownership interest in such Certificate including any
interest in such Certificate as the Holder thereof and any other interest
therein, whether direct or indirect, legal or beneficial.
Pass-Through
Rate:
The
Class A-1, Class A-2, Class ▇-▇, ▇▇▇▇▇ ▇-▇, 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, Class B-1,
Class B-2 and Class X Pass-Through Rate, as applicable.
Payahead:
Any
Scheduled Payment intended by the related Mortgagor to be applied in a Due
Period subsequent to the Due Period in which such payment was
received.
PCAOB:
Shall
mean the Public Company Accounting Oversight Board.
Percentage
Interest:
With
respect to any Certificate of a specified Class, the Percentage Interest set
forth on the face thereof or the percentage obtained by dividing the
Denomination of such Certificate by the aggregate of the Denominations of all
Certificates of such Class.
Periodic
Rate Cap:
With
respect to the Adjustment Date for any adjustable rate Mortgage Loan, the fixed
percentage set forth in the related Mortgage Note, which is the maximum amount
by which the Mortgage Rate for such adjustable rate Mortgage Loan may increase
or decrease (without regard to the Maximum Mortgage Interest Rate or the Minimum
Mortgage Interest Rate) on such Adjustment Date from the Mortgage Rate in effect
immediately prior to such Adjustment Date.
Permitted
Investments:
At any
time, any one or more of the following obligations and securities:
(i) direct
obligations of, or obligations fully guaranteed as to timely payment of
principal and interest by, the United States or any agency thereof, provided
such obligations are unconditionally backed by the full faith and credit of
the
United States;
(ii) general
obligations of or obligations guaranteed by any state of the United States
or
the District of Columbia receiving the highest long-term debt rating of each
Rating Agency, or such lower rating as will not result in the downgrading or
withdrawal of the ratings then assigned to the Certificates by each Rating
Agency, as evidenced by a signed writing delivered by each Rating
Agency;
(iii) commercial
or finance company paper which is then receiving the highest commercial or
finance company paper rating of each Rating Agency that rates such securities,
or such lower rating as will not result in the downgrading or withdrawal of
the
ratings then assigned to the Certificates by each Rating Agency, as evidenced
by
a signed writing delivered by each Rating Agency;
(iv) certificates
of deposit, demand or time deposits, or bankers’ acceptances issued by any
depository institution or trust company incorporated under the laws of the
United States or of any state thereof and subject to supervision and examination
by federal and/or state banking authorities (including the Trustee or the Master
Servicer in its commercial banking capacity), provided that the commercial
paper
and/or long term unsecured debt obligations of such depository institution
or
trust company are then rated one of the two highest long-term and the highest
short-term ratings of each such Rating Agency for such securities, or such
lower
ratings as will not result in the downgrading or withdrawal of the rating then
assigned to the Certificates by any Rating Agency, as evidenced by a signed
writing delivered by each Rating Agency;
(v) demand
or
time deposits or certificates of deposit issued by any bank or trust company
or
savings institution to the extent that such deposits are fully insured by the
FDIC;
(vi) guaranteed
reinvestment agreements issued by any bank, insurance company or other
corporation containing, at the time of the issuance of such agreements, such
terms and conditions as will not result in the downgrading or withdrawal of
the
rating then assigned to the Certificates by any such Rating Agency, as evidenced
by a signed writing delivered by each Rating Agency;
(vii) repurchase
obligations with respect to any security described in clauses (i) and (ii)
above, in either case entered into with a depository institution or trust
company (acting as principal) described in clause (iv) above;
(viii) securities
(other than stripped bonds, stripped coupons or instruments sold at a purchase
price in excess of 115% of the face amount thereof) bearing interest or sold
at
a discount issued by any corporation incorporated under the laws of the United
States or any state thereof which, at the time of such investment, have one
of
the two highest long term ratings of each Rating Agency, or such lower rating
as
will not result in the downgrading or withdrawal of the rating then assigned
to
the Certificates by any Rating Agency, as evidenced by a signed writing
delivered by each Rating Agency;
(ix) units
of
money market funds registered under the Investment Company Act of 1940 including
funds managed or advised by the Trustee, the Master Servicer or an affiliate
of
either, having a rating by S&P of AAAm or AAAm-G, and if rated by ▇▇▇▇▇’▇,
rated Aaa, Aa1 or Aa2, and if rated by Fitch, F1, F2 or F3;
(x) short
term investment funds sponsored by any trust company or banking association
incorporated under the laws of the United States or any state thereof (including
any such fund managed or advised by the Trustee, the Master Servicer or any
affiliate thereof) which on the date of acquisition has been rated by each
Rating Agency in their respective highest applicable rating category or such
lower rating as will not result in the downgrading or withdrawal of the ratings
then assigned to the Certificates by each Rating Agency, as evidenced by a
signed writing delivered by each Rating Agency; and
(xi) such
other investments having a specified stated maturity and bearing interest or
sold at a discount acceptable to each Rating Agency as will not result in the
downgrading or withdrawal of the rating then assigned to the Certificates by
any
Rating Agency, as evidenced by a signed writing delivered by each Rating Agency,
as evidenced by a signed writing delivered by each Rating Agency;
provided,
however, that no instrument described hereunder shall evidence either the right
to receive (a) only interest with respect to the obligations underlying such
instrument or (b) both principal and interest payments derived from obligations
underlying such instrument and the interest and principal payments with respect
to such instrument provide a yield to maturity at par greater than 120% of
the
yield to maturity at par of the underlying obligations.
Permitted
Transferee:
Any
person other than (i) the United States, any State or political subdivision
thereof, any possession of the United States or any agency or instrumentality
of
any of the foregoing, (ii) a foreign government, International Organization
or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers’ cooperatives described in Section 521 of the Code)
that is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on
any excess inclusions (as defined in Section 860E(c)(1) of the Code) with
respect to any Residual Certificate, (iv) rural electric and telephone
cooperatives described in Section 1381(a)(2)(C) of the Code, (v) a Person
that is not a citizen or resident of the United States, a corporation,
partnership (other than a partnership that has any direct or indirect foreign
partners) or other entity (treated as a corporation or a partnership for federal
income tax purposes), created or organized in or under the laws of the United
States, any state thereof or the District of Columbia, an estate whose income
from sources without the United States is includible in gross income for United
States federal income tax purposes regardless of its connection with the conduct
of a trade or business within the United States, or a trust if a court within
the United States is able to exercise primary supervision over the
administration of the trust and one or more United States persons have authority
to control all substantial decisions of the trustor and (vi) any other Person
based upon an Opinion of Counsel (which shall not be an expense of the Trustee)
that states that the Transfer of an Ownership Interest in a Residual Certificate
to such Person may cause any REMIC to fail to qualify as a REMIC at any time
that any Certificates are Outstanding. The terms “United States,” “State” and
“International Organization” shall have the meanings set forth in
Section 7701 of the Code or successor provisions. A corporation will not be
treated as an instrumentality of the United States or of any State or political
subdivision thereof for these purposes if all of its activities are subject
to
tax and, with the exception of ▇▇▇▇▇▇▇ Mac, a majority of its board of directors
is not selected by such government unit.
Person:
Any
individual, corporation, partnership, joint venture, association,
joint-stock
company, limited liability company, trust, unincorporated organization or
government, or any agency or political subdivision thereof.
Prepayment
Assumption:
The
assumed rate of prepayment, as described in the Prospectus Supplement relating
to each Class of Publicly Offered Certificates.
Prepayment
Charge:
With
respect to any Principal Prepayment, any prepayment premium, penalty or charge
payable by a Mortgagor in connection with any Principal Prepayment on a Mortgage
Loan pursuant to the terms of the related Mortgage Note (other than any Servicer
Prepayment Charge Payment Amount) as shown on the Prepayment Charge
Schedule.
Prepayment
Charge Schedule:
As of
any date, the list of Mortgage Loans providing for a Prepayment Charge included
in the Trust Fund on such date, attached hereto as Exhibit K (including the
prepayment charge summary attached thereto). The Depositor shall deliver or
cause the delivery of the Prepayment Charge Schedule to the Servicer, the Master
Servicer and the Trustee on the Closing Date. The Prepayment Charge Schedule
shall set forth the following information with respect to each Prepayment
Charge:
|
(i)
|
the
Mortgage Loan identifying number;
|
|
(ii)
|
a
code indicating the type of Prepayment Charge;
|
|
(iii)
|
the
date on which the first Monthly Payment was due on the related Mortgage
Loan;
|
|
(iv)
|
the
term of the related Prepayment Charge;
|
|
(v)
|
the
original Stated Principal Balance of the related Mortgage Loan;
and
|
|
(vi)
|
the
Stated Principal Balance of the related Mortgage Loan as of the Cut-off
Date.
|
Prepayment
Interest Shortfall:
With
respect to any Distribution Date, for each Mortgage Loan that was the subject
of
a Principal Prepayment in full during the portion of the related Prepayment
Period occurring in the month prior to the month in which such Distribution
Date
occurs, (other than a Principal Prepayment in full resulting from the purchase
of a Mortgage Loan pursuant to Section 2.02, 2.03, 3.24 or 10.01 hereof),
the amount, if any, by which (i) one month’s interest at the applicable Net
Mortgage Rate on the Stated Principal Balance of such Mortgage Loan immediately
prior to such prepayment exceeds (ii) the amount of interest paid or collected
in connection with such Principal Prepayment less the sum of (a) the Servicing
Fee, (b) the Credit Risk Management Fee and (c) the fee payable to any provider
of lender-paid mortgage insurance, if any.
Prepayment
Period:
With
respect to any Distribution Date, and (a) prepayments in full, the
16th
of the
immediately preceding calendar month (or with respect to the first Prepayment
Period, the Closing Date) through the 15th
of the
month in which such Distribution Date occurs or (b) prepayments in part, the
prior calendar month.
Principal
Payment Amount:
With
respect to each Distribution Date, the Principal Remittance Amount for such
date
minus the Overcollateralization Release Amount, if any, for such Distribution
Date.
Principal
Prepayment:
Any
Mortgagor payment or other recovery of (or proceeds with respect to) principal
on a Mortgage Loan (including loans purchased or repurchased under Sections
2.02, 2.03, 3.26 and 10.01 hereof) that is received in advance of its scheduled
Due Date and is not accompanied by an amount as to interest representing
scheduled interest due on any Due Date in any month or months subsequent to
the
month of prepayment. Partial Principal Prepayments shall be applied by the
Servicer in accordance with the terms of the related Mortgage Note.
Principal
Remittance Amount:
With
respect to any Distribution Date, the sum, without duplication, of (a) the
principal portion of all Scheduled Payments on the Mortgage Loans due during
the
related Due Period whether or not received on or prior to the related
Determination Date, (b) the principal portion of all unscheduled collections
(other than Payaheads) including Insurance Proceeds, Condemnation Proceeds,
Subsequent Recoveries and all full and partial Principal Prepayments exclusive
of prepayment charges or penalties collected during the related Prepayment
Period, to the extent applied as recoveries of principal on the Mortgage Loans,
(c) the Stated Principal Balance of each Mortgage Loan that was repurchased
by
the Sponsor during the related Prepayment Period pursuant to Sections 2.02,
2.03 and 3.24, (d) the aggregate of all Substitution Adjustment Amounts received
during the related Prepayment Period for the related Determination Date in
connection with the substitution of Mortgage Loans pursuant to
Section 2.03(b), (e) amounts in respect of principal on the Mortgage Loans
paid by the Master Servicer pursuant to Section 10.01, (f) all Liquidation
Proceeds and Subsequent Recoveries with respect to the Mortgage Loans collected
during the related Prepayment Period (to the extent such Liquidation Proceeds
and Subsequent Recoveries relate to principal), in each case to the extent
remitted by the Servicer to the Distribution Account pursuant to this Agreement,
(g) the principal portion of Payaheads previously received on the Mortgage
Loans
and intended for application in the related Due Period and (h) any payments
made
pursuant to the Swap Agreement with respect to Realized Losses, minus (ii)
all
amounts required to be reimbursed by the Trust pursuant to Sections 4.02,
4.05, 4.07, 5.10 and 9.05 or as otherwise set forth in this Agreement, the
Servicing Agreement or the Custodial Agreement and to the extent not reimbursed
from the Interest Remittance Amount for
such
Distribution Date.
Private
Certificate:
Each of
the Class B-1, Class B-2, Class X, Class P and Class R
Certificates.
Prospectus
Supplement:
The
Prospectus Supplement dated April 26, 2006 relating to the offering of the
Publicly Offered Certificates.
Protected
Account:
An
account established and maintained for the benefit of the Certificateholders
by
the Servicer with respect to the Mortgage Loans and any related REO Properties
pursuant to the Servicing Agreement.
Publicly
Offered Certificates:
Any
Certificates other than the Private Certificates.
PUD:
A
planned unit development.
Purchase
Price:
With
respect to any Mortgage Loan required to be repurchased by the Sponsor pursuant
to Section 2.02, 2.03 or 3.24 hereof and as confirmed by an Officer’s
Certificate from the Sponsor to the Trustee, an amount equal to the sum of
(i)
100% of the outstanding principal balance of the Mortgage Loan as of the date
of
such purchase plus, (ii) 30 days’ accrued interest thereon at the applicable Net
Mortgage Rate, plus any portion of the Servicing Fee, Servicing Advances and
Advances payable to the Servicer or Master Servicer, as applicable, with respect
to such Mortgage Loan plus (iii) any costs and damages of the Trust Fund in
connection with any violation by such Mortgage Loan of any abusive or predatory
lending law, including any expenses incurred by the Trustee with respect to
such
Mortgage Loan prior to the purchase thereof.
Rating
Agency:
Each of
▇▇▇▇▇’▇, S&P, Fitch and DBRS. If any such organization or its successor is
no longer in existence, “Rating Agency” shall be a nationally recognized
statistical rating organization, or other comparable Person, designated by
the
Depositor, notice of which designation shall be given to the Trustee. References
herein to a given rating category of a Rating Agency shall mean such rating
category without giving effect to any modifiers.
Realized
Loss:
With
respect to each Mortgage Loan as to which a Final Recovery Determination has
been made, an amount (not less than zero) equal to (i) the Stated Principal
Balance of such Mortgage Loan as of the commencement of the calendar month
in
which the Final Recovery Determination was made, plus (ii) accrued interest
from
the Due Date as to which interest was last paid by the Mortgagor through the
end
of the calendar month in which such Final Recovery Determination was made,
calculated in the case of each calendar month during such period (A) at an
annual rate equal to the annual rate at which interest was then accruing on
such
Mortgage Loan and (B) on a principal amount equal to the Stated Principal
Balance of such Mortgage Loan as of the close of business on the Distribution
Date during such calendar month, minus (iii) the proceeds, if any, received
in
respect of such Mortgage Loan during the calendar month in which such Final
Recovery Determination was made, net of amounts that are payable therefrom
to
the Servicer pursuant to the Servicing Agreement. To the extent the Servicer
receives Subsequent Recoveries with respect to any Mortgage Loan, the amount
of
the Realized Loss with respect to that Mortgage Loan will be reduced to the
extent that Subsequent Recoveries are applied to reduce the Certificate
Principal Balance of any Class of Certificates on any Distribution
Date.
With
respect to any REO Property as to which a Final Recovery Determination has
been
made, an amount (not less than zero) equal to (i) the Stated Principal Balance
of the related Mortgage Loan as of the date of acquisition of such REO Property
on behalf of REMIC I, plus (ii) accrued interest from the Due Date as to which
interest was last paid by the Mortgagor in respect of the related Mortgage
Loan
through the end of the calendar month immediately preceding the calendar month
in which such REO Property was acquired, calculated in the case of each calendar
month during such period (A) at an annual rate equal to the annual rate at
which
interest was then accruing on the related Mortgage Loan and (B) on a principal
amount equal to the Stated Principal Balance of the related Mortgage Loan as
of
the close of business on the Distribution Date during such calendar month,
minus
(iii) the aggregate of all unreimbursed Advances and Servicing
Advances.
With
respect to each Mortgage Loan which has become the subject of a Deficient
Valuation, the difference between the principal balance of the Mortgage Loan
outstanding immediately prior to such Deficient Valuation and the principal
balance of the Mortgage Loan as reduced by the Deficient Valuation.
With
respect to each Mortgage Loan which has become the subject of a Debt Service
Reduction, the portion, if any, of the reduction in each affected Monthly
Payment attributable to a reduction in the Mortgage Rate imposed by a court
of
competent jurisdiction. Each such Realized Loss shall be deemed to have been
incurred on the Due Date for each affected Monthly Payment.
In
addition, to the extent the Servicer receives Subsequent Recoveries with respect
to any Mortgage Loan, the amount of the Realized Loss with respect to that
Mortgage Loan will be reduced to the extent such Subsequent Recoveries are
applied to reduce the Certificate Principal Balance of any Class of Certificates
on any Distribution Date.
Record
Date:
With
respect to the Publicly Offered Certificates and Class B Certificates and any
Distribution Date, so long as such Certificates are Book-Entry Certificates,
the
Business Day preceding such Distribution Date, and otherwise, the close of
business on the last Business Day of the month preceding the month in which
such
Distribution Date occurs. With respect to the Class X, Class P and Class R
Certificates and any Distribution Date, the close of business on the last
Business Day of the month preceding the month in which such Distribution Date
occurs.
Reference
Banks:
Shall
mean leading banks selected by the Securities Administrator and engaged in
transactions in Eurodollar deposits in the international Eurocurrency market
(i)
with an established place of business in London, (ii) which have been designated
as such by the Securities Administrator and (iii) which are not controlling,
controlled by, or under common control with, the Depositor, the Sponsor or
the
Servicer.
Reference
Bank Rate:
With
respect to any Accrual Period shall mean the arithmetic mean, rounded upwards,
if necessary, to the nearest whole multiple of 0.03125%, of the offered rates
for United States dollar deposits for one month that are quoted by the Reference
Banks as of 11:00 a.m., New York City time, on the related Interest
Determination Date to prime banks in the London interbank market for a period
of
one month in an amount approximately equal to the aggregate Certificate
Principal Balance of the Publicly Offered Certificates and Class B Certificates
for such Accrual Period, provided that at least two such Reference Banks provide
such rate. If fewer than two offered rates appear, the Reference Bank Rate
will
be the arithmetic mean, rounded upwards, if necessary, to the nearest whole
multiple of 0.03125%, of the rates quoted by one or more major banks in New
York
City, selected by the Securities Administrator, as of 11:00 a.m., New York
City
time, on such date for loans in United States dollars to leading European banks
for a period of one month in amounts approximately equal to the aggregate
Certificate Principal Balance of the Publicly Offered Certificates and Class
B
Certificates for such Accrual Period.
Regular
Certificate:
Any
Certificate other than a Residual Certificate.
Regulation
AB:
Means
Subpart 229.1100 - Asset Backed Securities (Regulation AB), 17 C.F.R.
§§229.1100-229.1123, as such may be amended from time to time, and subject to
such clarification and interpretation as have been provided by the Commission
in
the adopting release (Asset-Backed Securities, Securities Act Release No.
33-8518, 70 Fed. Reg. 1,506, 1,531 (Jan. 7, 2005)) or by the staff of the
Commission, or as may be provided by the Commission or its staff from time
to
time.
Relevant
Servicing Criteria:
Means
with respect to any Servicing Function Participant, the Servicing Criteria
applicable to such party, as set forth on Exhibit
L
attached
hereto. For clarification purposes, multiple parties can have responsibility
for
the same Relevant Servicing Criteria. With respect to a Servicing Function
Participant engaged by the Master Servicer, the Securities Administrator or
the
Servicer, the term “Relevant Servicing Criteria” may refer to a portion of the
Relevant Servicing Criteria applicable to such party.
Relief
Act:
The
Servicemembers Civil Relief Act of 2003, as amended from time to time or similar
state or local laws.
REMIC:
A “real
estate mortgage investment conduit” within the meaning of Section 860D of
the Code.
REMIC
I:
The
segregated pool of assets subject hereto, constituting the primary trust created
hereby and to be administered hereunder, with respect to which a REMIC election
is to be made, consisting of (i) the Mortgage Loans and all interest accruing
and principal due with respect thereto after the Cut-off Date to the extent
not
applied in computing the Cut-off Date Principal Balance thereof and all related
Prepayment Charges; (ii) the related Mortgage Files, (iii) the
Protected Account (other than any amounts representing any Servicer Prepayment
Charge Payment Amount), the Distribution Account, the Class P Certificate
Account and such assets that are deposited therein from time to time, together
with any and all income, proceeds and payments with respect thereto; (iv)
property that secured a Mortgage Loan and has been acquired by foreclosure,
deed
in lieu of foreclosure or otherwise; (v) the mortgagee’s rights under the
Insurance Policies with respect to the Mortgage Loans; (vi) the rights under
the
Mortgage Loan Purchase Agreement, and (vii) all proceeds of the foregoing,
including proceeds of conversion, voluntary or involuntary, of any of the
foregoing into cash or other liquid property. Notwithstanding
the foregoing, however, REMIC I specifically excludes (i) all payments and
other
collections of principal and interest due on the Mortgage Loans on or before
the
Cut-off Date, (ii) all Prepayment Charges payable in connection with Principal
Prepayments on the Mortgage Loans made before the Cut-off Date, (iii) the Basis
Risk Shortfall Reserve Fund, (iv) the Swap Agreement and (v) the Supplemental
Interest Trust.
REMIC
I Regular Interest:
Any of
the separate non-certificated beneficial ownership interests in REMIC I issued
hereunder and designated as a “regular interest” in REMIC I. Each REMIC I
Regular Interest shall accrue interest at the related Uncertificated REMIC
I
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto. The designations for the respective
REMIC I Regular Interests are set forth in the Preliminary Statement
hereto.
REMIC
II:
The
segregated pool of assets consisting of all of the REMIC I Regular Interests
conveyed in trust to the Trustee, for the benefit of the Holders of the REMIC
II
Regular Interests and the Holders of the Class R (as holders of the Class R-II
Interest), pursuant to Article II hereunder, and all amounts deposited therein,
with respect to which a separate REMIC election is to be made.
REMIC
II Interest Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then
outstanding and (ii) the Uncertificated REMIC II Pass-Through Rate for REMIC
II
Regular Interest LT-AA minus the Marker Rate, divided by (b) 12.
REMIC
II Overcollateralization Amount:
With
respect to any date of determination, (i) 1.00% of the aggregate Uncertificated
Principal Balances of the REMIC II Regular Interests minus (ii) the aggregate
of
the Uncertificated Principal Balances of REMIC II Regular Interest LT-A1, REMIC
II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular
Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest
LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest LT-B2 and
REMIC II Regular Interest LT-P, in each case as of such date of
determination.
REMIC
II Principal Loss Allocation Amount:
With
respect to any Distribution Date, an amount equal to (a) the product of (i)
the
aggregate Stated Principal Balance of the Mortgage Loans and REO Properties
then
outstanding and (ii) 1 minus a fraction, the numerator of which is two times
the
aggregate of the Uncertificated Principal Balances of REMIC II Regular Interest
LT-A1, REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC
II Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest
LT-B2
and the denominator of which is the aggregate of the Uncertificated Principal
Balances of REMIC II Regular Interest LT-A1, REMIC II Regular Interest LT-A2,
REMIC II Regular Interest LT-A3, REMIC II Regular Interest LT-A4, REMIC II
Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular
Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular Interest
LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular Interest LT-M7, REMIC
II Regular Interest LT-M8, REMIC II Regular Interest LT-M9, REMIC II Regular
Interest LT-B1, REMIC II Regular Interest LT-B2 and REMIC II Regular Interest
LT-ZZ.
REMIC
II Regular Interests:
REMIC
II Regular Interest LT-AA, REMIC II Regular Interest LT-A1, REMIC II Regular
Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular Interest
LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC
II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular
Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular Interest
LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest LT-M9, REMIC
II Regular Interest LT-B1, REMIC II Regular Interest LT-B2, REMIC II Regular
Interest LT-ZZ and REMIC II Regular Interest LT-▇.
▇▇▇▇▇
▇▇ Regular Interest LT-AA:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-AA shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-A1:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
▇▇▇▇▇▇▇▇ ▇▇-▇▇ shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-A2:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
▇▇▇▇▇▇▇▇ ▇▇-▇▇ shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-A3:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
▇▇▇▇▇▇▇▇ ▇▇-▇▇ shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-A4:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
▇▇▇▇▇▇▇▇ ▇▇-▇▇ shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-B1:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-B1 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-B2:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-B2 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-IO:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-IO shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, subject to the terms and
conditions hereof.
REMIC
II Regular Interest LT-M1:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M1 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M2:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M2 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M3:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M3 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M4:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M4 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M5:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M5 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M6:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M6 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M7:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M7 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M8:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M8 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-M9:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-M9 shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-P:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-P shall be entitled to distributions of principal, subject to the
terms and conditions hereof, in an aggregate amount equal to its initial
Uncertificated Principal Balance as set forth in the Preliminary Statement
hereto.
REMIC
II Regular Interest LT-ZZ:
One of
the separate non-certificated beneficial ownership interests in REMIC II issued
hereunder and designated as a Regular Interest in REMIC II. REMIC II Regular
Interest LT-ZZ shall accrue interest at the related Uncertificated REMIC II
Pass-Through Rate in effect from time to time, and shall be entitled to
distributions of principal, subject to the terms and conditions hereof, in
an
aggregate amount equal to its initial Uncertificated Principal Balance as set
forth in the Preliminary Statement hereto.
REMIC
II Regular Interest LT-ZZ Maximum Interest Deferral Amount:
With
respect to any Distribution Date, the excess of (i) accrued interest at the
Uncertificated REMIC II Pass-Through Rate applicable to REMIC II Regular
Interest LT-ZZ for such Distribution Date on a balance equal to the
Uncertificated Principal Balance of REMIC II Regular Interest LT-ZZ minus the
REMIC II Overcollateralization Amount, in each case for such Distribution Date,
over (ii) the Uncertificated Accrued Interest on REMIC II Regular ▇▇▇▇▇▇▇▇
▇▇-▇▇, REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC
II Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1 and REMIC II Regular Interest
LT-B2 for such Distribution Date, with the rate on each such REMIC II Regular
Interest subject to a cap equal to the related Pass-Through Rate.
REMIC
II Targeted Overcollateralization Amount:
1.00%
of the Targeted Overcollateralization Amount.
REMIC
III:
The
segregated pool of assets consisting of all of the REMIC II Regular Interests
conveyed in trust to the Trustee, for the benefit of the REMIC III
Certificateholders pursuant to Section 2.07, and all amounts deposited
therein, with respect to which a separate REMIC election is to be
made.
REMIC
III Certificate:
Any
Regular Certificate or Class R Certificate.
REMIC
III Certificateholder:
The
Holder of any REMIC III Certificate.
REMIC
Opinion:
Shall
mean an Opinion of Counsel to the effect that the proposed action will not
have
an adverse affect on any REMIC created hereunder.
REMIC
Provisions:
Provisions of the federal income tax law relating to real estate mortgage
investment conduits, which appear at Sections 860A through 860G of Subchapter
M
of Chapter 1 of the Code, and related provisions, and proposed, temporary and
final regulations and published rulings, notices and announcements promulgated
thereunder, as the foregoing may be in effect from time to time as well as
provisions of applicable state laws.
REMIC
Regular Interest:
Any
REMIC I Regular Interest, REMIC II Regular Interest, Regular Certificate or
Class IO Interest.
Remittance
Date:
Shall
mean not later than 3:00 p.m. Eastern Time on the eighteenth (18th) day of
the
month and if such day is not a Business Day, the immediately preceding Business
Day.
REO
Property:
A
Mortgaged Property acquired by the Servicer through foreclosure or deed-in-lieu
of foreclosure in connection with a defaulted Mortgage Loan.
Replacement
Mortgage Loan:
A
Mortgage Loan or Mortgage Loans in the aggregate substituted by the Sponsor
for
a Deleted Mortgage Loan, which must, on the date of such substitution, as
confirmed in a request for release in accordance with the terms of the Custodial
Agreement, (i) have a Stated Principal Balance, after deduction of the principal
portion of the Scheduled Payment due in the month of substitution, not in excess
of, and not less than 90% of, the Stated Principal Balance of the Deleted
Mortgage Loan; (ii) have an adjustable Mortgage Rate not less than or more
than
1% per annum higher than the Mortgage Rate of the Deleted Mortgage Loan; (iii)
have the same or higher credit quality characteristics than that of the Deleted
Mortgage Loan; (iv) have a Loan-to-Value Ratio or Combined Loan-to-Value Ratio
no higher than that of the Deleted Mortgage Loan; (v) have a remaining term
to
maturity no greater than (and not more than one year less than) that of the
Deleted Mortgage Loan; (vi) have the same lien priority as the Deleted Mortgage
Loan; (vii) constitute the same occupancy type as the Deleted Mortgage Loan
or
be owner occupied; (viii) have a Maximum Mortgage Interest Rate not less than
the Maximum Mortgage Interest Rate on the Deleted Loan; (ix) have a Minimum
Mortgage Interest Rate not less than the Minimum Mortgage Interest Rate of
the
Deleted Loan, if applicable; (x) have a Gross Margin equal to the Gross Margin
of the Deleted Loan; (xi) have a next Adjustment Date not more than two months
later than the next Adjustment Date on the Deleted Loan, if applicable; and
(xii) comply with each representation and warranty set forth in the Mortgage
Loan Purchase Agreement.
Reportable
Event:
Has the
meaning set forth in Section 5.13(b) of this Agreement.
Reporting
Servicer:
Shall
mean the Servicer, the Master Servicer, the Securities Administrator, the
Custodian under the Custodial Agreement, and any Servicing Function Participant
engaged by such parties.
Required
Insurance Policy:
With
respect to any Mortgage Loan, any insurance policy that is required to be
maintained from time to time under this Agreement.
Residual
Certificates:
The
Class R Certificates.
Responsible
Officer:
With
respect to the Trustee and the Securities Administrator, any Vice President,
any
Assistant Vice President, the Secretary, any Assistant Secretary, any Trust
Officer, any other officer customarily performing functions similar to those
performed by any of the above designated officers or other officers of the
Trustee or the Securities Administrator specified by the Trustee or the
Securities Administrator, as the case may be, having direct responsibility
over
this Agreement and customarily performing functions similar to those performed
by any one of the designated officers, as to whom, with respect to a particular
matter, such matter is referred because of such officer’s knowledge of and
familiarity with the particular subject.
Responsible
Party:
The
party indicated on Exhibit N as the entity primarily responsible for reporting
the information set forth therein to the Securities Administrator pursuant
to
Section 5.13.
S&P:
Standard & Poor’s, a division of The ▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or its
successor in interest.
▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act:
Means
the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002 and the rules and regulations of the Commission
promulgated thereunder (including any interpretations thereof by the
Commission’s staff).
▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification:
A
written certification signed by an officer of the Master Servicer that complies
with (i) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002, as amended from time to time, and
(ii)
Exchange Act Rules 13a-14(d) and 15d-14(d), as in effect from time to time;
provided that if, after the Closing Date (a) the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Act of 2002
is
amended, (b) the Rules referred to in clause (ii) are modified or superseded
by
any subsequent statement, rule or regulation of the Commission or any statement
of a division thereof, or (c) any future releases, rules and regulations are
published by the Commission from time to time pursuant to the ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Act
of 2002, which in any such case affects the form or substance of the required
certification and results in the required certification being, in the reasonable
judgment of the Master Servicer, materially more onerous than the form of the
required certification as of the Closing Date, the ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
shall be as agreed to by the Master Servicer, the Depositor and the Seller
following a negotiation in good faith to determine how to comply with any such
new requirements.
Scheduled
Payment:
The
scheduled monthly payment on a Mortgage Loan due on any Due Date allocable
to
principal and/or interest on such Mortgage Loan.
Securities
Act:
The
Securities Act of 1933, as amended, and the rules and regulations promulgated
thereunder.
Securities
Administrator:
As of
the Closing Date, ▇▇▇▇▇ Fargo Bank, N.A. and thereafter, its respective
successors in interest that meet the qualifications of this Agreement. The
Securities Administrator and the Master Servicer shall at all times be the
same
Person or Affiliates.
Senior
Certificates:
The
Class A-1, Class A-2, Class A-3 and Class A-4 Certificates.
Senior
Enhancement Percentage:
With
respect to any Distribution Date will be the fraction, expressed as a
percentage, the numerator of which is the sum of the aggregate Certificate
Principal Balance of the Subordinate Certificates and the Overcollateralization
Amount, in each case after giving effect to payments on such Distribution Date
(assuming no Trigger Event is in effect), and the denominator of which is the
Aggregate Loan Balance for such Distribution Date.
Senior
Principal Payment Amount:
With
respect to any Distribution Date on or after the Stepdown Date and as long
as a
Trigger Event is not in effect with respect to such Distribution Date, the
amount, if any, by which (x) the Certificate Principal Balances of the Senior
Certificates, in each case, immediately prior to such Distribution Date exceed
(y) the lesser of (A) the product of (i) 59.60% and (ii) the Aggregate Loan
Balance for such Distribution Date and (B) the amount, if any, by which (i)
the
Aggregate Loan Balance for such Distribution Date exceeds (ii) 0.50% of the
Aggregate Loan Balance as of the Cut-off Date.
Service(s)(ing):
Means,
in accordance with Regulation AB, the act of servicing and administering the
Mortgage Loans or any other assets of the Trust Fund by an entity that meets
the
definition of “servicer’ set forth in Item 1101 of Regulation AB and is subject
to the disclosure requirements set forth in 1108 of Regulation AB. For
clarification purposes, any uncapitalized occurrence of this term shall have
the
meaning commonly understood by participants in the residential mortgage-backed
securitization market.
Servicer:
▇▇▇▇▇
Fargo Bank, National Association, or any successor thereto appointed hereunder
in connection with the servicing and administration of the Mortgage
Loans.
Servicer
Default:
As
defined in Section 8.01.
Servicer
Prepayment Charge Payment Amount:
The
amount payable by a Servicer in respect of any waived Prepayment Charges
pursuant to the Servicing Agreement.
Servicing
Advances:
All
customary, reasonable and necessary “out of pocket” costs and expenses
(including reasonable legal fees) incurred prior to, on or after the Cut-off
Date in the performance by the Servicer of its servicing obligations under
the
Servicing Agreement, including, but not limited to, the cost of (i) the
preservation, restoration, inspection, valuation and protection of a Mortgaged
Property, (ii) any enforcement or judicial proceedings, including foreclosures,
and including any expenses incurred in relation to any such proceedings that
result from the Mortgage Loan being registered in the MERS® System, (iii) the
management and liquidation of any REO Property (including, without limitation,
realtor’s commissions), (iv) compliance with any obligations under
Section 3.07 hereof to cause insurance to be maintained, (v) payment of
taxes, (vi) obtaining broker price opinions and (vii) obtaining any legal
documentation required to be included in the Mortgage File and/or correcting
any
outstanding title issues (i.e., any lien or encumbrance on the Mortgaged
Property that prevents the effective enforcement of the intended lien position)
reasonably necessary for the Servicer to perform its obligations under this
Agreement. Servicing Advances also include any reasonable “out-of-pocket” cost
and expenses (including legal fees) incurred by the Servicer in connection
with
executing and recording instruments of satisfaction, deeds of reconveyance
or
Assignments to the extent not recovered from the Mortgagor or otherwise payable
under the Servicing Agreement. The Servicer shall not be required to make any
Servicing Advances that would constitute a Nonrecoverable Advance, provided
that
the Servicer delivers an Officer’s Certificate to the Master Servicer and the
Trustee certifying that such Servicing Advance would constitute a Nonrecoverable
Advance.
Servicing
Agreement:
The
Seller’s Warranties and Servicing Agreement, dated as of March 1, 2006 between
the Sponsor and the Servicer (as modified pursuant to the Assignment
Agreement).
Servicing
Criteria:
Means
the criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such
may be amended from time to time.
Servicing
Fee:
As to
each Mortgage Loan and any Distribution Date, an amount equal to 1/12th of
the
Servicing Fee Rate multiplied by the Stated Principal Balance of such Mortgage
Loan as of the last day of the related Due Period or, in the event of any
payment of interest that accompanies a Principal Prepayment in full during
the
related Due Period made by the Mortgagor immediately prior to such prepayment,
interest at the Servicing Fee Rate on the same Stated Principal Balance of
such
Mortgage Loan used to calculate the payment of interest on such Mortgage
Loan.
Servicing
Fee Rate:
0.50%
per annum.
Servicing
Function Participant:
Means
any Subservicer or Subcontractor of the Servicer, the Master Servicer and the
Securities Administrator, the Custodian, respectively or any other Person that
is participating in the servicing function within the meaning of Item 1122
of
Regulation AB, without regard to any threshold referenced therein.
Servicing
Officer:
Any
officer of the Servicer involved in, or responsible for, the administration
and
the servicing of Mortgage Loans, whose name and specimen signature appear on
a
list of Servicing Officers furnished to the Master Servicer, the Securities
Administrator the Trustee and the Depositor on the Closing Date, as such list
may from time to time be amended.
Six-Month
LIBOR:
The per
annum rate equal to the average of interbank offered rates for Six-Month U.S.
dollar-denominated deposits in the London market based on quotations of major
banks as published in The Wall Street Journal and most recently available as
of
the time specified in the related Mortgage Note.
Sponsor:
Nomura
Credit & Capital, Inc., a Delaware corporation, and its successors and
assigns, in its capacity as seller of the Mortgage Loans to the
Depositor.
Startup
Day:
The
Startup Day for each REMIC formed hereunder shall be the Closing
Date.
Stated
Principal Balance:
With
respect to any Mortgage Loan or related REO Property and any Distribution Date,
the Cut-off Date Principal Balance thereof minus the sum of (i) the principal
portion of the Scheduled Payments due with respect to such Mortgage Loan during
each Due Period ending prior to such Distribution Date (and irrespective of
any
delinquency in their payment), (ii) all Principal Prepayments with respect
to
such Mortgage Loan received prior to or during the related Prepayment Period,
and all Liquidation Proceeds to the extent applied by the Servicer as recoveries
of principal in accordance with the Servicing Agreement with respect to such
Mortgage Loan, that were received by the Servicer as of the close of business
on
the last day of the Prepayment Period related to such Distribution Date and
(iii) any Realized Losses on such Mortgage Loan incurred during the related
Prepayment Period. The Stated Principal Balance of a Liquidated Loan equals
zero.
Stepdown
Date:
The
later to occur of (x) the Distribution Date in July 2009 and (y) the first
Distribution Date on which the Senior Enhancement Percentage (calculated for
this purpose only after taking into account distributions of principal on the
Mortgage Loans, but prior to any distributions to the holders of the Publicly
Offered Certificates and the Class B Certificates on such Distribution Date)
is
greater than or equal to 40.40%.
Subcontractor:
Shall
mean any vendor, subcontractor or other Person who is not responsible for the
overall servicing of Mortgage Loans but performs one or more discrete functions
identified in Item 1122(d) of Regulation AB with respect to Mortgage Loans
under
the direction or authority of the Servicer (or a Subservicer of the Servicer),
the Master Servicer, the Trustee, the Custodian or the Securities
Administrator.
Subordinate
Certificates:
Shall
mean, collectively, the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9, Class B-1 and Class B-2
Certificates.
Subsequent
Recoveries:
Shall
mean all amounts in respect of principal received by a Servicer (net of
reimbursable expenses) on a Mortgage Loan for which a Realized Loss was
previously incurred.
Subservicer:
Shall
mean any Person who is identified in Item 1122(d) of Regulation AB that services
the Mortgage Loans on behalf of the Servicer, and is responsible for the
performance (whether directly or through subservicers or Subcontractors) of
servicing functions required to be performed under the Servicing Agreement
or
any subservicing agreement.
Subservicing
Agreement:
Any
agreement entered into between the Servicer and a Subservicer with respect
to
the subservicing of any Mortgage Loan subject to the Servicing Agreement by
such
Subservicer.
Substitution
Adjustment Amount:
The
meaning ascribed to such term pursuant to Section 2.03(d).
Successor
Servicer:
Any
successor to the Servicer appointed pursuant to Section 8.02 of this
Agreement after the occurrence of a Servicer Default or upon the resignation
of
the Servicer pursuant to the Servicing Agreement.
Supplemental
Interest Trust:
The
corpus of a trust created pursuant to Section 5.11 of this Agreement and
designated as the “Supplemental Interest Trust,” consisting of the Swap
Agreement, the Class IO Interest and the right to receive payments in respect
of
the Class IO Distribution Amount. For the avoidance of doubt, the Supplemental
Interest Trust does not constitute a part of the Trust Fund.
Swap
Agreement:
The
interest rate swap agreement, dated June 30, 2006, between HSBC Bank USA,
National Association, as trustee on behalf of the Supplemental Interest Trust,
and the Swap Provider, which agreement provides for Net Swap Trust Payments
and
Swap Termination Payments to be paid, as provided therein, together with any
schedules, confirmations or other agreements relating thereto, attached hereto
as Exhibit
P.
Swap
LIBOR:
LIBOR
as determined pursuant to the Swap Agreement.
Swap
Provider:
The
swap provider under the Swap Agreement either (a) entitled to receive payments
from the Supplemental Interest Trust or (b) required to make payments to the
Supplemental Interest Trust, in either case pursuant to the terms of the Swap
Agreement, and any successor in interest or assign. Initially, the Swap Provider
shall be Bear ▇▇▇▇▇▇ Financial Products, Inc.
Swap
Provider Trigger Event:
A Swap
Provider Trigger Event shall have occurred if any of an Event of Default (under
the Swap Agreement) with respect to which the Swap Provider is a Defaulting
Party, a Termination Event (under the Swap Agreement) with respect to which
the
Swap Provider is the sole Affected Party or an Additional Termination Event
(under the Swap Agreement) with respect to which the Swap Provider is the sole
Affected Party has occurred.
Swap
Termination Payment:
Upon
the designation of an “Early Termination Date” as defined in the Swap Agreement,
the payment to be made by the Supplemental Interest Trust to the Swap Provider,
or by the Swap Provider to the Supplemental Interest Trust, as applicable,
pursuant to the terms of the Swap Agreement.
Targeted
Overcollateralization Amount:
With
respect to any Distribution Date prior to the Stepdown Date, 2.20% of the
Aggregate Loan Balance as of the Cut-off Date; with respect to any Distribution
Date on or after the Stepdown Date and with respect to which a Trigger Event
is
not in effect, the greater of (a) 4.40% of the Aggregate Loan Balance for such
Distribution Date, or (b) 0.50% of the Aggregate Loan Balance as of the Cut-off
Date; with respect to any Distribution Date on or after the Stepdown Date with
respect to which a Trigger Event is in effect, the Targeted
Overcollateralization Amount for such Distribution Date will be equal to the
Targeted Overcollateralization Amount for the Distribution Date immediately
preceding such Distribution Date. Notwithstanding the foregoing, on and after
any Distribution Date following the reduction of the aggregate Certificate
Principal Balance of the Publicly Offered Certificates and the Class B
Certificates to zero, the Targeted Overcollateralization Amount shall be
zero.
Tax
Matters Person:
The
person designated as “tax matters person” in the manner provided under Treasury
regulation § 1.860F-4(d) and temporary Treasury regulation
§ 301.6231(a)(7)-1T. The holder of the greatest Percentage Interest in a
Class of Residual Certificates shall be the Tax Matters Person for the related
REMIC. The Securities Administrator, or any successor thereto or assignee
thereof shall serve as tax administrator hereunder and as agent for the related
Tax Matters Person.
Termination
Price:
The
price, calculated as set forth in Section 10.01, to be paid in connection
with the purchase of the Mortgage Loans pursuant to
Section 10.01.
Transaction
Party:
Shall
mean the Depositor, the Sponsor, the Trustee, the Servicer, the Master Servicer,
the Securities Administrator, the Custodian and the Swap Provider.
Transfer
Affidavit:
As
defined in Section 6.02(c).
Transfer:
Any
direct or indirect transfer or sale of any Ownership Interest in a
Certificate.
Trigger
Event:
With
respect to any Distribution Date, a Trigger Event is in effect if either (i)
the
Delinquency Rate as of the last day of the related Due Period exceeds 39.60%
of
the Senior Enhancement Percentage for such Distribution Date or (ii) the
cumulative Realized Losses as a percentage of the original Aggregate Loan
Balance on the Closing Date for such Distribution Date is greater than the
percentage set forth in the following table:
|
Distribution
Date
|
Percentage
|
|
July
2009 - June 2010
|
1.25%
|
|
July
2010 - June 2011
|
2.75%
|
|
July
2011 - June 2012
|
4.30%
|
|
July
2012 - June 2013
|
5.55%
|
|
July
2013 and thereafter
|
6.25%
|
*The
cumulative loss percentages set forth above are applicable to the first
Distribution Date in the corresponding range of Distribution Dates. The
cumulative loss percentage for each succeeding Distribution Date in a range
increases incrementally by 1/12 of the positive difference between the
percentage applicable
to the first Distribution Date in that range and the percentage applicable
to
the first Distribution
Date in the succeeding range.
Trust
Fund:
Collectively, the assets of REMIC I, REMIC II, REMIC III and the Basis Risk
Shortfall Reserve Fund. For the avoidance of doubt, the Trust Fund does not
include the Supplemental Interest Trust.
Trustee:
HSBC
Bank USA, National Association, a national banking association, not in its
individual capacity, but solely in its capacity as trustee for the benefit
of
the Certificateholders under this Agreement, 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.
Uncertificated
Accrued Interest:
With
respect to each Uncertificated REMIC Regular Interest on each Distribution
Date,
an amount equal to one month’s interest at the related Uncertificated
Pass-Through Rate on the Uncertificated Principal Balance of such REMIC Regular
Interest. In each case, Uncertificated Accrued Interest will be reduced by
any
Prepayment Interest Shortfalls and shortfalls resulting from application of
the
Relief Act (allocated to such REMIC Regular Interests as set forth in Sections
1.02 and 5.07).
Uncertificated
Notional Amount:
With
respect to the Class X Interest and any Distribution Date, an amount equal
to
the aggregate Uncertificated Principal Balance of the REMIC II Regular Interests
(other than REMIC II Regular Interest P) for such Distribution Date.
With
respect to REMIC II Regular Interest LT-IO and each Distribution Date listed
below, the aggregate Uncertificated Principal Balance of the REMIC I Regular
Interests ending with the designation “A” listed below:
|
Distribution
Date
|
REMIC
I Regular Interests
|
|
1
|
I-1-A
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
▇▇▇▇▇▇▇ ▇-▇▇-▇
|
|
▇
|
▇-▇-▇
through I-60-A
|
|
10
|
I-10-A
through I-60-A
|
|
11
|
I-11-A
through I-60-A
|
|
12
|
I-12-A
through I-60-A
|
|
13
|
I-13-A
through I-60-A
|
|
14
|
I-14-A
through I-60-A
|
|
15
|
I-15-A
through I-60-A
|
|
16
|
I-16-A
through I-60-A
|
|
17
|
I-17-A
through I-60-A
|
|
18
|
I-18-A
through I-60-A
|
|
19
|
I-19-A
through I-60-A
|
|
20
|
I-20-A
through I-60-A
|
|
21
|
I-21-A
through I-60-A
|
|
22
|
I-22-A
through I-60-A
|
|
23
|
I-23-A
through I-60-A
|
|
24
|
I-24-A
through I-60-A
|
|
25
|
I-25-A
through I-60-A
|
|
26
|
I-26-A
through I-60-A
|
|
27
|
I-27-A
through I-60-A
|
|
28
|
I-28-A
through I-60-A
|
|
29
|
I-29-A
through I-60-A
|
|
30
|
I-30-A
through I-60-A
|
|
31
|
I-31-A
through I-60-A
|
|
32
|
I-32-A
through I-60-A
|
|
33
|
I-33-A
through I-60-A
|
|
34
|
I-34-A
through I-60-A
|
|
35
|
I-35-A
through I-60-A
|
|
36
|
I-36-A
through I-60-A
|
|
37
|
I-37-A
through I-60-A
|
|
38
|
I-38-A
through I-60-A
|
|
39
|
I-39-A
through I-60-A
|
|
40
|
I-40-A
through I-60-A
|
|
41
|
I-41-A
through I-60-A
|
|
42
|
I-42-A
through I-60-A
|
|
43
|
I-43-A
through I-60-A
|
|
44
|
I-44-A
through I-60-A
|
|
45
|
I-45-A
through I-60-A
|
|
46
|
I-46-A
through I-60-A
|
|
47
|
I-47-A
through I-60-A
|
|
48
|
I-48-A
through I-60-A
|
|
49
|
I-49-A
through I-60-A
|
|
50
|
I-50-A
through I-60-A
|
|
51
|
I-51-A
through I-60-A
|
|
52
|
I-52-A
through I-60-A
|
|
53
|
I-53-A
through I-60-A
|
|
54
|
I-54-A
through I-60-A
|
|
55
|
I-55-A
through I-60-A
|
|
56
|
I-56-A
through I-60-A
|
|
57
|
I-57-A
through I-60-A
|
|
58
|
I-58-A
through I-60-A
|
|
59
|
I-59-A
and I-60-A
|
|
60
|
I-60-A
|
|
thereafter
|
$0.00
|
With
respect to the Class IO Interest and any Distribution Date, an amount equal
to
the Uncertificated Notional Amount of the REMIC II Regular Interest
IO.
Uncertificated
Principal Balance:
With
respect to each REMIC Regular Interest (other than REMIC II Regular Interest
LT-IO), the principal amount of such REMIC Regular Interest outstanding as
of
any date of determination. As of the Closing Date, the Uncertificated Principal
Balance of each such REMIC Regular Interest shall equal the amount set forth
in
the Preliminary Statement hereto as its initial Uncertificated Principal
Balance. On each Distribution Date, the Uncertificated Principal Balance of
each
REMIC Regular Interest shall be reduced by all distributions of principal made
on such REMIC Regular Interest on such Distribution Date pursuant to Section
5.07 and, if and to the extent necessary and appropriate, shall be further
reduced on such Distribution Date by Realized Losses as provided in Section
5.07. The Uncertificated Principal Balance of each REMIC Regular Interest shall
never be less than zero.
Uncertificated
Pass-Through Rate:
The
Uncertificated REMIC I Pass-Through Rate or Uncertificated REMIC II Pass-Through
Rate.
Uncertificated
REMIC I Pass-Through Rate:
With
respect to REMIC I Regular Interest I, a per annum rate equal to the weighted
average Net Mortgage Rate of Mortgage Loans. With respect to each REMIC I
Regular Interest ending with the designation “A”, a per annum rate equal to the
weighted average Net Mortgage Rate of the Mortgage Loans multiplied by 2,
subject to a maximum rate of 11.228%. With respect to each REMIC I Regular
Interest ending with the designation “B”, the greater of (x) a per annum rate
equal to the excess, if any, of (i) 2 multiplied by the weighted average Net
Mortgage Rate of the Mortgage Loans over (ii) 11.228% and (y)
0.00%.
Uncertificated
REMIC II Pass-Through Rate:
With
respect to REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-A1,
REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II
Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest
LT-B2
and REMIC II Regular Interest LT-ZZ, a
per
annum rate (but not less than zero) equal to the weighted average of (w) with
respect to REMIC I Regular Interest I, the Uncertificated REMIC I Pass-Through
Rate for such REMIC I Regular Interest for each such Distribution Date, (x)
with
respect to REMIC I Regular Interests ending with the designation “B”, the
weighted average of the Uncertificated REMIC I Pass-Through Rates for such
REMIC
I Regular Interests, weighted on the basis of the Uncertificated Principal
Balance of such REMIC I Regular Interests for each such Distribution Date and
(y) with respect to REMIC I Regular Interests ending with the designation “A”,
for each Distribution Date listed below, the weighted average of the rates
listed below for each such REMIC I Regular Interest listed below, weighted
on
the basis of the Uncertificated Principal Balance of each such REMIC I Regular
Interest for each such Distribution Date:
|
Distribution
Date
|
REMIC
I Regular Interest
|
Rate
|
|
1
|
I-1-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
2
|
I-2-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
3
|
I-3-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
and I-2-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
4
|
I-4-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-3-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
5
|
I-5-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-4-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
6
|
I-6-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-5-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
7
|
I-7-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-6-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
8
|
I-8-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-7-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
9
|
I-9-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-8-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
10
|
I-10-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-9-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
11
|
I-11-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-10-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
12
|
I-12-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-11-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
13
|
I-13-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-12-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
14
|
I-14-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-13-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
15
|
I-15-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-14-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
16
|
I-16-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-15-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
17
|
I-17-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-16-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
18
|
I-18-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-17-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
19
|
I-19-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-18-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
20
|
I-20-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-19-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
21
|
I-21-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-20-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
22
|
I-22-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-21-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
23
|
I-23-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-22-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
24
|
I-24-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-23-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
25
|
I-25-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-24-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
26
|
I-26-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-25-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
27
|
I-27-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-26-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
28
|
I-28-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-27-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
29
|
I-29-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-28-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
30
|
I-30-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-29-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
31
|
I-31-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-30-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
32
|
I-32-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-31-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
33
|
I-33-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-32-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
34
|
I-34-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-33-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
35
|
I-35-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-34-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
36
|
I-36-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-35-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
37
|
I-37-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-36-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
38
|
I-38-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-37-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
39
|
I-39-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-38-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
40
|
I-40-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-39-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
41
|
I-41-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-40-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
42
|
I-42-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-41-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
43
|
I-43-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-42-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
44
|
I-44-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-43-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
45
|
I-45-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-44-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
46
|
I-46-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-45-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
47
|
I-47-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-46-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
48
|
I-48-A
through I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-47-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
49
|
I-49-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-48-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
50
|
I-50-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-49-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
51
|
I-51-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-50-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
52
|
I-52-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-51-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
53
|
I-53-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-52-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
54
|
I-54-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-53-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
55
|
I-55-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-54-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
56
|
I-56-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-55-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
57
|
I-57-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-56-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
58
|
I-58-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-57-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
59
|
I-59-A
and I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-58-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
60
|
I-60-A
|
2
multiplied by Swap LIBOR, subject to a maximum rate of Uncertificated
REMIC I Pass-Through Rate
|
|
I-1-A
through I-59-A
|
Uncertificated
REMIC I Pass-Through Rate
|
|
|
thereafter
|
I-1-A
through I-60-A
|
Uncertificated
REMIC I Pass-Through Rate
|
With
respect to REMIC II Regular Interest LT-IO, the excess of (i) the Uncertificated
REMIC I Pass-Through Rates for REMIC I Regular Interests ending with the
designation “A”, over (ii) 2 multiplied by Swap LIBOR.
Uncertificated
REMIC Regular Interest:
The
REMIC I Regular Interests, the REMIC II Regular Interests and the Class IO
Interest.
Voting
Rights:
The
portion of the voting rights of all the Certificates that is allocated to any
Certificate for purposes of the voting provisions hereunder. Voting Rights
shall
be allocated (i) 95% to the Certificates (other than the Class X, Class P
and the Residual Certificates) and (ii) 3% to the Class X Certificates and
1% to each of the Class P Certificates and the Class R Certificates. Voting
rights will be allocated among the Certificates of each such Class in accordance
with their respective Percentage Interests. The Residual Certificates will
not
be allocated any voting rights.
Section
1.02 Allocation
of Certain Interest Shortfalls.
For
purposes of calculating the amount of the Interest Remittance Amount for any
Distribution Date, (1) the aggregate amount of any Net Interest Shortfalls
in
respect of the Mortgage Loans for any Distribution Date shall reduce the
Interest Remittance Amount on a pro
rata
basis
based on, and to the extent of, one month’s interest at the then applicable
respective Pass-Through Rate on the respective Certificate Principal Balance
of
each class of Publicly Offered Certificates and (2) the aggregate amount of
any
Realized Losses allocated to the Subordinate Certificates and Basis Risk
Shortfalls allocated to the Publicly Offered Certificates and the Class B
Certificates for any Distribution Date shall be allocated to the Class X
Certificates based on, and to the extent of, one month’s interest at the then
applicable respective Pass-Through Rate on the Certificate Principal Balance
thereof on any Distribution Date.
For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC I Regular Interests for any Distribution Date the aggregate amount of
any
Net Interest Shortfalls for any Distribution Date shall be allocated first,
to
REMIC I Regular Interest I and to the REMIC I Regular Interests ending with
the
designation “B”, pro
rata
based
on, and to the extent of, one month’s interest at the then applicable respective
Uncertificated REMIC I Pass-Through Rates on the respective Uncertificated
Principal Balances of each such REMIC I Regular Interest, and then, to REMIC
I
Regular Interests ending with the designation “A”, pro rata based on, and to the
extent of, one month’s interest at the then applicable respective Uncertificated
REMIC I Pass-Through Rates on the respective Uncertificated Principal Balances
of each such REMIC I Regular Interest.
For
purposes of calculating the amount of Uncertificated Accrued Interest for the
REMIC II Regular Interests for any Distribution Date:
The
aggregate amount of any Net Interest Shortfalls incurred in respect of the
Mortgage Loans for any Distribution Date shall be allocated among
REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-A1, REMIC II
Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular
Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest
LT-M9, REMIC II Regular Interest LT-B1, REMIC II Regular Interest LT-B2 and
REMIC I Regular Interest LT-ZZ, pro
rata
based
on, and to the extent of, one month’s interest at the then applicable respective
Uncertificated REMIC I Pass-Through Rate on the respective Uncertificated
Principal Balance of each such REMIC I Regular Interest.
ARTICLE
II
CONVEYANCE
OF TRUST FUND
REPRESENTATIONS
AND WARRANTIES
Section
2.01 Conveyance
of Trust Fund.
The
Sponsor hereby sells, transfers, assigns, sets over and otherwise conveys to
the
Depositor, without recourse, all the right, title and interest of the Sponsor
in
and to the assets in the Trust Fund and
the
Supplemental Interest Trust.
The
Sponsor has entered into this Agreement in consideration for the purchase of
the
Mortgage Loans by the Depositor and has agreed to take the actions specified
herein.
The
Depositor, concurrently with the execution and delivery hereof, hereby sells,
transfers, assigns, sets over and otherwise conveys to the Trustee for the
use
and benefit of the Certificateholders, without recourse, all the right, title
and interest of the Depositor in and to the Trust Fund and the Supplemental
Interest Trust.
Concurrently
with the execution and delivery of this Agreement, the Depositor does hereby
assign to the Trustee all of its rights and interest under the Mortgage Loan
Purchase Agreement, to the extent of the Mortgage Loans sold under the Mortgage
Loan Purchase Agreement and all of the rights and interests under the Assignment
Agreement. The Trustee hereby accepts such assignment, and shall be entitled
to
exercise all rights of the Depositor under the Mortgage Loan Purchase Agreement
and the Assignment Agreement as if, for such purpose, it were the Depositor.
The
foregoing sale, transfer, assignment, set-over, deposit and conveyance does
not
and is not intended to result in creation or assumption by the Trustee of any
obligation of the Depositor, the Sponsor or any other Person in connection
with
the Mortgage Loans or any other agreement or instrument relating thereto except
as specifically set forth herein.
In
connection with such sale, the Depositor does hereby deliver to, and deposit
with the Custodian pursuant to the Custodial Agreement the documents with
respect to each Mortgage Loan as described under Section 2 of the Custodial
Agreement (the “Mortgage Loan Documents”). In connection with such delivery and
as further described in the Custodial Agreement, the Custodian will be required
to review such Mortgage Loan Documents and deliver to the Trustee, the
Depositor, the Servicer and the Sponsor certifications (in the forms attached
to
the Custodial Agreement) with respect to such review with exceptions noted
thereon. In addition, under the Custodial Agreement the Depositor will be
required to cure certain defects with respect to the Mortgage Loan Documents
for
the related Mortgage Loans after the delivery thereof by the Depositor to the
Custodian as more particularly set forth therein.
Notwithstanding
anything to the contrary contained herein, the parties hereto acknowledge that
the functions of the Trustee with respect to the custody, acceptance, inspection
and release of the Mortgage Files and preparation and delivery of the
certifications shall be performed by the Custodian pursuant to the terms and
conditions of the Custodial Agreement.
The
Depositor shall deliver or cause to be delivered to the Servicer copies of
all
trailing documents required to be included in the related Mortgage File at
the
same time the originals or certified copies thereof are delivered to the
Custodian, such documents including the mortgagee policy of title insurance
and
any Mortgage Loan Documents upon return from the recording office.
The
Mortgage Loans permitted by the terms of this Agreement to be included in the
Trust are limited to (i) Mortgage Loans (which the Depositor acquired pursuant
to the Mortgage Loan Purchase Agreement, which contains, among other
representations and warranties, a representation and warranty of the Sponsor
that no Mortgage Loan is a “High-Cost Home Loan” as defined in the New Jersey
Home Ownership Act effective November 27, 2003, as defined in the New Mexico
Home Loan Protection Act effective January 1, 2004) as defined in the
Massachusetts Predatory Home Loan Practices Act, effective November 7, 2004
(Mass. ▇▇▇. Laws Ch. 183C) or as defined in the Indiana Home Loan Practices
Act,
effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1 through 24-9-9) and
(ii) Qualified Substitute Mortgage Loans (which, by definition as set forth
herein and referred to in the Mortgage Loan Purchase Agreement, are required
to
conform to, among other representations and warranties, the representation
and
warranty of the Sponsor that no Qualified Substitute Mortgage Loan is a
“High-Cost Home Loan” as defined in the New Jersey Home Ownership Act effective
November 27, 2003, as defined in the New Mexico Home Loan Protection Act
effective January 1, 2004, as defined in the Massachusetts Predatory Home Loan
Practices Act, effective November 7, 2004 (Mass. ▇▇▇. Laws Ch. 183C) or as
defined in the Indiana Home Loan Practices Act, effective January 1, 2005 (Ind.
Code ▇▇▇. Sections 24-9-1 through 24-9-9). The Depositor and the Trustee on
behalf of the Trust understand and agree that it is not intended that any
mortgage loan be included in the Trust that is a “High-Cost Home Loan” as
defined in the New Jersey Home Ownership Act effective November 27, 2003, as
defined in the New Mexico Home Loan Protection Act effective January 1, 2004,
as
defined in the Massachusetts Predatory Home Loan Practices Act, effective
November 7, 2004 (Mass. ▇▇▇. Laws Ch. 183C) or as defined in the Indiana Home
Loan Practices Act, effective January 1, 2005 (Ind. Code ▇▇▇. Sections 24-9-1
through 24-9-9).
Section
2.02 Acceptance
of the Mortgage Loans.
(a) Based
on
the initial trust receipt received by it from the Custodian pursuant to the
Custodial Agreement, the Trustee acknowledges receipt, subject to the provisions
of Section 2.01 hereof and Section 2 of the Custodial Agreement, of
the Mortgage Loan Documents and all other assets included in the definition
of
“REMIC I” under clauses (i), (ii) (iii), (v) and (vi) (to the extent of amounts
deposited into the Distribution Account) and declares that it holds (or the
Custodian on its behalf holds) and will hold such documents and the other
documents delivered to it constituting a Mortgage Loan Document, and that it
holds (or the Custodian on its behalf holds) or will hold all such assets and
such other assets included in the definition of “REMIC I” in trust for the
exclusive use and benefit of all present and future
Certificateholders.
(b) In
conducting the review of the Mortgage Files in accordance with the Custodial
Agreement, the Custodian on the Trustee’s behalf will ascertain whether all
required documents have been executed and received and whether those documents
relate to the Mortgage Loans identified in Exhibit B to this Agreement, as
supplemented. If the Custodian finds any document constituting part of the
Mortgage File not to have been executed or received, or to be unrelated to
the
Mortgage Loans identified in Exhibit B, the Sponsor shall correct or cure any
such defect or, if prior to the end of the second anniversary of the Closing
Date, the Sponsor may substitute for the related Mortgage Loan a Replacement
Mortgage Loan, which substitution shall be accomplished in the manner and
subject to the conditions set forth in Section 2.03 or shall deliver to the
Trustee an Opinion of Counsel to the effect that such defect does not materially
or adversely affect the interests of the Certificateholders in such Mortgage
Loan within sixty (60) days from the date of notice from the Custodian of the
defect and if the Sponsor fails to correct or cure the defect or deliver such
opinion within such period, the Sponsor will, subject to Section 2.03,
within ninety (90) days from the notification of the Custodian purchase such
Mortgage Loan at the Purchase Price; provided, however, that if such defect
relates solely to the inability of the Sponsor to deliver the Mortgage,
assignment thereof to the Custodian, or intervening assignments thereof with
evidence of recording thereon because such documents have been submitted for
recording and have not been returned by the applicable jurisdiction, the Sponsor
shall not be required to purchase such Mortgage Loan if the Sponsor delivers
such documents promptly upon receipt, but in no event later than 360 days after
the Closing Date.
(c) No
later
than 180 days after the Closing Date, the Custodian on the Trustee’s behalf will
review, for the benefit of the Certificateholders, the Mortgage Files and will
execute and deliver or cause to be executed and delivered to the Sponsor, the
Servicer and the Trustee, a final trust receipt substantially in the form
annexed to the Custodial Agreement. In conducting such review, the Custodian
on
the Trustee’s behalf and in accordance with the terms of the Custodial Agreement
will ascertain whether each document required to be recorded has been returned
from the recording office with evidence of recording thereon and the Custodian
on the Trustee’s behalf has received either an original or a copy thereof, as
required in the Custodial Agreement. If the Custodian finds that any document
with respect to a Mortgage Loan has not been received, or is unrelated to the
Mortgage Loans identified in Exhibit B or appears to be defective on its face,
the Custodian shall note such defect in the exception report attached the final
trust receipt issued pursuant to the Custodial Agreement and the Sponsor shall
correct or cure any such defect or, if prior to the end of the second
anniversary of the Closing Date, the Sponsor may substitute for the related
Mortgage Loan a Replacement Mortgage Loan, which substitution shall be
accomplished in the manner and subject to the conditions set forth in
Section 2.03 or shall deliver to the Trustee an Opinion of Counsel to the
effect that such defect does not materially or adversely affect the interests
of
Certificateholders in such Mortgage Loan within 60 days from the date of notice
from the Trustee of the defect and if the Sponsor is unable within such period
to correct or cure such defect, or to substitute the related Mortgage Loan
with
a Replacement Mortgage Loan or to deliver such opinion, the Sponsor shall,
subject to Section 2.03, within 90 days from the notification of the
Trustee, purchase such Mortgage Loan at the Purchase Price; provided, however,
that if such defect relates solely to the inability of the Sponsor to deliver
the Mortgage, assignment thereof to the Trustee or intervening assignments
thereof with evidence of recording thereon, because such documents have not
been
returned by the applicable jurisdiction, the Sponsor shall not be required
to
purchase such Mortgage Loan, if the Sponsor delivers such documents promptly
upon receipt, but in no event later than 360 days after the Closing
Date.
(d) In
the
event that a Mortgage Loan is purchased by the Sponsor in accordance with
subsections 2.02(a) or (b) above or Section 2.03, the Sponsor shall remit
the applicable Purchase Price to the Servicer for deposit in the Protected
Account and shall provide written notice to the Securities Administrator
detailing the components of the Purchase Price, signed by an authorized officer.
Upon receipt of notice of the deposit of the Purchase Price in the Protected
Account and upon receipt of a request for release (in the form attached to
the
Custodial Agreement) with respect to such Mortgage Loan, the Custodian, on
behalf of the Trustee, will release to the Sponsor the related Mortgage File
and
the Trustee shall execute and deliver all instruments of transfer or assignment,
without recourse, furnished to it by the Sponsor, as are necessary to vest
in
the Sponsor title to and rights under the Mortgage Loan. Such purchase shall
be
deemed to have occurred on the date on which the deposit into the Protected
Account was made. The Securities Administrator shall promptly notify the Rating
Agencies of such repurchase. The obligation of the Sponsor to cure, repurchase
or substitute for any Mortgage Loan as to which a defect in a constituent
document exists shall be the sole remedies respecting such defect available
to
the Certificateholders or to the Securities Administrator on their behalf.
The
Sponsor shall promptly reimburse the Securities Administrator for any expenses
incurred by the Securities Administrator in respect of enforcing the remedies
for such breach.
(e) The
Sponsor shall deliver to the Custodian the Mortgage Note and other documents
constituting the Mortgage File with respect to any Replacement Mortgage Loan,
which the Custodian will review as provided in the Custodial Agreement,
provided, that the Closing Date referred to therein shall instead be the date
of
delivery of the Mortgage File with respect to each Replacement Mortgage
Loan.
Section
2.03 Representations,
Warranties and Covenants of the Sponsor and the Master Servicer.
(a) The
Sponsor hereby represents and warrants to and covenants with, the Depositor,
the
Master Servicer, the Securities Administrator and the Trustee as follows, as
of
the Closing Date:
(i) The
Sponsor is duly organized, validly existing and in good standing under the
laws
of the State of Delaware and is duly authorized and qualified to transact any
and all business contemplated by this Agreement to be conducted by the Sponsor
in any state in which a Mortgaged Property is located or is otherwise not
required under applicable law to effect such qualification and, in any event,
is
in compliance with the doing business laws of any such state, to the extent
necessary to ensure its ability to enforce each Mortgage Loan, to sell the
Mortgage Loans in accordance with the terms of this Agreement and to perform
any
of its other obligations under this Agreement in accordance with the terms
hereof.
(ii) The
Sponsor has the full corporate power and authority to sell each Mortgage Loan,
and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized by all
necessary corporate action on the part of the Sponsor the execution, delivery
and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery hereof by the other parties hereto,
constitutes a legal, valid and binding obligation of the Sponsor, enforceable
against the Sponsor in accordance with its terms, except that (a) the
enforceability hereof may be limited by bankruptcy, insolvency, moratorium,
receivership and other similar laws relating to creditors’ rights generally and
(b) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought and further
subject to public policy with respect to indemnity and contribution under
applicable securities law.
(iii) The
execution and delivery of this Agreement by the Sponsor, the sale of the
Mortgage Loans by the Sponsor under this Agreement, the consummation of any
other of the transactions contemplated by this Agreement, and the fulfillment
of
or compliance with the terms hereof are in the ordinary course of business
of
the Sponsor and will not (A) result in a material breach of any term or
provision of the charter or by-laws of the Sponsor or (B) materially conflict
with, result in a material breach, violation or acceleration of, or result
in a
material default under, the terms of any other material agreement or instrument
to which the Sponsor is a party or by which it may be bound, or (C) constitute
a
material violation of any statute, order or regulation applicable to the Sponsor
of any court, regulatory body, administrative agency or governmental body having
jurisdiction over the Sponsor; and the Sponsor is not in breach or violation
of
any material indenture or other material agreement or instrument, or in
violation of any statute, order or regulation of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it which
breach or violation may materially impair the Sponsor’s ability to perform or
meet any of its obligations under this Agreement.
(iv) The
Sponsor is an approved seller of conventional mortgage loans for ▇▇▇▇▇▇ ▇▇▇
or
▇▇▇▇▇▇▇ Mac and is a mortgagee approved by the Secretary of Housing and Urban
Development pursuant to sections 203 and 211 of the National Housing
Act.
(v) No
litigation is pending or, to the best of the Sponsor’s knowledge, threatened,
against the Sponsor that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of the Sponsor
to
sell the Mortgage Loans or to perform any of its other obligations under this
Agreement in accordance with the terms hereof.
(vi) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Sponsor
of,
or compliance by the Sponsor with, this Agreement or the consummation of the
transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Sponsor has obtained the
same.
(vii) The
representations and warranties set forth in Section 8 of the Mortgage Loan
Purchase Agreement are true and correct as of the Closing Date.
(viii) No
Mortgage Loan is subject to the Home Ownership and Equity Protection Act of
1994
or any comparable law and no Mortgage Loan is classified and/or defined as
a
“high cost”, “covered”, “high risk home” or “predatory” loan under any other
state, federal or local law or regulation or ordinance (or a similarly
classified loan using different terminology under a law imposing heightened
regulatory scrutiny or additional legal liability for residential mortgage
loans
having high interest rates, points and/or fees).
(ix) No
loan
is a High Cost Loan or Covered Loan, as applicable (as such terms are defined
in
Appendix E of the Standard & Poor's Glossary For File Format For LEVELS®
Version 5.6 Revised (attached hereto as Exhibit O) and no Mortgage Loan
originated on or after October 1, 2002 through March 6, 2003 is governed by
the
Georgia Fair Lending Act.
(x) Any
and
all requirements of any federal, state or local law including, without
limitation, usury, truth in lending, real estate settlement procedures, consumer
credit protection, equal credit opportunity, fair housing, predatory, abusive
lending or disclosure laws applicable to the origination and servicing of the
Mortgage Loans have been complied with in all material respects.
(b) Upon
discovery by any of the parties hereto of a breach of a representation or
warranty set forth in Section 2.03(b)(viii), (ix) and (x) and
Section 8 of the Mortgage Loan Purchase Agreement that materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the party discovering such breach shall give prompt written notice thereof
to
the other parties. The Sponsor hereby covenants with respect to the
representations and warranties set forth in Section 2.03(b)(viii), (ix) and
(x) and Section 8 of the Mortgage Loan Purchase Agreement, that within
ninety (90) days of the discovery of a breach of any representation or warranty
set forth therein that materially and adversely affects the interests of the
Certificateholders in any Mortgage Loan, it shall cure such breach in all
material respects and, if such breach is not so cured, (i) prior to the second
anniversary of the Closing Date, remove such Mortgage Loan (a “Deleted Mortgage
Loan”) from the Trust Fund and substitute in its place a Replacement Mortgage
Loan, in the manner and subject to the conditions set forth in this Section;
or
(ii) repurchase the affected Mortgage Loan or Mortgage Loans from the Trustee
at
the Purchase Price in the manner set forth below; provided that any such
substitution pursuant to (i) above or repurchase pursuant to (ii) above shall
not be effected prior to the delivery to the Trustee of an Opinion of Counsel
if
required by Section 2.05 and any such substitution pursuant to (i) above
shall not be effected prior to the additional delivery to the Custodian of
a
request for release in accordance with the Custodial Agreement. The Sponsor
shall promptly reimburse the Trustee for any expenses reasonably incurred by
the
Trustee in respect of enforcing the remedies for such breach. To enable the
Servicer to amend the Mortgage Loan Schedule, the Sponsor shall, unless it
cures
such breach in a timely fashion pursuant to this Section 2.03, promptly
notify the Trustee whether it intends either to repurchase, or to substitute
for, the Mortgage Loan affected by such breach. With respect to the
representations and warranties in Section 8 of the Mortgage Loan Purchase
Agreement that are made to the best of the Sponsor’s knowledge, if it is
discovered by any of the Depositor, the Sponsor or the Trustee that the
substance of such representation and warranty is inaccurate and such inaccuracy
materially and adversely affects the value of the related Mortgage Loan,
notwithstanding the Sponsor’s lack of knowledge with respect to the substance of
such representation or warranty, the Sponsor shall nevertheless be required
to
cure, substitute for or repurchase the affected Mortgage Loan in accordance
with
the foregoing. Notwithstanding the foregoing, any breach of a representation
or
warranty contained in clauses (xxxiii), (xxxvii), (xxxviii), (xl), (xlv) and/or
(lii) of Section 8 of the Mortgage Loan Purchase Agreement shall be
automatically deemed to materially and adversely affect the interests of the
Certificateholders.
With
respect to any Replacement Mortgage Loan or Loans, the Sponsor shall deliver
to
the Custodian for the benefit of the Certificateholders such documents and
agreements as are required by Section 2 of the Custodial Agreement. No
substitution will be made in any calendar month after the Determination Date
for
such month. Scheduled Payments due with respect to Replacement Mortgage Loans
in
the Due Period related to the Distribution Date on which such proceeds are
to be
distributed shall not be part of the Trust Fund and will be retained by the
Sponsor. For the month of substitution, distributions to Certificateholders
will
include the Scheduled Payment due on any Deleted Mortgage Loan for the related
Due Period and thereafter the Sponsor shall be entitled to retain all amounts
received in respect of such Deleted Mortgage Loan. The Servicer shall amend
the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect
the
removal of such Deleted Mortgage Loan and the substitution of the Replacement
Mortgage Loan or Loans and shall deliver the amended Mortgage Loan Schedule
to
the Trustee, the Master Servicer and the Securities Administrator. Upon such
substitution, the Replacement Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and the Sponsor shall be deemed to
have
made with respect to such Replacement Mortgage Loan or Loans, as of the date
of
substitution, the representations and warranties set forth in Section 8 of
the Mortgage Loan Purchase Agreement with respect to such Mortgage Loan. Upon
any such substitution and the deposit into the Protected Account of the amount
required to be deposited therein in connection with such substitution as
described in the following paragraph and receipt by the Custodian of a request
for release for such Mortgage Loan in accordance with the Custodial Agreement,
the Custodian on behalf of the Trustee shall release to the Sponsor the Mortgage
File relating to such Deleted Mortgage Loan and held for the benefit of the
Certificateholders and the Trustee shall execute and deliver at the Sponsor’s
direction such instruments of transfer or assignment as have been prepared
by
the Sponsor, in each case without recourse, as shall be necessary to vest in
the
Sponsor, or its respective designee, title to the Trustee’s interest in any
Deleted Mortgage Loan substituted for pursuant to this Section 2.03.
Neither the Trustee nor the Custodian shall have any further responsibility
with
regard to such Mortgage File.
For
any
month in which the Sponsor substitutes one or more Replacement Mortgage Loans
for a Deleted Mortgage Loan, the Securities Administrator will determine the
amount (if any) by which the aggregate principal balance of all the Replacement
Mortgage Loans as of the date of substitution is less than the Stated Principal
Balance (after application of the principal portion of the Scheduled Payment
due
in the month of substitution) of such Deleted Mortgage Loan. An amount equal
to
the aggregate of such deficiencies, described in the preceding sentence for
any
Distribution Date (such amount, the “Substitution Adjustment Amount”) shall be
remitted to the Servicer for deposit in the Protected Account by the Sponsor
delivering such Replacement Mortgage Loan on or before the Determination Date
for the Distribution Date relating to the Prepayment Period during which the
related Mortgage Loan was required to be purchased or replaced
hereunder.
In
the
event that the Sponsor shall be required to repurchase a Mortgage Loan, the
Purchase Price therefor shall be remitted to the Servicer for deposit in the
Protected Account, on or before the Determination Date immediately following
the
date on which the Sponsor was required to repurchase such Mortgage Loan. The
Purchase Price shall be remitted by the Servicer to the Securities Administrator
on the Remittance Date occurring in the month immediately following the month
in
which the Purchase Price was deposited in the Protected Account. In addition,
upon such deposit of the Purchase Price, the delivery of an Officer’s
Certificate by the Servicer to the Trustee certifying that the Purchase Price
has been deposited in the Protected Account (which shall be delivered no more
than two Business Days following such deposit), the delivery of an Opinion
of
Counsel if required by Section 2.05 and the receipt of a Request for
Release, the Trustee shall release the related Mortgage File held for the
benefit of the related Certificateholders to the Sponsor, and the Trustee shall
execute and deliver at such Person’s direction the related instruments of
transfer or assignment prepared by the Sponsor, in each case without recourse,
as shall be necessary to transfer title from the Trustee for the benefit of
the
Certificateholders and transfer the Trustee’s interest to the Sponsor to any
Mortgage Loan purchased pursuant to this Section 2.03. It is understood and
agreed that the obligation under this Agreement of the Sponsor to cure,
repurchase or replace any Mortgage Loan as to which a breach has occurred or
is
continuing shall constitute the sole remedies against the Sponsor respecting
such breach available to Certificateholder, the Depositor or the
Trustee.
(c) The
Master Servicer hereby represents, warrants and covenants with the Sponsor,
the
Depositor and the Trustee as follows, as of the Closing Date:
(i) The
Master Servicer is a national banking association duly formed, validly existing
and in good standing under the laws of the United States of America and is
duly
authorized and qualified to transact any and all business contemplated by this
Agreement to be conducted by the Master Servicer;
(ii) The
Master Servicer has the full power and authority to conduct its business as
presently conducted by it and to execute, deliver and perform, and to enter
into
and consummate, all transactions contemplated by this Agreement. The Master
Servicer has duly authorized the execution, delivery and performance of this
Agreement, has duly executed and delivered this Agreement, and this Agreement,
assuming due authorization, execution and delivery by the other parties hereto,
constitutes a legal, valid and binding obligation of the Master Servicer,
enforceable against it in accordance with its terms except as the enforceability
thereof may be limited by bankruptcy, insolvency, reorganization or similar
laws
affecting the enforcement of creditors’ rights generally and by general
principles of equity;
(iii) The
execution and delivery of this Agreement by the Master Servicer, the
consummation by the Master Servicer of any other of the transactions herein
contemplated, and the fulfillment of or compliance with the terms hereof are
in
the ordinary course of business of the Master Servicer and will not (A) result
in a breach of any term or provision of charter and by-laws of the Master
Servicer or (B) conflict with, result in a breach, violation or acceleration
of,
or result in a default under, the terms of any other material agreement or
instrument to which the Master Servicer is a party or by which it may be bound,
or any statute, order or regulation applicable to the Master Servicer of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over the Master Servicer; and the Master Servicer is not a party
to, bound by, or in breach or violation of any indenture or other agreement
or
instrument, or subject to or in violation of any statute, order or regulation
of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to the Master
Servicer’s knowledge, would in the future materially and adversely affect, (x)
the ability of the Master Servicer to perform its obligations under this
Agreement or (y) the business, operations, financial condition, properties
or
assets of the Master Servicer taken as a whole;
(iv) The
Master Servicer does not believe, nor does it have any reason or cause to
believe, that it cannot perform each and every covenant made by it and contained
in this Agreement;
(v) No
litigation is pending against the Master Servicer that would materially and
adversely affect the execution, delivery or enforceability of this Agreement
or
the ability of the Master Servicer to perform any of its other obligations
hereunder in accordance with the terms hereof,
(vi) There
are
no actions or proceedings against, or investigations known to it of, the Master
Servicer before any court, administrative or other tribunal (A) that might
prohibit its entering into this Agreement, (B) seeking to prevent the
consummation of the transactions contemplated by this Agreement or (C) that
might prohibit or materially and adversely affect the performance by the Master
Servicer of its obligations under, or validity or enforceability of, this
Agreement; and
(vii) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Master
Servicer of, or compliance by the Master Servicer with, this Agreement or the
consummation by it of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations or orders, if any, that have been
obtained prior to the Closing Date.
(d) The
representations and warranties set forth in Section 2.03 shall survive
delivery of the respective Mortgage Loans and Mortgage Files to the Trustee
or
the Custodian for the benefit of the Certificateholders.
Section
2.04 Representations
and Warranties of the Depositor.
The
Depositor hereby represents and warrants to, and covenants, with the Sponsor,
the Master Servicer, the Securities Administrator and the Trustee as follows,
as
of the date hereof and as of the Closing Date:
(i) The
Depositor is duly organized and is validly existing as a corporation in good
standing under the laws of the State of Delaware and has full power and
authority (corporate and other) necessary to own or hold its properties and
to
conduct its business as now conducted by it and to enter into and perform its
obligations under this Agreement.
(ii) The
Depositor has the full corporate power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by,
this
Agreement and has duly authorized, by all necessary corporate action on its
part, the execution, delivery and performance of this Agreement; and this
Agreement, assuming the due authorization, execution and delivery hereof by
the
other parties hereto, constitutes a legal, valid and binding obligation of
the
Depositor, enforceable against the Depositor in accordance with its terms,
subject, as to enforceability, to (i) bankruptcy, insolvency, moratorium
receivership and other similar laws relating to creditors’ rights generally and
(ii) the remedy of specific performance and injunctive and other forms of
equitable relief may be subject to equitable defenses and to the discretion
of
the court before which any proceeding therefor may be brought and further
subject to public policy with respect to indemnity and contribution under
applicable securities law.
(iii) The
execution and delivery of this Agreement by the Depositor, the consummation
of
the transactions contemplated by this Agreement, and the fulfillment of or
compliance with the terms hereof are in the ordinary course of business of
the
Depositor and will not (A) result in a material breach of any term or provision
of the charter or by-laws of the Depositor or (B) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or instrument
to which the Depositor is a party or by which it may be bound or (C) constitute
a material violation of any statute, order or regulation applicable to the
Depositor of any court, regulatory body, administrative agency or governmental
body having jurisdiction over the Depositor; and the Depositor is not in breach
or violation of any material indenture or other material agreement or
instrument, or in violation of any statute, order or regulation of any court,
regulatory body, administrative agency or governmental body having jurisdiction
over it which breach or violation may materially impair the Depositor’s ability
to perform or meet any of its obligations under this Agreement.
(iv) No
litigation is pending, or, to the best of the Depositor’s knowledge, threatened,
against the Depositor that would materially and adversely affect the execution,
delivery or enforceability of this Agreement or the ability of the Depositor
to
perform its obligations under this Agreement in accordance with the terms
hereof.
(v) No
consent, approval, authorization or order of any court or governmental agency
or
body is required for the execution, delivery and performance by the Depositor
of, or compliance by the Depositor with, this Agreement or the consummation
of
the transactions contemplated hereby, or if any such consent, approval,
authorization or order is required, the Depositor has obtained the
same.
The
Depositor hereby represents and warrants to the Trustee as of the Closing Date,
following the transfer of the Mortgage Loans to it by the Sponsor, the Depositor
had good title to the Mortgage Loans and the related Mortgage Notes were subject
to no offsets, claims, defenses or counterclaims.
It
is
understood and agreed that the representations and warranties set forth in
this
Section 2.04 shall survive delivery of the Mortgage Files to the Trustee or
the Custodian for the benefit of the Certificateholders. Upon discovery by
the
Depositor, the Master Servicer or the Trustee of a breach of such
representations and warranties, the party discovering such breach shall give
prompt written notice to the others and to each Rating Agency.
Section
2.05 Delivery
of Opinion of Counsel in Connection with Substitutions and
Repurchases.
(a) Notwithstanding
any contrary provision of this Agreement, with respect to any Mortgage Loan
that
is not in default or as to which default is not imminent, no repurchase or
substitution pursuant to Sections 2.02 or 2.03 shall be made unless the Sponsor
delivers to the Trustee an Opinion of Counsel, addressed to the Trustee, to
the
effect that such repurchase or substitution would not (i) result in the
imposition of the tax on “prohibited transactions” of REMIC I, REMIC II or REMIC
III or contributions after the Closing Date, as defined in sections 860F(a)(2)
and 860G(d) of the Code, respectively or (ii) cause any of REMIC I, REMIC II
or
REMIC III to fail to qualify as a REMIC at any time that any Certificates are
outstanding. Any Mortgage Loan as to which repurchase or substitution was
delayed pursuant to this paragraph shall be repurchased or the substitution
therefor shall occur (subject to compliance with Sections 2.02 or 2.03) upon
the
earlier of (a) the occurrence of a default or imminent default with respect
to
such Mortgage Loan and (b) receipt by the Trustee of an Opinion of Counsel
to
the effect that such repurchase or substitution, as applicable, will not result
in the events described in clause (i) or clause (ii) of the preceding
sentence.
(b) Upon
discovery by the Depositor or the Sponsor that any Mortgage Loan does not
constitute a “qualified mortgage” within the meaning of section 860G(a)(3) of
the Code, the party discovering such fact shall promptly (and in any event
within five (5) Business Days of discovery) give written notice thereof to
the
other parties and the Trustee. In connection therewith, the Sponsor, at its
option, shall either (i) substitute, if the conditions in Section 2.03(c)
with respect to substitutions are satisfied, a Replacement Mortgage Loan for
the
affected Mortgage Loan, or (ii) repurchase the affected Mortgage Loan within
ninety (90) days of such discovery in the same manner as it would a Mortgage
Loan for a breach of representation or warranty contained in Section 2.03.
The Trustee shall reconvey to the Sponsor the Mortgage Loan to be released
pursuant hereto in the same manner, and on the same terms and conditions, as
it
would a Mortgage Loan repurchased for breach of a representation or warranty
contained in Section 2.03.
Section
2.06 Issuance
of the REMIC I Regular Interests and the Class R Certificates.
The
Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery
to the Custodian on its behalf of the related Mortgage Files, subject to the
provisions of Section 2.01 and Section 2.02, together with the
assignment to it of all other assets included in REMIC I, the receipt of which
is hereby acknowledged. The interests evidenced by the Class R-I Interest,
together with the REMIC I Regular Interests, constitute the entire beneficial
ownership interest in REMIC I. The rights of the Holders of the Class R-I
Interest and REMIC I (as holder of the REMIC I Regular Interests) to receive
distributions from the proceeds of REMIC I in respect of the Class R-I Interest
and the REMIC I Regular Interests, respectively, and all ownership interests
evidenced or constituted by the Class R-I Interest and the REMIC I Regular
Interests, shall be as set forth in this Agreement.
Section
2.07 Conveyance
of the REMIC I Regular Interests; Issuance and Conveyance of the REMIC II
Regular Interests.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, without recourse
all the right, title and interest of the Depositor in and to the REMIC I Regular
Interests for the benefit of the Class R-II Interest and REMIC II (as holder
of
the REMIC I Regular Interests). 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 the Class
R-II Interest and REMIC II (as holder of the REMIC I Regular Interests). The
rights of the Holder of the Class R-II Interest and REMIC II (as holder of
the
REMIC I Regular Interests) to receive distributions from the proceeds of REMIC
II in respect of the Class R-II Interest and the REMIC II Regular Interests,
respectively, and all ownership interests evidenced or constituted by the Class
R-II Interest and the REMIC II Regular Interests, shall be as set forth in
this
Agreement. The Class R-II Interest and the REMIC II Regular Interests shall
constitute the entire beneficial ownership interest in REMIC II.
The
Depositor, concurrently with the execution and delivery hereof, does hereby
transfer, assign, set over and otherwise convey to the Trustee, without recourse
all the right, title and interest of the Depositor in and to the REMIC II
Regular Interests for the benefit of the Class R-III Interest and REMIC III
(as
holder of the REMIC II Regular Interests). The Trustee acknowledges receipt
of
the REMIC II Regular Interests and declares that it holds and will hold the
same
in trust for the exclusive use and benefit of all present and future Holders
of
the Class R-III Interest and REMIC III (as holder of the REMIC II Regular
Interests). The rights of the Holder of the Class R-III Interest and REMIC
III
(as holder of the REMIC II Regular Interests) to receive distributions from
the
proceeds of REMIC III in respect of the Class R-III Interest and the Regular
Certificates and the Class IO Interest, respectively, and all ownership
interests evidenced or constituted by the Class R-III Interest and the Regular
Certificates and the Class IO Interest, shall be as set forth in this Agreement.
The Class R-III Interest, the Regular Certificates and the Class IO Interest
shall constitute the entire beneficial ownership interest in REMIC
III.
Section
2.08 Issuance
of Class R Certificates.
The
Trustee acknowledges the assignment to it of the REMIC I Regular Interests
and
the REMIC II Regular Interests and, concurrently therewith and in exchange
therefor, pursuant to the written request of the Depositor executed by an
officer of the Depositor, the Securities Administrator has executed,
authenticated and delivered to or upon the order of the Depositor, the Class
R
Certificates in authorized denominations.
Section
2.09 Establishment
of Trust.
The
Depositor does hereby establish, pursuant to the further provisions of this
Agreement and the laws of the State of New York, an express trust to be known,
for convenience, as “Nomura Home Equity Loan, Inc., Home Equity Loan Trust,
Series 2006-WF1” and does hereby appoint HSBC Bank USA, National Association, as
Trustee in accordance with the provisions of this Agreement.
Section
2.10 Purpose
and Powers of the Trust.
The
purpose of the common law trust, as created hereunder, is to engage in the
following activities:
(a) acquire
and hold the Mortgage Loans and the other assets of the Trust Fund and the
proceeds therefrom;
(b) to
issue
the Certificates sold to the Depositor in exchange for the Mortgage
Loans;
(c) to
make
payments on the Certificates;
(d) to
engage
in those activities that are necessary, suitable or convenient to accomplish
the
foregoing or are incidental thereto or connected therewith; and
(e) subject
to compliance with this Agreement, to engage in such other activities as may
be
required in connection with conservation of the Trust Fund and the making of
distributions to the Certificateholders.
The
trust
is hereby authorized to engage in the foregoing activities. The Trustee shall
not cause the trust to engage in any activity other than in connection with
the
foregoing or other than as required or authorized by the terms of this Agreement
while any Certificate is outstanding, and this Section 2.10 may not be amended,
without the consent of the Certificateholders evidencing 51% or more of the
aggregate voting rights of the Certificates.
ARTICLE
III
ADMINISTRATION
AND SERVICING OF THE MORTGAGE LOANS; ACCOUNTS
Section
3.01 Reserved.
Section
3.02 Reserved.
Section
3.03 Reserved.
Section
3.04 Reserved.
Section
3.05 Reserved.
Section
3.06 Reserved.
Section
3.07 Reserved.
Section
3.08 Reserved.
Section
3.09 Reserved.
Section
3.10 Reserved.
Section
3.11 Reserved.
Section
3.12 Reserved.
Section
3.13 Annual
Statement as to Compliance.
(a) The
Master Servicer and the Securities Administrator shall deliver or otherwise
make
available (and shall cause each Additional Servicer engaged by it to deliver)
to
the Depositor and the Securities Administrator and in the case of the Master
Servicer, to the Trustee on or before March 15 of each year, commencing in
March
2007, an Officer’s Certificate stating, as to the signer thereof, that (A) a
review of such party’s activities during the preceding calendar year or portion
thereof and of such party’s performance under this Agreement, or such other
applicable agreement in the case of an Additional Servicer, has been made under
such officer’s supervision and (B) to the best of such officer’s knowledge,
based on such review, such party has fulfilled all its obligations under this
Agreement, or such other applicable agreement in the case of an Additional
Servicer (other than the Master Servicer or the Securities Administrator),
in
all material respects throughout such year or portion thereof, or, if there
has
been a failure to fulfill any such obligation in any material respect,
specifying each such failure known to such officer and the nature and status
thereof.
The
Master Servicer shall enforce the obligation of the Servicer as set forth in
the
Servicing Agreement to deliver to the Master Servicer an annual statement of
compliance within the time frame set forth in, and in such form and substance
as
may be required pursuant to, the Servicing Agreement The Master Servicer shall
include such annual statement of compliance with its own annual statement of
compliance to be submitted to the Securities Administrator pursuant to this
Section. For so long as the Trust Fund is subject to Exchange Act reporting
requirements, failure of the Servicer to timely deliver an annual statement
of
compliance pursuant to the Servicing Agreement shall be deemed a Servicer
Default under the Servicing Agreement, automatically, without notice and without
any cure period, and the Master Servicer shall notify the Trustee and the
Trustee may, in addition to whatever rights the Trustee may have under this
Agreement, the Servicing Agreement and at law or in equity or to damages,
including injunctive relief and specific performance, terminate all the rights
and obligations of the Servicer under the Servicing Agreement and in and to
the
Mortgage Loans and the proceeds thereof without compensating the Servicer for
the same. The Trustee shall so terminate the Servicer by delivery of notice
thereof via first class mail, facsimile or electronic mail. After the Trust
Fund
ceases to be subject to Exchange Act reporting requirements, failure of the
Servicer to perform deliver an annual statement of compliance on or before
March
31 of each such year shall be deemed a Servicer Default under the Servicing
Agreement. The Master Servicer shall notify the Trustee and the Trustee may
terminate the Servicer by delivery of notice thereof via first class mail,
facsimile or electronic mail.
(b) (i)For
so
long as the Trust Fund is subject to Exchange Act reporting requirements,
failure of the Master Servicer to comply timely with this Section 3.13 shall
be
deemed a Master Servicer Default, without any cure period, and the Trustee
may,
in addition to whatever rights the Trustee may have under this Agreement and
at
law or in equity or to damages, including injunctive relief and specific
performance, terminate all the rights and obligations of the Master Servicer
under this Agreement and in and to the Mortgage Loans and the proceeds thereof
without compensating the Master Servicer for the same. The Trustee shall so
terminate the Master Servicer by delivery of notice thereof via first class
mail, facsimile or electronic mail. This paragraph shall supersede any other
provision in this Agreement or any other agreement to the contrary.
(ii) After
the
Trust Fund ceases to be subject to Exchange Act reporting requirements, failure
of the Master Servicer to duly perform its obligations under this Section 3.13
on or before March 31 of each such year shall be deemed a Master Servicer
Default as provided for in Section 8.01(a)(x). The Trustee may terminate the
Master Servicer by delivery of notice thereof via first class mail, facsimile
or
electronic mail.
(c) The
Master Servicer shall include all annual statements of compliance received
by it
from any Additional Servicer with its own annual statement of compliance to
be
submitted to the Securities Administrator pursuant to this Section
3.13.
(d) Copies
of
any Master Servicer annual statements of compliance required to be delivered
hereunder shall be provided to any Certificateholder upon request at the Master
Servicer’s expense.
(e) In
the
event the Servicer, the Master Servicer, the Securities Administrator or any
Additional Servicer is terminated or resigns pursuant to the terms of this
Agreement or the Servicing Agreement, or any applicable agreement in the case
of
such Additional Servicer, as the case may be, such party shall provide or cause
such Additional Servicer to provide an Officer’s Certificate pursuant to this
Section 3.13 or pursuant to the Servicing Agreement with respect to the period
of time it was subject to this Agreement, the Servicing Agreement or any other
applicable agreement, as the case may be.
Section
3.14 Assessments
of Compliance and Attestation Reports.
(a) By
March
15 of
each
year, commencing in March 2007,
the
Master Servicer and the Securities Administrator, each at its own expense and
pursuant to Item 1122(a) of Regulation AB, shall furnish or otherwise make
available, and shall cause any Servicing Function Participant engaged by it
to
furnish, which in each case shall not be an expense of the Trust Fund, to the
Securities Administrator and the Depositor, a report on an assessment of
compliance with the Relevant Servicing Criteria that contains (A) a statement
by
such party of its responsibility for assessing compliance with the Relevant
Servicing Criteria, (B) a statement that such party used the Relevant Servicing
Criteria to assess compliance with the Relevant Servicing Criteria, (C) such
party’s assessment of compliance with the Relevant Servicing Criteria for the
period consisting of the prior calendar year, including, if there has been
any
material instance of noncompliance with the Relevant Servicing Criteria, a
discussion of each such failure and the nature and status thereof, and (D)
a
statement that a registered public accounting firm has issued an attestation
report on such party’s assessment of compliance with the Relevant Servicing
Criteria for the period consisting of the prior calendar year; however,
notwithstanding anything herein to the contrary, no Subcontractor will be
required to deliver any assessment of compliance in any such given year in
which
a Form 10-K is not required to be filed.
(b) No
later
than February 1 of each year, commencing in February 2007, the Master Servicer
shall forward to the Securities Administrator and the Depositor the name of
each
Servicing Function Participant engaged by it and what Relevant Servicing
Criteria will be addressed in the report on assessment of compliance prepared
by
such Servicing Function Participant; provided, however, that the Master Servicer
need not provide such information to the Securities Administrator so long as
the
Master Servicer and the Securities Administrator are the same entity. When
the
Master Servicer (or any Servicing Function Participant engaged by them) submits
its assessments to the Securities Administrator, such party will also at such
time include the assessment (and attestation pursuant to paragraph (c) below)
of
each Servicing Function Participant engaged by it.
Promptly
after receipt of each such report on assessment of compliance pursuant to this
Agreement and the Servicing Agreement, (i) the Depositor shall review each
such
report and, if applicable, consult with the Servicer, the Master Servicer,
the
Securities Administrator and any Servicing Function Participant engaged by
such
parties as to the nature of any material instance of noncompliance with the
Relevant Servicing Criteria by each such party, and (ii) the Securities
Administrator shall confirm that the assessments, taken as a whole, address
all
of the Servicing Criteria and taken individually address the Relevant Servicing
Criteria for each party as set forth on Exhibit L and on any similar exhibit
set
forth in the Servicing Agreement in respect of the Servicer and notify the
Depositor of any exceptions.
In
the
event the Master Servicer, Securities Administrator or any Servicing Function
Participant is terminated, assigns its rights and obligations under or resigns
pursuant to the terms of this Agreement, or any other applicable agreement,
as
the case may be, such party shall provide, or cause a Servicing Function
Participant engaged by it to provide, a report on assessment of compliance
pursuant to this Section 3.14 with respect to the period of time it was subject
to this Agreement or any other applicable agreement, as the case may be,
notwithstanding any such termination, assignment or resignation.
The
Master Servicer shall include all annual reports on assessment of compliance
received by it from each Servicer with its own assessment of compliance to
be
submitted to the Securities Administrator pursuant to this Section.
(c) By
March
15 of each year, commencing in March 2007, the Master Servicer and the
Securities Administrator, each at its own expense, shall cause, and shall cause
any Servicing Function Participant engaged by such party to cause, which in
each
case shall not be an expense of the trust, a registered public accounting firm
(which may also render other services to such Servicing Function Participants)
and that is a member of the American Institute of Certified Public Accountants
to furnish an attestation report to the Master Servicer and Securities
Administrator to the effect that (i) it has obtained a representation regarding
certain matters from the management of such party, which includes an assertion
that such party has complied with the Relevant Servicing Criteria, and (ii)
on
the basis of an examination conducted by such firm in accordance with standards
for attestation engagements issued or adopted by the PCAOB, it is expressing
an
opinion as to whether such party’s compliance with the Relevant Servicing
Criteria was fairly stated in all material respects, or it cannot express an
overall opinion regarding such party’s assessment of compliance with the
Relevant Servicing Criteria; however, notwithstanding anything herein to the
contrary, no Subcontractor will be required to deliver any attestation in any
such given year in which a Form 10-K is not required to be filed. In the event
that an overall opinion cannot be expressed, such registered public accounting
firm shall state in such report why it was unable to express such an opinion.
Such report must be available for general use and not contain restricted use
language.
Promptly
after receipt of each such report on assessment of compliance and attestation
report from a Servicing Function Participant, the Securities Administrator
shall
confirm that each assessment submitted pursuant to paragraph (a) above is
coupled with an attestation meeting the requirements of this Section and notify
the Depositor of any exceptions.
In
the
event the Master Servicer, Securities Administrator or any Servicing Function
Participant is terminated, assigns its rights and obligations under or resigns
pursuant to the terms of this Agreement, or any other applicable agreement,
as
the case may be, such party shall cause a registered public accounting firm
to
provide an attestation pursuant to this Section 3.14 or such other agreement
with respect to the period of time it was subject to this Agreement or such
other agreement, as the case may be, notwithstanding any such termination,
assignment or resignation.
Section
3.15 Reserved.
Section
3.16 The
Trustee.
The
Trustee shall furnish the Servicer with any powers of attorney and other
documents prepared and submitted by the Servicer to the Trustee in a form
agreeable to the Trustee and necessary or appropriate to enable the Servicer
to
service and administer the related Mortgage Loans and REO
Properties.
The
Trustee shall provide access to the records and documentation in possession
of
the Trustee regarding the related Mortgage Loans and REO Property and the
servicing thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee; provided, however, that, unless otherwise required by law,
the
Trustee shall not be required to provide access to such records and
documentation if the provision thereof would violate the legal right to privacy
of any Mortgagor. The Trustee shall allow representatives of the above entities
to photocopy any of the records and documentation and shall provide equipment
for that purpose at a charge that covers the Trustee’s actual
costs.
The
Trustee shall execute and deliver as directed in writing by the Servicer any
court pleadings, requests for trustee’s sale or other documents necessary or
desirable to (i) the foreclosure or trustee’s sale with respect to a Mortgaged
Property; (ii) any legal action brought to obtain judgment against any Mortgagor
on the Mortgage Note; (iii) obtain a deficiency judgment against the Mortgagor;
or (iv) enforce any other rights or remedies provided by the Mortgage Note
or
otherwise available at law or equity.
Section
3.17 REMIC-Related
Covenants.
For
as
long as each REMIC shall exist, the Trustee and the Securities Administrator
shall act in accordance herewith to treat each REMIC as a REMIC, and the Trustee
and the Securities Administrator shall comply with any directions of the
Sponsor, the Servicer or the Master Servicer with respect to such treatment.
In
particular, the Trustee shall not (a) knowingly sell or permit the sale of
all
or any portion of the Mortgage Loans or of any investment of deposits in an
Account unless such sale is as a result of a repurchase of the Mortgage Loans
pursuant to this Agreement or the Trustee has received a REMIC Opinion prepared
at the expense of the Trust Fund; and (b) other than with respect to a
substitution pursuant to the Mortgage Loan Purchase Agreement or
Section 2.04 of this Agreement, as applicable, accept any contribution to
any REMIC after the Startup Day without receipt of a REMIC Opinion.
Section
3.18 Annual
▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification; Additional Information.
The
Master Servicer and the Securities Administrator shall and shall cause any
Servicing Function Participant engaged by such party to, provide to the
Certifying Person, by March 15 of each year in which the Trust Fund is subject
to the reporting requirements of the Exchange Act and otherwise within a
reasonable period of time upon request, a certification (each, a “Back-Up
Certification”),
in
the form attached hereto as Exhibit
M,
upon
which the Certifying Person, the entity for which the Certifying Person acts
as
an officer, and such entity’s officers, directors and Affiliates (collectively
with the Certifying Person, “Certification
Parties”)
can
reasonably rely. The senior officer of the Master Servicer in charge of the
master servicing function shall prepare a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification and
sign
the same on behalf of the Trust Fund serving as the “Certifying Person”. Such
officer of the Certifying Person can be contacted by e-mail at ▇▇▇.▇▇▇.▇▇▇▇▇▇▇▇▇▇▇▇▇@▇▇▇▇▇▇▇▇▇▇.▇▇▇
or by
facsimile at (▇▇▇) ▇▇▇-▇▇▇▇. In the event the Servicer, the Master Servicer
or
the Securities Administrator, or any Servicing Function Participant engaged
by
such party, is terminated or resigns pursuant to the terms of this Agreement,
or
any other applicable agreement, as the case may be, such party shall provide
a
Back-Up Certification to the Certifying Person pursuant to this Section 3.18
with respect to the period of time it was subject to this Agreement or any
other
applicable agreement, as the case may be.
Notwithstanding
the foregoing, (i) the Master Servicer and the Securities Administrator shall
not be required to deliver a Back-Up Certification to each other if each is
the
same Person and the Master Servicer is the Certifying Person and (ii) the Master
Servicer shall not be obligated to execute any ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification
in
the event that it does not receive a Back-Up Certification from any party
required to deliver such Back-Up Certification pursuant to this Section or
the
Custodial Agreement; provided, however, in the event the Master Servicer shall
not be required to execute a ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification pursuant to clause
(ii), the Master Servicer shall prepare such ▇▇▇▇▇▇▇▇-▇▇▇▇▇ Certification and
deliver it to the Depositor for execution.
Section
3.19 Release
of Mortgage Files.
(a) Upon
becoming aware of the payment in full of any Mortgage Loan, or the receipt
by
the Servicer of a notification that payment in full has been escrowed in a
manner customary for such purposes for payment to Certificateholders on the
next
Distribution Date, the Servicer will (or if the Servicer does not, the Master
Servicer may), if required by the Servicing Agreement, promptly furnish to
the
Trustee and the Custodian, on behalf of the Trustee, two copies of a request
for
release substantially in the form attached to the Custodial Agreement signed
by
an Authorized Servicer Representative or in a mutually agreeable electronic
format which will, in lieu of a signature on its face, originate from an
Authorized Servicer Representative (which certification shall include a
statement to the effect that all amounts received in connection with such
payment that are required to be deposited in the Protected Account pursuant
to
the Servicing Agreement have been or will be so deposited) and shall request
that the Custodian, on behalf of the Trustee, deliver to the Servicer the
related Mortgage File. Within three (3) Business Days of receipt of such
certification and request, the Custodian, on behalf of the Trustee, shall
release the related Mortgage File to the Servicer and the Trustee and the
Custodian shall have no further responsibility with regard to such Mortgage
File. Upon any such payment in full, the Servicer is authorized, to give, as
agent for the Trustee, as the mortgagee under the Mortgage that secured the
related Mortgage Loan, an instrument of satisfaction (or assignment of mortgage
without recourse) regarding the Mortgaged Property subject to the Mortgage,
which instrument of satisfaction or assignment, as the case may be, shall be
delivered to the Person or Persons entitled thereto against receipt therefor
of
such payment, it being understood and agreed that no expenses incurred in
connection with such instrument of satisfaction or assignment, as the case
may
be, shall be chargeable to the Protected Account unless determined to be a
Servicing Advance.
(b) From
time
to time and as appropriate for the servicing or foreclosure of any Mortgage
Loan
and in accordance with the Servicing Agreement, the Trustee shall execute such
documents as shall be prepared and furnished to the Trustee by the Servicer
(in
form reasonably acceptable to the Trustee) and as are necessary to the
prosecution of any such proceedings. The Custodian, on behalf of the Trustee,
shall, within three (3) Business Days following written request of the Servicer,
and delivery to the Custodian, on behalf of the Trustee, of two copies of a
request for release signed by an Authorized Servicer Representative
substantially in the form attached to the Custodial Agreement (or in a mutually
agreeable electronic format which will, in lieu of a signature on its face,
originate from an Authorized Servicer Representative), release the related
Mortgage File held in its possession or control to the Servicer. Such request
for release shall obligate the Servicer to return the Mortgage File to the
Custodian on behalf of the Trustee, when the need therefor by such Person no
longer exists unless the Mortgage Loan shall be liquidated, in which case,
upon
receipt of a certificate of an Authorized Servicer Representative similar to
that hereinabove specified, the Mortgage File shall be released by the
Custodian, on behalf of the Trustee, to the Servicer.
Section
3.20 Reserved.
Section
3.21 Reserved.
Section
3.22 Reserved.
Section
3.23 UCC.
The
Sponsor agrees to execute and file continuation statements for any Uniform
Commercial Code financing statements which the Sponsor has informed the Trustee
were filed on the Closing Date in connection with the Trust. The Sponsor shall
file any financing statements or amendments and continuation statements thereto
required by any change in the Uniform Commercial Code.
Section
3.24 Optional
Purchase of Certain Mortgage Loans.
With
respect to any Mortgage Loan which is delinquent in payment by ninety-one (91)
days or more or is an REO Property, the Sponsor shall have the right to purchase
such Mortgage Loan or REO Property from the Trust at a price equal to the
Purchase Price. The Purchase Price shall be remitted to the Servicer for deposit
in the Protected Account and remitted by the Servicer to the Securities
Administrator on the Remittance Date in the month immediately following the
month in which the Purchase Price was deposited in the Protected
Account.
In
addition, the Sponsor shall, at its option, purchase any Mortgage Loan from
the
Trust if the first or second Due Date for such Mortgage Loan is subsequent
to
the Cut-off Date and the first or second Monthly Payment is not made within
thirty (30) days of such Due Date. Such purchase shall be made at a price equal
to the Purchase Price.
If
at any
time the Sponsor remits to the Servicer a payment for deposit in the Protected
Account covering the amount of the Purchase Price for such a Mortgage Loan
and
the Servicer delivers an Officer’s Certificate to the Trustee certifying that
the Purchase Price has been deposited in the Protected Account (which shall
be
delivered no more than two Business Days following such deposit), the Trustee
shall execute the assignment of such Mortgage Loan at the request of the Sponsor
without recourse to the Sponsor which shall succeed to all the Trustee’s, right,
title and interest in and to such Mortgage Loan, and all security and documents
relative thereto. Such assignment shall be an assignment outright and not for
security. The Sponsor will thereupon own such Mortgage, and all such security
and documents, free of any further obligation to the Trustee or the
Certificateholders with respect thereto. The Sponsor shall be responsible for
any transfer costs incurred with respect to a Mortgage Loan purchased pursuant
to this Section 3.24.
If
the
Sponsor is required to repurchase a Mortgage Loan pursuant to this Section
3.24,
the Servicer shall continue to service such Mortgage Loan unless the Sponsor
shall repurchase the servicing rights thereon on terms mutually agreed to by
the
Sponsor and the Servicer. Notwithstanding the foregoing, the Master Servicer
shall have no obligation to master service any Mortgage Loan that has been
so
repurchased.
Section
3.25 Obligations
Under Credit Risk Management Agreement.
Notwithstanding
anything in this Agreement or the Credit Risk Management Agreements to the
contrary, the Trustee shall not have any duty or obligation to enforce any
Credit Risk Management Agreement or to supervise, monitor or oversee the
activities of the Credit Risk Manager or the Servicer under the Credit Risk
Management Agreements or this Agreement with respect to any action taken or
not
taken by the Servicer pursuant to a recommendation of the Credit Risk Manager
or
otherwise in connection with obligations of the Servicer under the related
Credit Risk Management Agreement.
Section
3.26 Reserved.
Section
3.27 Reserved.
Section
3.28 Reserved.
Section
3.29 Reserved.
Section
3.30 Reserved.
Section
3.31 Distribution
Account.
(a) The
Securities Administrator shall establish and maintain in the name of the
Trustee, for the benefit of the Certificateholders, the Distribution Account
as
a segregated non-interest bearing trust account or accounts. The Securities
Administrator will deposit in the Distribution Account as identified by the
Securities Administrator and as received by the Securities Administrator, the
following amounts:
(i) All
payments and recoveries in respect of principal on the Mortgage Loans,
including, without limitation, Principal Prepayments, Subsequent Recoveries,
Liquidation Proceeds, Insurance Proceeds, condemnation proceeds and all payments
and recoveries in respect of interest on the Mortgage Loans withdrawn by the
Servicer from the Protected Account and remitted by the Servicer to the
Securities Administrator;
(ii) Any
Advance and any Compensating Interest Payments;
(iii) Any
Prepayment Charges collected by the Servicer in connection with the Principal
Prepayment of any of the Mortgage Loans (including any Servicer Prepayment
Charge Payment Amounts);
(iv) Any
Insurance Proceeds or Liquidation Proceeds received by or on behalf of the
Securities Administrator or which were not deposited in a Protected
Account;
(v) The
Purchase Price with respect to any Mortgage Loans purchased by the Sponsor
or
Section 2.02 or 2.03, any amounts which are to be treated pursuant to
Section 2.04 of this Agreement as the payment of such a Purchase Price, the
Purchase Price with respect to any Mortgage Loans purchased by the Depositor
pursuant to Section 3.24, and all proceeds of any Mortgage Loans or
property acquired with respect thereto repurchased by the Master Servicer
pursuant to Section 10.01;
(vi) Any
amounts required to be deposited with respect to losses on investments of
deposits in an Account; and
(vii) Any
other
amounts received by or on behalf of the Securities Administrator and required
to
be deposited in the Distribution Account pursuant to this
Agreement.
(b) All
amounts deposited to the Distribution Account shall be held by the Securities
Administrator in the name of the Trustee in trust for the benefit of the
Certificateholders in accordance with the terms and provisions of this
Agreement. The requirements for crediting the Distribution Account shall be
exclusive, it being understood and agreed that, without limiting the generality
of the foregoing, payments in the nature of late payment charges or assumption,
tax service, statement account or payoff, substitution, satisfaction, release
and other like fees and charges, need not be credited by the Securities
Administrator to the Distribution Account.
(c) The
amount at any time credited to the Distribution Account may be invested by
the
Securities Administrator in Permitted Investments that mature no later than
the
Business Day prior to the next succeeding Distribution Date as directed by
the
Master Servicer, unless the investment is managed by the Securities
Administrator or an affiliate of the Securities Administrator, in which case
such Permitted Investments may mature on the Distribution Date. All such
investment income shall be for the benefit of the Master Servicer, and any
losses incurred shall be deposited by the Master Servicer in the Distribution
Account immediately as realized.
Section
3.32 Permitted
Withdrawals and Transfers from the Distribution Account.
(a) The
Securities Administrator will from time to time make or cause to be made such
withdrawals or transfers from the Distribution Account pursuant to this
Agreement for the following purposes:
(i) to
pay to
the Trustee any expenses recoverable by the Trustee pursuant to this
Agreement.
(ii) to
reimburse the Master Servicer as Successor Servicer or the Servicer for any
Advance or Servicing Advance of its own funds, the right of the Master Servicer
as Successor Servicer or the Servicer to reimbursement pursuant to this
subclause (ii) being limited to amounts received on a particular Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance Proceeds,
Liquidation Proceeds and condemnation proceeds) which represent late payments
or
recoveries of the principal of or interest on such Mortgage Loan respecting
which such Advance or Servicing Advance was made;
(iii) to
reimburse the Master Servicer or the Servicer from Insurance Proceeds or
Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended
by the Master Servicer as Successor Servicer or the Servicer in good faith
in
connection with the restoration of the related Mortgaged Property which was
damaged by an uninsured cause or in connection with the liquidation of such
Mortgage Loan;
(iv) to
reimburse the Trustee as Successor Servicer or the Servicer from Insurance
Proceeds relating to a particular Mortgage Loan for insured expenses incurred
with respect to such Mortgage Loan and to reimburse the Master Servicer as
Successor Servicer or the Servicer from Liquidation Proceeds from a particular
Mortgage Loan for Liquidation Expenses incurred with respect to such Mortgage
Loan;
(v) to
reimburse the Trustee as Successor Servicer or the Servicer for advances of
funds pursuant to this Agreement, and the right to reimbursement pursuant to
this subclause being limited to amounts received on the related Mortgage Loan
(including, for this purpose, the Purchase Price therefor, Insurance Proceeds,
Liquidation Proceeds and condemnation proceeds) which represent late recoveries
of the payments for which such advances were made;
(vi) to
reimburse the Trustee as Successor Servicer or the Servicer for any Advance
or
advance, after a Realized Loss has been allocated with respect to the related
Mortgage Loan if the Advance or advance has not been reimbursed pursuant to
clauses (ii) and (v);
(vii) to
pay
the Credit Risk Management Fee to the Credit Risk Manager; provided, however,
that upon the termination of the Credit Risk Manager pursuant to
Section 3.32 hereof, the amount of the Credit Risk Management Fee (or any
portion thereof) previously payable to the Credit Risk Manager as described
herein shall be paid to the Sponsor;
(viii) to
reimburse the Trustee or the Securities Administrator for expenses, costs and
liabilities incurred by and reimbursable to it pursuant to this Agreement
(including the expenses of the Securities Administrator in connection with
a tax
audit in connection with the performance of its obligations pursuant to
Section 9.13);
(ix) to
pay to
the Trust Fund, as additional servicing compensation, any Excess Liquidation
Proceeds to the extent not retained by the Servicer;
(x) to
reimburse or pay the Servicer any such amounts as are due thereto under this
Agreement and have not been retained by or paid to the Servicer, to the extent
provided herein or therein;
(xi) to
reimburse the Trustee for expenses incurred in the transfer of servicing
responsibilities of the terminated Servicer after the occurrence and continuance
of a Servicer Default to the extent not paid by the terminated
servicer;
(xii) to
reimburse the Master Servicer for any costs and expenses reimbursable to the
Master Servicer pursuant to this Agreement;
(xiii) to
reimburse the Custodian for expenses, costs and liabilities incurred or
reimbursable to it pursuant to this Agreement or the Custodial
Agreement;
(xiv) to
remove
amounts deposited in error; and
(xv) to
clear
and terminate the Distribution Account pursuant to
Section 10.01.
(b) The
Securities Administrator shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any
reimbursement from the Distribution Account pursuant to subclauses (ii) through
(v), inclusive, and (vii) or with respect to any such amounts which would have
been covered by such subclauses had the amounts not been retained by the
Securities Administrator without being deposited in the Distribution Account
under Section 3.31.
(c) On
each
Distribution Date, the Securities Administrator shall distribute the Available
Distribution Amount, to the extent of funds on deposit in the Distribution
Account to the holders of the Certificates in accordance with
Section 5.04.
Section
3.33 Duties
of the Credit Risk Manager; Termination.
(a) The
Depositor appoints Portfolio Surveillance Analytics, LLC, a wholly owned
subsidiary of InformationLogix, Inc., as Credit Risk Manager. For and on behalf
of the Depositor, the Credit Risk Manager will provide reports and
recommendations concerning the Mortgage Loans that are past due, as to which
there has been commencement of foreclosure, as to which there has been
forbearance in exercise of remedies which are in default, as to which a
Mortgagor is the subject of bankruptcy, receivership, or an arrangement of
creditors, or as to which have become REO Properties. Such reports and
recommendations will be based upon information provided to the Credit Risk
Manager pursuant to the related Credit Risk Management Agreement and the Credit
Risk Manager shall look solely to the Servicer and/or Master Servicer for all
information and data (including loss and delinquency information and data)
and
loan level information and data relating to the servicing of the related
Mortgage Loans. If the Credit Risk Manager is no longer able to perform its
duties hereunder, the Credit Risk Manager may be terminated by the Depositor
at
the direction of Certificateholders evidencing not less than 66 2/3% of the
Voting Rights. The Depositor may, at its option, cause the appointment of a
successor Credit Risk Manager. Upon any termination of the Credit Risk Manager
or the appointment of a successor Credit Risk Manager, the Depositor shall
give
written notice thereof to the Servicer, the Trustee, each Rating Agency and
the
Credit Risk Manager. Notwithstanding the foregoing, the termination of the
Credit Risk Manager pursuant to Section 3.33(b) shall not become effective
until the appointment of a successor Credit Risk Manager.
(b) Within
six months of the Closing Date, the Sponsor may, at its option, terminate the
Credit Risk Manager if, in its reasonable judgment, (i) the value of the
servicing rights with respect to the Mortgage Loans is adversely affected as
a
result of the presence of the Credit Risk Manager or (ii) the presence of the
Credit Risk Manager impairs the ability of the Sponsor to transfer the servicing
rights with respect to the Mortgage Loans as permitted by this Agreement. Upon
the termination of the Credit Risk Manager, the Sponsor may, at its option,
cause the Depositor to appoint a successor Credit Risk Manager. Notice of such
termination shall be provided by the Sponsor to the Rating Agencies, the
Trustee, the Securities Administrator, the Depositor, the Servicer and the
Credit Risk Manager. Upon the appointment of a successor Credit Risk Manager,
the Depositor shall provide written notice thereof to each Rating Agency, the
Trustee, the Servicer, the Securities Administrator and the Credit Risk
Manager.
If
the
Credit Risk Manager is terminated pursuant to this Section 3.33(b), the
Credit Risk Manager shall only be entitled to a fee equal to 0.0050% with
respect to each Mortgage Loan for the one year period following such
termination. After the expiration of such one year period, the Credit Risk
Manager shall not be entitled to the Credit Risk Management Fee or any portion
thereof with respect to any Mortgage Loan. The excess of the Credit Risk
Management Fee with respect to each Mortgage Loan over the amount payable to
the
Credit Risk Manager as described in this paragraph shall be paid to the Sponsor
pursuant to Section 5.04(a).
Section
3.34 Limitation
Upon Liability of the Credit Risk Manager.
Neither
the Credit Risk Manager, nor any of the directors, officers, employees or agents
of the Credit Risk Manager, shall be under any liability to the Servicer, the
Master Servicer, the Securities Administrator, the Trustee, the
Certificateholders or the Depositor for any action taken or for refraining
from
the taking of any action in good faith pursuant to this Agreement, in reliance
upon information provided by the Servicer and/or Master Servicer under the
related Credit Risk Management Agreement or of errors in judgment; provided,
however, that this provision shall not protect the Credit Risk Manager or any
such person against liability that would otherwise be imposed by reason of
willful malfeasance, bad faith or gross negligence in its performance of its
duties under this Agreement or the applicable Credit Risk Management Agreement.
The Credit Risk Manager and any director, officer, employee or agent of the
Credit Risk Manager may rely in good faith on any document of any kind prima
facie properly executed and submitted by any Person respecting any matters
arising hereunder, and may rely in good faith upon the accuracy of information
furnished by the Servicer and/or Master Servicer pursuant to the related Credit
Risk Management Agreement in the performance of its duties thereunder and
hereunder.
ARTICLE
IV
ADMINISTRATION
AND MASTER SERVICING OF THE MORTGAGE LOANS
Section
4.01 The
Master Servicer.
The
Master Servicer shall supervise, monitor and oversee the obligation of the
Servicer to
service and administer the Mortgage Loans in accordance with the terms of the
Servicing Agreement and shall have full power and authority to do any and all
things which it may deem necessary or desirable in connection with such master
servicing and administration. In performing its obligations hereunder, the
Master Servicer shall act in a manner consistent with Accepted Master Servicing
Practices. Furthermore, the Master Servicer shall oversee and consult with
the
Servicer as necessary from time-to-time to carry out the Master Servicer’s
obligations hereunder, shall receive, review and evaluate all reports,
information and other data provided to the Master Servicer by the Servicer
and
shall enforce the Servicer’s obligation to perform and observe the covenants,
obligations and conditions to be performed or observed by the Servicer under
the
Servicing Agreement. The Master Servicer shall independently and separately
monitor the Servicer’s servicing activities with respect to each Mortgage Loan,
reconcile the results of such monitoring with such information provided in
the
previous sentence on a monthly basis and coordinate corrective adjustments
to
the Servicer’s and Master Servicer’s records, and based on such reconciled and
corrected information, provide such information relating to the Mortgage Loans
to the Securities Administrator as shall be necessary to enable it to prepare
the statements specified in Section 5.06 and any other information and
statements required to be provided by the Securities Administrator hereunder.
The Master Servicer shall reconcile the results of its Mortgage Loan monitoring
with the actual remittances of the Servicer to the Distribution Account pursuant
to the Servicing Agreement.
Notwithstanding
anything in this Agreement or the Servicing Agreement to the contrary, the
Master Servicer shall not have any duty or obligation to enforce any Credit
Risk
Management Agreement that the Servicer is a party to (the “Servicer Credit Risk
Management Agreement”) or to supervise, monitor or oversee the activities of the
Credit Risk Manager under the Servicer Credit Risk Management Agreement with
respect to any action taken or not taken by the Servicer pursuant to a
recommendation of the Credit Risk Manager.
The
Trustee shall furnish the Servicer and the Master Servicer with any limited
powers of attorney and other documents in form agreeable to the Trustee
necessary or appropriate to enable the Servicer and the Master Servicer to
service or master service and administer the Mortgage Loans and REO Property.
The Trustee shall have no responsibility for any action of the Master Servicer
or the Servicer pursuant to any such limited power of attorney or any other
executed document delivered by the Trustee pursuant to this paragraph and shall
be indemnified by the Master Servicer and the Servicer for any cost, liability
or expense arising from the misuse thereof by the Master Servicer or the
Servicer.
The
Trustee, the Custodian and the Securities Administrator shall provide access
to
the records and documentation in possession of the Trustee, the Custodian or
the
Securities Administrator regarding the Mortgage Loans and REO Property and
the
servicing thereof to the Certificateholders, the FDIC, and the supervisory
agents and examiners of the FDIC, such access being afforded only upon
reasonable prior written request and during normal business hours at the office
of the Trustee, the Custodian or the Securities Administrator; provided,
however, that, unless otherwise required by law, none of the Trustee, the
Custodian or the Securities Administrator shall be required to provide access
to
such records and documentation if the provision thereof would violate the legal
right to privacy of any Mortgagor. The Trustee, the Custodian and the Securities
Administrator shall allow representatives of the above entities to photocopy
any
of the records and documentation and shall provide equipment for that purpose
at
a charge that covers the Trustee’s, the Custodian’s or the Securities
Administrator’s actual costs.
The
Trustee shall execute and deliver to the Servicer or the Master Servicer upon
request any court pleadings, requests for trustee’s sale or other documents
necessary or desirable and, in each case, provided to the Trustee by the
Servicer or the Master Servicer to (i) the foreclosure or trustee’s sale with
respect to a Mortgaged Property; (ii) any legal action brought to obtain
judgment against any Mortgagor on the Mortgage Note or any other Loan Document;
(iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any
other rights or remedies provided by the Mortgage Note or any other Mortgage
Loan Document or otherwise available at law or equity.
Section
4.02 Monitoring
of the Servicer.
The
Master Servicer shall be responsible for monitoring the compliance by the
Servicer with its duties under the Servicing Agreement. In the review of the
Servicer’s activities, the Master Servicer may rely upon an officer’s
certificate of the Servicer with regard to its compliance with the terms of
the
Servicing Agreement. In the event that the Master Servicer, in its judgment,
determines that the Servicer should be terminated in accordance with the
Servicing Agreement, or that a notice should be sent pursuant to the Servicing
Agreement with respect to the occurrence of an event that, unless cured, would
constitute grounds for such termination, the Master Servicer shall notify the
Sponsor and the Trustee thereof and the Trustee shall issue such notice or
take
such other action as it deems appropriate.
The
Master Servicer, for the benefit of the Trustee and the Certificateholders,
shall enforce the obligations of the Servicer under the Servicing Agreement,
and
shall, in the event that the Servicer fails to perform its obligations in
accordance with the Servicing Agreement, subject to this Section and
Article VIII, shall notify the Trustee and the Trustee shall terminate the
rights and obligations of the Servicer hereunder in accordance with the
provisions of Article VIII and act as Successor Servicer of the Mortgage Loans
or enter in to a new servicing agreement with a Successor Servicer selected
by
the Trustee; provided, however, it is understood and acknowledged by the parties
hereto that there will be a period of transition (not to exceed ninety (90)
days) before the actual servicing functions can be fully transferred to such
Successor Servicer. Such enforcement, including, without limitation, the legal
prosecution of claims and the pursuit of other appropriate remedies, shall
be in
such form and carried out to such an extent and at such time as the Master
Servicer, in its good faith business judgment, would require were it the owner
of the Mortgage Loans. The Master Servicer shall pay the costs of such
enforcement at its own expense, provided that the Master Servicer shall not
be
required to prosecute or defend any legal action except to the extent that
the
Master Servicer shall have received indemnity reasonably acceptable to it for
its costs and expenses in pursuing such action.
To
the
extent that the costs and expenses related to the termination of the Servicer,
appointment of a Successor Servicer or the transfer and assumption of servicing
by the Trustee as Successor Servicer with respect to the Servicing Agreement
(including, without limitation, (i) all legal costs and expenses and all due
diligence costs and expenses associated with an evaluation of the potential
termination of the Servicer as a result of an event of default by the Servicer
and (ii) all costs and expenses associated with the complete transfer of
servicing, including all servicing files and all servicing data and the
completion, correction or manipulation of such servicing data as may be required
by the Successor Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the Successor Servicer to service the
Mortgage Loans in accordance with the Servicing Agreement) are not fully and
timely reimbursed by the terminated Servicer, the Trustee shall be entitled
to
reimbursement of such costs and expenses from the Distribution
Account.
The
Master Servicer shall require the Servicer to comply with the remittance
requirements and other obligations set forth in the Servicing
Agreement.
If
the
Trustee acts as Successor Servicer, it shall not assume liability for the
representations and warranties of the Servicer, if any, that it
replaces.
Section
4.03 Fidelity
Bond.
The
Master Servicer, at its expense, shall maintain in effect a blanket fidelity
bond and an errors and omissions insurance policy that shall be in such form
and
amount generally acceptable for entities serving as master servicers or
trustees, affording coverage with respect to all directors, officers, employees
and other Persons acting on such Master Servicer’s behalf, and covering errors
and omissions in the performance of the Master Servicer’s obligations hereunder.
Any such errors and omissions policy and fidelity bond may not be cancelable
without thirty (30) days’ prior written notice to the Trustee.
Section
4.04 Power
to Act; Procedures.
The
Master Servicer shall master service the Mortgage Loans and shall have full
power and authority, subject to the REMIC Provisions and the provisions of
Section 9.13 hereof, to do any and all things that it may deem necessary or
desirable in connection with the master servicing and administration of the
Mortgage Loans, including but not limited to the power and authority (i) to
execute and deliver, on behalf of the Certificateholders and the Trustee,
customary consents or waivers and other instruments and documents, (ii) to
consent to transfers of any Mortgaged Property and assumptions of the Mortgage
Notes and related Mortgages, (iii) to collect any Insurance Proceeds and
Liquidation Proceeds, and (iv) to effectuate foreclosure or other conversion
of
the ownership of the Mortgaged Property securing any Loan, in each case, in
accordance with the provisions of this Agreement and the Servicing Agreement,
as
applicable; provided, however, that the Master Servicer shall not (and,
consistent with its responsibilities under Section 4.02, shall not permit
the Servicer to) knowingly or intentionally take any action, or fail to take
(or
fail to cause to be taken) any action reasonably within its control and the
scope of duties more specifically set forth herein, that, under the REMIC
Provisions, if taken or not taken, as the case may be, would cause any REMIC
to
fail to qualify as a REMIC or result in the imposition of a tax upon the Trust
Fund (including but not limited to the tax on prohibited transactions as defined
in Section 860F(a)(2) of the Code and the tax on contributions to a REMIC
set forth in Section 860G(d) of the Code) unless the Master Servicer has
received an Opinion of Counsel (but not at the expense of the Master Servicer)
to the effect that the contemplated action will not cause any REMIC to fail
to
qualify as a REMIC or result in the imposition of a tax upon any REMIC. The
Trustee shall furnish the Master Servicer, upon written request from a Servicing
Officer or an Authorized Servicer Representative, with any powers of attorney,
in form agreeable to the Trustee, empowering the Master Servicer, or the
Servicer to execute and deliver instruments of satisfaction or cancellation,
or
of partial or full release or discharge, and to foreclose upon or otherwise
liquidate Mortgaged Property, and to appeal, prosecute or defend in any court
action relating to the Mortgage Loans or the Mortgaged Property, in accordance
with the Servicing Agreement and this Agreement, and the Trustee shall execute
and deliver such other documents, as the Master Servicer or the Servicer may
request, to enable the Master Servicer to master service and administer the
Mortgage Loans and carry out its duties hereunder, in each case in accordance
with Accepted Master Servicing Practices (and the Trustee shall have no
liability for the misuse of any such powers of attorney by the Master Servicer
or the Servicer and shall be indemnified by the Master Servicer and the
Servicer, as applicable, for any costs, liabilities or expenses incurred by
the
Trustee in connection with such misuse). If the Master Servicer or the Trustee
has been advised that it is likely that the laws of the state in which action
is
to be taken prohibit such action if taken in the name of the Trustee or that
the
Trustee would be adversely affected under the “doing business” or tax laws of
such state if such action is taken in its name, the Master Servicer shall join
with the Trustee in the appointment of a co-trustee pursuant to
Section 9.10 hereof. In the performance of its duties hereunder, the Master
Servicer shall be an independent contractor and shall not, except in those
instances where it is taking action authorized pursuant to this Agreement to
be
taken by it in the name of the Trustee, be deemed to be the agent of the
Trustee.
Section
4.05 Due-on-Sale
Clauses; Assumption Agreements.
To
the
extent provided in the Servicing Agreement and to the extent Mortgage Loans
contain enforceable due-on-sale clauses, the Master Servicer shall enforce
the
Servicer’s obligation to enforce such clauses in accordance with the Servicing
Agreement. If applicable law prohibits the enforcement of a due-on-sale clause
or such clause is otherwise not enforced in accordance with the Servicing
Agreement, and, as a consequence, a Mortgage Loan is assumed, the original
Mortgagor may be released from liability in accordance with the Servicing
Agreement.
Section
4.06 Documents,
Records and Funds in Possession of Master Servicer To Be Held for
Trustee.
The
Master Servicer shall transmit, and the Servicer (to the extent required under
the Servicing Agreement) shall transmit to the Trustee or Custodian such
documents and instruments coming into the possession of the Master Servicer
or
the Servicer from time to time as are required by the terms hereof, or in the
case of the Servicer, the Servicing Agreement, to be delivered to the Trustee
or
the Custodian. Any funds received by the Master Servicer or by the Servicer
in
respect of any Mortgage Loan or which otherwise are collected by the Master
Servicer or by the Servicer as Liquidation Proceeds, Insurance Proceeds or
Subsequent Recoveries in respect of any Mortgage Loan shall be held for the
benefit of the Trustee and the Certificateholders subject to the Master
Servicer’s right to retain or withdraw from the Distribution Account the Master
Servicing Compensation and other amounts provided in this Agreement, and to
the
right of the Servicer to retain its Servicing Fee and other amounts as provided
in the Servicing Agreement. The Master Servicer shall, and (to the extent
provided in the Servicing Agreement) shall enforce the Servicer’s obligation to,
provide access to information and documentation regarding the Mortgage Loans
to
the Trustee, its agents and accountants at any time upon reasonable request
and
during normal business hours, and to Certificateholders that are savings and
loan associations, banks or insurance companies, the OTS, the FDIC and the
supervisory agents and examiners of such Office and Corporation or examiners
of
any other federal or state banking or insurance regulatory authority if so
required by applicable regulations of the OTS or other regulatory authority,
such access to be afforded without charge but only upon reasonable request
in
writing and during normal business hours at the offices of the Master Servicer
designated by it. In fulfilling such a request the Master Servicer shall not
be
responsible for determining the sufficiency of such information.
All
Mortgage Files and funds collected or held by, or under the control of, the
Master Servicer, in respect of any Mortgage Loans, whether from the collection
of principal and interest payments or from Liquidation Proceeds or Insurance
Proceeds, shall be held by the Master Servicer for and on behalf of the Trustee
and the Certificateholders and shall be and remain the sole and exclusive
property of the Trustee; provided, however, that the Master Servicer and the
Servicer shall be entitled to setoff against, and deduct from, any such funds
any amounts that are properly due and payable to the Master Servicer or the
Servicer under this Agreement or the Servicing Agreement.
Section
4.07 Standard
Hazard Insurance and Flood Insurance Policies.
For
each
Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicer
under the Servicing Agreement to maintain or cause to be maintained standard
fire and casualty insurance and, where applicable, flood insurance, all in
accordance with the provisions of the Servicing Agreement. It is understood
and
agreed that such insurance shall be with insurers meeting the eligibility
requirements set forth in the Servicing Agreement and that no earthquake or
other additional insurance is to be required of any Mortgagor or to be
maintained on property acquired in respect of a defaulted loan, other than
pursuant to such applicable laws and regulations as shall at any time be in
force and as shall require such additional insurance.
Pursuant
to Section 3.31, any amounts collected by the Master Servicer or by the
Servicer, under any insurance policies (other than amounts to be applied to
the
restoration or repair of the property subject to the related Mortgage or
released to the Mortgagor in accordance with the Servicing Agreement) shall
be
deposited into the Distribution Account, subject to withdrawal pursuant to
Section 3.32. Any
cost incurred by the Servicer in maintaining any such insurance if the Mortgagor
defaults in its obligation to do so shall be added to the amount owing under
the
Mortgage Loan where the terms of the Mortgage Loan so permit; provided, however,
that the addition of any such cost shall not be taken into account for purposes
of calculating the distributions to be made to Certificateholders and shall
be
recoverable by the Servicer pursuant to the Servicing Agreement.
Section
4.08 Presentment
of Claims and Collection of Proceeds.
The
Master Servicer shall enforce (to the extent provided in the Servicing
Agreement) the Servicer’s obligation to, prepare and present on behalf of the
Trustee and the Certificateholders all claims under any insurance policies
and
take such actions (including the negotiation, settlement, compromise or
enforcement of the insured’s claim) as shall be necessary to realize recovery
under such policies. Any proceeds disbursed to the Master Servicer (or disbursed
to the Servicer and remitted to the Master Servicer) in respect of such
policies, bonds or contracts shall be promptly deposited in the Distribution
Account upon receipt, except that any amounts realized that are to be applied
to
the repair or restoration of the related Mortgaged Property as a condition
precedent to the presentation of claims on the related Mortgage Loan to the
insurer under any applicable insurance policy need not be so deposited (or
remitted).
Section
4.09 Maintenance
of the Primary Mortgage Insurance Policies.
The
Master Servicer shall not take, or (to the extent within its control) permit
the
Servicer (to the extent such action is prohibited under the Servicing Agreement)
to take, any action that would result in noncoverage under any primary mortgage
insurance policy or any loss which, but for the actions of the Master Servicer
or the Servicer, would have been covered thereunder. The Master Servicer shall
use its best reasonable efforts to enforce the Servicer’s obligation (to the
extent required under the Servicing Agreement) to keep in force and effect
(to
the extent that the related Mortgage Loan requires the Mortgagor to maintain
such insurance), primary mortgage insurance applicable to each Mortgage Loan
in
accordance with the provisions of this Agreement and the Servicing Agreement,
as
applicable. The Master Servicer shall not, and (to the extent within its
control) shall not permit the Servicer (to the extent required under the
Servicing Agreement) to, cancel or refuse to renew any primary mortgage
insurance policy that is in effect at the date of the initial issuance of the
Mortgage Note and is required to be kept in force hereunder except in accordance
with the provisions of this Agreement and the Servicing Agreement, as
applicable.
The
Master Servicer agrees to
enforce
the Servicer’s obligation
(to the
extent required under the Servicing Agreement) to present, on behalf of the
Trustee and the Certificateholders, claims to the insurer under any primary
mortgage insurance policies and, in this regard, to take such reasonable action
as shall be necessary to permit recovery under any primary mortgage insurance
policies respecting defaulted Mortgage Loans. Pursuant to Section 3.31, any
amounts collected by the Master Servicer or the Servicer under any primary
mortgage insurance policies shall be deposited by the Servicer or by the Master
Servicer in the Distribution Account, subject to withdrawal pursuant to
Section 3.32.
Section
4.10 Trustee
to Retain Possession of Certain Insurance Policies and Documents.
The
Trustee or the Custodian, shall retain possession and custody of the originals
(to the extent available) of any primary mortgage insurance policies, or
certificate of insurance if applicable, and any certificates of renewal as
to
the foregoing as may be issued from time to time as contemplated by this
Agreement. Until all amounts distributable in respect of the Certificates have
been distributed in full and the Master Servicer and the Servicer otherwise
have
fulfilled theirobligations under this Agreement and the Servicing Agreement,
the
Trustee or the Custodian shall also retain possession and custody of each
Mortgage File in accordance with and subject to the terms and conditions of
this
Agreement and the Custodial Agreement. The Master Servicer shall promptly
deliver or cause to be delivered to the Trustee or the Custodian, upon the
execution or receipt thereof the originals of any primary mortgage insurance
policies, any certificates of renewal, and such other documents or instruments
that constitute Mortgage Loan Documents that come into the possession of the
Master Servicer from time to time.
Section
4.11 Realization
Upon Defaulted Loans.
The
Master Servicer shall enforce the Servicer’s obligation (to the extent required
under the Servicing Agreement) to foreclose upon, repossess or otherwise
comparably convert the ownership of Mortgaged Properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments,
all
in accordance with the Servicing Agreement.
Section
4.12 Compensation
for the Master Servicer.
As
compensation for its services hereunder, the Master Servicer shall be entitled
to retain all income and gain realized from any investment of funds in the
Distribution Account. The Master Servicer shall be required to pay all expenses
incurred by it in connection with its activities hereunder and shall not be
entitled to reimbursement therefor except as provided in this
Agreement.
The
amount of the Master Servicing Compensation payable to the Master Servicer
in
respect of any Distribution Date shall be reduced in accordance with
Section 4.14.
Section
4.13 REO
Property.
In
the
event the Trust Fund acquires ownership of any REO Property in respect of any
Mortgage Loan, the deed or certificate of sale shall be issued to the Trustee,
or to its nominee, on behalf of the Certificateholders. The Master Servicer
shall enforce, to the extent provided in the Servicing Agreement, the Servicer’s
obligation to sell, and the Servicer agrees to sell, any REO Property as
expeditiously as possible and in accordance with the provisions of this
Agreement and the Servicing Agreement, as applicable. Further, the Master
Servicer shall to the extent provided in the Servicing Agreement, enforce the
Servicer’s obligation to sell any REO Property prior to three (3) years after
the end of the calendar year of its acquisition by REMIC I, unless (i) the
Trustee and the Securities Administrator shall have been supplied with an
Opinion of Counsel to the effect that the holding by the Trust Fund of such
REO
Property subsequent to such three-year period will not result in the imposition
of taxes on “prohibited transactions” of any REMIC hereunder as defined in
Section 860F of the Code or cause any REMIC hereunder to fail to qualify as
a REMIC at any time that any Certificates are outstanding, in which case the
Trust Fund may continue to hold such Mortgaged Property (subject to any
conditions contained in such Opinion of Counsel) or (ii) the Servicer shall
have
applied for, prior to the expiration of such three-year period, an extension
of
such three-year period in the manner contemplated by Section 856(e)(3) of
the Code, in which case the three-year period shall be extended by the
applicable extension period. The Master Servicer shall to the extent provided
in
the Servicing Agreement, cause the Servicer to protect and conserve, such REO
Property in the manner and to the extent required by the Servicing Agreement,
in
accordance with the REMIC Provisions and in a manner that does not result in
a
tax on “net income from foreclosure property” or cause such REO Property to fail
to qualify as “foreclosure property” within the meaning of
Section 860G(a)(8) of the Code.
The
Master Servicer shall enforce, to the extent required by the Servicing
Agreement, the Servicer’s obligation to deposit all funds collected and received
in connection with the operation of any REO Property in the Protected Account
maintained by the Servicer.
The
Master Servicer and the Servicer, upon the final disposition of any REO
Property, shall be entitled to reimbursement for any related unreimbursed
Advances and other unreimbursed advances as well as any unpaid Servicing Fees
and Master Servicing Fees from Liquidation Proceeds received in connection
with
the final disposition of such REO Property; provided, that any such unreimbursed
Advances as well as any unpaid Servicing Fees may be reimbursed or paid, as
the
case may be, prior to final disposition, out of any net rental income or other
net amounts derived from such REO Property.
Section
4.14 Obligation
of the Master Servicer in Respect of Prepayment Interest
Shortfalls.
The
Master Servicer shall deposit in the Distribution Account not later than each
Distribution Date an amount equal to the lesser of (i) the aggregate amounts
required to be paid by the Servicer under the Servicing Agreement with respect
to Prepayment Interest Shortfalls on the Mortgage Loans for the related
Distribution Date, and not so paid by the Servicer and (ii) the Master Servicing
Compensation for such Distribution Date without reimbursement
therefor.
ARTICLE
V
ADVANCES
AND DISTRIBUTIONS
Section
5.01 Advances.
If
the
Scheduled Payment on a Mortgage Loan or a portion thereof is delinquent as
of
its Due Date, other than as a result of interest shortfalls due to bankruptcy
proceedings or application of the Relief Act, and the Servicer fails to make
an
advance of the delinquent amount pursuant to the Servicing Agreement, then
the
Trustee (in its capacity as Successor Servicer) shall deposit in the
Distribution Account on the Remittance Date on which such Advance was required
to be remitted by the Servicer, from its own funds an amount equal to such
delinquency, net of the Servicing Fee for such Mortgage Loan except to the
extent the Trustee determines any such advance to be nonrecoverable from
Liquidation Proceeds, Insurance Proceeds, or future payments on the Mortgage
Loan for which such Advance was made; provided, however, that if the Trustee
is
prohibited by law or regulation from obligating itself to make advances
regarding delinquent mortgage loans, then the Trustee shall not be obligated
to
make Advances pursuant to this Section 5.01; and provided further, that any
failure to perform such duties or responsibilities caused by the Servicer’s
failure to provide information required by the Trustee in connection with the
making of any such required Advance shall not be considered a default by the
Trustee as successor to the Servicer; provided, however, that (1) it is
understood and acknowledged by the parties hereto that there will be a period
of
transition (not to exceed 90 days) before the actual servicing functions can
be
fully transferred to the Trustee or any Successor Servicer and (2) any failure
to perform such duties or responsibilities caused by the Servicer’s failure to
provide information required by the Trustee in connection with the making of
any
such Advance shall not be considered a default by the Trustee as successor
to
the Servicer.
Section
5.02 Compensating
Interest Payments.
In
the
event that there is a Prepayment Interest Shortfall arising from a voluntary
Principal Prepayment in full by the Mortgagor with respect to any Mortgage
Loan,
the Servicer shall, to the extent of the Servicing Fee for such Distribution
Date, deposit into its Protected Account, no later than the close of business
on
the Remittance Date immediately preceding such Distribution Date, an amount
equal to the Prepayment Interest Shortfall; and
in
case of such deposit, the Servicer shall not be entitled to any recovery or
reimbursement from the Depositor, the Trustee, the Sponsor, the Trust Fund,
the
Master Servicer or the Certificateholders.
In the
event that the Servicer fails to make such payments, the Master Servicer shall
deposit in the Distribution Account not later than each Distribution Date an
amount equal to the lesser of (i) the aggregate amounts required to be paid
by
the Servicer under the Servicing Agreement with respect to Prepayment Interest
Shortfalls on the Mortgage Loans for the related Distribution Date, and (ii)
the
Master Servicing Compensation for such Distribution Date without reimbursement
therefor.
Section
5.03 REMIC
Distributions.
On
each
Distribution Date the Securities Administrator, shall be deemed to allocate
distributions to the REMIC I Regular Interests and REMIC II Regular Interests
in
accordance with Section 5.07 hereof.
Section
5.04 Distributions.
(a) On
each
Distribution Date, the Securities Administrator will withdraw funds on deposit
in the Distribution Account and make distributions to the Certificateholders
in
accordance with the Remittance Report for such Distribution Date, in the
following order of priority:
(i) On
each
Distribution Date, the Interest Remittance Amount for such Distribution Date
will be paid in the following order of priority:
(1) any
Net
Swap Payment or Swap Termination Payment paid to the Supplemental Interest
Trust
and owed to the Swap Provider (unless the Swap Provider is the sole Defaulting
Party or the sole Affected Party (as defined in the ISDA Master Agreement)
and
to the extent not paid by the Securities Administrator from any upfront payment
received pursuant to any replacement interest
rate swap agreement
that may
be entered into by the Supplemental Interest Trust Trustee);
(2) to
the
Senior Certificates, pro rata based on amounts due, Current Interest and any
Carryforward Interest for each such Class and such Distribution
Date;
(3) to
the
Class M-1 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(4) to
the
Class M-2 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(5) to
the
Class M-3 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(6) to
the
Class M-4 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(7) to
the
Class M-5 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(8) to
the
Class M-6 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(9) to
the
Class M-7 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(10) to
the
Class M-8 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(11) to
the
Class M-9 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date;
(12) to
the
Class B-1 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date; and
(13) to
the
Class B-2 Certificates, Current Interest and any Carryforward Interest for
such
Class and Distribution Date.
(ii) The
Principal Payment Amount will be paid on each Distribution Date as
follows:
I. On
each
Distribution Date (a) prior to the Stepdown Date or (b) with respect to which
a
Trigger Event is in effect, the Principal Payment Amount will be paid in the
following order of priority:
|
(i)
|
to
the Supplemental Interest Trust from the Principal Payment Amount,
any Net
Swap Payment or Swap Termination Payment owed to the Swap Provider
(unless
the Swap Provider is the sole Defaulting Party or the sole Affected
Party
(as defined in the ISDA Master Agreement and to the extent not paid
by the
Securities Administrator from any upfront payment received pursuant
to any
replacement interest rate swap agreement that may be entered into
by the
Supplemental Interest Trust Trustee)) to the extent not paid from
the
Interest Remittance Amount on such Distribution Date;
|
|
(ii)
|
sequentially,
to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates,
in that
order, until the Certificate Principal Balance of each such Class
has been
reduced to zero;
|
|
(iii)
|
to
the Class M-1 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(iv)
|
to
the Class M-2 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(v)
|
to
the Class M-3 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(vi)
|
to
the Class M-4 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(vii)
|
to
the Class M-5 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(viii)
|
to
the Class M-6 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(ix)
|
to
the Class M-7 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(x)
|
to
the Class M-8 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(xi)
|
to
the Class M-9 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(xii)
|
to
the Class B-1 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(xiii)
|
to
the Class B-2 Certificates, until its Certificate Principal Balance
is
reduced to zero; and
|
|
(xiv)
|
for
application as part of Monthly Excess Cashflow for such Distribution
Date
pursuant to subclause (iii) below, any such Principal Payment Amount
remaining after application pursuant to clauses I(i) through (xiii)
above.
|
II. On
each
Distribution Date (a) on or after the Stepdown Date and (b) with respect to
which a Trigger Event is not in effect, the Principal Payment Amount will be
paid in the following order of priority:
|
(i)
|
to
the Supplemental Interest Trust from the Principal Payment Amount,
any Net
Swap
Payment or Swap Termination Payment owed to the Swap Provider (unless
the
Swap Provider is the sole Defaulting Party or the sole Affected Party
(as
defined in the ISDA Master Agreement and to the extent not paid by
the
Securities Administrator from any upfront payment received pursuant
to any
replacement interest rate swap agreement that may be entered into
by the
Supplemental Interest Trust Trustee)) remaining unpaid after the
distribution of the Interest Remittance Amount on such Distribution
Date;
|
|
(ii)
|
from
the Senior Principal Payment Amount, sequentially, to the Class A-1,
Class
A-2, Class A-3 and Class A-4 Certificates, in that order, until the
Certificate Principal Balance of each such Class has been reduced
to
zero;
|
|
(iii)
|
to
the Class M-1 Certificates, the Class M-1 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(iv)
|
to
the Class M-2 Certificates, the Class M-2 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(v)
|
to
the Class M-3 Certificates, the Class M-3 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(vi)
|
to
the Class M-4 Certificates, the Class M-4 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(vii)
|
to
the Class M-5 Certificates, the Class M-5 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(viii)
|
to
the Class M-6 Certificates, the Class M-6 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(ix)
|
to
the Class M-7 Certificates, the Class M-7 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(x)
|
to
the Class M-8 Certificates, the Class M-8 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(xi)
|
to
the Class M-9 Certificates, the Class M-9 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(xii)
|
to
the Class B-1 Certificates, the Class B-1 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero;
|
|
(xiii)
|
to
the Class B-2 Certificates, the Class B-2 Principal Payment Amount
for
such Distribution Date, until its Certificate Principal Balance is
reduced
to zero; and
|
|
(xiv)
|
for
application as part of Monthly Excess Cashflow for such Distribution
Date
pursuant to clause (iii) below, any such Principal Payment Amount
remaining after application pursuant to clauses II(i) through (xiii)
above.
|
The
foregoing notwithstanding, on and after the Distribution Date on which the
aggregate Certificate Principal Balance of each class of Subordinate
Certificates has been reduced to zero, distributions to the Senior Certificates
will be allocated to the Class A-1, Class A-2, Class A-3 and Class A-4
Certificates, on a pro rata basis based on the Certificate Principal Balance
of
each such Class, until the Certificate Principal Balance of each such Class
has
been reduced to zero.
(iii) On
each
Distribution Date, the Monthly Excess Cashflow will be distributed in the
following order of priority:
(1)(A) until
the
aggregate Certificate Principal Balance of the Publicly Offered Certificates
and
Class B Certificates equals the Aggregate Loan Balance for such Distribution
Date minus the Targeted Overcollateralization Amount for such Distribution
Date,
on each Distribution Date (a) prior to the Stepdown Date or (b) with respect
to
which a Trigger Event is in effect, to the extent of Monthly Excess Interest
for
such Distribution Date, to the Publicly Offered Certificates and Class B
Certificates, in the following order of priority:
|
(a)
|
sequentially,
to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates,
in that
order, until the Certificate Principal Balance of each such Class
has been
reduced to zero;
|
|
(b)
|
to
the Class M-1 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(c)
|
to
the Class M-2 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(d)
|
to
the Class M-3 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(e)
|
to
the Class M-4 Certificates, until its Certificate Principal Balance
is
reduced to zero; and
|
|
(f)
|
to
the Class M-5 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(g)
|
to
the Class M-6 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(h)
|
to
the Class M-7 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(i)
|
to
the Class M-8 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(j)
|
to
the Class M-9 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
|
(k)
|
to
the Class B-1 Certificates, until its Certificate Principal Balance
is
reduced to zero; and
|
|
(l)
|
to
the Class B-2 Certificates, until its Certificate Principal Balance
is
reduced to zero;
|
(B) on
each
Distribution Date on or after the Stepdown Date and with respect to which a
Trigger Event is not in effect, to fund any principal distributions required
to
be made on such Distribution Date set forth in Section 5.04(ii)II after
giving effect to the distribution of the Principal Payment Amount for such
date,
in accordance with the priorities set forth therein;
(2) to
the
Class M-1 Certificates, any Deferred Amount for such Class;
(3) to
the
Class M-2 Certificates, any Deferred Amount for such Class;
(4) to
the
Class M-3 Certificates, any Deferred Amount for such Class;
(5) to
the
Class M-4 Certificates, any Deferred Amount for such Class;
(6) to
the
Class M-5 Certificates, any Deferred Amount for such Class;
(7) to
the
Class M-6 Certificates, any Deferred Amount for such Class;
(8) to
the
Class M-7 Certificates, any Deferred Amount for such Class;
(9) to
the
Class M-8 Certificates, any Deferred Amount for such Class;
(10) to
the
Class M-9 Certificates, any Deferred Amount for such Class;
(11) to
the
Class B-1 Certificates, any Deferred Amount for such Class;
(12) to
the
Class B-2 Certificates, any Deferred Amount for such Class;
(13) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class A-1, Class A-2, Class A-3 and Class A-4 Certificates,
concurrently, any Basis Risk Shortfall for each such Class, on a pro rata basis
based on the entitlement of each such Class;
(14) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-1 Certificates, any Basis Risk Shortfall for such Class;
(15) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-2 Certificates, any Basis Risk Shortfall for such Class;
(16) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-3 Certificates, any Basis Risk Shortfall for such Class;
(17) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-4 Certificates, any Basis Risk Shortfall for such
Class;
(18) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-5 Certificates, any Basis Risk Shortfall for such
Class;
(19) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-6 Certificates, any Basis Risk Shortfall for such
Class;
(20) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-7 Certificates, any Basis Risk Shortfall for such
Class;
(21) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-8 Certificates, any Basis Risk Shortfall for such
Class;
(22) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class M-9 Certificates, any Basis Risk Shortfall for such
Class;
(23) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class B-1 Certificates, any Basis Risk Shortfall for such
Class;
(24) to
the
Basis Risk Shortfall Reserve Fund and then from the Basis Risk Shortfall Reserve
Fund to the Class B-2 Certificates, any Basis Risk Shortfall for such
Class;
(25) to
the
Supplemental Interest Trust, any Swap Termination Payment owed to the Swap
Provider in the event of a Swap Provider Trigger Event not paid on prior
Distribution Dates and to the extent not paid by the Securities Administrator
from any upfront payment received pursuant to any replacement interest rate
swap
agreement that may be entered into by the Supplemental Interest Trust
Trustee;
(26) to
the
Class X Certificates, the Class X Distribution Amount; and
(27) to
the
Class R Certificates, any remaining amount. It is not anticipated that any
amounts will be distributed to the Class R Certificates under this clause
(27).
Notwithstanding
the foregoing, distributions pursuant to clauses (8) through (24) above on
any
Distribution Date will be made after giving effect to payments received pursuant
to the Swap Agreement. On each Distribution Date, the Securities Administrator,
after making the required distributions of interest and principal to the
Certificates as described in clauses (i) and (ii) above and after the
distribution of the Monthly Excess Cashflow as described in clause (iii) above,
will withdraw from the Basis Risk Shortfall Reserve Fund the amounts on deposit
therein and distribute such amounts to the Publicly Offered Certificates and
Class B Certificates in respect of any Basis Risk Shortfalls in the following
manner and order of priority: first, concurrently to the Senior Certificates,
on
a pro rata basis, based on the entitlement of each such Class, the amount of
any
Basis Risk Shortfalls allocated to such Class for such Distribution Date;
second, to the Class M-1 Certificates, the amount of any Basis Risk Shortfall
allocated to such Class for such Distribution Date for such Class; third, to
the
Class M-2 Certificates, the amount of any Basis Risk Shortfall allocated to
such
Class for such Distribution Date for such Class; fourth, to the Class M-3
Certificates, the amount of any Basis Risk Shortfalls allocated to such Class
for such Distribution Date for such Class; fifth, to the Class M-4 Certificates,
the amount of any Basis Risk Shortfalls allocated to such Class for such
Distribution Date; sixth, to the Class M-5 Certificates, the amount of any
Basis
Risk Shortfalls allocated to such Class for such Distribution Date; seventh,
to
the Class M-6 Certificates, the amount of any Basis Risk Shortfall allocated
to
such Class for such Distribution Date for such Class; eighth, to the Class
M-7
Certificates, the amount of any Basis Risk Shortfall allocated to such Class
for
such Distribution Date for such Class; ninth, to the Class M-8 Certificates,
the
amount of any Basis Risk Shortfall allocated to such Class for such Distribution
Date for such Class; tenth, to the Class M-9 Certificates, the amount of any
Basis Risk Shortfall allocated to such Class for such Distribution Date for
such
Class; eleventh, to the Class B-1 Certificates, the amount of any Basis Risk
Shortfall allocated to such Class for such Distribution Date for such Class;
and
twelfth, to the Class B-2 Certificates, the amount of any Basis Risk Shortfall
allocated to such Class for such Distribution Date for such Class.
(iv) Subject
to Section 10.02 hereof respecting the final distribution on a Class of
Publicly Offered Certificates or a Class of Class B Certificates, on each
Distribution Date the Securities Administrator shall make distributions to
each
Holder of a Publicly Offered Certificate or Class B Certificate of record on
the
preceding Record Date either by wire transfer in immediately available funds
to
the account of such holder at a bank or other entity having appropriate
facilities therefor, if (i) such Holder has so notified the Securities
Administrator at least five (5) Business Days prior to the related Record Date
and (ii) such Holder shall hold Regular Certificates with aggregate principal
denominations of not less than $1,000,000 or evidencing a Percentage Interest
aggregating ten percent (10%) or more with respect to such Class or, if not,
by
check mailed by first class mail to such Certificateholder at the address of
such holder appearing in the Certificate Register. Notwithstanding the
foregoing, but subject to Section 10.02 hereof respecting the final
distribution, distributions with respect to Publicly Offered Certificates and
Class B Certificates registered in the name of a Depository shall be made to
such Depository in immediately available funds.
(v) Net
Swap
Payments and Swap Termination Payments (other than Swap Termination Payments
resulting from a Swap Provider Trigger Event) payable by the Supplemental
Interest Trust to the Swap Provider pursuant to the Swap Agreement shall be
deducted from Interest Remittance Amount, and to the extent of any such
remaining amounts due, from Principal Remittance Amount, prior to any
distributions to the Certificateholders. On each Distribution Date, such amounts
will be remitted to the Supplemental Interest Trust, first to make any Net
Swap
Trust Payment owed to the Swap Provider pursuant to the Swap Agreement for
such
Distribution Date, and second to make any Swap Termination Payment (not due
to a
Swap Provider Trigger Event) owed to the Swap Provider pursuant to the Swap
Agreement for such Distribution Date. Any Swap Termination Payment due as a
result of the occurrence of a Swap Provider Trigger Event owed to the Swap
Provider pursuant to the Swap Agreement will be subordinated to distributions
to
the Holders of the Publicly Offered Certificates and Class B Certificates and
shall be paid as set forth in Section 5.04(a)(iii)(25).
(b) On
each
Distribution Date, the Securities Administrator shall distribute from the
amounts received from the Swap Provider in respect of any Net Swap Trust Payment
then on deposit in the Supplemental Interest Trust in the following order of
priority:
(i) concurrently
to the Senior Certificates, on a pro rata basis based on the entitlement of
each
such Class, in an amount equal to any Carryforward Interest for such Class
or
Classes to the extent not covered by the Interest Remittance Amount on that
Distribution Date and solely to the extent the amount of any Carryforward
Interest is a result of the allocation of the interest portion of Realized
Losses;
(ii) concurrently
to the Senior Certificates and Subordinate Certificates, on a pro rata basis
based on the entitlement of each such Class, an amount equal to any Principal
Payment Amount, to the extent not covered by the Monthly Excess Cashflow on
that
Distribution Date and solely to the extent the payment of the Extra Principal
Distribution Amount is as a result of current or prior period Realized Losses,
to be included in the Principal Payment Amount for that Distribution Date and
payable as provided under Section 5.04(a)(ii) above;
(iii) sequentially,
to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9, Class B-1 and Class B-2 Certificates, in that order,
in an amount equal to any Carryforward Interest for such Class or Classes to
the
extent not covered by the Monthly Excess Cashflow on that Distribution Date
and
solely to the extent the amount of any Carryforward Interest is as a result
of
the allocation of the interest portion of Realized Losses;
(iv) sequentially,
to the Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8, Class M-9, Class B-1 and Class B-2 Certificates, in an amount
equal to any Applied Loss Amount for such Class or Classes, to the extent not
covered by the Monthly Excess Cashflow on that Distribution Date;
(v) to
the
Basis Risk Shortfall Reserve Fund, to pay the Senior Certificates and
Subordinate Certificates as follows: first, to the Senior Certificates, on
a pro
rata basis based on the entitlement of each such Class, based on the aggregate
amount of Basis Risk Shortfall Amounts for each such Class of Senior
Certificates remaining unpaid, and second, sequentially, to the Class ▇-▇,
▇▇▇▇▇
▇-▇, Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class
M-9, Class B-1 and Class B-2 Certificates, in that order, any related Basis
Risk
Shortfall Amount for such Class or Classes remaining unpaid on such Distribution
Date, in each case to the extent not covered by the Monthly Excess Cashflow
on
that Distribution Date; and
(vi)
to
the
Class X Certificates, any remaining amounts.
Section
5.05 Allocation
of Realized Losses.
(a) On
or
prior to each Determination Date, the Securities Administrator shall determine
the amount of any Realized Loss in respect of each Mortgage Loan that occurred
during the immediately preceding calendar month, based solely on the reports
delivered by the Servicer pursuant to the Servicing Agreement.
(b) The
interest portion of Realized Losses on the Mortgage Loans shall be allocated
to
the Certificates as described in Section 1.02 hereof.
(c) The
principal portion of all Realized Losses on the Mortgage Loans shall be
allocated on each Distribution Date as follows: first, in reduction of Net
Swap
Payments paid by the Swap Provider under the Interest Rate Swap Agreement and
the Monthly Excess Cashflow for such Distribution date; second, to the Class
X
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; third, to the Class B-2 Certificates, until the Certificate Principal
Balance thereof has been reduced to zero; fourth, to the Class B-1 Certificates,
until the Certificate Principal Balance thereof has been reduced to zero; fifth,
to the Class M-9 Certificates, until the Certificate Principal Balance thereof
has been reduced to zero; sixth, to the Class M-8 Certificates, until the
Certificate Principal Balance thereof has been reduced to zero; seventh, to
the
Class M-7 Certificates, until the Certificate Principal Balance thereof has
been
reduced to zero; eighth, to the Class M-6 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; ninth, to the Class M-5
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; tenth, to the Class M-4 certificates, until the Certificate Principal
Balance thereof has been reduced to zero; eleventh, to the Class M-3
Certificates, until the Certificate Principal Balance thereof has been reduced
to zero; thirteenth, to the Class M-2 Certificates, until the Certificate
Principal Balance thereof has been reduced to zero; and fourteenth, to the
Class
M-1 Certificates, until the Certificate Principal Balance thereof has been
reduced to zero. All such Realized Losses to be allocated to the Certificate
Principal Balances of the Classes of Subordinate Certificates on any
Distribution Date shall be so allocated after the actual distributions to be
made on such date as provided above. All references above to the Certificate
Principal Balance of any Class of Subordinate Certificates shall be to the
Certificate Principal Balance of such Class immediately prior to the relevant
Distribution Date, before reduction thereof by any Realized Losses, in each
case
to be allocated to such Class of Certificates, on such Distribution
Date.
Any
allocation of the principal portion of Realized Losses to a Class of Subordinate
Certificates on any Distribution Date shall be made by reducing the Certificate
Principal Balance thereof by the amount so allocated; any allocation of Realized
Losses to a Class X Certificate shall be made by reducing the amount otherwise
payable in respect thereof pursuant to Section 5.04(iii)(26). No
allocations of any Realized Losses shall be made to the Certificate Principal
Balances of the Senior Certificates or Class P Certificates.
All
such
Realized Losses and all other losses allocated to a Class of Certificates
hereunder will be allocated among the Certificates of such Class in proportion
to the Percentage Interests evidenced thereby.
(d) Notwithstanding
anything to the contrary contained herein, if on any Distribution Date the
Securities Administrator discovers, based solely on the reports delivered by
the
Servicer under the Servicing Agreement that any Subsequent Recoveries have
been
collected by the Servicer with respect to the Mortgage Loans, the amount of
such
Subsequent Recoveries will be applied to increase the Certificate Principal
Balance of the Class of Subordinate Certificates with the highest payment
priority to which Realized Losses on the Mortgage Loans have been allocated,
but
not by more than the amount of Realized Losses previously allocated to that
Class of Subordinate Certificates pursuant to this Section 5.05. After the
Certificate Principal Balances of any Class of Subordinate Certificates have
been increased up to the amount of Realized Losses allocated thereto pursuant
to
this Section 5.05 to the extent that such Applied Loss Amounts have not
been paid to such certificates as a Deferred Amount, any additional Subsequent
Recoveries with respect to the Mortgage Loans will be applied to increase the
Certificate Principal Balance of the remaining Subordinate Certificates,
beginning with the Class of Subordinate Certificates with the next highest
payment priority, up to the amount of such Realized Losses previously allocated
to such Class of Certificates pursuant to this Section 5.05 but only to the
extent that any such Applied Loss Amount has not been paid to any Class of
Certificates as a Deferred Amount. Holders of such Certificates will not be
entitled to any payment in respect of current interest on the amount of such
increases for any Accrual Period preceding the Distribution Date on which such
increase occurs. Any such increases shall be applied to the Certificate
Principal Balance of each Class of Subordinate Certificate in accordance with
its respective Percentage Interest.
(e) With
respect to the REMIC I Regular Interests, all Realized Losses on the Mortgage
Loans shall be allocated on each Distribution Date first, to REMIC I Regular
Interest I until the Uncertificated Principal Balance has been reduced to zero,
and second, to REMIC I Regular Interest I-1-A through REMIC I Regular Interest
I-60-B, starting with the lowest numerical denomination until such REMIC I
Regular Interest has been reduced to zero, provided that, for REMIC I Regular
Interests with the same numerical denomination, such Realized Losses shall
be
allocated pro rata between such REMIC I Regular Interests.
(f) All
Realized Losses on the Mortgage Loans shall be allocated on each Distribution
Date to the following REMIC II Regular Interests in the specified percentages,
as follows: first, to Uncertificated Accrued Interest payable to the REMIC
II
Regular Interest LT-AA and REMIC II Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC II Interest Loss Allocation Amount, 98% and 2%,
respectively; second, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA and REMIC II Regular Interest LT-ZZ up to an aggregate
amount equal to the REMIC II Principal Loss Allocation Amount, 98% and 2%,
respectively; third, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-B2 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-B2 has been reduced to zero; fourth,
to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC
II Regular Interest LT-B1 and REMIC II Regular Interest LT-ZZ, 98%, 1% and
1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-B1 has been reduced to zero; fifth, to the Uncertificated Principal
Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-M9
and
REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC II Regular Interest LT-M9 has been
reduced to zero; sixth, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-M8 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-M8 has been reduced to zero; seventh,
to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC
II Regular Interest LT-M7 and REMIC II Regular Interest LT-ZZ, 98%, 1% and
1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-M7 has been reduced to zero; eighth, to the Uncertificated Principal
Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest LT-M6
and
REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until the
Uncertificated Principal Balance of REMIC II Regular Interest LT-M6 has been
reduced to zero; ninth, to the Uncertificated Principal Balances of REMIC II
Regular Interest LT-AA, REMIC II Regular Interest LT-M5 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-M5 has been reduced to zero; tenth,
to
the Uncertificated Principal Balances of REMIC II Regular Interest LT-AA, REMIC
II Regular Interest LT-M4 and REMIC II Regular Interest LT-ZZ, 98%, 1% and
1%,
respectively, until the Uncertificated Principal Balance of REMIC II Regular
Interest LT-M4 has been reduced to zero; eleventh, to the Uncertificated
Principal Balances of REMIC II Regular Interest LT-AA, REMIC II Regular Interest
LT-M3 and REMIC II Regular Interest LT-ZZ, 98%, 1% and 1%, respectively, until
the Uncertificated Principal Balance of REMIC II Regular Interest LT-M3 has
been
reduced to zero; twelfth, to the Uncertificated Principal Balances of REMIC
II
Regular Interest LT-AA, REMIC II Regular Interest LT-M2 and REMIC II Regular
Interest LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal
Balance of REMIC II Regular Interest LT-M2 has been reduced to zero; and
thirteenth, to the Uncertificated Principal Balances of REMIC II Regular
Interest LT-AA, REMIC II Regular Interest LT-M1 and REMIC II Regular Interest
LT-ZZ, 98%, 1% and 1%, respectively, until the Uncertificated Principal Balance
of REMIC II Regular Interest LT-M1 has been reduced to zero.
Section
5.06 Monthly
Statements to Certificateholders.
(a) Not
later
than each Distribution Date, the Securities Administrator shall prepare and
make
available to each Holder of Certificates, the Depositor and the Credit Risk
Manager via its website a statement setting forth the following information
for
the Certificates:
(i) the
Interest Accrual Period and general Distribution Dates for each Class of
Certificates;
(ii) the
Pass-Through Rate for each Class of Certificates with respect to the current
Accrual Period;
(iii) the
total
cash flows received and the general sources thereof;
(iv) the
amount of the related distribution to Holders of each Class allocable to
principal, separately identifying (A) the aggregate amount of any Principal
Prepayments included therein, (B) the aggregate of all scheduled payments of
principal included therein, (C) the Monthly Excess Interest with respect to
the
Certificates (if any) and (D) the amount of Prepayment Charges distributed
to
the Class P Certificates;
(v) the
amount distributed to Holders of each Class on such Distribution Date allocable
to interest;
(vi) the
Certificate Principal Balance of each Class of Certificates, if applicable,
after giving effect (i) to all distributions allocable to principal on such
Distribution Date and (ii) the allocation of any Realized Losses for such
Distribution Date;
(vii) the
aggregate amount of P&I Advances included in the distributions on the
Distribution Date;
(viii) the
aggregate amount of Relief Act Interest Shortfalls for such Distribution
Date;
(ix) the
aggregate amount of any Prepayment Interest Shortfall for such Distribution
Date, to the extent not covered by payments by the Servicer pursuant to
Section 3.02 of this Agreement or the Master Servicer pursuant to
Section 4.14 of this Agreement;
(x) the
cumulative amount of Realized Losses to date and, in addition, if the
Certificate Principal Balance of any Class of Certificates have been reduced
to
zero, the cumulative amount of any Realized Losses that have not been allocated
to any Class of Certificates;
(xi) the
Overcollateralization Amount and the Senior Enhancement Percentage, any
Overcollateralization Deficiency Amount and any Overcollateralization Release
Amount for such Distribution Date
(xii) the
amount of any Prepayment Charges remitted by the Servicer;
(xiii) the
number, aggregate principal balance, weighted average remaining term to maturity
and weighted average Mortgage Rate of the Mortgage Loans as of the related
Due
Date;
(xiv) the
number and Scheduled Principal Balance of all the Mortgage Loans for the
following Distribution Date;
(xv) the
number and aggregate principal balance of any Mortgage Loans that were (A)
delinquent (exclusive of Mortgage Loans in foreclosure) using the “OTS” method
(1) one scheduled payment is delinquent, (2) two scheduled payments are
delinquent, (3) three scheduled payments are delinquent and (4) foreclosure
proceedings have been commenced, and loss information for the period; the number
and aggregate principal balance of any Mortgage Loans in respect of which (A)
one scheduled payment is delinquent, (B) two scheduled payments are delinquent,
(C) three or more scheduled payments are delinquent and (D) foreclosure
proceedings have been commenced, and loss information for the
period;
(xvi) with
respect to any Mortgage Loan that was liquidated during the preceding calendar
month, the loan number and the Stated Principal Balance of, and Realized Loss
on, such Mortgage Loan as of the close of business on the Determination Date
preceding such Distribution Date;
(xvii) the
total
number and principal balance of any real estate owned or REO Properties as
of
the close of business on the Determination Date preceding such Distribution
Date;
(xviii) the
three
month rolling average of the percent equivalent of a fraction, the numerator
of
which is the Aggregate Loan Group Balance of the Mortgage Loans that are sixty
(60) days or more delinquent or are in bankruptcy or foreclosure or are REO
Properties, and the denominator of which is the Aggregate Loan Balance of all
of
the Mortgage Loans as of the related Due Period;
(xix) the
aggregate Servicing Fee received by the Servicer, and the Master Servicing
Fees,
if any, received by the Master Servicer during the related Due
Period;
(xx) the
amount of the Credit Risk Management Fees paid to the Credit Risk Manager and/or
the Sponsor for such Distribution Date;
(xxi) the
amount, if any, of other fees or expenses accrued and paid, with an
identification of the payee and the general purpose of such fees;
(xxii) the
amount of any Basis Risk Shortfalls and the amount in the Basis Risk Shortfall
Reserve Fund after all deposits and withdrawals on such Distribution Date;
(xxiii) amounts
payable in respect of the Swap Agreement; and
(xxiv) whether
the Stepdown Date has occurred and whether any Trigger Event is in
effect.
The
Securities Administrator may make the foregoing monthly statement (and, at
its
option, any additional files containing the same information in an alternative
format) available each month to Certificateholders via the Securities
Administrator’s internet website. The Securities Administrator’s internet
website shall initially be located at “▇▇▇.▇▇▇▇▇▇▇.▇▇▇”. Assistance in using the
website can be obtained by calling the Securities Administrator’s customer
service desk at (▇▇▇) ▇▇▇-▇▇▇▇. Parties that are unable to use the above
distribution options are entitled to have a paper copy mailed to them via first
class mail by calling the customer service desk and indicating such. The
Securities Administrator may change the way monthly statements are distributed
in order to make such distributions more convenient or more accessible to the
above parties.
The
Securities Administrator shall be entitled to rely on but shall not be
responsible for the content or accuracy of any information provided by third
parties for purposes of preparing such statement and may affix thereto any
disclaimer it deems appropriate in its reasonable discretion (without suggesting
liability on the part of any other party hereto).
(b) The
Securities Administrator’s responsibility for making the above information
available to the Certificateholders is limited to the availability, timeliness
and accuracy of the information provided by the Servicer and the Swap Provider.
The Securities Administrator will make available a copy of each statement
provided pursuant to this Section 5.06 to each Rating Agency.
(c) Within
a
reasonable period of time after the end of each calendar year, the Securities
Administrator shall cause to be furnished upon written request to each Person
who at any time during the calendar year was a Certificateholder, a statement
containing the information set forth in clauses (a)(i) and (a)(ii) of this
Section 5.06 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of
the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time
in
effect.
(d) Upon
filing with the Internal Revenue Service, the Securities Administrator shall
furnish to the Holders of the Residual Certificates the applicable Form 1066
and
each applicable Form 1066Q and shall respond promptly to written requests made
not more frequently than quarterly by any Holder of a Residual Certificate
with
respect to the following matters:
(i) The
original projected principal and interest cash flows on the Closing Date on
each
Class of regular and residual interests created hereunder and on the Mortgage
Loans, based on the Prepayment Assumption;
(ii) The
projected remaining principal and interest cash flows as of the end of any
calendar quarter with respect to each Class of regular and residual interests
created hereunder and the Mortgage Loans, based on the Prepayment
Assumption;
(iii) The
applicable Prepayment Assumption and any interest rate assumptions used in
determining the projected principal and interest cash flows described
above;
(iv) The
original issue discount (or, in the case of the Mortgage Loans, market discount)
or premium accrued or amortized through the end of such calendar quarter with
respect to each Class of regular or residual interests created hereunder and
to
the Mortgage Loans, together with each constant yield to maturity used in
computing the same;
(v) The
treatment of losses realized with respect to the Mortgage Loans or the regular
interests created hereunder, including the timing and amount of any cancellation
of indebtedness income of a REMIC with respect to such regular interests or
bad
debt deductions claimed with respect to the Mortgage Loans;
(vi) The
amount and timing of any non-interest expenses of a REMIC; and
(vii) Any
taxes
(including penalties and interest) imposed on the REMIC, including, without
limitation, taxes on “prohibited transactions,” “contributions” or “net income
from foreclosure property” or state or local income or franchise
taxes.
The
information pursuant to clauses (i), (ii), (iii) and (iv) above shall be
provided by the Depositor pursuant to Section 9.13.
Section
5.07 REMIC
Designations, REMIC I and REMIC II Allocations.
(a) The
Securities Administrator shall elect that each of REMIC I, REMIC II and REMIC
III shall be treated as a REMIC under Section 860D of the Code. Any
inconsistencies or ambiguities in this Agreement or in the administration of
this Agreement shall be resolved in a manner that preserves the validity of
such
REMIC elections. The REMIC I Regular Interests shall constitute the assets
of
REMIC II. The REMIC II Regular Interests shall constitute the assets of REMIC
III.
(b) On
each
Distribution Date, the following amounts, in the following order of priority
and
in accordance with the Remittance Report, shall be distributed by REMIC I to
REMIC II on account of the REMIC I Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R-I Interest,
as the case may be:
(i) to
Holders of each of REMIC I Regular Interest I and REMIC I Regular Interest
I-1-A
through I-60-B, pro rata, in an amount equal to (A) the Uncertificated Accrued
Interest for such REMIC I Regular Interests for such Distribution Date, plus
(B)
any amounts payable in respect thereof remaining unpaid from previous
Distribution Dates;
(ii) to
the
extent of amounts remaining after the distributions made pursuant to clause
(i)
above, payments of principal shall be allocated as follows: first, to REMIC
I
Regular Interests I-1-A through I-60-B starting with the lowest numerical
denomination until the Uncertificated Principal Balance of each such REMIC
I
Regular Interest is reduced to zero, provided that, for REMIC I Regular
Interests with the same numerical denomination, such payments of principal
shall
be allocated pro rata between such REMIC I Regular Interests, and second, to
the
extent of any Overcollateralization Release Amounts, to REMIC I Regular Interest
I until the Uncertificated Principal Balance of such REMIC I Regular Interest
is
reduced to zero; and
(iii) to
the
Holders of REMIC I Regular Interest P, (A) on each Distribution Date, 100%
of
the amount paid in respect of Prepayment Charges and (B) on the Distribution
Date in July 2011 until $100 has been distributed pursuant to this
clause.
(c) On
each
Distribution Date, the following amounts, in the following order of priority
and
in accordance with the Remittance Report, shall be distributed by REMIC II
to
REMIC III on account of the REMIC II Regular Interests or withdrawn from the
Distribution Account and distributed to the Holders of the Class R-II Interest,
as the case may be:
(i) first,
to
the Holders of REMIC II Regular Interest LT-IO, in an amount equal to (A)
Uncertificated Accrued Interest for such REMIC II Regular Interest for such
Distribution Date, plus (B) any amounts in respect thereof remaining unpaid
from
previous Distribution Dates and then to the Holders of REMIC II Regular Interest
LT-AA, REMIC II Regular Interest LT-A1, REMIC II Regular Interest LT-A2, REMIC
II Regular Interest LT-A3, REMIC II Regular Interest LT-A4, REMIC II Regular
Interest LT-M1, REMIC II Regular Interest LT-M2, REMIC II Regular Interest
LT-M3, REMIC II Regular Interest LT-M4, REMIC II Regular Interest LT-M5, REMIC
II Regular Interest LT-M6, REMIC II Regular Interest LT-M7, REMIC II Regular
Interest LT-M8, REMIC II Regular Interest LT-M9, REMIC II Regular Interest
LT-B1, REMIC II Regular Interest LT-B2 and REMIC II Regular Interest LT-ZZ,
pro
rata, in an amount equal to (A) the Uncertificated Accrued Interest for each
such REMIC II Regular Interest for such Distribution Date, plus (B) any amounts
in respect thereof remaining unpaid from previous Distribution Dates. Amounts
payable as Uncertificated Accrued Interest in respect of REMIC II Regular
Interest LT-ZZ shall be reduced and deferred when the REMIC II
Overcollateralization Amount is less than the REMIC II Targeted
Overcollateralization Amount, by the lesser of (x) the amount of such difference
and (y) the REMIC II Regular Interest LT-ZZ Maximum Interest Deferral Amount
and
such amount will be payable to the Holders of REMIC II Regular Interest LT-A1,
REMIC II Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II
Regular Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular
Interest LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest
LT-M4, REMIC II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC
II Regular Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular
Interest LT-M9, REMIC II Regular Interest LT-B1 and REMIC II Regular Interest
LT-B2 in the same proportion as the Overcollateralization Deficiency is
allocated to the Corresponding Certificates and the Uncertificated Principal
Balance of REMIC II Regular Interest LT-ZZ shall be increased by such
amount;
(ii) second,
to the Holders of REMIC II Regular Interests, in an amount equal to the
remainder of the Interest Remittance Amount and the Principal Payment Amount
for
such Distribution Date after the distributions made pursuant to clause (i)
above, allocated as follows:
(A) 98.00%
of
such remainder (other than amounts payable under clause (C) below) to the
Holders of REMIC II Regular Interest LT-AA and REMIC II Regular Interest LT-P,
until the Uncertificated Principal Balance of such REMIC II Regular Interest
is
reduced to zero, provided, however, that the Uncertificated Principal Balance
of
REMIC II Regular Interest LT-P shall not be reduced until the Distribution
Date
in July 2011 or any Distribution Date thereafter, at which point such amount
shall be distributed to REMIC II Regular Interest LT-P, until $100 has been
distributed pursuant to this clause;
(B) 2.00%
of
such remainder, first, to the Holders REMIC II Regular Interest LT-A1, REMIC
II
Regular Interest LT-A2, REMIC II Regular Interest LT-A3, REMIC II Regular
Interest LT-A4, REMIC II Regular Interest LT-M1, REMIC II Regular Interest
LT-M2, REMIC II Regular Interest LT-M3, REMIC II Regular Interest LT-M4, REMIC
II Regular Interest LT-M5, REMIC II Regular Interest LT-M6, REMIC II Regular
Interest LT-M7, REMIC II Regular Interest LT-M8, REMIC II Regular Interest
LT-M9, REMIC II Regular Interest LT-B1 and REMIC II Regular Interest LT-B2,
1%
in the same proportion as principal payments are allocated to the Corresponding
Certificates, until the Uncertificated Principal Balances of such REMIC II
Regular Interests are reduced to zero and second, to the Holders of REMIC II
Regular Interest LT-ZZ (other than amounts payable under the proviso below),
until the Uncertificated Principal Balance of such REMIC II Regular Interest
is
reduced to zero; and
(C) any
remaining amount to the Holders of the Class R Certificates (in respect of
the
Class R-II Interest).
provided,
however, that (i) 98.00% and (ii) 2.00% of any principal payments that are
attributable to an Overcollateralization Release Amount shall be allocated
to
Holders of (i) REMIC II Regular Interest LT-AA and REMIC II Regular Interest
LT-P, in that order and (ii) REMIC II Regular Interest LT-ZZ, respectively;
provided that REMIC II Regular Interest LT-P shall not be reduced until the
Distribution Date in July 2011, at which point such amount shall be distributed
to REMIC II Regular Interest LT-P, until $100 has been distributed pursuant
to
this clause.
Section
5.08 Prepayment
Charges.
On
each
Distribution Date, all amounts representing Prepayment Charges in respect of
the
Mortgage Loans received during the related Prepayment Period and deposited
in
the Distribution Account will be withdrawn from the Distribution Account and
distributed by the Securities Administrator in accordance with the Remittance
Report to the Class P Certificates and shall not be available for distribution
to the holders of any other Class of Certificates. The payment of such
Prepayment Charges shall not reduce the Certificate Principal Balance of the
Class P Certificates.
Section
5.09 Class
P Certificate Account.
The
Securities Administrator shall establish and maintain with itself a separate,
segregated trust account titled “▇▇▇▇▇ Fargo Bank, NA, as Securities
Administrator, for the benefit of Nomura Home Equity Loan, Inc., Home Equity
Loan Trust 2006-WF1 Class P Certificate Account”. On the Closing Date, the
Depositor will deposit, or cause to be deposited in the Class P Certificate
Account $100.00. The amount on deposit in the Class P Certificate Account shall
be held uninvested. On the July 2011 Distribution Date, the Securities
Administrator shall withdraw the amount on deposit in the Class P Certificate
Account and remit such amount to the Holders of the Class P Certificates, in
reduction of the Certificate Principal Balance thereof.
Section
5.10 Basis
Risk Shortfall Reserve Fund.
(a) The
Securities Administrator shall establish a Basis Risk Shortfall Reserve Fund
on
behalf of the holders of the Publicly Offered Certificates and the Class B
Certificates. The Basis Risk Shortfall Reserve Fund must be an Eligible Account.
The Basis Risk Shortfall Reserve Fund shall be entitled “Basis Risk Shortfall
Reserve Fund, HSBC Bank USA, National Association, as Trustee for the benefit
of
holders of Nomura Home Equity Loan, Inc., Asset-Backed Certificates, Series
2006-WF1, Class A-1, Class ▇-▇, ▇▇▇▇▇ ▇-▇, Class A-4, 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,
Class B-1 and Class B-2 Certificates. On the Closing Date, the Depositor will
deposit, or cause to be deposited, into the Basis Risk Shortfall Reserve Fund
$5,000. On each Distribution Date as to which there is a Basis Risk Shortfall
payable to any Class of Certificates, the Securities Administrator shall deposit
the amounts pursuant to paragraphs (13) through (24) of
Section 5.04(a)(iii) into the Basis Risk Shortfall Reserve Fund and the
Securities Administrator has been directed by the Class X Certificateholder
to
distribute such amounts to the Holders of the Publicly Offered Certificates
and
Class B Certificates in the amounts and priorities set forth in
Section 5.04(a)(iii).
(b) The
Basis
Risk Shortfall Reserve Fund is an “outside reserve fund” within the meaning of
Treasury Regulation §1.860G-2(h) and shall be an asset of the Trust Fund but not
an asset of any REMIC. The Securities Administrator on behalf of the Trust
shall
be the nominal owner of the Basis Risk Shortfall Reserve Fund. The Class X
Certificateholders shall be the beneficial owners of the Basis Risk Shortfall
Reserve Fund, subject to the power of the Securities Administrator to transfer
amounts under Section 5.04(a)(iii). Amounts in the Basis Risk Shortfall
Reserve Fund shall be held either uninvested in a trust or deposit account
of
the Securities Administrator with no liability for interest or other
compensation thereof or, at the written direction of the Majority Class X
Certificateholder, be invested in Permitted Investments that mature no later
than the Business Day prior to the next succeeding Distribution Date. All net
income and gain from such investments shall be distributed to the Majority
Class
X Certificateholder, not as a distribution in respect of any interest in any
REMIC, on such Distribution Date. All amounts earned on amounts on deposit
in
the Basis Risk Shortfall Reserve Fund shall be taxable to the Majority Class
X
Certificateholder. Any losses on such investments shall be deposited in the
Basis Risk Shortfall Reserve Fund by the Majority Class X Certificateholder
out
of its own funds immediately as realized. In the event that the Majority Class
X
Certificateholder shall fail to provide investment instructions to the
Securities Administrator, the amounts on deposit in the Basis Risk Shortfall
Reserve Fund shall be held uninvested.
(c) For
federal tax return and information reporting, the value of the right of the
holders of the Senior Certificates and Subordinate Certificates
to
receive payments from the Basis Risk Shortfall Reserve Fund in respect of any
Basis Risk Shortfall shall
be
zero dollars ($0.00).
Section
5.11 Supplemental
Interest Trust.
(a) On
the
Closing Date, the Securities Administrator shall establish and maintain in
the
name of the Trustee a separate account for the benefit of the holders of the
Publicly Offered Certificates and Class B Certificates (the “Supplemental
Interest Trust”). The Supplemental Interest Trust shall be an Eligible Account,
and funds on deposit therein shall be held separate and apart from, and shall
not be commingled with, any other moneys, including, without limitation, other
moneys of the Trustee or of the Securities Administrator held pursuant to this
Agreement.
(b) On
each
Distribution Date, the Securities Administrator shall deposit into the
Supplemental Interest Trust amounts distributable to the Swap Provider by the
Supplemental Interest Trust pursuant to Sections 5.04(a)(i)(1) and
5.04(a)(iii)(25) of this Agreement. On each Distribution Date, the Securities
Administrator shall distribute any such amounts to the Swap Provider pursuant
to
the Swap Agreement, first to pay any Net Swap Payment owed to the Swap Provider
for such Distribution Date, and second to pay any Swap Termination Payment
owed
to the Swap Provider.
(c) On
each
Distribution Date, the Securities Administrator shall deposit into the
Supplemental Interest Trust amounts received by it from the Swap Provider.
On
each Distribution Date, the Securities Administrator shall distribute from
the
Supplemental Interest Trust an amount equal to the amount of any Net Swap
Payment received from the Swap Provider under the Swap Agreement, and make
the
distributions required under Section 5.04(b) of this Agreement.
(d) The
Supplemental Interest Trust constitutes an “outside reserve fund” within the
meaning of Treasury Regulation § 1.860G-2(h) and is not an asset of any REMIC.
The Holders of the Class X Certificates shall be the beneficial owner of the
Supplemental Interest Trust, subject to the power of the Securities
Administrator to transfer amounts under this Agreement. The Securities
Administrator shall keep records that accurately reflect the funds on deposit
in
the Supplemental Interest Trust. The Securities Administrator shall, at the
written direction of the holder of the Majority Class X Certificateholder,
invest amounts on deposit in the Supplemental Interest Trust in Permitted
Investments. In the absence of written direction to the Securities Administrator
from the Majority Class X Certificateholder, all funds in the Supplemental
Interest Trust shall remain uninvested. On each Distribution Date, the
Securities Administrator shall distribute, not in respect of any REMIC, any
interest earned on the Supplemental Interest Trust to the Holders of the Class
X
Certificates.
(e) For
federal income tax purposes, amounts paid to the Supplemental Interest Trust
on
each Distribution Date pursuant to Sections 5.04(a)(i)(1) and 5.04(a)(iii)(25)
shall first be deemed paid to the Supplemental Interest Trust in respect of
the
Class IO Interest to the extent of the amount distributable on such Class IO
Interest on such Distribution Date, and any remaining amount shall be deemed
paid to the Supplemental Interest Trust in respect of a Class IO Distribution
Amount. For federal income tax purposes, the Supplemental Interest Trust will
be
a disregarded entity.
(f) The
Securities Administrator shall treat the Holders of Certificates (other than
the
Class P, Class X and Class R Certificates) as having entered into a notional
principal contract with respect to the Holders of the Class X Certificates.
Pursuant to each such notional principal contract, all Holders of Certificates
(other than the Class P, Class X and Class R Certificates) shall be treated
as
having agreed to pay, on each Distribution Date, to the Holder of the Class
X
Certificates an aggregate amount equal to the excess, if any, of (i) the amount
payable on such Distribution Date on the REMIC III Regular Interest ownership
of
which is represented by such Class of Certificates over (ii) the amount payable
on such Class of Certificates on such Distribution Date (such excess, a “Class
IO Distribution Amount”). A Class IO Distribution Amount payable from interest
collections shall be allocated pro rata among such Certificates based on the
amount of interest otherwise payable to such Certificates, and a Class IO
Distribution Amount payable from principal collections shall be allocated to
the
most subordinate Class of such Certificates with an outstanding principal
balance to the extent of such balance. In addition, pursuant to such notional
principal contract, the Holder of the Class X Certificates shall be treated
as
having agreed to pay Basis Risk Shortfalls to the Holders of the Certificates
(other than the Class X, Class P and Class R Certificates) in accordance with
the terms of this Agreement. Any payments to such Certificates from amounts
deemed received in respect of this notional principal contract shall not be
payments with respect to a Regular Interest in a REMIC within the meaning of
Code Section 860G(a)(1). However, any payment from the Certificates (other
than
the Class X, Class P and Class R Certificates) of a Class IO Distribution Amount
shall be treated for tax purposes as having been received by the Holders of
such
Certificates in respect of the REMIC III Regular Interest ownership of which
is
represented by such Certificates, and as having been paid by such Holders to
the
Supplemental Interest Trust pursuant to the notional principal contract. Thus,
each Certificate (other than the Class P Certificates and Class R Certificates)
shall be treated as representing not only ownership of a Regular Interest in
REMIC III, but also ownership of an interest in, and obligations with respect
to, a notional principal contract.
(g) The
Sponsor shall provide to the Securities Administrator the value of the right
of
the holders of the Senior and Subordinate Certificates to receive payments
from
the Supplemental Interest Trust for federal tax return and information reporting
not later than the December 31, 2006.
(h) In
the
event that the Swap Agreement is terminated prior to the Distribution Date
in
June 2011, the Sponsor shall use reasonable efforts to appoint a successor
swap
provider using any Swap Termination Payments paid by the Swap Provider. If
the
Sponsor is unable to locate a qualified successor swap provider, any such Swap
Termination Payments will be remitted to the Securities Administrator for
payment to the holders of the Publicly Offered Certificates and Class B
Certificates of amounts described in Section 5.11(c).
Section
5.12 Tax
Treatment of Swap Payments and Swap Termination Payments.
For
federal income tax purposes, each holder of a Senior Certificate or Subordinate
Certificate is deemed to own an undivided beneficial ownership interest in
a
REMIC regular interest and the right to receive payments from either the Basis
Risk Shortfall Reserve Fund or the Supplemental Interest Trust in respect of
any
Basis Risk Shortfall Carry-Forward Amounts or the obligation to make payments
to
the Supplemental Interest Trust. For federal income tax purposes, the Securities
Administrator will account for payments to each Senior Certificate and
Subordinate Certificate as follows: each Senior Certificate and Subordinate
Certificate will be treated as receiving their entire payment from REMIC III
(regardless of any Swap Termination Payment or obligation under the Swap
Agreement) and subsequently paying their portion of any Swap Termination Payment
in respect of each such Class’ obligation under the Swap Agreement. In the event
that any such Class is resecuritized in a REMIC, the obligation under the Swap
Agreement to pay any such Swap Termination Payment (or any shortfall in Net
Swap
Payment), will be made by one or more of the REMIC Regular Interests issued
by
the resecuritization REMIC subsequent to such REMIC Regular Interest receiving
its full payment from any such Senior Certificate and Subordinate
Certificate.
The
REMIC
Regular Interest corresponding to a Senior Certificate and Subordinate
Certificate will be entitled to receive interest and principal payments at
the
times and in the amounts equal to those made on the certificate to which it
corresponds, except that (i) the maximum interest rate of that REMIC regular
interest will equal the Net Funds Cap computed for this purpose by limiting
the
Notional Amount of the Swap Agreement to the aggregate Stated Principal Balance
of the Mortgage Loans and (ii) any Swap Termination Payment will be treated
as
being payable solely from amounts otherwise payable to the Class X Certificates.
As a result of the foregoing, the amount of distributions and taxable income
on
the REMIC Regular Interest corresponding to a Senior Certificate and Subordinate
Certificate may exceed the actual amount of distributions on the Senior
Certificate and Subordinate Certificate.
Section
5.13 Reports
Filed with Securities and Exchange Commission.
(a) (i)For
so
long as the Trust Fund is subject to Exchange Act reporting requirements, within
fifteen (15) days after each Distribution Date (subject to permitted extensions
under the Exchange Act), the Securities Administrator shall prepare and file
on
behalf of the Trust Fund any Form 10-D required by the Exchange Act, in form
and
substance as required by the Exchange Act. The Securities Administrator shall
file each Form 10-D with a copy of the related Monthly Statement attached
thereto. Any disclosure in addition to the Monthly Statement that is required
to
be included on Form 10-D (“Additional Form 10-D Disclosure”) shall be reported
to the Depositor and the Securities Administrator by the entity indicated on
Exhibit N and approved by the Depositor pursuant to the following paragraph.
The
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure, except
as
set forth in the next paragraph.
(i) As
set
forth on Exhibit N hereto, within five (5) calendar days after the related
Distribution Date, (i) each Transaction Party shall be required to provide
to
the Securities Administrator and to the Depositor, to the extent known by a
responsible officer thereof, in ▇▇▇▇▇-compatible form, or in such other form
as
otherwise agreed upon by the Securities Administrator and such party, the form
and substance of any Additional Form 10-D Disclosure, if applicable, together
with an Additional Disclosure Notification in the form of Exhibit H hereto
(an
“Additional Disclosure Notification”) and (ii) the Depositor will approve, as to
form and substance, or disapprove, as the case may be, the inclusion of the
Additional Form 10-D Disclosure on Form 10-D. The Depositor will be responsible
for any reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-D Disclosure
on Form 10-D pursuant to this paragraph.
(ii) After
preparing the Form 10-D, the Securities Administrator shall forward
electronically a copy of the Form 10-D to the Depositor (provided that such
Form
10-D includes any Additional Form 10-D Disclosure). Within two (2) Business
Days
after receipt of such copy, but no later than the twelfth (12th) calendar day
after the Distribution Date, the Depositor shall notify the Securities
Administrator in writing (which may be furnished electronically) of any changes
to or approval of such Form 10-D. In the absence of receipt of any written
changes or approval, the Securities Administrator shall be entitled to assume
that such Form 10-D is in final form and the Securities Administrator may
proceed with the execution and filing of the Form 10-D. A duly authorized
representative of the Master Servicer shall sign each Form 10-D. If a Form
10-D
cannot be filed on time or if a previously filed Form 10-D needs to be amended,
the Securities Administrator will follow the procedures set forth in Section
5.13(c)(ii). Promptly (but no later than one (1) Business Day) after filing
with
the Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-D filed by the Securities
Administrator. Each party to this Agreement acknowledges that the performance
by
the Master Servicer and the Securities Administrator of its duties under this
Section 5.13(a) related to the timely preparation, execution and filing of
Form
10-D is contingent upon such parties strictly observing all applicable deadlines
in the performance of their duties as set forth in this Agreement. Neither
the
Master Servicer nor the Securities Administrator shall have any liability for
any loss, expense, damage, claim arising out of or with respect to any failure
to properly prepare, execute and/or timely file such Form 10-D, where such
failure results from the Securities Administrator’s inability or failure to
obtain or receive, on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-D, not
resulting from its own negligence, bad faith or willful misconduct.
(b) (i)For
so
long as the Trust Fund is subject to Exchange Act reporting requirements, within
four (4) Business Days after the occurrence of an event set forth on Exhibit
N
hereto or such other event requiring disclosure on Form 8-K (each such event,
a
“Reportable
Event”),
or if
requested by the Depositor, and subject to receipt of such information by the
Securities Administrator from the entity indicated on Exhibit N as the
responsible party for providing that information, the Securities Administrator
shall prepare and file on behalf of the Trust Fund any Form 8-K, as required
by
the Exchange Act, provided
that the
Depositor shall file the initial Form 8-K in connection with the issuance of
the
Certificates. Any disclosure or information related to a Reportable Event or
that is otherwise required to be included on Form 8-K other than the initial
Form 8-K (“Form
8-K Disclosure Information”)
shall
be reported by the parties set forth on Exhibit
N
to the
Depositor and the Securities Administrator and directed and approved by the
Depositor pursuant to the following paragraph and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or prepare
any Form 8-K Disclosure Information or any Form 8-K, except as set forth in
the
next paragraph.
(ii) As
set
forth on Exhibit N hereto, for so long as the Trust is subject to the Exchange
Act reporting requirements, no later than the close of business (New York City
time) on the second (2nd) Business Day after the occurrence of a Reportable
Event (i) the parties to this transaction shall be required to provide to the
Securities Administrator and to the Depositor, to the extent known by a
responsible officer thereof, in ▇▇▇▇▇-compatible form, or in such other form
as
otherwise agreed upon by the Securities Administrator and such party, the form
and substance of any Form 8-K Disclosure Information, if applicable, together
with an Additional Disclosure Notification and (ii) the Depositor will approve,
as to form and substance, or disapprove, as the case may be, the inclusion
of
the Form 8-K Disclosure Information. The Depositor will be responsible for
any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Form 8-K Disclosure Information
on Form 8-K pursuant to this paragraph.
(iii) After
preparing the Form 8-K, the Securities Administrator shall forward
electronically a copy of the Form 8-K to the Depositor. Promptly, but no later
than the close of business on the third (3rd) Business Day after the Reportable
Event, the Depositor shall notify the Securities Administrator in writing (which
may be furnished electronically) of any changes to or approval of such Form
8-K.
In the absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 8-K is in final form
and the Securities Administrator may proceed with the execution and filing
of
the Form 8-K. A duly authorized representative of the Master Servicer shall
sign
each Form 8-K. If a Form 8-K cannot be filed on time or if a previously filed
Form 8-K needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 5.13(c)(ii). Promptly (but no later than 1
Business Day) after filing with the Commission, the Securities Administrator
will, make available on its internet website a final executed copy of each
Form
8-K that it has filed. The parties to this Agreement acknowledge that the
performance by the Master Servicer and the Securities Administrator of its
duties under this Section 5.13(b) related to the timely preparation, execution
and filing of Form 8-K is contingent upon such parties strictly observing all
applicable deadlines in the performance of their duties under this Agreement.
Neither the Master Servicer nor the Securities Administrator shall have any
liability for any loss, expense, damage, claim arising out of or with respect
to
any failure to properly prepare, execute and/or timely file such Form 8-K,
where
such failure results from the Securities Administrator’s inability or failure to
obtain or receive, on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 8-K, not
resulting from its own negligence, bad faith or willful misconduct.
(c) (i)On
or
prior to January 30 of the first year in which the Securities Administrator
is
able to do so under applicable law, the Securities Administrator shall prepare
and file a Form 15 Suspension Notification relating to the automatic suspension
of reporting in respect of the Trust Fund under the Exchange Act.
(ii) In
the
event that the Securities Administrator is unable to timely file with the
Commission all or any required portion of any Form 8-K, 10-D or 10-K required
to
be filed by this Agreement because required disclosure information was either
not delivered to it or delivered to it after the delivery deadlines set forth
in
this Agreement or for any other reason, the Securities Administrator will
promptly notify electronically the Depositor. In the case of Form 10-D and
10-K,
the parties to this Agreement will cooperate to prepare and file a Form 12b-25
and a 10-D/A and 10-K/A as applicable, pursuant to Rule 12b-25 of the Exchange
Act. In the case of Form 8-K, the Securities Administrator will, upon receipt
of
all required Form 8-K Disclosure Information and upon the approval and direction
of the Depositor, include such disclosure information on the next Form 10-D.
In
the event that any previously filed Form 8-K, 10-D or 10-K needs to be amended
in connection with any Additional Form 10-D Disclosure (other than for the
purpose of restating any monthly report), Additional Form 10-K Disclosure or
Form 8-K Disclosure Information, the Securities Administrator will
electronically notify the Depositor and such other parties to the transaction
as
are affected by such amendment, and such parties will cooperate to prepare
any
necessary 8-K/A, 10-D/A or 10-K/A. Any Form 15, Form 12b-25 or any amendment
to
Form 8-K, 10-D or 10-K shall be signed by a duly authorized representative,
or
senior officer in charge of master servicing, as applicable, of the Master
Servicer. The parties to this Agreement acknowledge that the performance by
the
Master Servicer and the Securities Administrator of its duties under this
Section 5.12(c) related to the timely preparation, execution and filing of
Form
15, a Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K is contingent
upon
each such party performing its duties under this Section. Neither the Master
Servicer nor the Securities Administrator shall have any liability for any
loss,
expense, damage, claim arising out of or with respect to any failure to properly
prepare, execute and/or timely file any such Form 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results from the
Securities Administrator’s inability or failure to obtain or receive, on a
timely basis, any information from any other party hereto needed to prepare,
arrange for execution or file such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad faith or
willful misconduct.
(d) (i)For
so
long as the trust is subject to Exchange Act reporting requirements, within
ninety (90) days after the end of each calendar year or such earlier date as
may
be required by the Exchange Act (the “10-K
Filing Deadline”),
(it
being understood that the fiscal year for the trust ends on December 31 of
each
year) commencing in March 2007, the Securities Administrator shall prepare
and
file on behalf of the Trust Fund a Form 10-K, in form and substance as required
by the Exchange Act. Each such Form 10-K shall include the following items,
in
each case to the extent they have been delivered to the Securities Administrator
within the applicable time frames set forth in this Agreement, (i) an annual
compliance statement for each Additional Servicer and Reporting Servicer other
than any servicing function participant, as described under Section 3.13,
(ii)(A) the annual reports on assessment of compliance with servicing criteria
for each Reporting Servicer, as described under Section 3.14, and (B) if any
Reporting Servicer’s report on assessment of compliance with servicing criteria
described under Section 3.14 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or if any Servicing
Function Participant’s report on assessment of compliance with servicing
criteria described under Section 3.14 is not included as an exhibit to such
Form
10-K, disclosure that such report is not included and an explanation why such
report is not included, (iii)(A) the registered public accounting firm
attestation report for each Servicing Function Participant, as described under
Section 3.14, and (B) if any registered public accounting firm attestation
report described under Section 3.14 identifies any material instance of
noncompliance, disclosure identifying such instance of noncompliance, or if
any
such registered public accounting firm attestation report is not included as
an
exhibit to such Form 10-K, disclosure that such report is not included and
an
explanation why such report is not included, and (iv) a ▇▇▇▇▇▇▇▇-▇▇▇▇▇
Certification as described in Section 3.18. Any disclosure or information in
addition to (i) through (iv) above that is required to be included on Form
10-K
as set forth on Exhibit N under Form 10-K (“Additional
Form 10-K Disclosure”)
shall
be reported to the Depositor and the Securities Administrator by the parties
set
forth on Exhibit N, and shall be approved by the Depositor pursuant to the
following paragraph. The Securities Administrator will have no duty or liability
for any failure hereunder to determine or prepare any Additional Form 10-K
Disclosure, except as set forth in the next paragraph.
(ii) As
set
forth on Exhibit N hereto, no later than March 15 of each year that the Trust
is
subject to the Exchange Act reporting requirements, commencing in 2007, (i)
each
Transaction Party shall be required to provide to the Securities Administrator
and to the Depositor, to the extent known by a responsible officer thereof,
in
▇▇▇▇▇-compatible form, or in such other form as otherwise agreed upon by the
Securities Administrator and such party, the form and substance of any
Additional Form 10-K Disclosure, if applicable, together with an Additional
Disclosure Notification and (ii) the Depositor will approve, as to form and
substance, or disapprove, as the case may be, the inclusion of the Additional
Form 10-K Disclosure on Form 10-K. The Depositor will be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this paragraph.
(iii) After
preparing the Form 10-K, the Securities Administrator shall forward
electronically a copy of the Form 10-K to the Depositor. Within three (3)
Business Days after receipt of such copy, but no later than March 25th, the
Depositor shall notify the Securities Administrator in writing (which may be
furnished electronically) of any changes to or approval of such Form 10-K.
In
the absence of receipt of any written changes or approval, the Securities
Administrator shall be entitled to assume that such Form 10-K is in final form
and the Securities Administrator may proceed with the execution and filing
of
the Form 10-K. A senior officer of the Master Servicer in charge of the master
servicing function shall sign the Form 10-K. If a Form 10-K cannot be filed
on
time or if a previously filed Form 10-K needs to be amended, the Securities
Administrator will follow the procedures set forth in Section 5.13(c)(ii).
Promptly (but no later than one (1) Business Day) after filing with the
Commission, the Securities Administrator will make available on its internet
website a final executed copy of each Form 10-K to be filed by the Securities
Administrator. The parties to this Agreement acknowledge that the performance
by
the Master Servicer and the Securities Administrator of its duties under this
Section 5.13(d) related to the timely preparation, execution and filing of
Form
10-K is contingent upon such parties (and any Servicing Function Participant)
strictly observing all applicable deadlines in the performance of their duties
under this Section 5.13(d), Section 3.13, Section 3.14 and Section 3.18. Neither
the Master Servicer nor the Securities Administrator shall have any liability
for any loss, expense, damage or claim arising out of or with respect to any
failure to properly prepare and/or timely file such Form 10-K, where such
failure results from the Securities Administrator’s inability or failure to
obtain or receive, on a timely basis, any information from any other party
hereto needed to prepare, arrange for execution or file such Form 10-K, not
resulting from its own negligence, bad faith or willful misconduct.
(e) The
Master Servicer, the Depositor, the Custodian, the Sponsor and Securities
Administrator shall indemnify and hold harmless the Depositor, the Trustee
and
their respective officers, directors and Affiliates from and against any losses,
damages, penalties, fines, forfeitures, reasonable and necessary legal fees
and
related costs, judgments and other costs and expenses arising out of or based
upon a breach of such party’s obligations under this Section 5.13 or such
party’s negligence, bad faith or willful misconduct in connection therewith.
Notwithstanding
the provisions of Section 11.01, this Section 5.13 may be amended without the
consent of the Certificateholders.
(f) Any
notice required to be delivered by the Securities Administrator to the Depositor
pursuant to this Sections 3.13, 3.14, 3.18 or 5.13 shall be delivered by the
Securities Administrator by facsimile and electronic mail to ▇▇▇▇▇▇ ▇▇▇▇, Esq.
at (▇▇▇) ▇▇▇-▇▇▇▇ and ,
with a
copy to ▇▇▇▇ ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ and and
a
copy to N. ▇▇▇▇▇ ▇▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ and .
ARTICLE
VI
THE
CERTIFICATES
Section
6.01 The
Certificates.
(a) The
Certificates shall be substantially in the forms attached hereto as Exhibits
A-1
through A-6. The Certificates shall be issuable in registered form, in the
minimum dollar denominations, integral dollar multiples in excess thereof
(except that one Certificate of each Class may be issued in a different amount
which must be in excess of the applicable minimum dollar denomination) and
aggregate dollar denominations as set forth in the following table:
|
Class
|
Minimum
Denomination
|
Integral
Multiple in Excess of Minimum
|
Original
Certificate Principal Balance
|
Pass-Through
Rate
|
|||||||
|
A-1
|
$
|
100,000
|
$
|
1
|
$
|
316,881,000.00
|
Class
A-1 Pass-Through Rate
|
||||
|
A-2
|
$
|
100,000
|
$
|
1
|
$
|
40,807,000.00
|
Class
A-2 Pass-Through Rate
|
||||
|
A-3
|
$
|
100,000
|
$
|
1
|
$
|
93,357,000.00
|
Class
A-3 Pass-Through Rate
|
||||
|
A-4
|
$
|
100,000
|
$
|
1
|
$
|
46,080,000.00
|
Class
A-4 Pass-Through Rate
|
||||
|
M-1
|
$
|
100,000
|
$
|
1
|
$
|
21,180,000.00
|
Class
M-1 Pass-Through Rate
|
||||
|
M-2
|
$
|
100,000
|
$
|
1
|
$
|
19,623,000.00
|
Class
M-2 Pass-Through Rate
|
||||
|
M-3
|
$
|
100,000
|
$
|
1
|
$
|
11,524,000.00
|
Class
M-3 Pass-Through Rate
|
||||
|
M-4
|
$
|
100,000
|
$
|
1
|
$
|
10,278,000.00
|
Class
M-4 Pass-Through Rate
|
||||
|
M-5
|
$
|
100,000
|
$
|
1
|
$
|
9,344,000.00
|
Class
M-5 Pass-Through Rate
|
||||
|
M-6
|
$
|
100,000
|
$
|
1
|
$
|
9,032,000.00
|
Class
M-6 Pass-Through Rate
|
||||
|
M-7
|
$
|
100,000
|
$
|
1
|
$
|
8,721,000.00
|
Class
M-7 Pass-Through Rate
|
||||
|
M-8
|
$
|
100,000
|
$
|
1
|
$
|
7,164,000.00
|
Class
M-8 Pass-Through Rate
|
||||
|
M-9
|
$
|
100,000
|
$
|
1
|
$
|
4,672,000.00
|
Class
M-9 Pass-Through Rate
|
||||
|
B-1
|
$
|
100,000
|
$
|
1
|
$
|
4,983,000.00
|
Class
B-1 Pass-Through Rate
|
||||
|
B-2
|
$
|
100,000
|
$
|
1
|
$
|
5,606,000.00
|
Class
B-2 Pass-Through Rate
|
||||
|
X
|
$
|
1
|
$
|
1
|
$
|
13,712,030.21
|
Class
X Pass-Through Rate
|
||||
|
P
|
$
|
1
|
$
|
1
|
$
|
100.00
|
N/A
|
||||
|
R
|
N/A
|
N/A
|
N/A
|
N/A
|
|||||||
Upon
original issue, the Certificates shall be executed and authenticated by the
Securities Administrator and delivered by the Trustee to and upon the written
order of the Depositor. The Certificates shall be executed by manual or
facsimile signature on behalf of the Trust by the Securities Administrator
by an
authorized signatory. Certificates bearing the manual or facsimile signatures
of
individuals who were at any time the proper officers of the Securities
Administrator shall bind the Trust, notwithstanding that such individuals or
any
of them have ceased to hold such offices prior to the authentication and
delivery of such Certificates or did not hold such offices at the date of such
Certificates. No Certificate shall be entitled to any benefit under this
Agreement or be valid for any purpose, unless there appears on such Certificate
a certificate of authentication substantially in the form provided herein
executed by the Securities Administrator by manual signature, and such
certificate of authentication shall be conclusive evidence, and the only
evidence, that such Certificate has been duly authenticated and delivered
hereunder. All Certificates shall be dated the date of their
authentication.
The
Depositor shall provide, or cause to be provided, to the Securities
Administrator on a continuous basis, an adequate inventory of Certificates
to
facilitate transfers.
(b) The
Class
X Certificates and Class P Certificates offered and sold to Qualified
Institutional Buyers in reliance on Rule 144A under the Securities Act (“Rule
144A”) will be issued in the form of Definitive Certificates.
Section
6.02 Certificate
Register; Registration of Transfer and Exchange of Certificates.
(a) The
Securities Administrator shall maintain, or cause to be maintained in accordance
with the provisions of Section 6.09, a Certificate Register for the
Certificates in which, subject to the provisions of subsections (b) and (c)
below and to such reasonable regulations as it may prescribe, the Securities
Administrator shall provide for the registration of Certificates and of
Transfers and exchanges of Certificates as herein provided. Upon surrender
for
registration of Transfer of any Certificate, the Securities Administrator shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same Class and of like
aggregate Percentage Interest.
At
the
option of a Certificateholder, Certificates may be exchanged for other
Certificates of the same Class in authorized denominations and evidencing the
same aggregate Percentage Interest upon surrender of the Certificates to be
exchanged at the office or agency of the Securities Administrator. Whenever
any
Certificates are so surrendered for exchange, the Securities Administrator
shall
execute, authenticate, and deliver the Certificates that the Certificateholder
making the exchange is entitled to receive. Every Certificate presented or
surrendered for registration of Transfer or exchange shall be accompanied by
a
written instrument of Transfer in form satisfactory to the Securities
Administrator duly executed by the holder thereof or his attorney duly
authorized in writing.
No
service charge to the Certificateholders shall be made for any registration
of
Transfer or exchange of Certificates, but payment of a sum sufficient to cover
any tax or governmental charge that may be imposed in connection with any
Transfer or exchange of Certificates may be required.
All
Certificates surrendered for registration of Transfer or exchange shall be
canceled and subsequently destroyed by the Securities Administrator in
accordance with the Securities Administrator’s customary
procedures.
(b) No
Transfer of a Private Certificate shall be made unless such Transfer is made
pursuant to an effective registration statement under the Securities Act and
any
applicable state securities laws or is exempt from the registration requirements
under the Securities Act and such state securities laws. In the event that
a
Transfer is to be made in reliance upon an exemption from the Securities Act
and
such laws, in order to assure compliance with the Securities Act and such laws,
the Certificateholder desiring to effect such Transfer and such
Certificateholder’s prospective transferee shall each certify to the Securities
Administrator in writing the facts surrounding the Transfer in substantially
the
forms set forth in Exhibit E (the “Transferor Certificate”) and (x) deliver a
letter in substantially the form of either Exhibit F (the “Investment Letter”)
or Exhibit G (the “Rule 144A Letter”) or (y) there shall be delivered to the
Securities Administrator an Opinion of Counsel, at the expense of the
transferor, that such Transfer may be made pursuant to an exemption from the
Securities Act, which Opinion of Counsel shall not be an expense of the
Depositor, the Sponsor, the Securities Administrator, the Trustee or the Trust
Fund. The Depositor shall provide to any Holder of a Private Certificate and
any
prospective transferee designated by any such Holder, information regarding
the
related Certificates and the Mortgage Loans and such other information as shall
be necessary to satisfy the condition to eligibility set forth in Rule
144A(d)(4) for Transfer of any such Certificate without registration thereof
under the Securities Act pursuant to the registration exemption provided by
Rule
144A. The Securities Administrator shall cooperate with the Depositor in
providing the Rule 144A information referenced in the preceding sentence,
including providing to the Depositor such information regarding the
Certificates, the Mortgage Loans and other matters regarding the Trust Fund
as
the Depositor shall reasonably request to meet its obligation under the
preceding sentence. Each Holder of a Private Certificate desiring to effect
such
Transfer shall, and does hereby agree to, indemnify the Securities
Administrator, the Depositor and the Sponsor against any liability that may
result if the Transfer is not so exempt or is not made in accordance with such
federal and state laws.
If
any
such transfer of a Class B-1 Certificate or Class B-2 Certificate held by the
related transferor and also to be held by the related transferee in the form
of
a Book-Entry Certificate is to be made without registration under the Securities
Act, the transferor will be deemed to have made as of the transfer date each
of
the representations and warranties set forth on Exhibit J hereto in respect
of
such Class B-1 Certificate or Class B-2 Certificate and the transferee will
be
deemed to have made as of the transfer date each of the representations and
warranties set forth on Exhibit G or Exhibit F hereto in respect of such Class
B-1 Certificate or Class B-2 Certificate.
No
transfer of any Class B-1 Certificate or Class B-2 Certificate that is a
Book-Entry Certificate or interest therein shall be made by any related
Certificate Owner except (A) in the manner set forth in the preceding paragraph
and in reliance on Rule 144A under the 1933 Act to a “qualified institutional
buyer” that is acquiring such Book-Entry Certificate for its own account or for
the account of another “qualified institutional buyer” or (B) in the manner set
forth in the second preceding paragraph and in the form of a Definitive
Certificate.
If
any
Certificate Owner that is required under this Section 6.02(b) to transfer its
Book-Entry Certificates in the form of Definitive Certificates, (i) notifies
the
Securities Administrator of such transfer or exchange and (ii) transfers such
Book-Entry Certificates to the Securities Administrator, in its capacity as
such, through the book-entry facilities of the Depository, then the Securities
Administrator shall decrease the balance of such Book-Entry Certificates or,
the
Securities Administrator shall use reasonable efforts to cause the surrender
to
the Certificate Registrar of such Book-Entry Certificates by the Depository,
and
thereupon, the Securities Administrator shall execute, authenticate and deliver
to such Certificate Owner or its designee one or more Definitive Certificates
in
authorized denominations and with a like aggregate principal
amount.
Subject
to the provisions of this Section 6.02(b) governing registration of transfer
and
exchange, Class B-1 Certificates or Class B-2 Certificates (i) held as
Definitive Certificates may be transferred in the form of Book-Entry
Certificates in reliance on Rule 144A under the 1933 Act to one or more
“qualified institutional buyers” that are acquiring such Definitive Certificates
for their own accounts or for the accounts of other “qualified institutional
buyers” and (ii) held as Definitive Certificates by a “qualified institutional
buyer” for its own account or for the account of another “qualified
institutional buyer” may be exchanged for Book-Entry Certificates, in each case
upon surrender of such Class B-1 Certificates or Class B-2 Certificates for
registration of transfer or exchange at the offices of the Securities
Administrator maintained for such purpose. Whenever any such Class B-1
Certificates are so surrendered for transfer or exchange, either the Securities
Administrator shall increase the balance of the related Book-Entry Certificates
or the Securities Administrator shall execute, authenticate and deliver the
Book-Entry Certificates for which such Class B-1 Certificates or Class B-2
Certificates were transferred or exchanged, as necessary and appropriate. No
Holder of Definitive Certificates other than a “qualified institutional buyer”
holding such Certificates for its own account or for the account of another
“qualified institutional buyer” may exchange such Class B-1 Certificates or
Class B-2 Certificates for Book-Entry Certificates. Further, any Certificate
Owner of a Book-Entry Certificate other than any such “qualified institutional
buyers” shall notify the Securities Administrator of its status as such and
shall transfer such Book-Entry Certificate to the Securities Administrator,
through the book-entry facilities of the Depository, whereupon, and also upon
surrender to the Securities Administrator of such Book-Entry Certificate by
the
Depository, (which surrender the Securities Administrator shall use reasonable
efforts to cause to occur), the Securities Administrator shall execute,
authenticate and deliver to such Certificate Owner or such Certificate Owner’s
nominee one or more Definitive Certificates in authorized denominations and
with
a like aggregate principal amount.
No
Transfer of an ERISA Restricted Certificate shall be made unless the Securities
Administrator shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA and/or a
plan subject to Section 4975 of the Code, or a Person acting on behalf of
any such plan or using the assets of any such plan, or (ii) in the case of
any
such ERISA Restricted Certificate presented for registration in the name of
an
employee benefit plan subject to ERISA, or a plan subject to Section 4975
of the Code (or comparable provisions of any subsequent enactments), or a
trustee of any such plan or any other person acting on behalf of any such plan,
an Opinion of Counsel satisfactory to the Securities Administrator for the
benefit of the Securities Administrator, the Depositor and the Servicer and
on
which they may rely to the effect that the purchase and holding of such ERISA
Restricted Certificate is permissible under applicable law, will not result
in
any prohibited transactions under ERISA or Section 4975 of the Code and
will not subject the Securities Administrator, the Depositor, the Trustee or
the
Servicer to any obligation in addition to those expressly undertaken in this
Agreement, which Opinion of Counsel shall not be an expense of the Securities
Administrator, the Depositor, the Servicer or the Trustee. Notwithstanding
anything else to the contrary herein, any purported transfer of an ERISA
Restricted Certificate to or on behalf of an employee benefit plan subject
to
Section 406 of ERISA and/or a plan subject to Section 4975 of the Code
other than in compliance with the foregoing shall be void and of no effect;
provided that the restriction set forth in this sentence shall not be applicable
if there has been delivered to the Securities Administrator an Opinion of
Counsel meeting the requirements of clause (ii) of the first sentence of this
paragraph. The Securities Administrator shall not be under any liability to
any
Person for any registration of transfer of any ERISA Restricted Certificate
that
is in fact not permitted by this Section 6.02(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement. The Securities
Administrator shall be entitled, but not obligated, to recover from any Holder
of any ERISA Restricted Certificate that was in fact an employee benefit plan
subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a Person acting on behalf of any such plan at the time it became
a
Holder or, at such subsequent time as it became such a plan or Person acting
on
behalf of such a plan, all payments made on such ERISA Restricted Certificate
at
and after either such time. Any such payments so recovered by the Securities
Administrator shall be paid and delivered by the Securities Administrator to
the
last preceding Holder of such Certificate that is not such a plan or Person
acting on behalf of a plan.
For
so
long as the Supplemental Interest Trust is in existence, each beneficial owner
of a Publicly Offered Certificate, Class B Certificate or any interest therein,
shall be deemed to have represented, by virtue of its acquisition or holding
of
the Publicly Offered Certificate, Class B Certificate or interest therein,
that
either (i) it is not a Plan or (ii)(A) it is an accredited investor within
the
meaning of Prohibited Transaction Exemption 2002-41, as amended from time to
time (the “Exemption”) and (B) the acquisition and holding of such Certificate
and the separate right to receive payments from the Supplemental Interest Trust
are eligible for the exemptive relief available under Prohibited Transaction
Class Exemption (“PTCE”) 84-14 (for transactions by independent “qualified
professional asset managers”), 91-38 (for transactions by bank collective
investment funds), 90-1 (for transactions by insurance company pooled separate
accounts), 95-60 (for transactions by insurance company general accounts) or
96-23 (for transactions effected by “in-house asset managers”) in the case of a
Publicly Offered Certificate, or PTCE 95-60 in the case of a Class B-2
Certificate.
Each
beneficial owner of a Class M Certificate or a Class B Certificate or any
interest therein that is acquired after the termination of the Supplemental
Interest Trust shall be deemed to have represented, by virtue of its acquisition
or holding of that certificate or interest therein, that either (i) it is not
a
Plan or investing with “Plan Assets”, (ii) in the case of a Certificate other
than a Class B-2 Certificate, it has acquired and is holding such certificate
in
reliance on the Exemption, and that it understands that there are certain
conditions to the availability of the Exemption, including that the certificate
must be rated, at the time of purchase, not lower than “BBB-“ (or its
equivalent) by S&P, Fitch or ▇▇▇▇▇’▇, and the certificate is so rated or
(iii) (1) it is an insurance company, (2) the source of funds used to acquire
or
hold the certificate or interest therein is an “insurance company general
account,” as such term is defined in Prohibited Transaction Class Exemption
(“PTCE”) 95-60 and (3) the conditions in Sections I and III of PTCE 95-60 have
been satisfied.
If
any
Certificate, or any interest therein, is acquired or held in violation of this
section 6.02(b), the next preceding permitted beneficial owner will be treated
as the beneficial owner of that Certificate, retroactive to the date of transfer
to the purported beneficial owner. Any purported beneficial owner whose
acquisition or holding of a Certificate, or interest therein, was effected
in
violation of this Section shall indemnify to the extent permitted by law and
hold harmless the Depositor, the Sponsor, the Master Servicer, the Securities
Administrator, the Servicer, the Underwriter and the Trustee from and against
any and all liabilities, claims, costs or expenses incurred by such parties
as a
result of such acquisition or holding.
(c) (i)
Each
Person who has or who acquires any Ownership Interest in a Residual Certificate
shall be deemed by the acceptance or acquisition of such Ownership Interest
to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in a Residual Certificate are expressly
subject to the following provisions:
(A) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall be a Permitted Transferee and shall promptly notify the Securities
Administrator of any change or impending change in its status as a Permitted
Transferee.
(B) In
connection with any proposed Transfer of any Ownership Interest in a Residual
Certificate, the Trustee shall require delivery to it, and shall not register
the Transfer of any Residual Certificate until its receipt of, an affidavit
and
agreement (a “Transfer Affidavit and Agreement,” in the form attached hereto as
Exhibit B-3) from the proposed Transferee, in form and substance satisfactory
to
the Securities Administrator, representing and warranting, among other things,
that such Transferee is a Permitted Transferee, that it is not acquiring its
Ownership Interest in the Residual Certificate that is the subject of the
proposed Transfer as a nominee, trustee or agent for any Person that is not
a
Permitted Transferee, that for so long as it retains its Ownership Interest
in a
Residual Certificate, it will endeavor to remain a Permitted Transferee, and
that it has reviewed the provisions of this Section 6.02(c) and agrees to
be bound by them.
(C) Notwithstanding
the delivery of a Transfer Affidavit and Agreement by a proposed Transferee
under clause (B) above, if an authorized officer of the Securities Administrator
who is assigned to this transaction has actual knowledge that the proposed
Transferee is not a Permitted Transferee, no Transfer of an Ownership Interest
in a Residual Certificate to such proposed Transferee shall be
effected.
(D) Each
Person holding or acquiring any Ownership Interest in a Residual Certificate
shall agree (x) to require a Transfer Affidavit and Agreement from any other
Person to whom such Person attempts to transfer its Ownership Interest in a
Residual Certificate and (Y) not to transfer its Ownership Interest unless
it
provides a Transferor Affidavit (in the form attached hereto as Exhibit B-2)
to
the Securities Administrator stating that, among other things, it has no actual
knowledge that such other Person is not a Permitted Transferee.
(E) Each
Person holding or acquiring an Ownership Interest in a Residual Certificate,
by
purchasing an Ownership Interest in such Certificate, agrees to give the
Securities Administrator written notice that it is a “pass-through interest
holder” within the meaning of temporary Treasury regulation
Section 1.67-3T(a)(2)(i)(A) immediately upon acquiring an Ownership
Interest in a Residual Certificate, if it is, or is holding an Ownership
Interest in a Residual Certificate on behalf of, a “pass-through interest
holder.”
(ii) The
Securities Administrator will register the Transfer of any Residual Certificate
only if it shall have received the Transfer Affidavit and Agreement and all
of
such other documents as shall have been reasonably required by the Securities
Administrator as a condition to such registration. In addition, no Transfer
of a
Residual Certificate shall be made unless the Securities Administrator shall
have received a representation letter from the Transferee of such Certificate
to
the effect that such Transferee is a Permitted Transferee.
(iii) (A)
If any
purported Transferee shall become a Holder of a Residual Certificate in
violation of the provisions of this Section 6.02(c), then the last
preceding Permitted Transferee shall be restored, to the extent permitted by
law, to all rights as holder thereof retroactive to the date of registration
of
such Transfer of such Residual Certificate. The Securities Administrator shall
be under no liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by this Section 6.02(c)
or for making any payments due on such Certificate to the holder thereof or
for
taking any other action with respect to such holder under the provisions of
this
Agreement.
(B) If
any
purported Transferee shall become a holder of a Residual Certificate in
violation of the restrictions in this Section 6.02(c) and to the extent
that the retroactive restoration of the rights of the holder of such Residual
Certificate as described in clause (iii)(A) above shall be invalid, illegal
or
unenforceable, then the Securities Administrator shall have the right, without
notice to the holder or any prior holder of such Residual Certificate, to sell
such Residual Certificate to a purchaser selected by the Securities
Administrator on such terms as the Securities Administrator may choose. Such
purported Transferee shall promptly endorse and deliver each Residual
Certificate in accordance with the instructions of the Securities Administrator.
Such purchaser may be the Securities Administrator itself or any Affiliate
of
the Securities Administrator. The proceeds of such sale, net of the commissions
(which may include commissions payable to the Securities Administrator or its
Affiliates), expenses and taxes due, if any, will be remitted by the Securities
Administrator to such purported Transferee. The terms and conditions of any
sale
under this clause (iii)(B) shall be determined in the sole discretion of the
Securities Administrator, and the Securities Administrator shall not be liable
to any Person having an Ownership Interest in a Residual Certificate as a result
of its exercise of such discretion.
(iv) The
Securities Administrator shall make available to the Internal Revenue Service
and those Persons specified by the REMIC Provisions all information necessary
to
compute any tax imposed (A) as a result of the Transfer of an Ownership Interest
in a Residual Certificate to any Person who is a Disqualified Organization,
including the information described in Treasury regulations sections
1.860D-1(b)(5) and 1.860E-2(a)(5) with respect to the “excess inclusions” of
such Residual Certificate and (B) as a result of any regulated investment
company, real estate investment trust, common trust fund, partnership, trust,
estate or organization described in Section 1381 of the Code that holds an
Ownership Interest in a Residual Certificate having as among its record holders
at any time any Person which is a Disqualified Organization. Reasonable
compensation for providing such information may be charged or collected by
the
Securities Administrator.
(v) The
provisions of this Section 6.02(c) set forth prior to this subsection (v)
may be modified, added to or eliminated, provided that there shall have been
delivered to the Securities Administrator at the expense of the party seeking
to
modify, add to or eliminate any such provision the following:
(A) written
notification from each Rating Agency to the effect that the modification,
addition to or elimination of such provisions will not cause such Rating Agency
to downgrade its then-current ratings of any Class of Certificates;
and
(B) an
Opinion of Counsel, in form and substance satisfactory to the Securities
Administrator, to the effect that such modification of, addition to or
elimination of such provisions will not cause any Trust REMIC to cease to
qualify as a REMIC and will not cause any Trust REMIC, as the case may be,
to be
subject to an entity-level tax caused by the Transfer of any Residual
Certificate to a Person that is not a Permitted Transferee or a Person other
than the prospective transferee to be subject to a REMIC-tax caused by the
Transfer of a Residual Certificate to a Person that is not a Permitted
Transferee.
(d) Subject
to the preceding subsections, upon surrender for registration of transfer of
any
Certificate at any office or agency of the Securities Administrator maintained
for such purpose pursuant to Section 9.11, the Securities Administrator
shall execute, authenticate and deliver, in the name of the designated
Transferee or Transferees, one or more new Certificates of the same Class of
a
like aggregate Percentage Interest.
(e) At
the
option of the Holder thereof, any Certificate may be exchanged for other
Certificates of the same Class with authorized denominations and a like
aggregate Percentage Interest, upon surrender of such Certificate to be
exchanged at any office or agency of the Securities Administrator maintained
for
such purpose pursuant to Section 9.11. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute,
authenticate and deliver, the Certificates which the Certificateholder making
the exchange is entitled to receive. Every Certificate presented or surrendered
for transfer or exchange shall (if so required by the Securities Administrator)
be duly endorsed by, or be accompanied by a written instrument of transfer
in
the form satisfactory to the Securities Administrator duly executed by, the
Holder thereof or his attorney duly authorized in writing. In addition, with
respect to each Class R Certificate, the holder thereof may exchange, in the
manner described above, such Class R Certificate for three separate
certificates, each representing such holder's respective Percentage Interest
in
the Class R-I Interest, the Class R-II Interest and the Class R-III Interest
respectively, in each case that was evidenced by the Class R Certificate being
exchanged.
(f) No
service charge to the Certificateholders shall be made for any transfer or
exchange of Certificates, but the Securities Administrator may require payment
of a sum sufficient to cover any tax or governmental charge that may be imposed
in connection with any transfer or exchange of Certificates.
(g) The
preparation and delivery of all certificates and opinions referred to above
in
this Section 6.02 shall not be an expense of the Trust Fund, the Securities
Administrator, the Depositor or the Sponsor.
(h) All
Certificates surrendered for transfer and exchange shall be canceled and
destroyed by the Securities Administrator in accordance with its customary
procedures.
Section
6.03 Mutilated,
Destroyed, Lost or Stolen Certificates.
If
(a)
any mutilated Certificate is surrendered to the Securities Administrator, or
the
Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and of the ownership thereof
and
(b) there is delivered to the Securities Administrator such security or
indemnity as may be required by them to save each of them harmless, then, in
the
absence of notice to the Securities Administrator that such Certificate has
been
acquired by a bona fide purchaser, the Securities Administrator shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new Certificate
under this Section 6.03, the Securities Administrator may require the
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses (including the fees
and expenses of the Securities Administrator) connected therewith. Any
replacement Certificate issued pursuant to this Section 6.03 shall
constitute complete and indefeasible evidence of ownership in the Trust Fund,
as
if originally issued, whether or not the lost, stolen or destroyed Certificate
shall be found at any time. All Certificates surrendered to the Securities
Administrator under the terms of this Section 6.03 shall be canceled and
destroyed by the Securities Administrator in accordance with its standard
procedures without liability on its part.
Section
6.04 Persons
Deemed Owners.
The
Depositor, the Servicer, the Trustee, the Master Servicer, the Securities
Administrator and any of their agents may treat the person in whose name any
Certificate is registered as the owner of such Certificate for the purpose
of
receiving distributions as provided in this Agreement and for all other purposes
whatsoever, and none of the Depositor, the Servicer, the Trustee, the Master
Servicer, the Securities Administrator nor any of their agents shall be affected
by any notice to the contrary.
Section
6.05 Access
to List of Certificateholders’ Names and Addresses.
If
three
or more Certificateholders (a) request such information in writing from the
Securities Administrator, (b) state that such Certificateholders desire to
communicate with other Certificateholders with respect to their rights under
this Agreement or under the Certificates, and (c) provide a copy of the
communication that such Certificateholders propose to transmit or if the
Depositor shall request such information in writing from the Securities
Administrator, then the Securities Administrator shall, within ten Business
Days
after the receipt of such request, provide the Depositor or such
Certificateholders at such recipients’ expense the most recent list of the
Certificateholders of the Trust Fund held by the Securities Administrator,
if
any. The Depositor and every Certificateholder, by receiving and holding a
Certificate, agree that the Securities Administrator shall not be held
accountable by reason of the disclosure of any such information as to the list
of the Certificateholders hereunder, regardless of the source from which such
information was derived.
Section
6.06 Book-Entry
Certificates.
The
Regular Certificates, upon original issuance, shall be issued in the form of
one
or more typewritten Certificates representing the Book- Entry Certificates,
to
be delivered to the Depository by or on behalf of the Depositor. Such
Certificates shall initially be registered on the Certificate Register in the
name of the Depository or its nominee, and no Certificate Owner of such
Certificates will receive a definitive certificate representing such Certificate
Owner’s interest in such Certificates, except as provided in Section 6.08.
Unless and until definitive, fully registered Certificates (“Definitive
Certificates”) have been issued to the Certificate Owners of such Certificates
pursuant to Section 6.08:
(a) the
provisions of this Section shall be in full force and effect;
(b) the
Depositor and the Securities Administrator may deal with the Depository and
the
Depository Participants for all purposes (including the making of distributions)
as the authorized representative of the respective Certificate Owners of such
Certificates;
(c) registration
of the Book-Entry Certificates may not be transferred by the Securities
Administrator except to another Depository;
(d) the
rights of the respective Certificate Owners of such Certificates shall be
exercised only through the Depository and the Depository Participants and shall
be limited to those established by law and agreements between the Owners of
such
Certificates and the Depository and/or the Depository Participants. Pursuant
to
the Depository Agreement, unless and until Definitive Certificates are issued
pursuant to Section 6.08, the Depository will make book-entry transfers
among the Depository Participants and receive and transmit distributions of
principal and interest on the related Certificates to such Depository
Participants;
(e) the
Depository may collect its usual and customary fees, charges and expenses from
its Depository Participants;
(f) the
Depositor, the Servicer, the Trustee, the Master Servicer and the Securities
Administrator may rely and shall be fully protected in relying upon information
furnished by the Depository with respect to its Depository Participants;
and
(g) to
the
extent that the provisions of this Section conflict with any other
provisions of this Agreement, the provisions of this Section shall
control.
For
purposes of any provision of this Agreement requiring or permitting actions
with
the consent of, or at the direction of, Certificateholders evidencing a
specified percentage of the aggregate unpaid principal amount of any Class
of
Certificates, such direction or consent may be given by Certificate Owners
(acting through the Depository and the Depository Participants) owning
Book-Entry Certificates evidencing the requisite percentage of principal amount
of such Class of Certificates.
Section
6.07 Notices
to Depository.
Whenever
any notice or other communication is required to be given to Certificateholders
of a Class with respect to which Book-Entry Certificates have been issued,
unless and until Definitive Certificates shall have been issued to the related
Certificate Owners, the Securities Administrator shall give all such notices
and
communications to the Depository.
Section
6.08 Definitive
Certificates.
If,
after
Book-Entry Certificates have been issued with respect to any Certificates,
(a)
the Depositor or the Depository advises the Securities Administrator that the
Depository is no longer willing or able to discharge properly its
responsibilities under the Depository Agreement with respect to such
Certificates and the Securities Administrator or the Depositor is unable to
locate a qualified successor, (b) the Depositor, at its sole option, advises
the
Securities Administrator that it elects to terminate the book-entry system
with
respect to such Certificates through the Depository or (c) after the occurrence
and continuation of either of the events described in clauses (a) or (b) above,
Certificate Owners of such Book-Entry Certificates having not less than fifty
one percent (51%) of the Voting Rights evidenced by any Class of Book-Entry
Certificates advise the Securities Administrator and the Depository in writing
through the Depository Participants that the continuation of a book-entry system
with respect to Certificates of such Class through the Depository (or its
successor) is no longer in the best interests of the Certificate Owners of
such
Class, then the Securities Administrator shall notify all Certificate Owners
of
such Certificates, through the Depository, of the occurrence of any such event
and of the availability of Definitive Certificates to applicable Certificate
Owners requesting the same. The Depositor shall provide the Securities
Administrator with an adequate inventory of certificates to facilitate the
issuance and transfer of Definitive Certificates. Upon surrender to the
Securities Administrator of any such Certificates by the Depository, accompanied
by registration instructions from the Depository for registration, the
Securities Administrator shall countersign and deliver such Definitive
Certificates. Neither the Depositor nor the Securities Administrator shall
be
liable for any delay in delivery of such instructions and each may conclusively
rely on, and shall be protected in relying on, such instructions. Upon the
issuance of such Definitive Certificates, all references herein to obligations
imposed upon or to be performed by the Depository shall be deemed to be imposed
upon and performed by the Securities Administrator, to the extent applicable
with respect to such Definitive Certificates and the Securities Administrator
shall recognize the Holders of such Definitive Certificates as
Certificateholders hereunder.
Section
6.09 Maintenance
of Office or Agency.
Certificates
may be surrendered for registration of transfer or exchange at the applicable
Corporate Trust Office of the Securities Administrator. The Securities
Administrator will give prompt written notice to the Certificateholders of
any
change in such location of any such office or agency.
ARTICLE
VII
THE
DEPOSITOR AND THE MASTER
SERVICER
Section
7.01 Liabilities
of the Depositor and the Master Servicer.
Each
of
the Depositor and the Master Servicer shall be liable in accordance herewith
only to the extent of the obligations specifically imposed upon and undertaken
by it herein.
Section
7.02 Merger
or Consolidation of the Depositor or the Master Servicer.
(a) Subject
to subsection (b) below, the Depositor will keep in full force and effect its
rights and franchises as a corporation under the laws of the jurisdiction of
its
incorporation. Subject to the following paragraph, the Master Servicer shall
keep in full force and effect its existence, rights and franchises as a
corporation under the laws of the jurisdiction of its formation. The Depositor
and the Master Servicer each will obtain and preserve its qualification to
do
business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, the Certificates or any of the Loans and
to
perform its respective duties under this Agreement.
(b) The
Depositor or the Master Servicer may be merged or consolidated, or any person
resulting from any merger or consolidation to which the Depositor or the Master
Servicer shall be a party, or any Person succeeding to the business of the
Depositor or the Master Servicer shall be the successor of the Depositor or
the
Master Servicer hereunder, without the execution or filing of any paper or
further act on the part of any of the parties hereto, anything herein to the
contrary notwithstanding.
Section
7.03 Indemnification
of Depositor and Servicing Function Participants.
(a) The
Depositor agrees to indemnify the Indemnified Persons for, and to hold them
harmless against, any loss, liability or expense (including reasonable legal
fees and disbursements of counsel) incurred on their part that may be sustained
in connection with, arising out of, or relating to, any claim or legal action
(including any pending or threatened claim or legal action) relating to this
Agreement or the Certificates (i) related to the Depositor’s failure to perform
its duties in compliance with this Agreement (except as any such loss, liability
or expense shall be otherwise reimbursable pursuant to this Agreement) or (ii)
incurred by reason of the Depositor’s willful misfeasance, bad faith or gross
negligence in the performance of duties hereunder or by reason of reckless
disregard of obligations and duties hereunder. This indemnity shall survive
the
resignation and the termination of this Agreement.
(b) [Reserved].
(c) Each
of
the Depositor, Master Servicer, Securities Administrator and any Servicing
Function Participant engaged by such party, respectively, shall indemnify and
hold harmless the Master Servicer, the Securities Administrator and the
Depositor, respectively, and each of its directors, officers, employees, agents,
and affiliates from and against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonable legal fees and related costs, judgments and
other
costs and expenses arising out of or based upon (a) any breach by such party
of
any if its obligations under hereunder, including particularly its obligations
to provide any Assessment of Compliance, Attestation Report, Compliance
Statement or any information, data or materials required to be included in
any
1934 Act report, (b) any material misstatement or omission in any information,
data or materials provided by such party (or, in the case of the Securities
Administrator or Master Servicer, any material misstatement or material omission
in (i) any Compliance Statement, Assessment of Compliance or Attestation Report
delivered by it, or by any Servicing Function Participant engaged by it,
pursuant to this Agreement, or (ii) any Additional Form 10-D Disclosure,
Additional Form 10-K Disclosure or Form 8-K Disclosure concerning the Master
Servicer or the Securities Administrator), or (c) the negligence, bad faith
or
willful misconduct of such indemnifying party in connection with its performance
hereunder. If the indemnification provided for in this Section 11.03(e) is
unavailable or insufficient to hold harmless the Master Servicer, the Securities
Administrator or the Depositor, as the case may be, then each such party agrees
that it shall contribute to the amount paid or payable by the Master Servicer,
the Securities Administrator or the Depositor, as applicable, as a result of
any
claims, losses, damages or liabilities incurred by such party in such proportion
as is appropriate to reflect the relative fault of the indemnified party on
the
one hand and the indemnifying party on the other. This indemnification shall
survive the termination of this Agreement or the termination of any party to
this Agreement.
Section
7.04 Limitations
on Liability of the Depositor, the Securities Administrator, the Master
Servicer, the Servicer and Others.
Subject
to the obligation of the Depositor to indemnify the Indemnified Persons pursuant
to Section 7.03 and the Servicer’s indemnification obligations under the
Servicing Agreement:
(a) None
of
the Depositor, the Securities Administrator, the Master Servicer or any of
the
directors, officers, employees or agents of the Depositor, the Securities
Administrator, the Master Servicer and the Servicer shall be under any liability
to the Indemnified Persons, the Trust Fund or the Certificateholders for taking
any action or for refraining from taking any action in good faith pursuant
to
this Agreement or the Servicing Agreement, as applicable, or for errors in
judgment; provided, however, that this provision shall not protect the
Depositor, the Securities Administrator, the Master Servicer or any such Person
against any breach of warranties, representations or covenants made herein
or
under the Servicing Agreement or against any specific liability imposed on
any
such Person pursuant hereto or against any liability which would otherwise
be
imposed by reason of such Person’s willful misfeasance, bad faith or gross
negligence in the performance of duties or by reason of reckless disregard
of
obligations and duties hereunder or under the Servicing Agreement.
(b) The
Depositor, the Securities Administrator, the Master Servicer, the Servicer
and
any director, officer, employee or agent of the Depositor, the Securities
Administrator and the Master Servicer may rely in good faith on any document
of
any kind prima facie properly executed and submitted by any Person respecting
any matters arising hereunder or under the Servicing Agreement.
(c) The
Depositor, the Securities Administrator, the Master Servicer, the Servicer,
the
Trustee, the Custodian and any director, officer, employee or agent of the
Depositor, the Securities Administrator, the Master Servicer, the Servicer,
the
Trustee or the Custodian shall be indemnified by the Trust Fund and held
harmless thereby against any loss, liability or expense (including reasonable
legal fees and disbursements of counsel) incurred on their part that may be
sustained in connection with, arising out of, or relating to this Agreement,
the
Servicing Agreement, the Custodial Agreement or the Certificates (including
any
pending or threatened claim or legal action), other than (i) with respect to
the
Servicer, such loss, liability or expense related to the Servicer’s failure to
perform its duties in compliance with the Servicing Agreement (except as any
such loss, liability or expense shall be otherwise reimbursable pursuant to
this
Agreement) or, with respect to the Custodian, to the Custodian’s failure to
perform its duties under the Custodial Agreement, (ii) with respect to the
Servicer, any such loss, liability or expense incurred by reason of the
Servicer’s willful misfeasance, bad faith or gross negligence in the performance
of its duties under the Servicing Agreement or (iii) with respect to the
Custodian, any such loss, liability or expense incurred by reason of the
Custodian’s willful misfeasance, bad faith or gross negligence in the
performance of its duties hereunder.
(d) The
Depositor, the Securities Administrator, the Servicer or the Master Servicer
shall not be under any obligation to appear in, prosecute or defend any legal
action that is not incidental to its duties under this Agreement or the
Servicing Agreement and that in its opinion may involve it in any expense or
liability; provided, however, that each of the Depositor, the Securities
Administrator, the Servicer and the Master Servicer may in its discretion,
undertake any such action which it may deem necessary or desirable with respect
to this Agreement and the Servicing Agreement and the rights and duties of
the
parties hereto and the interests of the Certificateholders hereunder and under
the Servicing Agreement. In such event, the legal expenses and costs of such
action and any liability resulting therefrom (except any loss, liability or
expense incurred by reason of willful misfeasance, bad faith or gross negligence
in the performance of duties hereunder or under the Servicing Agreement or
by
reason of reckless disregard of obligations and duties hereunder or under the
Servicing Agreement) shall be expenses, costs and liabilities of the Trust
Fund,
and the Depositor, the Securities Administrator, the Servicer and the Master
Servicer shall be entitled to be reimbursed therefor out of the Distribution
Account as provided by Section 3.27 or Section 3.32, as applicable. Nothing
in this Subsection 7.04(d) shall affect the Master Servicer’s obligation to take
such actions as are necessary to ensure the servicing and administration of
the
Mortgage Loans pursuant to this Agreement.
(e) In
taking
or recommending any course of action pursuant to this Agreement, unless
specifically required to do so pursuant to this Agreement, the Trustee shall
not
be required to investigate or make recommendations concerning potential
liabilities which the Trust might incur as a result of such course of action
by
reason of the condition of the Mortgaged Properties.
(f) The
Trustee shall not be liable for any acts or omissions of the Servicer, the
Depositor or the Custodian.
Section
7.05 Reserved.
Section
7.06 Appointment
of Special Servicer; Termination of the Servicer.
(a) The
Sponsor may appoint a special servicer with respect to the Mortgage Loans.
The
Sponsor and the Servicer shall negotiate in good faith with any proposed special
servicer with respect to the duties and obligations of such special servicer
with respect to any such Mortgage Loan. Any subservicing agreement shall contain
terms and provisions not inconsistent with this Agreement and shall obligate
the
special servicer to service such Mortgage Loans in accordance with Accepted
Servicing Practices. The fee payable to the special servicer for the performance
of such duties and obligations will be paid from the Servicing Fee collected
by
the Servicer with respect to each such Mortgage Loan and will be remitted to
such special servicer by the Servicer. The Sponsor shall reimburse the Servicer
for Servicing Fee shortfalls, if any, incurred as a result of the fee payable
to
such special servicer.
(b) If
at any
time the Sponsor retains or comes into possession of any servicing rights with
respect to any of the Mortgage Loans, the Sponsor may, at its option, terminate
the servicing responsibilities of the Servicer hereunder with respect to such
Mortgage Loans without cause. No such termination shall become effective unless
and until a successor to the Servicer shall have been appointed to service
and
administer the related Mortgage Loans pursuant to the terms and conditions
of
this Agreement. No appointment shall be effective unless (i) such Successor
Servicer meets the eligibility criteria contained in Section 8.02, (ii) the
Master Servicer shall have consented to such appointment, (iii) the Rating
Agencies have been notified in writing of such appointment and such Successor
Servicer meets the Minimum Servicing Requirements, (iv) such successor has
agreed to assume the obligations of the Servicer hereunder to the extent of
the
related Mortgage Loans and (v) all amounts reimbursable to the terminated
Servicer pursuant to the terms of this Agreement shall have been paid to the
Servicer by the Successor Servicer appointed pursuant to the terms of this
Section 7.06 or by the Sponsor including without limitation, all unpaid
Servicing Fees accrued and unreimbursed Advances and Servicing Advances made
by
the terminated Servicer and all out-of-pocket expenses of the Servicer incurred
in connection with the transfer of servicing to such successor. The Sponsor
shall provide a copy of the agreement executed by such successor to the Trustee
and the Master Servicer.
Section
7.07 Limitation
on Resignation of the Master Servicer.
The
Master Servicer shall not resign from the obligations and duties hereby imposed
on it except upon determination that its duties hereunder are no longer
permissible under applicable law. Any such determination pursuant to the
preceding sentence permitting the resignation of the Master Servicer shall
be
evidenced by an Opinion of Counsel to such effect obtained at the expense of
the
Master Servicer and delivered to the Trustee and the Rating Agencies. No
resignation of the Master Servicer shall become effective until the Trustee
or a
successor Master Servicer meeting the criteria specified in Section 7.08
shall have assumed the Master Servicer’s responsibilities, duties, liabilities
(other than those liabilities arising prior to the appointment of such
successor) and obligations under this Agreement.
Section
7.08 Assignment
of Master Servicing.
The
Master Servicer may sell and assign its rights and delegate its duties and
obligations in its entirety as Master Servicer under this Agreement; provided,
however, that: (i) the purchaser or transferee accepting such assignment and
delegation and assuming the obligations of the Master Servicer hereunder (a)
shall have a net worth of not less than $15,000,000 (unless otherwise approved
by each Rating Agency pursuant to clause (ii) below); (b) shall be reasonably
satisfactory to the Trustee (as evidenced in a writing signed by the Trustee);
and (c) shall execute and deliver to the Trustee an agreement, in form and
substance reasonably satisfactory to the Trustee, which contains an assumption
by such Person of the due and punctual performance and observance of each
covenant and condition to be performed or observed by it as Master Servicer
under this Agreement, any custodial agreement from and after the effective
date
of such agreement; (ii) each Rating Agency shall be given prior written notice
of the identity of the proposed successor to the Master Servicer and each Rating
Agency’s rating of the Certificates in effect immediately prior to such
assignment, sale and delegation will not be downgraded, qualified or withdrawn
as a result of such assignment, sale and delegation, as evidenced by a letter
to
such effect delivered to the Master Servicer and the Trustee; and (iii) the
Master Servicer assigning the master servicing shall deliver to the Trustee
an
officer’s certificate and an Opinion of Independent counsel, each stating that
all conditions precedent to such action under this Agreement have been completed
and such action is permitted by and complies with the terms of this Agreement.
No such assignment or delegation shall affect any liability of the Master
Servicer arising out of acts or omissions prior to the effective date
thereof.
Section
7.09 Rights
of the Depositor in Respect of the Master Servicer.
The
Master Servicer shall afford the Depositor and the Trustee, upon reasonable
notice, during normal business hours, access to all records maintained by the
Master Servicer in respect of the Master Servicer’s rights and obligations
hereunder and access to officers of the Master Servicer responsible for such
obligations. Upon request, the Master Servicer shall furnish to the Depositor
and the Trustee its most recent financial statements and such other information
relating to the Master Servicer’s capacity to perform its obligations under this
Agreement as it possesses. To the extent the Depositor and the trustee are
informed that such information is not otherwise available to the public, the
Depositor and the Trustee shall not disseminate any information obtained
pursuant to the preceding two sentences without the Master Servicer’s written
consent, except as required pursuant to this Agreement or to the extent that
it
is appropriate to do so (i) to its legal counsel, auditors, taxing authorities
or other governmental agencies and the Certificateholders, (ii) pursuant to
any
law, rule, regulation, order, judgment, writ, injunction or decree of any court
or governmental authority having jurisdiction over the Depositor and the Trustee
or the Trust Fund, and in any case, the Depositor or the Trustee, (iii)
disclosure of any and all information that is or becomes publicly known, or
information obtained by the Trustee from sources other than the Depositor or
the
Master Servicer, (iv) disclosure as required pursuant to this Agreement or
(v)
disclosure of any and all information (A) in any preliminary or final offering
circular, registration statement or contract or other document pertaining to
the
transactions contemplated by the Agreement approved in advance by the Depositor
or the Master Servicer or (B) to any affiliate, independent or internal auditor,
agent, employee or attorney of the Trustee having a need to know the same,
provided that the Trustee advises such recipient of the confidential nature
of
the information being disclosed, shall use its best efforts to assure the
confidentiality of any such disseminated non-public information. Nothing in
this
Section 7.09 shall limit the obligation of the Master Servicer to comply
with any applicable law prohibiting disclosure of information regarding the
Mortgagors and the failure of the Master Servicer to provide access as provided
in this Section 7.09 as a result of such obligation shall not constitute a
breach of this Section. Nothing in this Section 7.09 shall require the
Master Servicer to collect, create, collate or otherwise generate any
information that it does not generate in its usual course of business. The
Master Servicer shall not be required to make copies of or ship documents to
any
party unless provisions have been made for the reimbursement of the costs
thereof. The Depositor may, but is not obligated to, enforce the obligations
of
the Master Servicer under this Agreement and may, but is not obligated to,
perform, or cause a designee to perform, any defaulted obligation of the Master
Servicer under this Agreement or exercise the rights of the Master Servicer
under this Agreement; provided that the Master Servicer shall not be relieved
of
any of its obligations under this Agreement by virtue of such performance by
the
Depositor or its designee. The Depositor shall not have any responsibility
or
liability for any action or failure to act by the Master Servicer and is not
obligated to supervise the performance of the Master Servicer under this
Agreement or otherwise.
ARTICLE
VIII
DEFAULT;
TERMINATION OF
SERVICER
AND MASTER SERVICER
Section
8.01 Events
of Default.
(a) In
case
one or more events of default by the Servicer under the Servicing Agreement
(each, a “Servicer Default”) shall occur and be continuing, then, and in each
and every such case, so long as a Servicer Default shall not have been remedied,
the Master Servicer shall notify the Trustee and the Trustee, by notice in
writing to the defaulting Servicer, shall with respect to a payment default
by
the Servicer pursuant to the Servicing Agreement and, upon the occurrence and
continuance of any other Servicer Default, may, and, at the written direction
of
Certificateholders evidencing not less than 25% of the Voting Rights shall,
in
addition to whatever rights the Trustee on behalf of the Certificateholders
may
have under this Agreement and the Servicing Agreement and at law or equity
to
damages, including injunctive relief and specific performance, terminate all
the
rights and obligations of the defaulting Servicer under the Agreement and in
and
to the Mortgage Loans and the proceeds thereof without compensating the
defaulting Servicer for the same with respect to a default by the Servicer.
On
or after the receipt by the defaulting Servicer of such written notice, all
authority and power of the Servicer under the Servicing Agreement whether with
respect to the Mortgage Loans or otherwise, shall pass to and be vested in
the
Trustee. Upon written request from the Trustee, the defaulting Servicer shall
prepare, execute and deliver, any and all documents and other instruments,
place
in the Trustee’s (or its custodian’s) possession all Mortgage Files relating to
the related Mortgage Loans, and do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the related
Mortgage Loans and related documents, or otherwise, at the Servicer’s sole
expense. The defaulting Servicer shall cooperate with the Trustee in effecting
the termination of the Servicer’s responsibilities and rights under the
Servicing Agreement including, without limitation, the transfer to such
successor for administration by it of all cash amounts which shall at the time
be credited by the defaulting Servicer to the Protected Account or thereafter
received with respect to the related Mortgage Loans or any related REO Property
(provided, however, that the defaulting Servicer shall continue to be entitled
to receive all amounts accrued or owing to it under the Servicing Agreement
on
or prior to the date of such termination, whether in respect of Advances,
Servicing Advances, accrued and unpaid Servicing Fees or otherwise. The Trustee
shall not have knowledge of any Servicer Default unless a Responsible Officer
of
the Trustee has actual knowledge or unless written notice of the Servicer
Default is received by the Trustee at its address for notice and such notice
references the Certificates, the Trust Fund or this Agreement.
(b) In
case
one or more of the following events of default by the Master Servicer (each,
a
“Master Servicer Default”) shall occur and be continuing, that is to
say:
(i) any
failure on the part of the Master Servicer duly to observe or perform in any
material respect any other of the covenants or agreements on the part of the
Master Servicer contained in this Agreement, or the breach by the Master
Servicer of any representation and warranty contained in Section 2.03,
which continues unremedied for a period of thirty (30) days after the date
on
which written notice of such failure, requiring the same to be remedied, shall
have been given to the Master Servicer by the Depositor or the Trustee or to
the
Master Servicer, the Depositor and the Trustee by the Holders of Certificates
entitled to at least twenty-five percent (25%) of the Voting Rights;
or
(ii) a
decree
or order of a court or agency or supervisory authority having jurisdiction
in
the premises in an involuntary case under any present or future federal or
state
bankruptcy, insolvency or similar law or the appointment of a conservator or
receiver or liquidator in any insolvency, readjustment of debt, marshalling
of
assets and liabilities or similar proceeding, or for the winding-up or
liquidation of its affairs, shall have been entered against the Master Servicer
and such decree or order shall have remained in force undischarged or unstayed
for a period of ninety (90) days; or
(iii) the
Master Servicer shall consent to the appointment of a conservator or receiver
or
liquidator in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to it or of or relating to
all
or substantially all of its property; or
(iv) the
Master Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit of
its
creditors, or voluntarily suspend payment of its obligations; or
(v) so
long
as the Trust Fund is subject to Exchange Act reporting requirements, failure
by
the Master Servicer to duly perform, within the required time period, its
obligations under Sections 3.13, 3.14, 3.18 or 5.12, which default shall not
be
subject to notice or a cure period.
If
a
Master Servicer Default shall occur, then, and in each and every such case,
so
long as such Master Servicer Default shall not have been remedied, the Depositor
or the Trustee may, and at the written direction of the Holders of Certificates
entitled to at least 51% of Voting Rights, the Trustee shall, by notice in
writing to the Master Servicer (and to the Depositor if given by the Trustee
or
to the Trustee if given by the Depositor) with a copy to each Rating Agency,
terminate all of the rights and obligations of the Master Servicer in its
capacity as Master Servicer under this Agreement, to the extent permitted by
law, and in and to the Mortgage Loans and the proceeds thereof. On or after
the
receipt by the Master Servicer of such written notice, all authority and power
of the Master Servicer under this Agreement, whether with respect to the
Certificates (other than as a Holder of any Certificate) or the Mortgage Loans
or otherwise including, without limitation, the compensation payable to the
Master Servicer under this Agreement, shall pass to and be vested in the Trustee
pursuant to and under this Section, and, without limitation, the Trustee is
hereby authorized and empowered, as attorney-in-fact or otherwise, to execute
and deliver, on behalf of and at the expense of the Master Servicer, any and
all
documents and other instruments and to do or accomplish all other acts or things
necessary or appropriate to effect the purposes of such notice of termination,
whether to complete the transfer and endorsement or assignment of the Mortgage
Loans and related documents, or otherwise. The Master Servicer agrees promptly
(and in any event no later than ten Business Days subsequent to such notice)
to
provide the Trustee with all documents and records requested by it to enable
it
to assume the Master Servicer’s functions under this Agreement, and to cooperate
with the Trustee in effecting the termination of the Master Servicer’s
responsibilities and rights under this Agreement (provided, however, that the
Master Servicer shall continue to be entitled to receive all amounts accrued
or
owing to it under this Agreement on or prior to the date of such termination
and
shall continue to be entitled to the benefits of Section 7.03,
notwithstanding any such termination, with respect to events occurring prior
to
such termination). For purposes of this Section 8.01, the Trustee shall not
be deemed to have knowledge of a Master Servicer Default unless a Responsible
Officer of the Trustee assigned to and working in the Trustee’s Corporate Trust
Office has actual knowledge thereof or unless written notice of any event which
is in fact such a Master Servicer Default is received by the Trustee and such
notice references the Certificates, the Trust or this Agreement. The Trustee
shall promptly notify the Rating Agencies of the occurrence of a Master Servicer
Default of which it has knowledge as provided above.
To
the
extent that the costs and expenses of the Trustee related to the termination
of
the Master Servicer, appointment of a successor Master Servicer or the transfer
and assumption of the master servicing by the Trustee (including, without
limitation, (i) all legal costs and expenses and all due diligence costs and
expenses associated with an evaluation of the potential termination of the
Master Servicer as a result of a Master Servicer Default and (ii) all costs
and
expenses associated with the complete transfer of the master servicing,
including all servicing files and all servicing data and the completion,
correction or manipulation of such servicing data as may be required by the
successor Master Servicer to correct any errors or insufficiencies in the
servicing data or otherwise to enable the successor Master Servicer to master
service the Mortgage Loans in accordance with this Agreement) are not fully
and
timely reimbursed by the terminated Master Servicer, the Trustee shall be
entitled to reimbursement of such costs and expenses from the Distribution
Account.
Neither
the Trustee nor any other successor master servicer shall be deemed to be in
default hereunder by reason of any failure to make, or any delay in making,
any
distribution hereunder or any portion thereof or any failure to perform, or
any
delay in performing, any duties or responsibilities hereunder, in either case
caused by the failure of the Master Servicer to deliver or provide, or any
delay
in delivering or providing, any cash, information, documents or records to
it.
Notwithstanding
the above, the Trustee may, if it shall be unwilling to continue to so act,
or
shall, if it is unable to so act, petition a court of competent jurisdiction
to
appoint, or appoint on its own behalf, any established housing and home finance
institution servicer, master servicer, servicing or mortgage servicing
institution having a net worth of not less than $15,000,000 and meeting such
other standards for a successor master servicer as are set forth in this
Agreement, as the successor to such Master Servicer in the assumption of all
of
the responsibilities, duties or liabilities of a master servicer, like the
Master Servicer.
Section
8.02 Trustee
to Act; Appointment of Successor.
On
and
after the time the Servicer receives a notice of termination pursuant to
Section 8.01, the Trustee shall become the successor to the Servicer with
respect to the transactions set forth or provided for herein and after a
transition period (not to exceed 90 days), shall be subject to all the
responsibilities, duties and liabilities relating thereto placed on the Servicer
by the terms and provisions of the Servicing Agreement, including, the
obligation to make Advances, except as otherwise provided herein; provided,
however, that the Trustee’s obligation to make Advances in its capacity as
Successor Servicer shall not be subject to such 90 day transition period and
the
Trustee will make any Advance required to be made by the terminated Servicer
on
the Distribution Date on which the terminated Servicer was required to make
such
Advance. Effective on the date of such notice of termination, as compensation
therefor, the Trustee shall be entitled to all fees, costs and expenses relating
to the Mortgage Loans that the terminated Servicer would have been entitled
to
if it had continued to act as Servicer under the Servicing Agreement, provided,
however, that the Trustee shall not be (i) liable for any acts or omissions
of
the terminated Servicer, (ii) obligated to make Advances if it is prohibited
from doing so under applicable law or determines that such Advance, if made,
would constitute a Nonrecoverable Advance, (iii) responsible for expenses of
the
terminated Servicer or (iv) obligated to deposit losses on any Permitted
Investment directed by the terminated Servicer.
Notwithstanding
the foregoing, the Trustee may, if it shall be unwilling to so act, or shall,
if
it is prohibited by applicable law from making Advances pursuant to this
Agreement or if it is otherwise unable to so act, appoint, or petition a court
of competent jurisdiction to appoint, any established mortgage loan servicing
institution the appointment of which does not adversely affect the then current
rating of the Certificates by each Rating Agency as the successor to the
Servicer under the Servicing Agreement in the assumption of all or any part
of
the responsibilities, duties or liabilities of the Servicer under the Servicing
Agreement. Any Successor Servicer shall (i) be an institution that is a ▇▇▇▇▇▇
▇▇▇ and ▇▇▇▇▇▇▇ Mac approved seller/servicer in good standing, that has a net
worth of at least $15,000,000 and (ii) be willing to act as Successor Servicer
of the Mortgage Loans under the Servicing Agreement, and shall have executed
and
delivered to the Depositor and the Trustee an agreement accepting such
delegation and assignment, that contains an assumption by such Person of the
rights, powers, duties, responsibilities, obligations and liabilities of the
terminated Servicer (other than any liabilities of the terminated Servicer
hereof incurred prior to termination of the Servicer under the Servicing
Agreement), with like effect as if originally named as a party to the Servicing
Agreement, provided that each Rating Agency shall have acknowledged in writing
that its rating of the Certificates in effect immediately prior to such
assignment and delegation will not be qualified or reduced as a result of such
assignment and delegation. If the Trustee assumes the duties and
responsibilities of the terminated Servicer in accordance with this
Section 8.02, the Master Servicer shall not resign as Servicer until a
Successor Servicer has been appointed and has accepted such appointment. Pending
appointment of a successor to the terminated Servicer hereunder, the Trustee,
unless the Trustee is prohibited by law from so acting, shall act in such
capacity as hereinabove provided. In connection with such appointment and
assumption, the Trustee may make such arrangements for the compensation of
such
successor out of payments on the Mortgage Loans or otherwise as it and such
successor shall agree; provided that no such compensation shall be in excess
of
that permitted the terminated Servicer under the Servicing Agreement. The
Trustee and such successor shall take such action, consistent with this
Agreement and the Servicing Agreement, as shall be necessary to effectuate
any
such succession. Neither the Trustee nor any other Successor Servicer shall
be
deemed to be in default hereunder by reason of any failure to make, or any
delay
in making, any distribution hereunder or any portion thereof or any failure
to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the Servicer to deliver or provide,
or
any delay in delivering or providing, any cash, information, documents or
records to it.
The
costs
and expenses of the Trustee in connection with the termination of the Servicer,
appointment of a Successor Servicer and, if applicable, any transfer of
servicing, including, without limitation, all costs and expenses associated
with
the complete transfer of all servicing data and the completion, correction
or
manipulation of such servicing data as may be required by the Trustee to correct
any errors or insufficiencies in the servicing data or otherwise to enable
the
Trustee or the Successor Servicer to service the related Mortgage Loans properly
and effectively, to the extent not paid by the terminated Servicer as may be
required herein shall be payable to the Trustee from the Distribution Account
pursuant to Section 3.31. Any successor to the terminated Servicer as
Successor Servicer under the Servicing Agreement shall give notice to the
applicable Mortgagors of such change of the Servicer and shall, during the
term
of its service as Successor Servicer maintain in force the policy or policies
that the terminated Servicer is required to maintain pursuant to the Servicing
Agreement.
On
and
after the time the Master Servicer receives a notice of termination, the Trustee
shall be the successor in all respects to the Master Servicer (and, if
applicable, the Securities Administrator) in its capacity as Master Servicer
(and, if applicable, the Securities Administrator) under this Agreement and
the
transactions set forth or provided for herein, and all the responsibilities,
duties and liabilities relating thereto and arising thereafter shall be assumed
by the Trustee (except for any representations or warranties of the Master
Servicer under this Agreement, the responsibilities, duties and liabilities
contained in Section 2.3 and the obligation to deposit amounts in respect of
losses pursuant to Section 3.22(c)) by the terms and provisions hereof. As
compensation therefor, the Trustee shall be entitled to and all funds relating
to the Loans, investment earnings on the Distribution Account and all other
remuneration to which the Master Servicer would have been entitled if it had
continued to act hereunder. Notwithstanding the above and subject to the
immediately following paragraph, the Trustee may, if it shall be unwilling
to so
act, or shall, if it is unable to so act or if it is prohibited by law from
making advances regarding delinquent mortgage loans or if the Holders of
Certificates evidencing, in aggregate, not less than 51% of the Certificate
Principal Balance of the Certificates so request in writing promptly appoint
or
petition a court of competent jurisdiction to appoint, an established mortgage
loan servicing institution acceptable to each Rating Agency and having a net
worth of not less than $25,000,000, as the successor to the Master Servicer
under this Agreement in the assumption of all or any part of the
responsibilities, duties or liabilities of the Master Servicer under this
Agreement.
No
appointment of a successor to the Master Servicer (and, if applicable, the
Securities Administrator) under this Agreement shall be effective until the
assumption by the successor of all of the Master Servicer’s (and, if applicable,
the Securities Administrator’s) responsibilities, duties and liabilities
hereunder. In connection with such appointment and assumption described herein,
the Trustee may make such arrangements for the compensation of such successor
out of payments on Loans as it and such successor shall agree; provided,
however, that no such compensation shall be in excess of that permitted the
Master Servicer (and, if applicable, the Securities Administrator) as such
hereunder. The Depositor, the Trustee and such successor shall take such action,
consistent with this Agreement, as shall be necessary to effectuate any such
succession. Pending appointment of a successor to the Master Servicer (and,
if
applicable, the Securities Administrator) under this Agreement, the Trustee
shall act in such capacity as hereinabove provided. The transition costs and
expenses incurred by the Trustee in connection with the replacement of the
Master Servicer (and, if applicable, the Securities Administrator) shall be
reimbursed out of the Trust Fund.
Section
8.03 Notification
to Certificateholders.
(a) Upon
any
termination of or appointment of a successor to the Servicer or the Master
Servicer, the Trustee shall give prompt written notice thereof to
Certificateholders and to each Rating Agency.
(b) Within
sixty (60) days after the occurrence of any Servicer Default or Master Servicer
Default, the Trustee shall transmit by mail to all Certificateholders notice
of
each such Servicer Default or Master Servicer Default hereunder known to the
Trustee, unless such default shall have been cured or waived.
Section
8.04 Waiver
of Servicer Defaults and Master Servicer Defaults.
The
Trustee may waive only by written notice from Certificateholders evidencing
66-2/3 of the Voting Rights (unless such default materially and adversely
affects all Certificateholders, in which case the written direction shall be
from all of the Certificateholders) any default by the Servicer or Master
Servicer in the performance of its obligations hereunder and its consequences.
Upon any such waiver of a past default, such default shall cease to exist,
and
any Servicer Default or Master Servicer Default arising therefrom shall be
deemed to have been remedied for every purpose of this Agreement. No such waiver
shall extend to any subsequent or other default or impair any right consequent
thereon except to the extent expressly so waived in writing.
ARTICLE
IX
CONCERNING
THE TRUSTEE AND SECURITIES ADMINISTRATOR
Section
9.01 Duties
of Trustee and Securities Administrator.
(a) The
Trustee, prior to the occurrence of a Servicer Default or Master Servicer
Default, and after the curing or waiver of all Servicer Defaults or Master
Servicer Defaults, which may have occurred, and the Securities Administrator
each undertake to perform such duties and only such duties as are specifically
set forth in this Agreement as duties of the Trustee and the Securities
Administrator, respectively. If a Servicer Default or Master Servicer Default
has occurred and has not been cured or waived, the Trustee shall exercise such
of the rights and powers vested in it by this Agreement, and use the same degree
of care and skill in their exercise, as a prudent person would exercise or
use
under the circumstances in the conduct of such Person’s own affairs. Any
permissive right of the Trustee enumerated in this Agreement shall not be
construed as a duty.
(b) Each
of
the Trustee and the Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to it, which are specifically required to be furnished
pursuant to any provision of this Agreement, shall examine them to determine
whether they conform to the requirements of this Agreement. If any such
instrument is found not to conform to the requirements of this Agreement in
a
material manner, the Trustee or the Securities Administrator, as the case may
be, shall take such action as it deems appropriate to have the instrument
corrected, and if the instrument is not corrected to its satisfaction, the
Securities Administrator will provide notice to the Trustee thereof and the
Trustee will provide notice to the Certificateholders.
(c) The
Trustee shall promptly remit to the Servicer any complaint, claim, demand,
notice or other document (collectively, the “Notices”) delivered to the Trustee
as a consequence of the assignment of any Mortgage Loan hereunder and relating
to the servicing of the Mortgage Loans; provided than any such notice (i) is
delivered to the Trustee at its Corporate Trust Office, (ii) contains
information sufficient to permit the Trustee to make a determination that the
real property to which such document relates is a Mortgaged Property. The
Trustee shall have no duty hereunder with respect to any Notice it may receive
or which may be alleged to have been delivered to or served upon it unless
such
Notice is delivered to it or served upon it at its Corporate Trust Office and
such Notice contains the information required pursuant to clause (ii) of the
preceding sentence.
(d)
No
provision of this Agreement shall be construed to relieve the Trustee or the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own misconduct; provided, however,
that:
(i) Prior
to
the occurrence of a Servicer Default or Master Servicer Default and after the
curing or waiver of all such Servicer Defaults or Master Servicer Defaults
which
may have occurred with respect to the Trustee and at all times with respect
to
the Securities Administrator, the duties and obligations of the Trustee and
the
Securities Administrator shall be determined solely by the express provisions
of
this Agreement, neither the Trustee nor the Securities Administrator shall
be
liable except for the performance of its duties and obligations as are
specifically set forth in this Agreement, no implied covenants or obligations
shall be read into this Agreement against the Trustee or the Securities
Administrator and, in the absence of bad faith on the part of the Trustee or
the
Securities Administrator, respectively, the Trustee or the Securities
Administrator, respectively, may conclusively rely and shall be fully protected
in acting or refraining from acting, as to the truth of the statements and
the
correctness of the opinions expressed therein, upon any certificates or opinions
furnished to the Trustee or the Securities Administrator, respectively, that
conform to the requirements of this Agreement;
(ii) Neither
the Trustee nor the Securities Administrator shall be liable in its individual
capacity for an error of judgment made in good faith by a Responsible Officer
or
Responsible Officers of the Trustee or an officer or officers of the Securities
Administrator, respectively, unless it shall be proved that the Trustee or
Securities Administrator, respectively, was negligent in ascertaining the
pertinent facts;
(iii) Neither
the Trustee nor the Securities Administrator shall be liable with respect to
any
action taken, suffered or omitted to be taken by it in good faith and believed
by it to be authorized or within the rights or powers conferred upon it by
this
Agreement or in accordance with the directions of the Holders of Certificates
evidencing not less than 25% of the aggregate Voting Rights of the Certificates,
if such action or non-action relates to the time, method and place of conducting
any proceeding for any remedy available to the Trustee or the Securities
Administrator or exercising any trust or other power conferred upon the Trustee
or the Securities Administrator under this Agreement;
(iv) The
Trustee shall not be required to take notice or be deemed to have notice or
knowledge of any default, Servicer Default or Master Servicer Default unless
a
Responsible Officer of the Trustee shall have actual knowledge thereof. In
the
absence of such notice, the Trustee may conclusively assume there is no such
default or Master Servicer Default;
(v) The
Trustee shall not in any way be liable by reason of any insufficiency in any
Account held by or in the name of Trustee unless it is determined by a court
of
competent jurisdiction that the Trustee’s gross negligence or willful misconduct
was the primary cause of such insufficiency (except to the extent that the
Trustee is obligor and has defaulted thereon);
(vi) Anything
in this Agreement to the contrary notwithstanding, in no event shall the Trustee
or the Securities Administrator be liable for special, indirect, punitive or
consequential loss or damage of any kind whatsoever (including but not limited
to lost profits), even if the Trustee or the Securities Administrator has been
advised of the likelihood of such loss or damage and regardless of the form
of
action and whether or not any such damages were foreseeable or contemplated;
and
(vii) None
of
the Sponsor, the Depositor or the Trustee shall be responsible for the acts
or
omissions of the other, it being understood that this Agreement shall not be
construed to render them partners, joint venturers or agents of one
another.
Neither
the Trustee nor the Securities Administrator shall be required to expend or
risk
its own funds or otherwise incur liability, financial or otherwise, in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if there is reasonable ground for believing that the repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it, and none of the provisions contained in this Agreement
shall in any event require the Trustee or the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of the terminated Servicer or Master Servicer
hereunder.
(e) All
funds
received by the Securities Administrator and required to be deposited in the
Distribution Account pursuant to this Agreement will be promptly so deposited
by
the Securities Administrator.
Section
9.02 Certain
Matters Affecting the Trustee and Securities Administrator.
(a) Except
as
otherwise provided in Section 9.01:
(i) The
Trustee and the Securities Administrator may conclusively rely and shall be
fully protected in acting or refraining from acting in reliance on any
resolution or certificate of the Sponsor, the Depositor or the Servicer, any
certificates of auditors or any other certificate, statement, instrument,
opinion, report, notice, request, consent, order, appraisal, bond or other
paper
or document believed by it to be genuine and to have been signed or presented
by
the proper party or parties;
(ii) The
Trustee and the Securities Administrator may consult with counsel and any advice
of such counsel or any Opinion of Counsel shall be full and complete
authorization and protection with respect to any action taken or suffered or
omitted by it hereunder in good faith and in accordance with such advice or
Opinion of Counsel:
(iii) Neither
the Trustee nor the Securities Administrator shall be under any obligation
to
exercise any of the trusts or powers vested in it by this Agreement, other
than
its obligation to give notices pursuant to this Agreement, or to institute,
conduct or defend any litigation hereunder or in relation hereto at the request,
order or direction of any of the Certificateholders pursuant to the provisions
of this Agreement, unless such Certificateholders shall have offered to the
Trustee or the Securities Administrator, as the case may be, reasonable security
or indemnity satisfactory to it against the costs, expenses and liabilities
which may be incurred therein or thereby. Nothing contained herein shall,
however, relieve the Trustee of the obligation, upon the occurrence of a
Servicer Default or Master Servicer Default of which a Responsible Officer
of
the Trustee has actual knowledge (which has not been cured or waived), to
exercise such of the rights and powers vested in it by this Agreement, and
to
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own
affairs;
(iv) Neither
the Trustee nor the Securities Administrator shall be liable in its individual
capacity for any action taken, suffered or omitted by it in good faith and
believed by it to be authorized or within the discretion or rights or powers
conferred upon it by this Agreement;
(v) Prior
to
the occurrence of a Servicer Default or Master Servicer Default hereunder and
after the curing or waiver of all Servicer Defaults or Master Servicer Defaults
which may have occurred with respect to the Trustee and at all times with
respect to the Securities Administrator, neither the Trustee nor the Securities
Administrator shall be bound to make any investigation into the facts or matters
stated in any resolution, certificate, statement, instrument, opinion, report,
notice, request, consent, order, approval, bond or other paper or document,
unless requested in writing to do so by Holders of Certificates evidencing
not
less than 25% of the aggregate Voting Rights of the Certificates and provided
that the payment within a reasonable time to the Trustee or the Securities
Administrator of the costs, expenses or liabilities likely to be incurred by
it
in the making of such investigation is, in the opinion of the Trustee or the
Securities Administrator, as applicable, not reasonably assured to the Trustee
or the Securities Administrator, as applicable, by the security afforded to
it
by the terms of this Agreement, the Trustee or the Securities Administrator,
as
applicable, may require reasonable indemnity against such expense or liability
as a condition to taking any such action. The reasonable expense of every such
examination shall be paid by the Certificateholders requesting the
investigation;
(vi) The
Trustee may execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or through Affiliates, nominees, custodians, agents
or
attorneys. The Trustee shall not be liable or responsible for the misconduct
or
negligence of any of the Trustee’s agents or attorneys or paying agent appointed
hereunder by the Trustee with due care;
(vii) Should
the Trustee deem the nature of any action required on its part to be unclear,
the Trustee may require prior to such action that it be provided by the
Depositor with reasonable further instructions; the right of the Trustee to
perform any discretionary act enumerated in this Agreement shall not be
construed as a duty, and the Trustee shall not be accountable for other than
its
gross negligence or willful misconduct in the performance of any such
act;
(viii) The
Trustee shall not be required to give any bond or surety with respect to the
execution of the trust created hereby or the powers granted
hereunder;
(ix) The
Trustee shall not have any duty to conduct any affirmative investigation as
to
the occurrence of any condition requiring the repurchase of any Mortgage Loan
by
any Person pursuant to this Agreement, or the eligibility of any Mortgage Loan
for purposes of this Agreement;
(x) The
Trustee shall have no duty hereunder with respect to any complaint, claim,
demand, notice or other document it may receive or which may be alleged to
have
been delivered or served upon it by the parties as a consequence of the
assignment of any Mortgage Loan hereunder; provided, however that the Trustee
shall promptly remit to the Servicer upon receipt any such complaint, claim,
demand, notice or other document (i) which is delivered to the Trustee at is
Corporate Trust Office, (ii) of which a Responsible Officer has actual knowledge
and (iii) which contains information sufficient to permit the Trustee to make
a
determination that the real property to which such document relates is a
Mortgaged Property;
(xi) The
Trustee is hereby directed by the Depositor to execute the Swap
Agreement on
behalf
of the Supplemental Interest Trust, in the form presented to it by the Depositor
and shall have no responsibility for the contents of the Swap Agreement,
including, without limitation, the representations and warranties contained
therein. Any funds payable by the Securities Administrator, on behalf of the
Trustee, under the Swap Agreement at closing shall be paid by the Depositor;
(xii) None
of
the Securities Administrator, the Master Servicer, the Servicer, the Sponsor,
the Depositor, the Custodian or the Trustee shall be responsible for the acts
or
omissions of the others or of the Swap Provider, it being understood that this
Agreement shall not be construed to render them partners, joint venturers or
agents of one another; and
(xiii) The
permissive rights of the Trustee enumerated herein shall not be construed as
duties.
Section
9.03 Trustee
and Securities Administrator not Liable for Certificates or Mortgage
Loans.
The
recitals contained herein and in the Certificates (other than the signature
of
the Securities Administrator, the authentication of the Securities Administrator
on the Certificates, the acknowledgements of the Trustee contained in Article
II
and the representations and warranties of the Trustee in Section 9.12)
shall be taken as the statements of the Depositor, and neither the Trustee
nor
the Securities Administrator assumes any responsibility for their correctness.
Neither the Trustee nor the Securities Administrator makes any representations
or warranties as to the validity or sufficiency of this Agreement (other than
as
specifically set forth in Section 9.12), the Swap Agreement, the
Certificates (other than the signature of the Securities Administrator and
authentication of the Securities Administrator on the Certificates) or of any
Mortgage Loan except as expressly provided in Sections 2.02. The Securities
Administrator’s signature and authentication (or authentication of its agent) on
the Certificates shall be solely in its capacity as Securities Administrator
and
shall not constitute the Certificates an obligation of the Securities
Administrator in any other capacity. The Trustee and the Securities
Administrator shall not be accountable for the use or application by the
Depositor of any of the Certificates or of the proceeds of such Certificates,
or
for the use or application of any funds paid to the Depositor with respect
to
the Mortgage Loans.
Section
9.04 Trustee
and Securities Administrator May Own Certificates.
Each
of
the Trustee and the Securities Administrator in its individual capacity or
in
any other capacity other than as Trustee or Securities Administrator hereunder
may become the owner or pledgee of any Certificates and may transact business
with other interested parties and their Affiliates with the same rights it
would
have if it were not the Trustee or the Securities Administrator.
Section
9.05 Fees
and Expenses of Trustee and Securities Administrator.
The
fees
of the Trustee and the Securities Administrator hereunder shall be paid in
accordance with a side letter agreement with the Master Servicer and at the
sole
expense of the Master Servicer. In addition, the Trustee, the Securities
Administrator, the Custodian and any director, officer, employee or agent of
the
Trustee, the Securities Administrator and the Custodian shall be indemnified
by
the Trust and held harmless against any loss, liability or expense (including
reasonable attorney’s fees and expenses) incurred by the Trustee, the Custodian
or the Securities Administrator including any pending or threatened claim or
legal action arising out of or in connection with the acceptance or
administration of its respective obligations and duties under this Agreement
and
any and all other agreements related hereto, other than any loss, liability
or
expense (i) for which the Trustee is indemnified by the Master Servicer or
the
Servicer, (ii) that constitutes a specific liability of the Trustee or the
Securities Administrator pursuant to this Agreement or (iii) any loss, liability
or expense incurred by reason of willful misfeasance, bad faith or negligence
in
the performance of duties hereunder by the Trustee or the Securities
Administrator or by reason of reckless disregard of obligations and duties
hereunder. In no event shall the Trustee or the Securities Administrator be
liable for special, indirect or consequential loss or damage of any kind
whatsoever (including but not limited to lost profits), even if it has been
advised of the likelihood of such loss or damage and regardless of the form
of
action. The Master Servicer agrees to indemnify the Trustee, from, and hold
the
Trustee harmless against, any loss, liability or expense (including reasonable
attorney’s fees and expenses) incurred by the Trustee by reason of the Master
Servicer’s willful misfeasance, bad faith or gross negligence in the performance
of its duties under this Agreement or by reason of the Master Servicer’s
reckless disregard of its obligations and duties under this Agreement. The
indemnities in this Section 9.05 shall survive the termination or discharge
of this Agreement and the resignation or removal of the Master Servicer, the
Trustee, the Securities Administrator or the Custodian. Any payment hereunder
made by the Master Servicer to the Trustee shall be from the Master Servicer’s
own funds, without reimbursement from REMIC I therefor.
Section
9.06 Eligibility
Requirements for Trustee and Securities Administrator.
The
Trustee and the Securities Administrator shall at all times be a corporation
or
an association (other than the Depositor, the Sponsor or any Affiliate of the
foregoing) organized and doing business under the laws of any state or the
United States of America, authorized under such laws to exercise corporate
trust
powers, having a combined capital and surplus of at least $50,000,000 (or a
member of a bank holding company whose capital and surplus is at least
$50,000,000) and subject to supervision or examination by federal or state
authority. If such corporation or association publishes reports of conditions
at
least annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section the combined capital and surplus of such corporation or association
shall be deemed to be its combined capital and surplus as set forth in its
most
recent report of conditions so published. In case at any time the Trustee or
the
Securities Administrator, as applicable, shall cease to be eligible in
accordance with the provisions of this Section, the Trustee or the Securities
Administrator, as applicable, shall resign immediately in the manner and with
the effect specified in Section 9.07.
Additionally,
the Securities Administrator (i) may not be an originator, Master Servicer,
Servicer, Depositor or an affiliate of the Depositor unless the Securities
Administrator is in an institutional trust department, (ii) must be authorized
to exercise corporate trust powers under the laws of its jurisdiction of
organization, and (iii) must be rated at least "A/F1" by Fitch, if Fitch is
a
Rating Agency, or rated at least "A-1" by S&P (or such rating acceptable to
Fitch pursuant to a rating confirmation). ▇▇▇▇▇ Fargo Bank, N.A. shall act
as
Securities Administrator for so long as it is Master Servicer under this
Agreement.
Section
9.07 Resignation
and Removal of Trustee and Securities Administrator.
The
Trustee and the Securities Administrator may at any time resign (including,
without limitation, and in the case of the Securities Administrator, upon the
resignation or removal of the Master Servicer) and be discharged from the trust
hereby created by giving written notice thereof to the Depositor, to the Master
Servicer, to the Securities Administrator (or the Trustee, if the Securities
Administrator resigns) and to the Certificateholders. Upon receiving such notice
of resignation, the Depositor shall promptly appoint a successor trustee or
successor securities administrator by written instrument, in duplicate, which
instrument shall be delivered to the resigning Trustee or Securities
Administrator, as applicable, and to the successor trustee or successor
securities administrator, as applicable. A copy of such instrument shall be
delivered to the Certificateholders, the Trustee, the Securities Administrator
and the Master Servicer by the Depositor. If no successor trustee or successor
securities administrator shall have been so appointed and have accepted
appointment within thirty (30) days after the giving of such notice of
resignation, the resigning Trustee or Securities Administrator, as the case
may
be, may, at the expense of the Trust Fund, petition any court of competent
jurisdiction for the appointment of a successor trustee or successor securities
administrator, as applicable.
If
at any
time the Trustee or the Securities Administrator shall cease to be eligible
in
accordance with the provisions of Section 9.06 and shall fail to resign
after written request therefor by the Depositor, or if at any time the Trustee
or the Securities Administrator shall become incapable of acting, or shall
be
adjudged bankrupt or insolvent, or a receiver of the Trustee or the Securities
Administrator or of its property shall be appointed, or any public officer
shall
take charge or control of the Trustee or the Securities Administrator or of
its
property or affairs for the purpose of rehabilitation, conservation or
liquidation, then the Depositor may remove the Trustee or the Securities
Administrator, as applicable and appoint a successor trustee or successor
securities administrator, as applicable, by written instrument, in duplicate,
which instrument shall be delivered to the Trustee or the Securities
Administrator so removed and to the successor trustee or successor securities
administrator. A copy of such instrument shall be delivered to the
Certificateholders, the Trustee, the Securities Administrator and the Master
Servicer by the Depositor.
The
Holders of Certificates entitled to at least 51% of the Voting Rights may at
any
time remove the Trustee or the Securities Administrator and appoint a successor
trustee or successor securities administrator by written instrument or
instruments, in triplicate, signed by such Holders or their attorneys-in-fact
duly authorized, one complete set of which instruments shall be delivered to
the
Depositor, one complete set to the Trustee or the Securities Administrator
so
removed and one complete set to the successor so appointed. A copy of such
instrument shall be delivered to the Certificateholders, the Trustee (in the
case of the removal of the Securities Administrator), the Securities
Administrator (in the case of the removal of the Trustee) and the Master
Servicer by the Depositor.
Any
resignation or removal of the Trustee or the Securities Administrator and
appointment of a successor trustee or successor securities administrator
pursuant to any of the provisions of this Section shall not become
effective until acceptance of appointment by the successor trustee or successor
securities administrator, as applicable, as provided in
Section 9.08.
Notwithstanding
anything to the contrary contained herein, the Master Servicer and the
Securities Administrator shall at all times be the same Person.
Section
9.08 Successor
Trustee or Securities Administrator.
Any
successor trustee or successor securities administrator appointed as provided
in
Section 9.07 hereof shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee or predecessor securities administrator
instrument accepting such appointment hereunder and thereupon the resignation
or
removal of the predecessor trustee or predecessor securities administrator
shall
become effective and such successor trustee or successor securities
administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with the like effect as if originally named as trustee or Securities
Administrator herein. The predecessor trustee or predecessor securities
administrator shall deliver to the successor trustee or successor securities
administrator all Mortgage Loan Documents and related documents and statements
to the extent held by it hereunder, as well as all monies, held by it hereunder,
and the Depositor and the predecessor trustee or predecessor securities
administrator shall execute and deliver such instruments and do such other
things as may reasonably be required for more fully and certainly vesting and
confirming in the successor trustee or successor securities administrator all
such rights, powers, duties and obligations.
No
successor trustee or successor securities administrator shall accept appointment
as provided in this Section 9.08 unless at the time of such acceptance such
successor trustee or successor securities administrator shall be eligible under
the provisions of Section 9.07 hereof and its appointment shall not
adversely affect the then current rating of the Certificates.
Upon
acceptance of appointment by a successor trustee or successor securities
administrator as provided in this Section 9.08, the successor trustee or
successor securities administrator shall mail notice of the succession of such
trustee or securities administrator hereunder to all Holders of Certificates.
If
the successor trustee or successor securities administrator fails to mail such
notice within ten days after acceptance of appointment, the Depositor shall
cause such notice to be mailed at the expense of the Trust Fund.
Section
9.09 Merger
or Consolidation of Trustee or Securities Administrator.
Any
corporation, state bank or national banking association into which the Trustee
or Securities Administrator may be merged or converted or with which it may
be
consolidated or any corporation, state bank or national banking association
resulting from any merger, conversion or consolidation to which the Trustee
or
the Securities Administrator shall be a party, or any corporation, state bank
or
national banking association succeeding to substantially all of the corporate
trust business of the Trustee or Securities Administrator shall be the successor
of the Trustee or Securities Administrator hereunder, provided that such
corporation shall be eligible under the provisions of Section 9.06 without
the execution or filing of any paper or further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding.
Section
9.10 Appointment
of Co-Trustee or Separate Trustee.
Notwithstanding
any other provisions hereof, at any time, for the purpose of meeting any legal
requirements of any jurisdiction in which any part of the REMIC I or property
securing the same may at the time be located, the Trustee shall have the power
and shall execute and deliver all instruments to appoint one or more Persons
approved by the Trustee to act as co-trustee or co-trustees, jointly with the
Trustee, or separate trustee or separate trustees, of all or any part of REMIC
I, and to vest in such Person or Persons, in such capacity, and for the benefit
of the Holders of the Certificates, such title to REMIC I, or any part thereof,
and, subject to the other provisions of this Section 9.10, such powers,
duties, obligations, rights and trusts as the Trustee may consider necessary
or
desirable. No co-trustee or separate trustee hereunder shall be required to
meet
the terms of eligibility as a successor trustee under Section 9.06
hereunder and no notice to Holders of Certificates of the appointment of
co-trustee(s) or separate trustee(s) shall be required under Section 9.08
hereof.
In
the
case of any appointment of a co-trustee or separate trustee pursuant to this
Section 9.10 all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised or
performed by the Trustee and such separate trustee or co-trustee jointly, except
to the extent that under any law of any jurisdiction in which any particular
act
or acts are to be performed by the Trustee (whether as Trustee hereunder or
as
successor to a defaulting Master Servicer hereunder), the Trustee shall be
incompetent or unqualified to perform such act or acts, in which event such
rights, powers, duties and obligations (including the holding of title to REMIC
I or any portion thereof in any such jurisdiction) shall be exercised and
performed by such separate trustee or co-trustee at the direction of the
Trustee.
Any
notice, request or other writing given to the Trustee shall be deemed to have
been given to each of the then separate trustees and co-trustees, as effectively
as if given to each of them. Every instrument appointing any separate trustee
or
co-trustee shall refer to this Agreement and the conditions of this Article
IX.
Each separate trustee and co-trustee, upon its acceptance of the trust
conferred, shall be vested with the estates or property specified in its
instrument of appointment, either jointly with the Trustee, or separately,
as
may be provided therein, subject to all the provisions of this Agreement,
specifically including every provision of this Agreement relating to the conduct
of, affecting the liability of, or affording protection to, the Trustee. Every
such instrument shall be filed with the Trustee.
Any
separate trustee or co-trustee may, at any time, constitute the Trustee, its
agent or attorney-in-fact, with full power and authority, to the extent not
prohibited by law, to do any lawful act under or in respect of this Agreement
on
its behalf and in its name. If any separate trustee or co-trustee shall die,
become incapable of acting, resign or be removed, all of its estates,
properties, rights, remedies and trusts shall vest in and be exercised by the
Trustee, to the extent permitted by law, without the appointment of a new or
successor trustee or co-trustee.
Section
9.11 Appointment
of Office or Agency.
The
Certificates may be surrendered for registration of transfer or exchange at
the
Securities Administrator’s office initially located at ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and presented for final
distribution at the Corporate Trust Office of the Securities Administrator
where
notices and demands to or upon the Securities Administrator in respect of the
Certificates and this Agreement may be served.
Section
9.12 Representations
and Warranties.
The
Trustee hereby represents and warrants to the Master Servicer, the Securities
Administrator, the Servicer and the Depositor as applicable, as of the Closing
Date, that:
(i) It
is a
national banking association duly organized, validly existing and in good
standing under the laws of the United States of America.
(ii) The
execution and delivery of this Agreement by it, and the performance and
compliance with the terms of this Agreement by it, will not violate its articles
of association or bylaws or constitute a default (or an event which, with notice
or lapse of time, or both, would constitute a default) under, or result in
the
breach of, any material agreement or other instrument to which it is a party
or
which is applicable to it or any of its assets.
(iii) It
has
the full power and authority to enter into and consummate all transactions
contemplated by this Agreement, has duly authorized the execution, delivery
and
performance of this Agreement, and has duly executed and delivered this
Agreement.
(iv) This
Agreement, assuming due authorization, execution and delivery by the other
parties hereto, constitutes a valid, legal and binding obligation of it,
enforceable against it in accordance with the terms hereof, subject to (A)
applicable bankruptcy, insolvency, receivership, reorganization, moratorium
and
other laws affecting the enforcement of creditors’ rights generally, and (B)
general principles of equity, regardless of whether such enforcement is
considered in a proceeding in equity or at law.
(v) It
is not
in violation of, and its execution and delivery of this Agreement and its
performance and compliance with the terms of this Agreement will not constitute
a violation of, any law, any order or decree of any court or arbiter, or any
order, regulation or demand of any federal, state or local governmental or
regulatory authority, which violation, in its good faith and reasonable
judgment, is likely to affect materially and adversely either the ability of
it
to perform its obligations under this Agreement or its financial
condition.
No
litigation is pending or, to the best of its knowledge, threatened against
it,
which would prohibit it from entering into this Agreement or, in its good faith
reasonable judgment, is likely to materially and adversely affect either the
ability of it to perform its obligations under this Agreement or its financial
condition.
Section
9.13 Tax
Matters.
It
is
intended that the Trust Fund shall constitute, and that the affairs of the
Trust
Fund shall be conducted so that each REMIC formed hereunder qualifies as, a
“real estate mortgage investment conduit” as defined in and in accordance with
the REMIC Provisions. In furtherance of such intention, the Securities
Administrator covenants and agrees that it shall act as agent (and the
Securities Administrator is hereby appointed to act as agent) on behalf of
the
Trust Fund. The Securities Administrator, as agent on behalf of the Trust Fund,
shall do or refrain from doing, as applicable, the following: (a) the Securities
Administrator shall prepare and file, or cause to be prepared and filed, in
a
timely manner, U.S. Real Estate Mortgage Investment Conduit Income Tax Returns
(Form 1066 or any successor form adopted by the Internal Revenue Service) and
prepare and file or cause to be prepared and filed with the Internal Revenue
Service and applicable state or local tax authorities income tax or information
returns for each taxable year with respect to each such REMIC containing such
information and at the times and in the manner as may be required by the Code
or
state or local tax laws, regulations, or rules, and furnish or cause to be
furnished to Certificateholders the schedules, statements or information at
such
times and in such manner as may be required thereby; (b) the Securities
Administrator shall apply for an employer identification number with the
Internal Revenue Service via a Form SS-4 or other comparable method for each
REMIC that is or becomes a taxable entity, and within thirty days of the Closing
Date, furnish or cause to be furnished to the Internal Revenue Service, on
Forms
8811 or as otherwise may be required by the Code, the name, title, address,
and
telephone number of the person that the holders of the Certificates may contact
for tax information relating thereto, together with such additional information
as may be required by such Form, and update such information at the time or
times in the manner required by the Code for the Trust Fund; (c) the Securities
Administrator shall make or cause to be made elections, on behalf of each REMIC
formed hereunder to be treated as a REMIC on the federal tax return of such
REMIC for its first taxable year (and, if necessary, under applicable state
law); (d) the Securities Administrator shall prepare and forward, or cause
to be
prepared and forwarded, to the Certificateholders and to the Internal Revenue
Service and, if necessary, state tax authorities, all information returns and
reports as and when required to be provided to them in accordance with the
REMIC
Provisions, including without limitation, the calculation of any original issue
discount using the Prepayment Assumption; (e) the Securities Administrator
shall
provide information necessary for the computation of tax imposed on the transfer
of a Residual Certificate to a Person that is not a Permitted Transferee, or
an
agent (including a broker, nominee or other middleman) of a Person that is
not a
Permitted Transferee, or a pass-through entity in which a Person that is not
a
Permitted Transferee is the record holder of an interest (the reasonable cost
of
computing and furnishing such information may be charged to the Person liable
for such tax); (f) the Securities Administrator shall, to the extent under
its
control, conduct the affairs of the Trust Fund at all times that any
Certificates are outstanding so as to maintain the status of each REMIC formed
hereunder as a REMIC under the REMIC Provisions; (g) the Securities
Administrator shall not knowingly or intentionally take any action or omit
to
take any action that would cause the termination of the REMIC status of any
REMIC formed hereunder; (h) the Securities Administrator shall pay, from the
sources specified in the last paragraph of this Section 9.12, the amount of
any federal, state and local taxes, including prohibited transaction taxes
as
described below, imposed on any REMIC formed hereunder prior to the termination
of the Trust Fund when and as the same shall be due and payable (but such
obligation shall not prevent the Securities Administrator or any other
appropriate Person from contesting any such tax in appropriate proceedings
and
shall not prevent the Securities Administrator from withholding payment of
such
tax, if permitted by law, pending the outcome of such proceedings); (i) the
Trustee shall sign or cause to be signed federal, state or local income tax
or
information returns or any other document prepared by the Securities
Administrator pursuant to this Section 9.13 requiring a signature thereon
by the Trustee; (j) the Securities Administrator shall maintain records relating
to each REMIC formed hereunder including but not limited to the income,
expenses, assets and liabilities of each such REMIC and adjusted basis of the
Trust Fund property determined at such intervals as may be required by the
Code,
as may be necessary to prepare the foregoing returns, schedules, statements
or
information; (k) the Securities Administrator shall, for federal income tax
purposes, maintain books and records with respect to the REMICs on a calendar
year and on an accrual basis; (l) the Securities Administrator shall not enter
into any arrangement not otherwise provided for in this Agreement by which
the
REMICs will receive a fee or other compensation for services nor permit the
REMICs to receive any income from assets other than “qualified mortgages” as
defined in Section 860G(a)(3) of the Code or “permitted investments” as
defined in Section 860G(a)(5) of the Code; and (m) as and when necessary
and appropriate, the Securities Administrator shall represent the Trust Fund
in
any administrative or judicial proceedings relating to an examination or audit
by any governmental taxing authority, request an administrative adjustment
as to
any taxable year of any REMIC formed hereunder, enter into settlement agreements
with any governmental taxing agency, extend any statute of limitations relating
to any tax item of the Trust Fund, and otherwise act on behalf of each REMIC
formed hereunder in relation to any tax matter involving any such
REMIC.
In
order
to enable the Securities Administrator to perform its duties as set forth
herein, the Depositor shall provide, or cause to be provided, to the Securities
Administrator within 10 days after the Closing Date all information or data
that
the Securities Administrator requests in writing and determines to be relevant
for tax purposes to the valuations and offering prices of the Certificates,
including, without limitation, the price, yield, prepayment assumption and
projected cash flows of the Certificates and the Mortgage Loans. Thereafter,
the
Depositor shall provide to the Securities Administrator promptly upon written
request therefor, any such additional information or data that the Securities
Administrator may, from time to time, request in order to enable the Securities
Administrator to perform its duties as set forth herein. The Depositor hereby
indemnifies the Securities Administrator for any losses, liabilities, damages,
claims or expenses of the Securities Administrator arising from any errors
or
miscalculations of the Securities Administrator that result from any failure
of
the Depositor to provide, or to cause to be provided, accurate information
or
data to the Securities Administrator on a timely basis.
In
the
event that any tax is imposed on “prohibited transactions” of any of REMIC as
defined in Section 860F(a)(2) of the Code, on the “net income from
foreclosure property” of the Trust Fund as defined in Section 860G(c) of
the Code, on any contribution to any of REMIC after the startup day pursuant
to
Section 860G(d) of the Code, or any other tax is imposed, including,
without limitation, any federal, state or local tax or minimum tax imposed
upon
any REMIC, and is not paid as otherwise provided for herein, such tax shall
be
paid by (i) the Securities Administrator, if any such other tax arises out
of or
results from a breach by the Securities Administrator of any of its obligations
under this Section, (ii) any party hereto (other than the Securities
Administrator) to the extent any such other tax arises out of or results from
a
breach by such other party of any of its obligations under this Agreement or
(iii) in all other cases, or in the event that any liable party hereto fails
to
honor its obligations under the preceding clauses (i) or (ii), any such tax
will
be paid first with amounts otherwise to be distributed to the Class R
Certificateholders, and second with amounts otherwise to be distributed to
all
other Certificateholders in the following order of priority: first, to the
Class
B-2 Certificates; second, to the Class B-1 Certificates; third, to the Class
M-9
Certificates; fourth, to the Class M-8 Certificates; fifth, to the Class M-7
Certificates; sixth, to the Class M-6 Certificates; seventh, to the Class M-5
Certificates; eighth, to the Class M-4 Certificates; ninth, to the Class M-3
Certificates; tenth, to the Class M-2 Certificates; eleventh, to the Class
M-2
Certificates; and twelfth, to the Senior Certificates (pro rata based on the
amounts to be distributed). Notwithstanding anything to the contrary contained
herein, to the extent that such tax is payable by the Holder of any
Certificates, the Securities Administrator is hereby authorized to retain on
any
Distribution Date, from the Holders of the Class R Certificates (and, if
necessary, second, from the Holders of the other Certificates in the priority
specified in the preceding sentence), funds otherwise distributable to such
Holders in an amount sufficient to pay such tax. The Securities Administrator
shall include in its monthly report to Certificateholders distributions to
such
parties taking into account the priorities described in the second preceding
sentence. The Securities Administrator agrees to promptly notify in writing
the
party liable for any such tax of the amount thereof and the due date for the
payment thereof. Notwithstanding the foregoing, however, in no event shall
the
Securities Administrator have any liability (1) for any action or omission
that
is taken in accordance with and in compliance with the express terms of, or
which is expressly permitted by the terms of this Agreement, (2) for any losses
other than arising out of a grossly negligent performance by the Securities
Administrator of its duties and obligations set forth herein, and (3) for any
special or consequential damages to Certificateholders (in addition to payment
of principal and interest on the Certificates).
ARTICLE
X
TERMINATION
Section
10.01 Termination
upon Liquidation or Repurchase of all Mortgage Loans.
Subject
to Section 10.03, the obligations and responsibilities of the Depositor,
the Sponsor, the Securities Administrator, the Master Servicer and the Trustee
created hereby with respect to the Trust Fund shall terminate (other than the
obligations of the Master Servicer to the Trustee pursuant to Section 9.05
and of the Securities Administrator to make payments in respect of the REMIC
I
Regular Interests or the Classes of Certificates as hereinafter set forth)
upon
the earlier of (a) the Master Servicer’s exercise of its optional right to
purchase the Mortgage Loans and related REO Properties (the “Cleanup Call”) and
(b) the later of (i) the maturity or other liquidation (or any Advance with
respect thereto) of the last Mortgage Loan remaining in the Trust Fund and
the
disposition of all REO Property and (ii) the distribution to Certificateholders
of all amounts required to be distributed to them pursuant to this Agreement,
as
applicable. In no event shall the trusts created hereby continue beyond the
earlier of (i) the expiration of twenty-one (21) years from the death of the
last survivor of the descendants of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, the late Ambassador
of
the United States to the Court of St. ▇▇▇▇▇, living on the date hereof and
(ii)
the Latest Possible Maturity Date.
The
Cleanup Call or shall be exercisable at a price (the “Termination Price”) equal
to the sum of (i) 100% of the Stated Principal Balance of each Mortgage Loan,
(ii) accrued interest thereon at the applicable Mortgage Rate to, but not
including, the first day of the month of such purchase, (iii) the appraised
value of any related REO Property (up to the Stated Principal Balance of the
related Mortgage Loan), such appraisal to be conducted by an appraiser mutually
agreed upon by the Master Servicer and the Trustee, (iv) unreimbursed
out-of-pocket costs of the Securities Administrator, the Master Servicer, the
Servicer or the Trustee, including unreimbursed servicing advances and the
principal portion of any unreimbursed Advances, made on the related Mortgage
Loans prior to the exercise of such repurchase right, (v) any Swap Termination
Payment payable to the Swap Provider which remains unpaid or which is due to
such Cleanup Call and (vi) any other amounts due and owing to the Trustee,
the
Securities Administrator, the Master Servicer and the Custodian payable pursuant
to this Agreement or the Custodial Agreement.
The
right
to exercise the Cleanup Call pursuant to the preceding paragraph shall be
exercisable if the Stated Principal Balance of all of the Mortgage Loans at
the
time of any such repurchase, is less than or equal to ten percent (10%) of
the
aggregate Cut-off Date Principal Balance of the Mortgage Loans.
Section
10.02 Final
Distribution on the Certificates.
If
on any
Determination Date, (i) the Securities Administrator determines based on the
reports delivered by the Master Servicer under this Agreement that there are
no
Outstanding Mortgage Loans, and no other funds or assets in the Trust Fund
other
than the funds in the Distribution Account, the Securities Administrator shall
notify the Trustee and send a final distribution notice promptly to each related
Certificateholder or (ii) the Securities Administrator determines that a Class
of Certificates shall be retired after a final distribution on such Class,
the
Securities Administrator shall notify the Trustee and the Certificateholders
within five (5) Business Days after such Determination Date that the final
distribution in retirement of such Class of Certificates is scheduled to be
made
on the immediately following Distribution Date. Any final distribution made
pursuant to the immediately preceding sentence will be made only upon
presentation and surrender of the related Certificates at the office of the
Securities Administrator set forth herein. If the Master Servicer elects to
terminate the Trust Fund pursuant to Section 10.01, at least ten (10) days
prior to the date notice is to be mailed to the Certificateholders, the Master
Servicer shall notify the Securities Administrator and the Trustee of the date
the Master Servicer intends to terminate the Trust Fund. The Master Servicer
shall remit the related Termination Price to the Securities Administrator on
behalf of the Trust Fund on the Business Day prior to the Distribution Date
for
such Optional Termination by the Master Servicer.
Notice
of
the exercise of the Cleanup Call, specifying the Distribution Date on which
the
Certificateholders may surrender their Certificates for payment of the final
distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to the Certificateholders mailed no later than the
fifteenth (15th) day of the month of such final distribution. Any such notice
shall specify (a) the Distribution Date upon which final distribution on the
Certificates will be made upon presentation and surrender of the Certificates
at
the office therein designated, (b) the amount of such final distribution, (c)
the location of the office or agency at which such presentation and surrender
must be made and (d) that the Record Date otherwise applicable to such
Distribution Date is not applicable, distributions being made only upon
presentation and surrender of the Certificates at the office therein specified.
The Securities Administrator will give such notice to each Rating Agency at
the
time such notice is given to the Certificateholders.
In
the
event such notice is given, the Master Servicer shall deposit in the
Distribution Account on the Business Day prior to the applicable Distribution
Date an amount equal to the final distribution in respect of the Certificates.
Upon certification to the Trustee by the Securities Administrator of the making
of such final deposit, the Trustee shall promptly release or cause to be
released to the Master Servicer the Mortgage Files for the remaining Mortgage
Loans, and the Trustee shall execute all assignments, endorsements and other
instruments delivered to it and necessary to effectuate such
transfer.
In
connection with the exercise of the Cleanup Call, on or after the date on which
the Securities Administrator has mailed notice of the Cleanup Call to
Certificateholders, but no later than three Business Days prior to the final
Distribution Date specified in such notice, the Securities Administrator shall
provide written confirmation to the Sponsor, the Depositor, the Master Servicer,
the Supplemental Interest Trust Trustee, the Trustee and the Swap Provider
that
the aggregate Stated Principal Balance of the Mortgage Loans as of the end
of
the related Due Period is less than or equal to 10% of the Aggregate Cut-off
Date Principal Balance, and that all other requirements of the Cleanup Call
(other than the deposit of funds in the Distribution Account in an amount equal
to the final distribution in respect of the Certificates) have been met. Upon
such written confirmation, the Cleanup Call shall become irrevocable, notice
to
Certificateholders of such Cleanup Call shall become unrescindable, and the
Swap
Termination Price shall be determined as of that date.
Upon
presentation and surrender of the related Certificates, the Securities
Administrator shall cause to be distributed to Certificateholders of each Class
the amounts allocable to such Certificates held in the Distribution Account
in
the order and priority set forth in Section 5.04 hereof on the final
Distribution Date and in proportion to their respective Percentage
Interests.
In
the
event that any affected Certificateholders shall not surrender Certificates
for
cancellation within six (6) months after the date specified in the above
mentioned written notice, the Securities Administrator shall give a second
written notice to the remaining affected Certificateholders to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within six (6) months after the second notice all the applicable
Certificates shall not have been surrendered for cancellation, the Securities
Administrator may take appropriate steps, or may appoint an agent to take
appropriate steps, to contact the remaining affected Certificateholders
concerning surrender of their Certificates, and the cost thereof shall be paid
out of the funds and other assets that remain a part of the Trust Fund. If
within two (2) years after the second notice all affected Certificates shall
not
have been surrendered for cancellation, the related Residual Certificateholders
shall be entitled to all unclaimed funds and other assets of the Trust Fund
that
remain subject hereto and the Securities Administrator shall release such funds
upon written direction.
Section
10.03 Additional
Termination Requirements.
In
the
event of (i) the exercise by the Master Servicer of the Cleanup Call pursuant
to
the terms of this Agreement or (ii) the final payment on or other liquidation
of
the last Mortgage Loan or REO Property in REMIC I pursuant to
Section 10.01, the following additional requirements, unless the Trustee
has been supplied with an Opinion of Counsel, at the expense of the Master
Servicer (in the case of the exercise of the Cleanup Call) or the Depositor,
to
the effect that the failure of the Trust Fund to comply with the requirements
of
this Section 10.03 will not (i) result in the imposition of taxes on
“prohibited transactions” of a REMIC, or (ii) cause any REMIC to fail to qualify
as a REMIC at any time that any Certificates are outstanding:
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(1)
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The
Master Servicer (in the case of the exercise of the Cleanup Call)
or the
Depositor (in all other cases) shall establish a ninety-day liquidation
period and notify the Trustee thereof, and the Trustee shall in turn
specify the first day of such period in a statement attached to the
tax
return for each REMIC pursuant to Treasury Regulation
Section 1.860F-1. The Master Servicer or the Depositor, as
applicable, shall satisfy all the requirements of a qualified liquidation
under Section 860F of the Code and any regulations thereunder, as
evidenced by an Opinion of Counsel obtained at the expense of the
Master
Servicer or the Depositor, as applicable;
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(2)
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During
such ninety-day liquidation period, and at or prior to the time of
making
the final payment on the Certificates, the applicable Terminator
(in the
case of the exercise of the Cleanup Call) or the Depositor (in all
other
cases) shall sell all of the assets of REMIC I for cash;
and
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(3)
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At
the time of the making of the final payment on the Certificates,
the
Trustee shall distribute or credit, or cause to be distributed or
credited, to the Holders of the related Residual Certificates all
cash on
hand in the Trust Fund (other than cash retained to meet claims),
and the
Trust Fund shall terminate at that
time.
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By
their
acceptance of the Certificates, the Holders thereof hereby authorize the Master
Servicer (in the case of the exercise of the Cleanup Call) or the Depositor (in
all other cases) to specify the ninety-day liquidation period for REMIC I,
REMIC
II and REMIC III, which authorization shall be binding upon all successor
Certificateholders.
The
Trustee as agent for each REMIC hereby agrees to adopt and sign such a plan
of
complete liquidation upon the written request of the Master Servicer or the
Depositor, as applicable, and the receipt of the Opinion of Counsel referred
to
in Section 10.03(1) and to take such other action in connection therewith
as may be reasonably requested by the Master Servicer or the Depositor, as
applicable.
ARTICLE
XI
MISCELLANEOUS
PROVISIONS
Section
11.01 Amendment.
This
Agreement may be amended from time to time by parties hereto, without the
consent of any of the Certificateholders to cure any ambiguity, to correct
or
supplement any provisions herein, to change the manner in which the Distribution
Account is maintained or to make such other provisions with respect to matters
or questions arising under this Agreement as shall not be inconsistent with
any
other provisions herein if such action shall not, as evidenced by an Opinion
of
Counsel, adversely affect in any material respect the interests of any
Certificateholder (or the Swap Provider unless the Swap Provider shall have
consented to the amendment); provided that any such amendment shall be deemed
not to adversely affect in any material respect the interests of the
Certificateholders and no such Opinion of Counsel shall be required if the
Person requesting such amendment obtains a letter from each Rating Agency
stating that such amendment would not result in the downgrading or withdrawal
of
the respective ratings then assigned to the Certificates; provided further
that
any such amendment shall be deemed not to adversely affect in any material
respect the interests of the Certificateholders and no such Opinion of Counsel
nor any letter from the Rating Agencies stating that such amendment would not
result in the downgrading or withdrawal of the respective ratings then assigned
to the Certificates shall be required if such amendment is to effect a transfer
of servicing pursuant to Section 7.06(a) to a Successor Servicer satisfying
the
Minimum Servicing Requirements.
Notwithstanding
the foregoing, without the consent of the Certificateholders or the Swap
Provider, the parties hereto may at any time and from time to time amend this
Agreement to modify, eliminate or add to any of its provisions to such extent
as
shall be necessary or appropriate to maintain the qualification of each REMIC
created hereunder as a REMIC under the Code or to avoid or minimize the risk
of
the imposition of any tax on any of REMIC pursuant to the Code that would be
a
claim against any of REMIC at any time prior to the final redemption of the
Certificates, provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but
in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or appropriate to maintain such qualification
or
to avoid or minimize the risk of the imposition of such a tax.
This
Agreement may also be amended from time to time by the parties hereto and the
Holders of each Class of Certificates affected thereby evidencing over 50%
of
the Voting Rights of such Class or Classes for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions
of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates (or if such amendment modifies the rights of the Swap Provider
hereunder, with the consent of the Swap Provider); provided that no such
amendment shall (i) reduce in any manner the amount of, or delay the timing
of,
payments required to be distributed on any Certificate without the consent
of
the Holder of such Certificate, (ii) cause any REMIC created hereunder to cease
to qualify as a REMIC or (iii) reduce the aforesaid percentages of Certificates
of each Class the Holders of which are required to consent to any such amendment
without the consent of the Holders of all Certificates of such Class then
outstanding.
Notwithstanding
any contrary provision of this Agreement, the Trustee shall not consent to
any
amendment to this Agreement unless it shall have first received an Opinion
of
Counsel, which opinion shall be an expense of the party requesting such
amendment but in any case shall not be an expense of the Trustee, to the effect
that such amendment will not (other than an amendment pursuant to clause (ii)
of, and in accordance with, the preceding paragraph) cause the imposition of
any
tax on any REMIC or the Certificateholders or cause any REMIC to cease to
qualify as a REMIC at any time that any Certificates are outstanding. Further,
nothing in this Agreement shall require the Trustee to enter into an amendment
without receiving an Opinion of Counsel, satisfactory to the Trustee that (i)
such amendment is permitted and is not prohibited by this Agreement and (ii)
that all requirements for amending this Agreement (including any consent of
the
applicable Certificateholders) have been complied with. None of the parties
hereto shall consent to an amendment to this Agreement for which the consent
of
the Swap Provider is expressly required without the consent of the Swap
Provider, which consent shall not be unreasonably withheld.
Promptly
after the execution of any amendment to this Agreement requiring the consent
of
Certificateholders, the Trustee shall furnish written notification of the
substance of such amendment to each Certificateholder and each Rating
Agency.
It
shall
not be necessary for the consent of Certificateholders under this
Section to approve the particular form of any proposed amendment, but it
shall be sufficient if such consent shall approve the substance thereof. The
manner of obtaining such consents and of evidencing the authorization of the
execution thereof by Certificateholders shall be subject to such reasonable
regulations as the Trustee may prescribe.
The
Trustee may, but shall not be obligated to enter into any amendment that affects
its rights, duties or immunities under this Agreement or otherwise.
Section
11.02 Recordation
of Agreement; Counterparts.
To
the
extent permitted by applicable law, this Agreement is subject to recordation
in
all appropriate public offices for real property records in all of the counties
or other comparable jurisdictions in which any or all of the Mortgaged
Properties are situated, and in any other appropriate public recording office
or
elsewhere. The Sponsor or the Depositor shall effect such recordation at the
Trust’s expense upon the request in writing of a Certificateholder, but only if
such direction is accompanied by an Opinion of Counsel (provided at the expense
of the Certificateholder requesting recordation) to the effect that such
recordation would materially and beneficially affect the interests of the
Certificateholders or is required by law.
For
the
purpose of facilitating the recordation of this Agreement as herein provided
and
for other purposes, this Agreement may be executed simultaneously in any number
of counterparts, each of which counterparts shall be deemed to be an original,
and such counterparts shall constitute but one and the same
instrument.
Section
11.03 Governing
Law.
THIS
AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED
IN THE STATE OF NEW YORK AND THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES
HERETO AND THE CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH
LAWS WITHOUT REGARD TO THE CONFLICTS OF LAWS PRINCIPLES THEREOF OTHER THAN
THE
PROVISIONS OF SECTIONS 5-1401 AND 5-1402 OF THE NEW YORK GENERAL OBLIGATIONS
LAW.
Section
11.04 Intention
of Parties.
It
is the
express intent of the parties hereto that the conveyance of the Mortgage Notes,
Mortgages, assignments of Mortgages, title insurance policies and any
modifications, extensions and/or assumption agreements and private mortgage
insurance policies relating to the Mortgage Loans by the Sponsor to the
Depositor, and by the Depositor to the Trust Fund be, and be construed as,
an
absolute sale thereof to the Depositor or the Trust Fund, as applicable. It
is,
further, not the intention of the parties that such conveyance be deemed a
pledge thereof by the Sponsor to the Depositor, or by the Depositor to the
Trust
Fund. However, in the event that, notwithstanding the intent of the parties,
such assets are held to be the property of the Sponsor or the Depositor, as
applicable, or if for any other reason this Agreement is held or deemed to
create a security interest in such assets, then (i) this Agreement shall be
deemed to be a security agreement within the meaning of the Uniform Commercial
Code of the State of New York and (ii) each conveyance provided for in this
Agreement shall be deemed to be an assignment and a grant by the Sponsor or
the
Depositor, as applicable, for the benefit of the Certificateholders and the
Swap
Provider, of a security interest in all of the assets that constitute the Trust
Fund, whether now owned or hereafter acquired.
The
Depositor for the benefit of the Certificateholders shall, to the extent
consistent with this Agreement, take such actions as may be necessary to ensure
that, if this Agreement were deemed to create a security interest in the assets
of the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement.
Section
11.05 Notices.
(a) The
Trustee shall use its best efforts to promptly provide notice to each Rating
Agency with respect to each of the following of which it has actual
knowledge:
(i) Any
material change or amendment to this Agreement;
(ii) The
occurrence of any Servicer Default or Master Servicer Default that has not
been
cured;
(iii) The
resignation or termination of the Servicer Default or Master Servicer or the
Trustee and the appointment of any successor; and
(iv) The
final
payment to Certificateholders.
In
addition, the Securities Administrator shall promptly furnish to each Rating
Agency copies of the following:
(i)
Each
annual statement as to compliance described in Section 4.14;
and
(ii)
Each
annual independent public accountants’ servicing report described in
Section 4.15.
All
directions, demands and notices hereunder shall be in writing and shall be
deemed to have been duly given when delivered at or mailed by registered mail,
return receipt requested, postage prepaid, or by recognized overnight courier,
or by facsimile transmission to a number provided by the appropriate party
if
receipt of such transmission is confirmed to (i) in the case of the Depositor,
Nomura Home Equity Loan, Inc., 2 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Attention: Nomura Home Equity Loan, Inc., Home Equity Loan Trust,
Series 2006-WF1; (ii) in the case of the Sponsor, Nomura Credit & Capital,
Inc., 2 World ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Nomura Home Equity Loan, Inc., Home Equity Loan Trust, Series 2006-WF1 or such
other address as may be hereafter furnished to the other parties hereto by
the
Sponsor in writing; (iiv) in the case of the Trustee, at each Corporate Trust
Office or such other address as the Trustee may hereafter furnish to the other
parties hereto; (iv) in the case of ▇▇▇▇▇ Fargo Bank, National Association,
as
Custodian, ▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, (v) in the
case of the Securities Administrator, its Corporate Trust Office; (vi) in the
case of the Master Servicer, ▇.▇. ▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (or for
overnight deliveries, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇,
Attention Client Manager - NHEL 2006-WF1) and (vii) in the case of the Rating
Agencies, (a) Standard & Poor’s, ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇
▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: Mortgage Surveillance Group; (b) ▇▇▇▇▇’▇
Investors Service, Inc., ▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention:
Home Equity Monitoring; (c) Fitch Ratings, ▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇
▇▇▇▇ ▇▇▇▇▇; and (d) Dominion Bond Rating Service, Inc., 55 Broadway, Residential
Mortgage Ratings, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. Any notice delivered to the Sponsor
or the Trustee under this Agreement shall be effective only upon receipt. Any
notice required or permitted to be mailed to a Certificateholder, unless
otherwise provided herein, shall be given by first-class mail, postage prepaid,
at the address of such Certificateholder as shown in the Certificate Register;
any notice so mailed within the time prescribed in this Agreement shall be
conclusively presumed to have been duly given, whether or not the
Certificateholder receives such notice.
Section
11.06 Severability
of Provisions.
If
any
one or more of the covenants, agreements, provisions or terms of this Agreement
shall be for any reason whatsoever held invalid, then such covenants,
agreements, provisions or terms shall be deemed severable from the remaining
covenants, agreements, provisions or terms of this Agreement and shall in no
way
affect the validity or enforceability of the other provisions of this Agreement
or of the Certificates or the rights of the Holders thereof.
Section
11.07 Assignment.
Notwithstanding
anything to the contrary contained herein, except as provided pursuant to
Section 7.02, this Agreement may not be assigned by the Sponsor or the
Depositor.
Section
11.08 Limitation
on Rights of Certificateholders.
The
death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust Fund, nor entitle such Certificateholder’s legal
representative or heirs to claim an accounting or to take any action or commence
any proceeding in any court for a petition or winding up of the Trust Fund,
or
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
No
Certificateholder shall have any right to vote (except as provided herein)
or in
any manner otherwise control the operation and management of the Trust Fund,
or
the obligations of the parties hereto, nor shall anything herein set forth
or
contained in the terms of the Certificates be construed so as to constitute
the
Certificateholders from time to time as partners or members of an association;
nor shall any Certificateholder be under any liability to any third party by
reason of any action taken by the parties to this Agreement pursuant to any
provision hereof.
No
Certificateholder shall have any right by virtue or by availing itself of any
provisions of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee, a written notice of a
Servicer Default and of the continuance thereof, as hereinbefore provided,
the
Holders of Certificates evidencing not less than twenty five percent (25%)
of
the Voting Rights evidenced by the Certificates shall also have made written
request to the Trustee to institute such action, suit or proceeding in its
own
name as Trustee, hereunder and shall have offered to the Trustee such indemnity
satisfactory to it as it may require against the costs, expenses, and
liabilities to be incurred therein or thereby, and the Trustee or for sixty
(60)
days after its receipt of such notice, request and offer of indemnity shall
have
neglected or refused to institute any such action, suit or proceeding; it being
understood and intended, and being expressly covenanted by each
Certificateholder with every other Certificateholder and the Trustee, that
no
one or more Holders of Certificates shall have any right in any manner whatever
by virtue or by availing itself or themselves of any provisions of this
Agreement to affect, disturb or prejudice the rights of the Holders of any
other
of the Certificates, or to obtain or seek to obtain priority over or preference
to any other such Holder or to enforce any right under this Agreement, except
in
the manner herein provided and for the common benefit of all Certificateholders.
For the protection and enforcement of the provisions of this Section 11.08,
each and every Certificateholder or the Trustee shall be entitled to such relief
as can be given either at law or in equity.
Section
11.09 Certificates
Nonassessable and Fully Paid.
It
is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Trustee pursuant to this Agreement, are and shall be deemed fully
paid.
Section
11.10 Third
Party Beneficiaries.
The
Swap
Provider is an express third party beneficiary to this Agreement, and shall
have
to the right to enforce the provisions of this Agreement.
Section
11.11 Intention
of the Parties and Interpretation.
Each
of
the parties acknowledges and agrees that the purpose of Sections 3.13, 3.14,
3.18 and 5.13 of this Agreement is to facilitate compliance by the Sponsor
and
the Depositor with the provisions of Regulation AB promulgated by the SEC under
the Exchange Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be amended from
time to time and subject to clarification and interpretive advice as may be
issued by the staff of the SEC from time to time. Therefore, each of the parties
agrees that (a) the obligations of the parties hereunder shall be interpreted
in
such a manner as to accomplish that purpose, (b) the parties’ obligations
hereunder will be supplemented and modified as necessary to be consistent with
any such amendments, interpretive advice or guidance, convention or consensus
among active participants in the asset-backed securities markets, advice of
counsel, or otherwise in respect of the requirements of Regulation AB, (c)
the
parties shall comply with requests made by the Sponsor or the Depositor for
delivery of additional or different information as the Sponsor or the Depositor
may determine in good faith is necessary to comply with the provisions of
Regulation AB, and (d) no amendment of this Agreement shall be required to
effect any such changes in the parties’ obligations as are necessary to
accommodate evolving interpretations of the provisions of Regulation
AB.
Section
11.12 Early
Termination of Swap Agreement.
In
the
event that the Swap Agreement is canceled or otherwise terminated for any reason
(other than the exhaustion of the interest rate protection provided thereby),
the Sponsor shall, to the extent a replacement contract is available, direct
the
Trustee to execute a replacement contract comparable to the Swap Agreement,
providing interest rate protection which is equal to the then-existing
protection provided by the Swap Agreement, provided, however, that the cost
of
any such replacement contract providing the same interest rate protection
provided by such replacement contract may be reduced to a level such that the
cost of such replacement contract shall not exceed the amount of any early
termination payment.
IN
WITNESS WHEREOF, the Depositor, the Sponsor, the Master Servicer, the Securities
Administrator and the Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized as of the day and year
first
above written.
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NOMURA
HOME EQUITY LOAN, INC.,
as
Depositor
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By:
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Name:
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Title:
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NOMURA
CREDIT & CAPITAL, INC.,
as
Sponsor
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By:
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Name:
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Title:
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▇▇▇▇▇
FARGO BANK, NATIONAL ASSOCIATION,
as
Master Servicer and Securities Administrator
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By:
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Name:
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Title:
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HSBC
BANK USA, NATIONAL ASSOCIATION,
as
Trustee
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By:
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Name:
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Title:
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With
respect to Sections 3.33 and 3.34
PORTFOLIO
SURVEILLANCE ANALYTICS, LLC
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By:
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Name:
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Title:
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STATE
OF NEW YORK
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)
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)
ss.:
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COUNTY
OF NEW YORK
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)
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On
this
___ day of June 2006, before me, a notary public in and for said State, appeared
_____________, personally known to me on the basis of satisfactory evidence
to
be an authorized representative of Nomura Home Equity Loan, Inc., one of the
corporations that executed the within instrument, and also known to me to be
the
person who executed it on behalf of such corporation and acknowledged to me
that
such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
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____________________________
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Notary
Public
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[Notarial
Seal]
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STATE
OF NEW YORK
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)
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)
ss.:
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COUNTY
OF NEW YORK
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)
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On
this
____ day of June 2006 before me, a notary public in and for said State,
appeared_______________, personally known to me on the basis of satisfactory
evidence to be an authorized representative of Nomura Credit & Capital,
Inc., that executed the within instrument, and also known to me to be the person
who executed it on behalf of such corporation, and acknowledged to me that
such
corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
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____________________________
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Notary
Public
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[Notarial
Seal]
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STATE
OF CALIFORNIA
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)
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)
ss.:
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COUNTY
OF
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)
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On
this
____ day of June 2006, before me, a notary public in and for said State,
appeared _________________, personally known to me on the basis of satisfactory
evidence to be an authorized representative of ▇▇▇▇▇ Fargo Bank, National
Association, one of the entities that executed the within instrument, and also
known to me to be the person who executed it on behalf of such corporation
and
acknowledged to me that such corporation executed the within
instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
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____________________________
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Notary
Public
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[Notarial
Seal]
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STATE
OF
|
)
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)
ss.:
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COUNTY
OF
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)
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On
this
____ day of June 2006, before me, a notary public in and for said State,
appeared _______________, personally known to me on the basis of satisfactory
evidence to be an authorized representative of HSBC Bank USA, National
Association that executed the within instrument, and also known to me to be
the
person who executed it on behalf of such corporation, and acknowledged to me
that such corporation executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
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____________________________
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Notary
Public
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[Notarial
Seal]
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STATE
OF
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)
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)
ss.:
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COUNTY
OF
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)
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On
this
____ day of June
2006,
before
me, a notary public in and for said State, appeared _______________, personally
known to me on the basis of satisfactory evidence to be an authorized
representative of ▇▇▇▇▇ Fargo Bank, National Association that executed the
within instrument, and also known to me to be the person who executed it on
behalf of such corporation, and acknowledged to me that such corporation
executed the within instrument.
IN
WITNESS WHEREOF, I have hereunto set my hand and affixed my official seal the
day and year in this certificate first above written.
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____________________________
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Notary
Public
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[Notarial
Seal]