GREENWICH CAPITAL ACCEPTANCE, INC., Depositor MAIA MORTGAGE FINANCE STATUTORY TRUST, Seller LUMINENT MORTGAGE CAPITAL, INC., Sponsor WELLS FARGO BANK, N.A., Master Servicer and Securities Administrator and HSBC BANK USA, NATIONAL ASSOCIATION, Trustee...

 
 
GREENWICH CAPITAL ACCEPTANCE, INC.,
Depositor

MAIA MORTGAGE FINANCE STATUTORY TRUST,
Seller

LUMINENT MORTGAGE CAPITAL, INC.,
Sponsor

XXXXX FARGO BANK, N.A.,
Master Servicer and
Securities Administrator


and

HSBC BANK USA, NATIONAL ASSOCIATION,
Trustee

 
 
Dated as of February 1, 2006
 
__________________________________
 
 
Mortgage Loan Pass-Through Certificates, Series 2006-2
 
 
 
 
Page
 
ARTICLE I DEFINITIONS; DECLARATION OF TRUST
 
 
4
 
SECTION 1.01. Defined Terms.
4
SECTION 1.02. Accounting.
42
 
ARTICLE II CONVEYANCE OF MORTGAGE LOANS; ORIGINAL ISSUANCE OF CERTIFICATES
 
 
43
 
SECTION 2.01. Conveyance of Mortgage Loans.
43
SECTION 2.02. Acceptance by Trustee.
47
SECTION 2.03. Repurchase or Substitution of Mortgage Loans by the Originators and the Sponsor.
49
SECTION 2.04. Representations and Warranties of the Sponsor with Respect to the Mortgage Loans.
54
SECTION 2.05. [Reserved]
55
SECTION 2.06. Representations and Warranties of the Depositor.
55
SECTION 2.07. Issuance of Certificates.
56
SECTION 2.08. Representations and Warranties of the Seller and the Sponsor.
56
SECTION 2.09. Covenants of the Seller and Sponsor.
58
 
ARTICLE III ADMINISTRATION AND SERVICING OF THE MORTGAGE LOANS
 
 
59
 
SECTION 3.01. Master Servicer to Service and Administer the Mortgage Loans.
59
SECTION 3.02. REMIC-Related Covenants.
60
SECTION 3.03. Monitoring of Servicers.
60
SECTION 3.04. Fidelity Bond.
61
SECTION 3.05. Power to Act; Procedures.
61
SECTION 3.06. Due-on-Sale Clauses; Assumption Agreements.
62
SECTION 3.07. Release of Mortgage Files.
63
SECTION 3.08. Documents, Records and Funds in Possession of Master Servicer To Be Held for Trust.
64
SECTION 3.09. Standard Hazard Insurance and Flood Insurance Policies.
64
SECTION 3.10. Presentment of Claims and Collection of Proceeds.
65
SECTION 3.11. Maintenance of the Primary Insurance Policies.
65
SECTION 3.12. Trustee to Retain Possession of Certain Insurance Policies and Documents.
66
SECTION 3.13. Realization Upon Defaulted Mortgage Loans.
66
SECTION 3.14. Additional Compensation to the Master Servicer.
66
SECTION 3.15. REO Property.
67
SECTION 3.16. Assessments of Compliance and Attestation Reports.
67
SECTION 3.17. Annual Compliance Statement.
69
SECTION 3.18. Xxxxxxxx-Xxxxx Certification.
70
SECTION 3.19. Reports Filed with Securities and Exchange Commission.
70
SECTION 3.20. Additional Information.
75
SECTION 3.21. Intention of the Parties and Interpretation.
75
 
i
 
SECTION 3.22. Indemnification.
75
SECTION 3.23. [Reserved].
76
SECTION 3.24. [Reserved].
76
SECTION 3.25. [Reserved].
76
SECTION 3.26. [Reserved].
76
SECTION 3.27. Closing Certificate and Opinion.
76
SECTION 3.28. Liabilities of the Master Servicer.
76
SECTION 3.29. Merger or Consolidation of the Master Servicer.
76
SECTION 3.30. Indemnification of the Trustee, the Master Servicer and the Securities Administrator.
77
SECTION 3.31. Limitations on Liability of the Master Servicer and Others; Indemnification of Trustee and Others.
78
SECTION 3.32. Master Servicer Not to Resign.
79
SECTION 3.33. Successor Master Servicer.
79
SECTION 3.34. Sale and Assignment of Master Servicing.
79
SECTION 3.35. Reporting Requirements of the Commission.
80
 
ARTICLE IV ACCOUNTS
 
 
80
 
SECTION 4.01. Servicing Accounts.
80
SECTION 4.02. Distribution Account.
82
SECTION 4.03. Permitted Withdrawals and Transfers from the Distribution Account.
84
SECTION 4.04. [Reserved].
86
SECTION 4.05. Financial Guaranty Insurance Policy.
86
 
ARTICLE V FLOW OF FUNDS
 
 
88
 
SECTION 5.01. Distributions.
88
SECTION 5.02. Allocation of Net Deferred Interest.
91
SECTION 5.03. Allocation of Realized Losses.
91
SECTION 5.04. Statements.
92
SECTION 5.05. Remittance Reports; Advances.
95
SECTION 5.06. Compensating Interest Payments.
96
SECTION 5.07. Basis Risk Reserve Fund.
96
SECTION 5.08. Recoveries.
97
SECTION 5.09. [Reserved].
98
 
ARTICLE VI THE CERTIFICATES
 
 
98
 
SECTION 6.01. The Certificates.
98
SECTION 6.02. Registration of Transfer and Exchange of Certificates.
99
SECTION 6.03. Mutilated, Destroyed, Lost or Stolen Certificates.
106
SECTION 6.04. Persons Deemed Owners.
107
SECTION 6.05. Appointment of Paying Agent.
107
 
ARTICLE VII DEFAULT
 
 
108
 
SECTION 7.01. Event of Default.
108
SECTION 7.02. Trustee to Act.
111
 
ii
SECTION 7.03. Waiver of Event of Default.
111
SECTION 7.04. Notification to Certificateholders.
112
 
ARTICLE VIII THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
 
 
112
 
SECTION 8.01. Duties of Trustee and Securities Administrator.
112
SECTION 8.02. Certain Matters Affecting the Trustee and the Securities Administrator.
114
SECTION 8.03. Trustee and the Securities Administrator Not Liable for Certificates or Mortgage Loans.
115
SECTION 8.04. Trustee, Custodian, Master Servicer and Securities Administrator May Own Certificates.
116
SECTION 8.05. Trustee’s and Securities Administrator’s Fees and Expenses.
116
SECTION 8.06. Eligibility Requirements for Trustee and Securities Administrator.
117
SECTION 8.07. Resignation or Removal of Trustee and Securities Administrator.
117
SECTION 8.08. Successor Trustee and Successor Securities Administrator.
118
SECTION 8.09. Merger or Consolidation of Trustee or Securities Administrator.
119
SECTION 8.10. Appointment of Co-Trustee or Separate Trustee.
119
SECTION 8.11. Limitation of Liability.
120
SECTION 8.12. Trustee May Enforce Claims Without Possession of Certificates.
121
SECTION 8.13. Suits for Enforcement.
121
SECTION 8.14. Waiver of Bond Requirement.
122
SECTION 8.15. Waiver of Inventory, Accounting and Appraisal Requirement.
122
SECTION 8.16. Appointment of Custodians.
122
 
ARTICLE IX REMIC ADMINISTRATION
 
 
122
 
SECTION 9.01. REMIC Administration.
122
SECTION 9.02. Prohibited Transactions and Activities.
125
 
ARTICLE X TERMINATION
 
 
125
 
SECTION 10.01. Termination.
125
SECTION 10.02. Additional Termination Requirements.
128
 
ARTICLE XI DISPOSITION OF TRUST ASSETS
 
 
128
 
SECTION 11.01. Disposition of Trust Assets.
128
 
ARTICLE XII MISCELLANEOUS PROVISIONS
 
 
128
 
SECTION 12.01. Amendment.
128
SECTION 12.02. Recordation of Agreement; Counterparts.
130
SECTION 12.03. Limitation on Rights of Certificateholders.
130
SECTION 12.04. Governing Law; Jurisdiction.
131
SECTION 12.05. Notices.
132
SECTION 12.06. Severability of Provisions.
132
SECTION 12.07. Article and Section References.
133
SECTION 12.08. Notice to the Rating Agencies.
133
SECTION 12.09. Further Assurances.
134
SECTION 12.10. Benefits of Agreement.
134
 
iii
 
SECTION 12.11. Acts of Certificateholders.
134
SECTION 12.12. Successors and Assigns.
135
SECTION 12.13. Provision of Information.
135
SECTION 12.14. Indemnification.
135
 
EXHIBITS AND SCHEDULES:
     
Exhibit A
Form of Senior Certificate
A-1
Exhibit B
Form of Class X Certificate
B-1
Exhibit C
Form of Class A-R Certificate
C-1
Exhibit D
Form of Subordinate Certificate
D-1
Exhibit E
Form of Reverse of the Certificates
E-1
Exhibit F
Request for Release
F-1
Exhibit G-1
Form of Receipt of Mortgage Note
G-1-1
Exhibit G-2
Form of Interim Certification of Trustee
G-2-1
Exhibit G-3
Form of Final Certification of Trustee
G-3-1
Exhibit H
[Reserved]
H-1
Exhibit I
Form of ERISA Representation
I-1
Exhibit J-1
Form of Investment Letter [Non-Rule 000X]
X-0-0
Xxxxxxx X-0
Form of Rule 144A Investment Letter
J-2-1
Exhibit K
Form of Transferor Certificate
K-1
Exhibit L
Transfer Affidavit for Class A-R Certificate Pursuant to Section 6.02(e)
L-1
Exhibit M
List of Servicing Agreements
M-1
Exhibit N-1
Form of Transfer Certificate for Transfer from Restricted Global Security to Regulation S Global Security
N-1-1
Exhibit N-2
Form of Transfer Certificate for Transfer from Regulation S Global Security to Restricted Global Security
N-2-1
Exhibit O
Financial Guaranty Insurance Policy
O-1
Exhibit P
[Reserved]
P-1
Exhibit Q
Servicing Criteria
Q-1
Exhibit R
Additional Form 10-D Disclosure
R-1
Exhibit S
Additional Form 10-K Disclosure
S-1
Exhibit T
Additional Form 8-K Disclosure
T-1
Exhibit U
Form of Additional Disclosure Notification
U-1
     
Schedule I
Mortgage Loan Schedule
  
 
iv
 
This Pooling and Servicing Agreement is dated as of February 1, 2006 (the “Agreement”), among GREENWICH CAPITAL ACCEPTANCE, INC., a Delaware corporation, as depositor (the “Depositor”), MAIA MORTGAGE FINANCE STATUTORY TRUST, a Maryland business trust, as seller (the “Seller”), LUMINENT MORTGAGE CAPITAL, INC., a Maryland corporation, as sponsor (the “Sponsor”), XXXXX FARGO BANK, N.A., a national banking association, as master servicer (in such capacity, the “Master Servicer”) and as securities administrator (in such capacity, the “Securities Administrator”) and HSBC BANK USA, NATIONAL ASSOCIATION, a national banking association, as trustee (the “Trustee”).
 
PRELIMINARY STATEMENT:
 
Through this Agreement, the Depositor intends to cause the issuance and sale of the Luminent Mortgage Trust 2006-2’s Mortgage Pass-Through Certificates, Series 2006-2 (the “Certificates”) representing in the aggregate the entire beneficial ownership of the Trust, the primary assets of which are the Mortgage Loans (as defined below).
 
The Depositor intends to sell the Certificates, to be issued hereunder in multiple classes, which in the aggregate will evidence the entire beneficial ownership interest in the Trust Fund created hereunder. The Certificates will consist of twelve classes of certificates, designated as (i) the Class A1A Certificates, (ii) the Class A1B Certificates, (iii) the Class A1C Certificates, (iv) the Class X Certificates, (v) the Class PO Certificates, (vi) the Class A-R Certificates, (vii) the Class B-1 Certificates, (viii) the Class B-2 Certificates, (ix) the Class B-3 Certificates, (x) the Class B-4 Certificates, (xi) the Class B-5 Certificates and (xii) the Class B-6 Certificates.
 
As provided herein, the Trustee shall elect that the Trust Fund (exclusive of the assets held in the Basis Risk Reserve Fund (the “Excluded Trust Property”)) be treated for federal income tax purposes as comprising two real estate mortgage investment conduits (each, a “REMIC” or, in the alternative, the “Lower-Tier REMIC” and the “Upper-Tier REMIC”). Each Certificate, other than the Class A-R Certificates, shall represent ownership of a regular interest in the Upper-Tier REMIC, as described herein. In addition, the LIBOR Certificates represent the right to receive payments in respect of Basis Risk Shortfalls from the Basis Risk Reserve Fund as provided in Section 5.07. The owners of the Class X Certificates beneficially own the Basis Risk Reserve Fund. The Class A-R Certificate represents ownership of the sole class of residual interest in each of the Lower-Tier REMIC and the Upper-Tier REMIC.
 
The Lower-Tier REMIC shall hold as assets all property of the Trust Fund, other than the Excluded Trust Property and the Lower-Tier REMIC Interests. The Upper-Tier REMIC shall hold as assets the uncertificated Lower-Tier Interests, other than the Class LT-R Interest. Each such Lower-Tier Interest is hereby designated as a REMIC regular interest.
 
Lower-Tier REMIC Interests
 
The following table specifies the Class designation, interest rate, and initial principal amount for each Lower-Tier REMIC Interest:
 
Designation
  
Interest Rate
  
Initial Principal
Balance
  
Corresponding
Class of
Certificates
  
               
LT-A1A
    
(1
)
$
215,196,050.00
    
Class A1A, Class A-R
  
LT-A1B
    
(1
)
$
89,665,000.00
    
Class A1B
  
LT-A1C
    
(1
)
$
53,799,000.00
    
Class A1C
  
LT-Q
    
(1
)
$
384,707,496.16
    
N/A
  
LT-Z
    
(1
)
$
8,014,737.42
    
N/A
  
LT-Y
    
(1
)
$
8,014,737.42
    
N/A
  
LT-B1
    
(1
)
$
14,826,500.00
    
Class B-1
  
LT-B2
    
(1
)
$
9,217,000.00
    
Class B-2
  
LT-B3
    
(1
)
$
5,610,500.00
    
Class B-3
  
LT-B4
    
(1
)
$
5,209,500.00
    
Class B-4
  
LT-B5
    
(1
)
$
4,007,500.00
    
Class B-5
  
LT-B6
    
(1
)
$
3,205,821.00
    
Class B-6
  
LT-R
    
(2
)
  
(2
)
  
N/A
  

 
 
(1)
The interest rate with respect to any Distribution Date (and the related Accrual Period) for each of these Middle-Tier Interests is a per annum rate equal to the Net WAC.
 
 
(2)
The LT-R Interest is the sole class of residual interests in the Lower-Tier REMIC. It does not have an interest rate or a principal balance. Ownership of the LT-R Interest is represented by the Class A-R Certificates.
 
On each Distribution Date, Available Funds shall be allocated among the Lower-Tier Interests in the following order of priority:
 

 
(i)
First, to the LT-Z and LT-Y Interests in reduction of their principal balances as follows -
 
 
(a)
To the LT-Z Interests the amount, if any, required to reduce the principal balance of the LT-Z Interest to the LT-Z Target Balance for such Distribution Date,;

 
(b)
To the LT-Y Interests the amount, if any, required to reduce the principal balance of the LT-Y Interest to the LT-Y Target Balance for such Distribution Date; and

 
(c)
Concurrently to the LT-Z and LT-Y Interests, in proportion to their principal balances, after taking into account distributions pursuant to priorities (a) and (b) above, until the sum of their principal balances equals 2% of the aggregate Class Principal Balance of the Certificates, other than the Class PO and Class X Certificates, immediately after such Distribution Date.

2

 
(ii)
Second, concurrently to the XX-X0X, XX-X0X, XX-X0X, XX-X0, XX-X0, XX-X0, XX-X0, XX-X0, and LT-B6 Interests until the principal balance of each such Lower-Tier Interest equals 50% of the Class Principal Balance or Balances of the Corresponding Class or Classes of Certificates for such Lower-Tier Interest immediately after such Distribution Date;
 
 
(iii)
Third, to the LT-Q Interest until the principal balance of the LT-Q Interest equals the excess of (I) the aggregate Class Principal Balance of the Certificates, other then the Class X Certificates, immediately after such Distribution Date over (II) the aggregate of the principal balances of each Lower-Tier Interest, other than the LT-Q and LT-R Interests after taking into account the distributions made pursuant to priorities (i) and (ii) above on such Distribution Date;
 
 
(iv)
Fourth, remaining Available Funds shall be applied to interest distributions on the Lower-Tier Interests in the Lower-Tier REMIC at the interest rates described above, provided, however, that any Net Deferred Interest will be allocated among and increase the principal balances of the Lower-Tier Interests in the same order of priority in which principal is distributed among such Lower-Tier Interests pursuant to priorities (i)(c), (ii), and (iii) above.
 
On any Distribution Date, after all distributions of Available Funds, Realized Losses shall be allocated among the Lower-Tier Interests in the same order of priority in which principal is distributed among such Lower-Tier Interests pursuant to priorities (i) through (iii) above.
 
The Certificates
 
The following table sets forth (or describes) the Class designation, Pass-Through Rate, and Original Class Principal Balance (or Original Class Notional Balance) for each Class of Certificates comprising interests in the Trust Fund created hereunder. Each Class of Certificates, other than the Class A-R Certificates, is hereby designated as representing ownership of regular interests in the Upper-Tier REMIC.
 
   
Original Class Principal
Balance or Class Notional Balance
  
Pass-Through
Rate
  
Class A1A
  
$
430,392,000.00
    
(1
)
Class A1B
  
$
179,330,000.00
    
(1
)
Class A1C
  
$
107,598,000.00
    
(1
)
Class X
    
Notional Amount(2
)
  
(1
)
Class PO
  
$
100.00(3
)
  
(4
)
Class A-R
  
$
100.00(10
)
  
(6
)
Class B-1
  
$
29,653,000.00
    
(5
)
Class B-2
  
$
18,434,000.00
    
(5
)
Class B-3
  
$
11,221,000.00
    
(5
)
Class B-4
  
$
10,419,000.00
    
(5
)
Class B-5
  
$
8,015,000.00
    
(5
)
Class B-6
  
$
6,411,642.00
    
(5
)
 
3

____________
 
(1)
Calculated pursuant to the definition of “Pass-Through Rate.”
 
 
(2)
For purposes of the REMIC provisions, the Class X Certificates shall accrue interest on a notional balance equal to the sum of the principal balances of each Lower-Tier REMIC Interest. For purposes of the REMIC Provisions, interest shall accrue on the Class X Certificate at a rate equal to the excess, if any, of (i) Adjusted Net WAC, over (ii) the Adjusted Lower-Tier WAC. The Class X Certificates are interest-only certificates and will not be entitled to distributions of principal.
 
 
(3)
For purposes of the REMIC Provisions, the Class PO Certificates shall accrue interest on a notional balance equal to the sum of the principal balances of each Lower-Tier REMIC Interest. For purposes of the REMIC Provisions, interest shall accrue on the Class PO Certificates at a rate equal to the excess of (i) the Net WAC for such Distribution Date, over (ii) the Adjusted Lower-Tier Pay Rate. Any interest accrued on the Class PO Certificates will not be paid currently but shall increase the Principal Balance of the Class PO Certificate. All amounts so accrued shall be deferred and distributed as principal in respect of the PO Certificate.
 
 
(4)
The Class PO Certificates are principal-only certificates and will not be entitled to distributions of interest.
 
 
(5)
Calculated pursuant to the definition of “Pass-Through Rate,” but adjusted, for purposes of the REMIC Provisions, to reflect the allocation, if any, of Subordinate Class Expense Share.
 
 
(6)
For purposes of the REMIC provisions, the Class A-R Certificate represents ownership of (i) the Class LT-R Interest, which is the sole residual interest in the Lower-Tier REMIC and (ii) the sole class of residual interest in the Upper-Tier REMIC.
 
ARTICLE I
 
DEFINITIONS; DECLARATION OF TRUST
 
 
SECTION 1.01.
Defined Terms.
 
Whenever used in this Agreement or in the Preliminary Statement, the following words and phrases, unless the context otherwise requires, shall have the meanings specified in this Article. All calculations of interest described herein shall be made, in the case of the Interest-Only Certificates and the Class A-R Certificates, and each of the Lower-Tier Interests and Middle-Tier Interests, on the basis of an assumed 360-day year consisting of twelve 30-day months, and in the case of LIBOR Certificates, on the basis of an assumed 360-day year and the actual number of days elapsed in the Accrual Period.
 
“Accepted Master Servicing Practices”: With respect to any Mortgage Loan, as applicable, either (x) those customary mortgage 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 Trustee (as successor Master Servicer) or the Master Servicer (except in its capacity as successor to a Servicer), or (y) as provided in the applicable Servicing Agreement, to the extent applicable to any Servicer, but in no event below the standard set forth in clause (x).
4

“Account”: The Distribution Account, the Policy Account or each Servicing Account, as the context requires.
 
“Accrual Period”: With respect to each Distribution Date and the Interest-Only Certificates and Class A-R Certificates, and any Lower-Tier Interests and Middle-Tier Interests, the calendar month immediately preceding the month of that Distribution Date. With respect to each Distribution Date and the LIBOR Certificates, the period beginning on the immediately preceding Distribution Date (or Closing Date in the case of the first Distribution Date) and ending on the date immediately preceding such Distribution Date. Interest on the LIBOR Certificates shall be calculated on the basis of a 360-day year and the actual number of days elapsed in the related Accrual Period; in the case of the other Classes of Certificates (and the Pooling REMIC Interests, Lower-Tier Interests and Middle-Tier Interests), interest shall be calculated based on an assumption that each month has 30 days and each year has 360 days.
 
“Additional Disclosure Notification”: As defined in Section 3.19(a).
 
“Additional Form 10-D Disclosure”: As defined in Section 3.19(a).
 
“Additional Form 10-K Disclosure”: As defined in Section 3.19(b).
 
“Additional Servicer”: Each affiliate of a 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.
 
“Adjusted Cap Rate”: For any Distribution Date and the Certificates (other than the Class X and Class PO Certificates), the related Net WAC Cap for that Distribution Date, computed for this purpose by first reducing the Net WAC by a per annum rate equal to the quotient of (i) the product of (a) the Net Deferred Interest, if any, on the Mortgage Loans for that Distribution Date multiplied by (b) 12, divided by (ii) the Pool Balance as of the first day of the related Due Period (or in the case of the first Distribution Date, as of the Cut-off Date). For any Distribution Date and the Class X Certificates, the Class X Adjusted Cap Rate.
 
“Adjusted Lower-Tier Pay Rate”: For any Distribution Date (and the related Accrual Period), the product of (i) 2 multiplied by (ii) the weighted average of the interest rates on the XX-X0X, XX-X0X, XX-X0X, XX-X, LT-Y, and LT-Q Interests, weighted on the basis of their principal balances as of the first day of the related Accrual Period and computed for this purpose by (a) first subjecting the interest rate on each of the LT-Z, LT-Y, and LT-Q Interests to a cap of 0.00%, and (b) first subjecting the interest rate on each of the XX-X0X, XX-X0X, and LT-A1C Interests (I) to a cap equal to the Pass-Through Rate for the Corresponding Class of Certificates multiplied by the quotient of the actual number of days in the Accrual Period for the Corresponding Class of Certificates divided by 30 and (II) a floor equal to the Adjusted Net WAC for such Distribution Date.
 
“Adjusted Lower-Tier WAC”: For any Distribution Date (and the related Accrual Period), the product of (i) 2 multiplied by (ii) the weighted average of the interest rates on the XX-X0X, XX-X0X, XX-X0X, XX-X, LT-Y, and LT-Q Interests, weighted on the basis of their principal balances as of the first day of the related Accrual Period and computed for this purpose by (a) first subjecting the interest rate on each of the LT-Z, LT-Y, and LT-Q Interests to a cap of 0.00%, and (b) first subjecting the interest rate on each of the XX-X0X, XX-X0X, and LT-A1C Interests to a cap equal to the lesser of (I) the Pass-Through Rate for the Corresponding Class of Certificates multiplied by the quotient of the actual number of days in the Accrual Period for the Corresponding Class of Certificates divided by 30 and (II) the Adjusted Net WAC for such Distribution Date.
5

“Adjusted Net WAC”: For any Distribution Date, the excess of (i) the Net WAC for such Distribution Date over (ii) the quotient of (a) the product of (I) the Net Deferred Interest for the Mortgage Loans for such Distribution Date multiplied by (II) 12, divided by (b) the Pool Balance for such Distribution Date.
 
“Adjustment Date”: With respect to each Mortgage Loan, each adjustment date on which the related Loan Rate changes pursuant to the related Mortgage Note. The first Adjustment Date following the Cut-off Date as to each Mortgage Loan is set forth in the Mortgage Loan Schedule.
 
“Advance”: With respect to any Distribution Date and as to any Mortgage Loan or REO Property, any advance made by each Servicer or the Master Servicer (including the Trustee in its capacity as successor Master Servicer) in respect of any Distribution Date pursuant to Section 5.05.
 
“Adverse REMIC Event”: Either (i) the loss of status as a REMIC, within the meaning of Section 860D of the Code, for any group of assets identified as a REMIC in the Preliminary Statement to this Agreement, or (ii) the imposition of any tax, including the tax imposed under Section 860F(a)(1) on prohibited transactions and the tax imposed under Section 860G(d) on certain contributions to a REMIC, on any REMIC created hereunder to the extent such tax would be payable from assets held as part of the Trust Fund.
 
“Affiliate”: With respect to any Person, any other Person controlling, controlled by or under common control with such Person. For purposes of this definition, “control” means the power to direct the management and policies of a Person, directly or indirectly, whether through ownership of voting securities, by contract or otherwise and “controlling” and “controlled” shall have meanings correlative to the foregoing.
 
“Aggregate Premium Amount”: As to any Distribution Date and the Insured Certificates, the product of one-twelfth of the Premium Rate and the aggregate Class Principal Balance of the Class A1C Certificates on the immediately preceding Distribution Date, or, in the case of the first Distribution Date, the Closing Date, in each case after giving effect to distributions of principal made on such Distribution Date.
 
“Aggregate Subordinate Percentage”: As to any Distribution Date, the percentage equivalent of a fraction, the numerator of which is the aggregate of the Class Principal Balances of the Classes of Subordinate Certificates and the denominator of which is the Pool Balance for such Distribution Date.
6

“Agreement”: This Pooling and Servicing Agreement, dated as of February 1, 2006, as amended, supplemented and otherwise modified from time to time.
 
“Applicable Credit Support Percentage”: As defined in Section 5.01(d).
 
“Assignment”: As to any Mortgage, an assignment of mortgage, notice of transfer or equivalent instrument, in recordable form, which is sufficient, under the laws of the jurisdiction in which the related Mortgaged Property is located, to reflect or record the sale of such Mortgage.
 
“Available Funds”: As to any Distribution Date, an amount equal to (i) the sum of (a) the aggregate of the Monthly Payments received on or prior to the related Determination Date (excluding Monthly Payments due in future Due Periods but received by the related Determination Date) in respect of the Mortgage Loans, (b) Net Liquidation Proceeds, Insurance Proceeds, Principal Prepayments, Recoveries and other unscheduled recoveries of principal and interest in respect of the Mortgage Loans received during the related Prepayment Period, (c) the aggregate of any amounts received in respect of REO Properties for such Distribution Date in respect of the Mortgage Loans, (d) the aggregate of any amounts of Interest Shortfalls (excluding for such purpose all shortfalls as a result of Relief Act Reductions) paid by the Servicers pursuant to each related Servicing Agreement and Compensating Interest Payments deposited in the Distribution Account for that Distribution Date in respect of the Mortgage Loans, (e) the aggregate of the Purchase Prices and Substitution Adjustments deposited in the Distribution Account during the related Prepayment Period in respect of the Mortgage Loans, (f) the aggregate of any Advances made by the Servicers and the Master Servicer for that Distribution Date in respect of the Mortgage Loans, (g) the aggregate of any Advances made by the Trustee for that Distribution Date pursuant to Section 7.02 hereof in respect of the Mortgage Loans and (h) the Termination Price on the Distribution Date on which the Trust is terminated; minus (ii) the sum of (u) the related Premium Amount payable on such Distribution Date to the Certificate Insurer, (v) the Expense Fees for that Distribution Date in respect of the Mortgage Loans, (w) amounts in reimbursement for Advances previously made in respect of the Mortgage Loans and other amounts as to which the Servicers, the Trustee, the Securities Administrator, the Master Servicer and the Custodian are entitled to be reimbursed by the Trust Fund pursuant to Sections 3.30, 3.31(c), 4.03, (x) the amount payable to the Trustee, pursuant to Section 8.05 and the Custodian pursuant to Section 20 of the Xxxxx Custodial Agreement, and (y) amounts deposited in the Distribution Account in error in respect of the Mortgage Loans.
 
“Bankruptcy Code”: The Bankruptcy Reform Act of 1978 (Title 11 of the United States Code), as amended.
 
“Basis Risk Reserve Fund”: A fund created as part of the Trust Fund pursuant to Section 5.07 of this Agreement but which is not an asset of any of the REMICs.
 
“Basis Risk Shortfall”: With respect to any Distribution Date and the LIBOR Certificates, the “Basis Risk Shortfall” for such class, if any, will equal the sum of:
 
(i) the excess, if any, of the Interest Distributable Amount that such Class would have been entitled to receive if the Pass-Through Rate for such Class were calculated without regard to clause (ii) in the definition thereof, over the actual Interest Distributable Amount such Class is entitled to receive for such Distribution Date;
 
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(ii) any excess described in clause (i) above remaining unpaid from prior Distribution Dates; and
 
(iii)  interest for the applicable Accrual Period on the amount described in clause (ii) above based on the applicable Pass-Through Rate, determined without regard to clause (ii) in the definition thereof.
 
“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 6.02 hereof). On the Closing Date, all Classes of the Certificates other than the Physical Certificates shall be Book-Entry Certificates.
 
“Business Day”: Any day other than a Saturday, a Sunday or a day on which banking or savings institutions in the State of Minnesota, the State of Maryland, the State of California, the State of New York or in the city in which the Corporate Trust Office of the Trustee is located are authorized or obligated by law or executive order to be closed.
 
“Call Option”: The right to terminate this Agreement and the Trust pursuant to the second paragraph of Section 10.01(a) hereof.
 
“Certificate”: Any Regular Certificate or Residual Certificate.
 
“Certificate Insurer”: Financial Security Assurance Inc., a New York financial guaranty insurance company.
 
“Certificate Insurer Default”: The existence and continuance of any of the following: (a) a failure by the Certificate Insurer to make a payment required under the Financial Guaranty Insurance Policy in accordance with its terms (unless such failure was due to the failure of the Securities Administrator to provide a correct and timely notice of claim); (b) the entry of a final and non-appealable decree or order of a court or agency having jurisdiction in respect of the Certificate Insurer in an involuntary case under any present or future federal or state bankruptcy, insolvency or similar law appointing a conservator or receiver or liquidator or other similar official of the Certificate Insurer or of any substantial part of its property, or the entering of a final and non-appealable order for the winding up or liquidation of the affairs of the Certificate Insurer; (c) the Certificate Insurer shall consent to the appointment of a conservator or receiver or liquidator or other similar official in any insolvency, readjustment of debt, marshaling of assets and liabilities or similar proceedings of or relating to the Certificate Insurer or of or relating to all or substantially all of its property; or (d) the Certificate Insurer shall admit in writing its inability to pay its debts generally as they become due, file a petition to take advantage of or otherwise voluntarily commence a case or proceeding under any applicable bankruptcy, insolvency, reorganization or other similar statute, make an assignment for the benefit of its creditors, or voluntarily suspend payment of its obligations.

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“Certificate Insurer Reimbursement Amount”: For any Distribution Date, the sum of (a) all amounts previously paid by the Certificate Insurer in respect of Insured Amounts for which the Certificate Insurer has not been reimbursed prior to such Distribution Date and (b) interest accrued on the foregoing at the Late Payment Rate from the date the Securities Administrator received such amounts paid by the Certificate Insurer to such Distribution Date.
 
“Certificate Notional Balance”: With respect to the Interest-Only Certificates and any date of determination, the product of (i) the Class Notional Balance of such Class and (ii) the applicable Percentage Interest of such Certificate.
 
“Certificate Owner”: With respect to each Book-Entry Certificate, any beneficial owner thereof and with respect to each Physical Certificate, the Certificateholder thereof.
 
“Certificate Principal Balance”: With respect to each Certificate of a given Class (other than the Class X Certificates) and any date of determination, the product of (i) the Class Principal Balance of such Class and (ii) the applicable Percentage Interest of such Certificate.
 
“Certificate Register” and “Certificate Registrar”: The register maintained and registrar appointed pursuant to Section 6.02 hereof.
 
“Certificateholder” or “Holder”: The Person in whose name a Certificate is registered in the Certificate Register, except that a Disqualified Organization or non-U.S. Person shall not be a Holder of a Residual Certificate for any purpose hereof.
 
“Certification Parties”: As defined in Section 3.18.
 
“Certifying Person”: As defined in Section 3.18.
 
“Class”: Each of the classes of Certificates described under the heading “The Certificates” in the Preliminary Statement. Collectively, Certificates that have the same priority of payment and bear the same class designation and the form of which is identical except for variation in the Percentage Interest evidenced thereby.
 
“Class Notional Balance”: With respect to the Class X Certificates and any Distribution Date, the aggregate Class Principal Balance of the Class A1A, Class A1B, Class A1C and Class PO Certificates, and Subordinate Certificates, at the end of the related Due Period.
 
“Class Principal Balance”: With respect to any Class of Certificates (other than the Interest-Only Certificates and the Class PO Certificates) and any Distribution Date, the Original Class Principal Balance as reduced by the sum of (x) all amounts actually distributed in respect of principal of that Class on all prior Distribution Dates (provided, however, that the Certificate Insurer will be subrogated to the amount of any Realized Losses paid by it to the Insured Certificates), (y) all Realized Losses, if any, actually allocated to that Class on all prior Distribution Dates and (z) in the case of the Subordinate Certificates, any applicable Writedown Amount; provided, however, that (i) pursuant to Section 5.02, the Class Principal Balance of a Class of Certificates shall be increased up to the amount of Net Deferred Interest allocated to such Class of Certificates on such Distribution Date and (ii) pursuant to Section 5.08, the Class Principal Balance of a Class of Certificates may be increased up to the amount of Realized Losses previously allocated to such Class, in the event that there is a Recovery on a related Mortgage Loan, and the Certificate Principal Balance of any individual Certificate of such Class will be increased by its pro rata share of the increase to such Class. With respect to the Class PO Certificates and any Distribution Date, the Original Class Principal Balance of the Class PO Certificates as reduced by, the sum of (x) all amounts actually distributed in respect of principal of that Class on all prior Distribution Dates and (y) all Realized Losses, if any, actually allocated to that Class on all prior Distribution Dates; provided, however, that (i) pursuant to Section 5.02, the Class Principal Balance of the Class PO Certificates shall be increased up to the amount of Net Deferred Interest allocated to the Class X Certificates based on the Mortgage Loans on such Distribution Date and (ii) pursuant to Section 5.08, the Class Principal Balance of the Class PO Certificates may be increased up to the amount of Realized Losses previously allocated to such Class, in the event that there is a Recovery on a Mortgage Loan.

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“Class LT-R Interest”: As described in the Preliminary Statement.
 
“Class Subordination Percentage”: With respect to each Class of Subordinate Certificates and any Distribution Date, the percentage equivalent of a fraction the numerator of which is the Class Principal Balance of such Class immediately before such Distribution Date and the denominator of which is the aggregate of the Class Principal Balances of all Classes of Certificates immediately before such Distribution Date.
 
“Class X Adjusted Cap Rate”: With respect to the Class X Certificate for any Distribution Date, the Pass-Through Rate for the Class X Certificate, computed for this purpose by (i) reducing the amount of interest accrued on the Mortgage Loans for the related Due Period by the amount of any Net Deferred Interest for such Distribution Date and (ii) calculating the interest accrued on the Class A1A, Class A1B and Class A1C Certificates and the Subordinate Certificates by substituting the related “Adjusted Cap Rate” for the related “Net WAC Cap” in the definition of Pass-Through Rate for each such Certificate.
 
“Close of Business”: As used herein, with respect to any Business Day and location, 5:00 p.m. at such location.
 
“Closing Date”: February 23, 2006.
 
“Code”: The Internal Revenue Code of 1986, as amended.
 
“Commission”: U.S. Securities and Exchange Commission.
 
“Compensating Interest Payment”: With respect to any Distribution Date, an amount equal to the amount, if any, by which (x) the aggregate amount of any Interest Shortfalls (excluding for such purpose all shortfalls as a result of Relief Act Reductions) required to be paid by the Servicers pursuant to the related Servicing Agreement with respect to such Distribution Date, exceeds (y) the aggregate amount actually paid by the Servicers in respect of such shortfalls; provided, that such amount, to the extent payable by the Master Servicer, shall not exceed the aggregate Master Servicing Fee that would be payable to the Master Servicer in respect of such Distribution Date without giving effect to any Compensating Interest Payment.

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“Corporate Trust Office”: With respect to the Trustee, the principal corporate trust office of the Trustee at which at any particular time its corporate trust business in connection with this Agreement shall be administered, which office at the date of the execution of this instrument is located at 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Corporate Trust & Loan Agency/Luminent 2006-2, or at such other address as the Trustee may designate from time to time by notice to the Certificateholders, the Depositor, the Seller and the Sponsor. With respect to the Securities Administrator and the Certificate Registrar and (i) presentment of Certificates for registration of transfer, exchange or final payment, Xxxxx Fargo Bank, National Association, Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx 00000, Attention: Corporate Trust, Luminent Mortgage Trust 2006-2, and (ii) for all other purposes, X.X. Xxx 00, Xxxxxxxx, Xxxxxxxx 00000 (or for overnight deliveries, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000), Attention: Corporate Trust, Luminent Mortgage Trust 2006-2.
 
“Corresponding Class”: With respect to each Middle-Tier Interest, the Class or Classes of Certificates so designated in the Preliminary Statement.
 
“Countrywide”: Countrywide Home Loans, Inc., and its successors and assigns, in its capacity as an Originator of a portion of the Mortgage Loans.
 
“Countrywide Servicing”: Countrywide Home Loans Servicing LP, as a servicer of the Mortgage Loans identified on the Mortgage Loan Schedule hereto, and any successors thereto.
 
“Custodial Agreement”: The custodial agreement dated as of February 1, 2006, by and between Xxxxx Fargo Bank, N.A., as custodian, and HSBC Bank USA, National Association, as trustee.
 
“Custodian”: Xxxxx Fargo Bank, N.A., and its successors acting as custodian of the Mortgage Files.
 
“Cut-off Date”: With respect to any Mortgage Loan other than a Qualified Substitute Mortgage Loan, the Close of Business in New York City on February 1, 2006. With respect to any Qualified Substitute Mortgage Loan, the date designated as such on the Mortgage Loan Schedule (as amended).
 
“Cut-off Date Collateral Balance”: As to any Distribution Date, the aggregate Stated Principal Balance of all Mortgage Loans as of February 1, 2006.
 
“Cut-off Date Principal Balance”: With respect to any Mortgage Loan, the principal balance thereof remaining to be paid, after application of all scheduled principal payments due on or before the Cut-off Date whether or not received as of the Cut-off Date (or as of the applicable date of substitution with respect to a Qualified Substitute Mortgage Loan).
 
“Debt Service Reduction”: With respect to any Mortgage Loan, a reduction in the scheduled Monthly Payment for that Mortgage Loan by a court of competent jurisdiction in a proceeding under the Bankruptcy Code, unless the reduction results from a Deficient Valuation.
 
“Deferred Interest”: With respect to each Mortgage Loan and each related Due Date, will be the excess, if any, of the amount of interest accrued on such Mortgage Loan from the preceding Due Date to such due date over the portion of the Monthly Payment allocated to interest for such Due Date.

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“Deficiency Amount”: Means with respect to the Insured Certificates, (a) for any Distribution Date prior to the Final Distribution Date, the sum of (1) the excess, if any, of the Monthly Interest Distributable Amount on the Insured Certificates for such Distribution Date, net of any Net Interest Shortfalls, Basis Risk Shortfalls and Net Deferred Interest, over the amount of Available Funds to pay such net amount on the Insured Certificates on such Distribution Date and (2) the amount, if any, of any Realized Losses allocable to the Insured Certificates on such Distribution Date (after giving effect to all distributions to be made thereon on such Distribution Date, other than pursuant to a claim on the Policy) and (b) for the Final Distribution Date, the sum of (x) the amount set forth in clause (a)(1) above and (y) the aggregate outstanding Certificate Principal Balance of the Insured Certificates, after giving effect to all payments of principal on the Insured Certificates on such Final Distribution Date, other than pursuant to a claim on the Financial Guaranty Insurance Policy on that Distribution Date. Deficiency Amount shall not include (a) any portion of a Deficiency Amount due to holders of the Insured Certificates because a notice and certificate in proper form as required by the Financial Guaranty Insurance Policy was not timely received by the Certificate Insurer and (b) any portion of a Deficiency Amount due to holders of the Insured Certificates representing interest on any unpaid interest accrued from and including the date of payment by the Certificate Insurer of the amount of such unpaid interest.
 
“Deficient Valuation”: With respect to any Mortgage Loan, a valuation of the related Mortgaged Property by a court of competent jurisdiction in an amount less than the then outstanding principal balance of the Mortgage Loan, which valuation results from a proceeding initiated under the Bankruptcy Code.
 
“Definitive Certificates”: Any Certificate evidenced by a Physical Certificate and any Certificate issued in lieu of a Book-Entry Certificate pursuant to Section 6.02(c) or (d) hereof.
 
“Deleted Mortgage Loan”: A Mortgage Loan replaced or to be replaced by one or more Qualified Substitute Mortgage Loans.
 
“Delinquent”: Any Mortgage Loan with respect to which the Monthly Payment due on a Due Date is not made.
 
“Depositor”: Greenwich Capital Acceptance, Inc., a Delaware corporation, or any successor in interest.
 
“Depository”: The initial Depository shall be The Depository Trust Company, whose nominee 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(3) of the Uniform Commercial Code of the State of New York.
 
“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.

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“Determination Date”: For any Distribution Date and each Mortgage Loan, the date each month, as set forth in the related Servicing Agreement, on which the related Servicer determines the amount of all funds required to be remitted to the Master Servicer on the Servicer Remittance Date with respect to the Mortgage Loans it is servicing.
 
“Disqualified Organization”: A “disqualified organization” defined in Section 860E(e)(5) of the Code, or any other Person so designated by the Securities Administrator based upon an Opinion of Counsel provided to the Securities Administrator by nationally recognized counsel acceptable to the Securities Administrator that the holding of an ownership interest in the Residual Certificate by such Person may cause the Trust Fund or any Person having an ownership interest in any Class of Certificates (other than such Person) to incur liability for any federal tax imposed under the Code that would not otherwise be imposed but for the transfer of an ownership interest in the Residual Certificate to such Person.
 
“Distribution Account”: The trust account or accounts created and maintained by the Securities Administrator pursuant to Section 4.02 hereof for the benefit of the Certificate Insurer and the Certificateholders, which shall be entitled “Distribution Account, Xxxxx Fargo Bank, N.A., as Securities Administrator for HSBC Bank USA, National Association, as Trustee, in trust for the registered Holders of Luminent Mortgage Trust 2006-2, Mortgage Pass-Through Certificates, Series 2006-2” and which must be an Eligible Account.
 
“Distribution Account Income”: As to any Distribution Date, any interest or other investment income earned on funds deposited in the Distribution Account during the month of such Distribution Date.
 
“Distribution Date”: Commencing in March 2006, the 25th day of the month, or, if such day is not a Business Day, the next Business Day.
 
“Distribution Date Statement”: As defined in Section 5.04(a) hereof.
 
“Due Date”: With respect to each Mortgage Loan and any Distribution Date, the first day of the calendar month in which such Distribution Date occurs on which the Monthly Payment for such Mortgage Loan was due, exclusive of any days of grace.
 
“Due Period”: With respect to any Distribution Date, the period commencing on the second day of the month preceding the month in which such Distribution Date occurs and ending on the first day of the month in which such Distribution Date occurs.
 

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“Eligible Account”: Any of
 
(i) an account or accounts maintained with a federal or state chartered depository institution or trust company the short-term unsecured debt obligations of which (or, in the case of a depository institution or trust company that is the principal subsidiary of a holding company, the short-term unsecured debt obligations of such holding company) are rated in the highest short term rating category of each Rating Agency at the time any amounts are held on deposit therein;
 
(ii) an account or accounts the deposits in which are fully insured by the FDIC (to the limits established by it), the uninsured deposits in which account are otherwise secured such that, as evidenced by an Opinion of Counsel delivered to the Securities Administrator and the Trustee and to each Rating Agency, the Trustee on behalf of the Certificateholders and the Certificate Insurer will have a claim with respect to the funds in the account or a perfected first priority security interest against the collateral (which shall be limited to Permitted Investments) securing those funds that is superior to claims of any other depositors or creditors of the depository institution with which such account is maintained;
 
(iii) a trust account or accounts maintained with the trust department of a federal or state chartered depository institution, national banking association or trust company acting in its fiduciary capacity; or
 
(iv) an account otherwise acceptable to each Rating Agency without reduction or withdrawal of its then current ratings of the Certificates as evidenced by a letter from such Rating Agency to the Securities Administrator and the Trustee. Eligible Accounts may bear interest.
 
“Endorsement”: As defined in the Financial Guaranty Insurance Policy.
 
“ERISA”: The Employee Retirement Income Security Act of 1974, as amended.
 
“ERISA-Restricted Certificates”: The Residual Certificate and any Certificate that does not satisfy the applicable rating requirement under the Underwriter’s Exemption.
 
“Event of Default”: In respect of the Master Servicer, one or more of the events (howsoever described) set forth in Section 7.01 hereof as an event or events upon the occurrence and continuation of which the Master Servicer may be terminated.
 
“Exchange Act”: The Securities Exchange Act of 1934, as amended.
 
“Expense Fee”: With respect to any Mortgage Loan, the sum of (x) the Master Servicing Fee, (y) with respect to any Lender-Paid Mortgage Insurance Loan, the Lender-Paid Mortgage Insurance Fee and (z) the related Servicing Fee with respect to the related Servicer.
 
“Expense Fee Rate”: With respect to any Mortgage Loan, the per annum rate at which the Expense Fee accrues for such Mortgage Loan as set forth in the Mortgage Loan Schedule.
 
“Xxxxxx Xxx”: The Federal National Mortgage Association or any successor thereto.

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“FDIC”: The Federal Deposit Insurance Corporation or any successor thereto.
 
“Final Distribution Date”: With respect to the Certificates other than the Insured Certificates, the Distribution Date occurring in February 2046. With respect to the Insured Certificates, the Distribution Date occurring in February 2047.
 
“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 pursuant to or as contemplated by Sections 2.03 and 10.01), a determination made by the related Servicer and reported to the Master Servicer that all Insurance Proceeds, Liquidation Proceeds and other payments or recoveries which it expects to be finally recoverable in respect thereof have been so recovered.
 
“Financial Guaranty Insurance Policy”: The Financial Guaranty Insurance Policy (No. 51717-N) with respect to the Insured Certificates, and all endorsements thereto dated the Closing Date, issued by the Certificate Insurer for the benefit of the Holders of the Insured Certificates, a copy of which is attached hereto as Exhibit O.
 
“Form 8-K Disclosure Information”: As defined in Section 3.19(c).
 
“Xxxxxxx Mac”: The Federal Home Loan Mortgage Corporation or any successor thereto.
 
“Gross Margin”: With respect to each Mortgage Loan, the fixed percentage set forth in the related Mortgage Note that is added to the applicable Index on each Adjustment Date in accordance with the terms of the related Mortgage Note used to determine the Loan Rate for such Mortgage Loan.
 
“Indemnified Persons”: The Trustee (individually in its corporate capacity and in all capacities hereunder), the Custodian, the Master Servicer, the Seller, the Sponsor, the Depositor, the Certificate Insurer and the Securities Administrator 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 and its Affiliates, (b) does not have any direct financial interest in or any material indirect financial interest in the Depositor or any Affiliate thereof, and (c) is not connected with the Depositor 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 or any Affiliate thereof merely because such Person is the beneficial owner of 1% or less of any class of securities issued by the Depositor or any Affiliate thereof.
 
“Index”: With respect to each Mortgage Loan and each Adjustment Date, the index specified in the related Mortgage Note.

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“Initial Certificate Principal Balance”: With respect to any Certificate (other than the Interest-Only Certificates), the amount designated “Initial Certificate Principal Balance” on the face thereof.
 
“Initial Certificate Notional Balance”: With respect to the Interest-Only Certificate, the amount designated “Initial Certificate Notional Balance” on the face thereof.
 
“Insurance Proceeds”: With respect to any Mortgage Loan, proceeds of any title policy, hazard policy or other insurance policy covering a Mortgage Loan, to the extent such proceeds are not to be applied to the restoration of the related Mortgaged Property or released to the related Mortgagor in accordance with the related Servicing Agreement.
 
“Insured Amount”: The meaning assigned to the term “Guaranteed Distributions” in the Financial Guaranty Insurance Policy.
 
“Insured Certificate”: Any Class A1C Certificate.
 
“Interest Distributable Amount”: With respect to any Distribution Date and each Class of Certificates (other than the Class PO Certificates), the sum of (i) the Monthly Interest Distributable Amount for that Class and (ii) the Unpaid Interest Shortfall Amount for that Class.
 
“Interest-Only Certificate”: Any Class X Certificate.
 
“Interest Shortfall”: With respect to any Distribution Date and each Mortgage Loan that during the related Prepayment Period was the subject of a Principal Prepayment or a reduction of its Monthly Payment under the Relief Act, an amount determined as follows:
 
(a)       Principal Prepayments in part received during the relevant Prepayment Period: the difference between (i) one month’s interest at the applicable Net Loan Rate for such Mortgage Loan on the amount of such prepayment and (ii) the amount of interest for the calendar month of such prepayment (adjusted to the applicable Net Loan Rate) actually received with respect to such prepayment at the time of such prepayment; and
 
(b)       Principal Prepayments in full received during the relevant Prepayment Period: the difference between (i) one month’s interest at the applicable Net Loan Rate on the Stated Principal Balance of such Mortgage Loan immediately prior to such prepayment and (ii) the amount of interest for the calendar month of such prepayment (adjusted to the applicable Net Loan Rate) actually received with respect to such prepayment at the time of such prepayment; and
 
(c)       the amount of any Relief Act Reductions for such Distribution Date.
 
“Item 1122 Responsible Party”: As defined in Section 3.22.
 
“Late Payment Rate”: For any Distribution Date, the lesser of (i) the greater of (a) the rate of interest, as it is publicly announced by Citibank, N.A. at its principal office in New York, New York as its prime rate (any change in such prime rate of interest to be effective on the date such change is announced by Citibank, N.A.) plus 3% and (b) the then applicable highest rate of interest on the Insured Certificates and (ii) the maximum rate permissible under applicable usury or similar laws limiting interest rates.  The Late Payment Rate shall be computed on the basis of the actual number of days elapsed over a year of 360 days.

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“Latest Possible Maturity Date”: As determined as of the Cut-off Date, the Distribution Date following the fifth anniversary of the scheduled maturity date of the Mortgage Loan having the latest scheduled maturity date as of the Cut-off Date.
 
“Lender-Paid Mortgage Insurance Loan”: Each Mortgage Loan identified as such in the Mortgage Loan Schedule.
 
“Lender-Paid Mortgage Insurance Fee”: As to any Distribution Date and each Lender Paid Mortgage Insurance Mortgage Loan, an amount equal to the product of the Lender-Paid Mortgage Insurance Fee Rate and the outstanding Principal Balance of such Mortgage Loan as of the first day of the related Due Period.
 
“Lender-Paid Mortgage Insurance Fee Rate”: For each Lender-Paid Mortgage Insurance Loan and any Distribution Date, the per annum rate required to be paid in connection with the related lender-paid mortgage insurance policy for such Mortgage Loan on such Distribution Date and as specified on the Mortgage Loan Schedule.
 
“LIBOR”: With respect to each Accrual Period, a per annum rate determined on the LIBOR Determination Date in the following manner by the Securities Administrator on the basis of the “Interest Settlement Rate” set by the BBA for one-month United States dollar deposits, as such rates appear on the Telerate Page 3750, as of 11:00 a.m. (London time) on such LIBOR Determination Date.
 
(a)       If on such a LIBOR Determination Date, the BBA’s Interest Settlement Rate does not appear on the Telerate Page 3750 as of 11:00 a.m. (London time), or if the Telerate Page 3750 is not available on such date, the Securities Administrator will obtain such rate from Reuters’ “page LIBOR 01” or Bloomberg’s page “BBAM.” If such rate is not published for such LIBOR Determination Date, LIBOR for such date will be the most recently published Interest Settlement Rate. In the event that the BBA no longer sets an Interest Settlement Rate, the rate for such date will be determined on the basis of the rates at which one-month U.S. dollar deposits are offered by the Reference Banks at approximately 11:00 am (London time) on such date to prime banks in the London interbank market. In such event, the Securities Administrator will request the principal London office of each of the Reference Banks to provide a quotation of its rate. If at least two such quotations are provided, the rate for that date will be the arithmetic mean of the quotations (rounded upwards if necessary to the nearest whole multiple of 1/16%). If fewer than two quotations are provided as requested, the rate for that date will be the arithmetic mean of the rates quoted by major banks in New York City, selected by the Securities Administrator (after consultation with the Depositor), at approximately 11:00 a.m. (New York City time) on such date for one-month U.S. dollar loan to leading European banks.
 
(b)       The establishment of LIBOR by the Securities Administrator and the Securities Administrator’s subsequent calculation of the Pass-Through Rate applicable to the LIBOR Certificates for the relevant Accrual Period, in the absence of manifest error, will be final and binding.

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“LIBOR Business Day”: Any day on which banks in London, England and The City of New York are open and conducting transactions in foreign currency and exchange.
 
“LIBOR Certificates”: The Class A1A, Class A1B, Class A1C, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates.
 
“LIBOR Determination Date”: The second LIBOR Business Day immediately preceding the commencement of each Accrual Period for the LIBOR Certificates.
 
“Liquidated Mortgage Loan”: As to any Distribution Date, any Mortgage Loan in respect of which the related Servicer has determined, in accordance with the servicing procedures specified herein, as of the end of the related Prepayment Period, that all Liquidation Proceeds that it expects to recover with respect to the liquidation of such Mortgage Loan or disposition of the related REO Property have been recovered.
 
“Liquidation Event”: With respect to any Mortgage Loan, any of the following events: (i) such Mortgage Loan is paid in full; (ii) a Final Recovery Determination is made as to such Mortgage Loan; or (iii) such Mortgage Loan is removed from the Trust Fund by reason of its being purchased, sold or replaced pursuant to or as contemplated hereunder. With respect to any REO Property, either of the following events: (i) a Final Recovery Determination is made as to such REO Property; or (ii) such REO Property is removed from the Trust Fund by reason of its being sold or purchased pursuant to Section 10.01 hereof or the applicable provisions of the related Servicing Agreement.
 
“Liquidation Expenses”: With respect to a Mortgage Loan in liquidation, unreimbursed expenses paid or incurred by or for the account of the Master Servicer or the related Servicers, such expenses including (a) property protection expenses, (b) property sales expenses, (c) foreclosure and sale costs, including court costs and reasonable attorneys’ fees, and (d) similar expenses reasonably paid or incurred in connection with liquidation.
 
“Liquidation Proceeds”: With respect to any Mortgage Loan, the amount (other than amounts received in respect of the rental of any REO Property prior to REO Disposition) received by the related Servicer as proceeds from the liquidation of such Mortgage Loan, as determined in accordance with the applicable provisions of the related Servicing Agreement, other than Recoveries; provided that with respect to any Mortgage Loan or REO Property repurchased, substituted or sold pursuant to or as contemplated hereunder, or pursuant to the applicable provisions of the related Servicing Agreement, “Liquidation Proceeds” shall also include amounts realized in connection with such repurchase, substitution or sale.
 
“Loan 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.
 
“Loan-to-Value Ratio”: With respect to each Mortgage Loan and any date of determination, a fraction, expressed as a percentage, the numerator of which is the Principal Balance of the Mortgage Loan at such date of determination and the denominator of which is the Value of the related Mortgaged Property.

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“Lower-Tier Interest”: Any one of the interests in the Lower-Tier REMIC, as described in the Preliminary Statement.
 
“Lower-Tier REMIC”: As described in the Preliminary Statement.
 
“LT2-AZ Target Balance”: With respect to any Distribution Date, the excess, if any, of (i) the quotient of (a) the principal balance of the LT-Y Interest immediately preceding such Distribution Date divided by (b) the difference between (I) 100% minus (II) the quotient of (A) the Adjusted Net WAC for such Distribution Date divided by (B) the product of (1) two multiplied by (2) the Net WAC for such Distribution Date, over (ii) the principal balance of the LT-Y Interest immediately preceding such Distribution Date.
 
“LT-Y Target Balance”: With respect to any Distribution Date, the excess, if any, of (i) the quotient of (a) the product of (I) the principal balance of the LT-Z Interest immediately preceding such Distribution Date multiplied by (II) the Net WAC for such Distribution Date multiplied by (III) two, divided by (b) the Adjusted Net WAC for such Distribution Date, over (ii) the principal balance of the LT-Z Interest immediately preceding such Distribution Date.
 
“Majority Certificateholders”: The Holders of Certificates evidencing at least 51% of the Voting Rights.
 
“Margin”: On each Distribution Date on or prior to the Call Option Date, (i) with respect to the Class A1A Certificates, 0.200% per annum, and on each Distribution Date after the Call Option Date, 0.400% per annum, (ii) with respect to the Class A1B Certificates, 0.280% per annum, and on each Distribution Date after the Call Option Date, 0.560% per annum, (iii) with respect to the Class A1C Certificates, 0.210% per annum, and on each Distribution Date after the Call Option Date, 0.420% per annum, (iv) with respect to the Class B-1 Certificates, 0.480% per annum, and on each Distribution Date after the Call Option Date, 0.720% per annum, (v) with respect to the Class B-2 Certificates, 0.900% per annum, and on each Distribution Date after the Call Option Date, 1.350% per annum and (vi) with respect to the Class B-3, Class B-4, Class B-5 and Class B-6 Certificates, 1.750% per annum, and on each Distribution Date after the Call Option Date, 2.625% per annum.
 
“Master Servicer”: Xxxxx Fargo Bank, N.A., or any successor Master Servicer appointed as herein provided.
 
“Master Servicing Fee”: As to any Distribution Date and each related Mortgage Loan, an amount equal to the product of the applicable Master Servicing Fee Rate and the outstanding Principal Balance of such Mortgage Loan as of the first day of the related Due Period less the Trustee Fee, if any, payable to the Trustee for such Distribution Date. The Master Servicing Fee for any Mortgage Loan shall be payable in respect of any Distribution Date solely from the interest portion of the Monthly Payment or other payment or recovery with respect to such Mortgage Loan.
 
“Master Servicing Fee Rate”: 0.0125% per annum.

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“Maximum Loan Rate”: With respect to each Mortgage Loan, the percentage set forth in the related Mortgage Note as the maximum Loan Rate thereunder.
 
“MERS”: Mortgage Electronic Registration Systems, Inc., a corporation organized and existing under the laws of the State of Delaware, or any successor thereto.
 
“MERS Mortgage Loan”: Any Mortgage Loan registered with MERS on the MERS System.
 
“MERS® System”: The system of recording transfers of mortgages electronically maintained by MERS.
 
“Middle-Tier Interest”: Any one of the interests in the Middle-Tier REMIC, as described in the Preliminary Statement.
 
“Middle Tier REMIC”: As described in the Preliminary Statement.
 
“MIN”: The Mortgage Identification Number for any MERS Mortgage Loan.
 
“MOM Loan”: Any Mortgage Loan as to which MERS is acting as mortgagee, solely as nominee for the originator of such Mortgage Loan and its successors and assigns.
 
“Monthly Interest Distributable Amount”: With respect to each Class of Certificates (other than the Class PO Certificates) and any Distribution Date, the amount of interest accrued during the related Accrual Period at the lesser of the related Adjusted Cap Rate and the related Pass-Through Rate on the Class Principal Balance or Class Notional Balance, as applicable, immediately prior to that Distribution Date; provided, however, that for purposes of compliance with the REMIC Provisions, (A) the Monthly Interest Distributable Amount for each Class of Subordinate Certificates shall be calculated by reducing the related Pass-Through Rate by a per annum rate equal to (i) 12 times the Subordinate Class Expense Share for such Class divided by (ii) the Class Principal Balance of such Class as of the beginning of the related Accrual Period and (B) such Class shall be deemed to bear interest at such Pass-Through Rate as so reduced for federal income tax purposes; provided, further, such Monthly Interest Distributable Amount shall be reduced if the Pass-Through Rate applicable to such Class for the related Accrual Period exceeds the Adjusted Cap Rate applicable to such Class for such Distribution Date, subject to the allocation priority set forth in Section 5.02 herein.
 
“Monthly Payment”: With respect to any Mortgage Loan, the scheduled monthly payment of principal and/or interest on such Mortgage Loan that is payable by the related Mortgagor from time to time under the related Mortgage Note, determined, for the purposes of this Agreement: (a) after giving effect to any reduction in the amount of interest collectible from the related Mortgagor pursuant to the Relief Act; (b) without giving effect to any extension granted or agreed to by the related Servicer pursuant to the applicable provisions of the related Servicing Agreement; and (c) on the assumption that all other amounts, if any, due under such Mortgage Loan are paid when due.
 
“Moody’s”: Xxxxx’x Investors Service, Inc. or any successor thereto.

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“Mortgage”: The mortgage, deed of trust or other instrument creating a first lien on, or first priority security interest in, a Mortgaged Property securing a Mortgage Note.
 
“Mortgage File”: The mortgage documents listed in Section 2.01 hereof pertaining to a particular Mortgage Loan and any additional documents required to be added to the Mortgage File pursuant to this Agreement.
 
“Mortgage Loan”: Each mortgage loan transferred and assigned to the Trustee pursuant to Section 2.01 or Section 2.03(d) hereof as from time to time held as a part of the Trust Fund, the Mortgage Loans so held being identified in the Mortgage Loan Schedule.
 
“Mortgage Loan Purchase Agreement”: The Mortgage Loan Purchase Agreement among the Seller, the Sponsor and the Depositor, dated as of February 1, 2006, regarding the transfer of the Mortgage Loans by the Seller (including the Seller’s rights and interests in the Servicing Agreements) to or at the direction of the Depositor.
 
“Mortgage Loan Schedule”: As of any date, the list of Mortgage Loans included in the Trust Fund on such date, attached hereto as Schedule I. The Mortgage Loan Schedule shall be prepared by the Depositor and shall set forth the following information with respect to each Mortgage Loan:
 
 
(i)
the Mortgage Loan identifying number;
 
 
(ii)
a code indicating whether the Mortgaged Property was represented by the borrower, at the time of origination, as being owner-occupied;
 
 
(iii)
a code indicating whether the Residential Dwelling constituting the Mortgaged Property is (a) a detached single family dwelling, (b) a dwelling in a planned unit development, (c) a condominium unit, (d) a two- to four-unit residential property, (e) a townhouse or (f) other type of Residential Dwelling;
 
 
(iv)
if the related Mortgage Note permits the borrower to make Monthly Payments of interest only for a specified period of time, (a) the original number of such specified Monthly Payments and (b) the remaining number of such Monthly Payments as of the Cut-off Date;
 
 
(v)
the original months to maturity;
 
 
(vi)
the stated remaining months to maturity from the Cut-off Date based on the original amortization schedule;
 
 
(vii)
the Loan-to-Value Ratio at origination;
 
 
(viii)
the Loan Rate in effect immediately following the Cut-off Date;
 
 
(ix)
the date on which the first Monthly Payment is or was due on the Mortgage Loan;
 
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(x)
the stated maturity date;
 
 
(xi)
the Master Servicing Fee Rate and the Servicing Fee Rate;
 
 
(xii)
the last Due Date on which a Monthly Payment was actually applied to the unpaid Stated Principal Balance;
 
 
(xiii)
the original principal balance of the Mortgage Loan;
 
 
(xiv)
the Stated Principal Balance of the Mortgage Loan on the Cut-off Date and a code indicating the purpose of the Mortgage Loan (i.e., purchase financing, rate/term refinancing, cash-out refinancing);
 
 
(xv)
the Index and Gross Margin specified in related Mortgage Note;
 
 
(xvi)
the next Adjustment Date, if applicable;
 
 
(xvii)
the Maximum Loan Rate, if applicable;
 
 
(xviii)
the Value of the Mortgaged Property;
 
 
(xix)
the sale price of the Mortgaged Property, if applicable;
 
 
(xx)
the product code;
 
 
(xxi)
whether the Mortgage Loan is a Lender Paid Mortgage Insurance Loan; and
 
 
(xxii)
the Servicer that is servicing each Mortgage Loan and the related Originator of the Mortgage Loan.
 
The Mortgage Loan Schedule, as in effect from time to time, shall also set forth the following information with respect to the Mortgage Loans in the aggregate as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the current Principal Balance of the Mortgage Loans; (3) the weighted average Loan Rate of the Mortgage Loans; and (4) the weighted average remaining months to maturity of the Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to time by the Depositor in accordance with the provisions of this Agreement.
 
“Mortgage Note”: The original executed note or other evidence of indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
 
“Mortgaged Property”: The fee simple or leasehold interest in real property, together with improvements thereto including any exterior improvements to be completed within 120 days of disbursement of the related Mortgage Loan proceeds.
 
“Mortgagor”: The obligor on a Mortgage Note.

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“Net Deferred Interest”: With respect to any Distribution Date, the greater of (i) the excess, if any, of the Deferred Interest for the related Due Date over the aggregate amount of any principal prepayments in part or in full received during the related Prepayment Period and (ii) zero.
 
“Net Interest Shortfall”: With respect to any Distribution Date, the excess of the Interest Shortfall, if any, for such Distribution Date over the sum of (i) Interest Shortfalls paid by the Servicers under the related Servicing Agreements with respect to such Distribution Date and (ii) Compensating Interest Payments made with respect to such Distribution Date.
 
“Net Liquidation Proceeds”: With respect to any Liquidated Mortgage Loan or any other disposition of related Mortgaged Property (including REO Property) the related Liquidation Proceeds net of Advances, related Servicing Advances, Master Servicing Fee, related Servicing Fees and any other accrued and unpaid servicing fees received and retained in connection with the liquidation of such Mortgage Loan or Mortgaged Property.
 
“Net Loan Rate”: With respect to any Mortgage Loan (or the related REO Property), as of any date of determination, a per annum rate of interest equal to the then applicable Loan Rate for such Mortgage Loan minus the related Servicing Fee Rate, Master Servicing Fee Rate and, if applicable, the Lender Paid Mortgage Insurance Rate.
 
“Net Maximum Loan Rate”: With respect to any Mortgage Loan (or the related REO Property), as of any date of determination, a per annum rate of interest equal to the then applicable Maximum Loan Rate for such Mortgage Loan minus the related Servicing Fee Rate, Master Servicing Fee Rate and, if applicable, the Lender Paid Mortgage Insurance Rate.
 
 
“Net Maximum Rate Cap”: For any Distribution Date and any Class of Certificates (other than the Class X and Class PO Certificates), the related Net WAC Cap, computed by assuming that each Mortgage Loan accrued interest at its Net Maximum Loan Rate.
 
“Net Realized Losses”: For any Class of Certificates and any Distribution Date, the excess of (i) the amount of Realized Losses previously allocated to that Class or PO Component over (ii) the amount of any increases to the Class Principal Balance of that Class or Component Principal Balance pursuant to Section 5.08 due to Recoveries.
 
“Net WAC”: With respect to any Distribution Date, the weighted average of the Net Loan Rates of the Mortgage Loans as of the first day of the related Due Period (or, in the case of the first Distribution Date, as of the Cut-off Date), weighted on the basis of the related Stated Principal Balances at the beginning of the related Due Period.
 
“Net WAC Cap”: For any Distribution Date and the Class A1A and the Class A1B Certificates, and the Subordinate Certificates, the product of (i) the Net WAC multiplied by (ii) the quotient of 30 divided by the actual number of days in the Accrual Period. For any Distribution Date and the Class A1C Certificates, (a) the product of (i) the Net WAC multiplied by (ii) the quotient of 30 divided by the actual number of days in the Accrual Period less (b) the related insurance premium rate for such Distribution Date.

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For the Class A1C Certificates and the related Net WAC Cap and Pass-Through Rate, the per annum “insurance premium rate” for any Distribution Date is the product of (i)(a) the Premium Amount for the Class A1C Certificates for such Distribution Date, divided by (b) the Class Principal Balance of such Class immediately prior to such Distribution Date, multiplied by (ii) the quotient obtained by dividing 360 by the actual number of days in the related Accrual Period for such Class.
 
“Nonrecoverable”: The determination by the Master Servicer or the related Servicer in respect of a delinquent Mortgage Loan that if it were to make an Advance in respect thereof, such amount would not be recoverable from any collections or other recoveries (including Liquidation Proceeds) on such Mortgage Loan.
 
“Notice”: As defined in the Financial Guaranty Insurance Policy.
 
“Officers’ Certificate”: A certificate signed by the Chairman of the Board, the Vice Chairman of the Board, the President or a vice president (however denominated), or by the Treasurer, the Secretary, or one of the assistant treasurers or assistant secretaries of the Sponsor, the Master Servicer or the Depositor, as applicable.
 
“One-Month COFI Index”: The weighted average cost of funds of depository institutions, headquartered in Arizona, California or Nevada and members of the Eleventh District of the Federal Home Loan Bank System, as computed from statistics tabulated and published by the FHLB of San Francisco
 
“One-Month COFI Indexed Mortgage Loan”: Indicates a Mortgage Loan that has an adjustable Loan Rate calculated on the basis of the One-Month COFI index.
 
“One-Month MTA Index”: The twelve-month average yields on United States Treasury securities adjusted to a constant maturity of one year as published by the Federal Reserve Board in Statistical Release H.15(519).
 
“One-Month MTA Indexed Mortgage Loan”: Indicates a Mortgage Loan that has an adjustable Loan Rate calculated on the basis of the One-Month MTA index.
 
“Opinion of Counsel”: A written opinion of counsel, who may, without limitation, be a salaried counsel for the Depositor or the Sponsor, acceptable to the Trustee or the Securities Administrator, as applicable, except that any opinion of counsel relating to (a) the qualification of any REMIC created hereunder as a REMIC or (b) compliance with the REMIC Provisions must be an opinion of Independent counsel.

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“Original Applicable Credit Support Percentage”: With respect to each Class of Subordinate Certificates, the corresponding percentage set forth below opposite its Class designation:
 
Class B-1
10.50%
Class B-2
  6.80%
Class B-3
  4.50%
Class B-4
  3.10%
Class B-5
  1.80%
Class B-6
  0.80%

 
“Original Class Notional Balance”: With respect to the Class X Certificates, the corresponding aggregate notional amount set forth opposite the Class designation of such Class in the Preliminary Statement.
 
“Original Class Principal Balance”: With respect to each Class of Certificates other than the Interest-Only Certificates, the corresponding aggregate amount set forth opposite the Class designation of such Class in the Preliminary Statement.
 
“Original Subordinated Principal Balance”: The aggregate of the Original Class Principal Balances of the Classes of Subordinate Certificates.
 
“Originator”: Countrywide or Xxxx Financial.
 
“OTS”: The Office of Thrift Supervision.
 
“Outstanding Mortgage Loan”: As of any Due Date, a Mortgage Loan with a Stated Principal Balance greater than zero, that was not the subject of a prepayment in full prior to such Due Date and that did not become a Liquidated Mortgage Loan prior to such Due Date.
 
“Ownership Interest”: As to any Certificate, any ownership or security interest in such Certificate, including any interest in such Certificate as the Holder thereof and any other interest therein, whether direct or indirect, legal or beneficial, as owner or as pledgee.
 
“Pass-Through Rate”: With respect to each Class of Certificates and any Distribution Date, the rate set forth below:
 
 
(i)
The Pass-Through Rate for the Class A1A Certificates shall be equal to the least of (a) LIBOR plus the applicable Margin, (b) the applicable Net WAC Cap for that Distribution Date and (c) the Net Maximum Rate Cap;
 
 
(ii)
The Pass-Through Rate for the Class A1B Certificates shall be equal to the least of (a) LIBOR plus the applicable Margin, (b) the applicable Net WAC Cap for that Distribution Date and (c) the Net Maximum Rate Cap;
 
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(iii)
The Pass-Through Rate for the Class A1C Certificates shall be equal to the least of (a) LIBOR plus the applicable Margin, (b) the applicable Net WAC Cap for that Distribution Date and (c) the Net Maximum Rate Cap;
 
 
(iv)
The Pass-Through Rate for the Class A-R Certificate shall be equal to the applicable Net WAC for that Distribution Date;
 
 
(v)
The Pass-Through Rate for the Class X Certificates on any Distribution Date shall be equal to the quotient of (a) the product of (1) the excess, if any, of (i) the interest accrued on the Mortgage Loans for the related Due Period minus (ii) the sum of (x) the interest accrued for the related Accrual Period on the Certificates (other than the Class X Certificates) and (y) the Premium Amount multiplied by (2) 12, divided by (b) the Class X Notional Balance for such Distribution Date; and
 
 
(vi)
The Pass-Through Rate for the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 and Class B-6 Certificates shall be equal to the least of (a) LIBOR plus the applicable Margin, (b) the applicable Net WAC Cap for that Distribution Date and (c) the Net Maximum Rate Cap.
 
“Xxxx Financial”: Xxxx Financial LLC.
 
“Paying Agent”: Any paying agent appointed pursuant to Section 6.05 hereof.
 
“PCAOB”: The Public Company Accounting Oversight Board.
 
“Percentage Interest”: With respect to any Certificate other than a Residual Certificate, a fraction, expressed as a percentage, the numerator of which is the Initial Certificate Principal Balance or Initial Certificate Notional Balance, as applicable, represented by such Certificate and the denominator of which is the Original Class Principal Balance or Original Class Certificate Notional Balance, as applicable, of the related Class. With respect to the Residual Certificate, 100%.
 
“Permitted Investments”: Any one or more of the following obligations or securities acquired at a purchase price of not greater than par, regardless of whether issued or managed by the Depositor, the Master Servicer, the Trustee or any of their respective Affiliates or for which an Affiliate of the Trustee serves as an advisor:
 
(i) direct obligations of, or obligations fully guaranteed as to timely payment of principal and interest by, the United States or any agency or instrumentality thereof, provided such obligations are backed by the full faith and credit of the United States;
 
(ii) (A) demand and time deposits in, certificates of deposit of, bankers’ acceptances issued by or federal funds sold by any depository institution or trust company (including the Trustee or the Master Servicer or their agents acting in their respective commercial capacities) incorporated under the laws of the United States of America or any state thereof and subject to supervision and examination by federal and/or state authorities, so long as, at the time of such investment or contractual commitment providing for such investment, such depository institution or trust company or its ultimate parent has a short-term uninsured debt rating in one of the two highest available rating categories of each Rating Agency and (B) any other demand or time deposit or deposit which is fully insured by the FDIC; provided, however, that such investment shall not have a maturity longer than 365 days;

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(iii) repurchase obligations with respect to any security described in clause (i) above and entered into with a depository institution or trust company (acting as principal) rated A-1+ (or its equivalent)  or higher by the Rating Agencies; provided however, that such investment shall not have a maturity longer than 365 days;
 
(iv) securities bearing interest or sold at a discount that are issued by any corporation incorporated under the laws of the United States of America, the District of Columbia or any State thereof and that are rated by each Rating Agency in its highest long-term unsecured rating categories at the time of such investment or contractual commitment providing for such investment; provided, however, that such investment shall not have a maturity longer than 365 days;
 
(v) commercial paper (including both non-interest-bearing discount obligations and interest-bearing obligations) that is rated by each Rating Agency in its highest short-term unsecured debt rating available at the time of such investment;
 
(vi) units of money market funds (which may be 12b-1 funds, as contemplated by the Commission under the Investment Company Act of 1940) registered under the Investment Company Act of 1940 including funds managed or advised by the Trustee, the Master Servicer or an affiliate thereof having the highest applicable rating from each Rating Agency; and
 
(vii) if previously confirmed in writing to the Trustee, any other demand, money market or time deposit, or any other obligation, security or investment, as may be acceptable to each Rating Agency in writing as a permitted investment of funds backing securities having ratings equivalent to its highest initial rating of the Senior Certificates;
 
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.
 
The Securities Administrator or its Affiliates are permitted to receive additional compensation that could be deemed to be in the Securities Administrator’s economic self interest for (i) serving as investment advisor, administrator, shareholder servicing agent, custodian or sub-custodian with respect to certain Permitted Investments, (ii) using Affiliates to effect transactions in certain Permitted Investments and (iii) effecting transactions in certain Permitted Investments. The Securities Administrator does not guarantee the performance of any Permitted Investment.
 
“Permitted Transferee”: Any Transferee of a Residual Certificate other than a Disqualified Organization or a non-U.S. Person.

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“Person”: Any individual, corporation, partnership, limited liability company, joint venture, association, joint stock company, trust, unincorporated organization or government or any agency or political subdivision thereof.
 
“Physical Certificates”: The Residual Certificate and the Class B-4, Class B-5 and Class B-6 Certificates.
 
“Policy Account”: The trust account or accounts created and maintained by the Securities Administrator pursuant to Section 4.05 hereof in the name of the Trustee for the benefit of the Class A1C Certificateholders and designated “Policy Account, HSBC Bank USA, National Association, as Trustee, in trust for the registered Certificateholders of Luminent Mortgage Trust 2006-2, Mortgage Pass-Through Certificates, Series 2006-2, Class A1C Certificates.”
 
“Pool Balance”: As to any Distribution Date, the aggregate of the Stated Principal Balances, as of the Close of Business on the first day of the month preceding the month in which such Distribution Date occurs, of the Mortgage Loans that were Outstanding Mortgage Loans on that day.
 
“Premium Amount”: With respect to any Distribution Date and the Class A1C Certificates, the product of one-twelfth of the Premium Rate and the Class A1C Certificate Principal Balance on the immediately preceding Distribution Date, or, in the case of the first Distribution Date, on the Closing Date, in each case after giving effect to distributions of principal made on such Distribution Date.
 
“Premium Rate”: 0.09% per annum.
 
“Prepayment Penalty Amount”: Not Applicable.
 
“Prepayment Period”: With respect to any Distribution Date, the calendar month preceding the month in which such Distribution Date occurs.
 
“Primary Insurance Policy”: Mortgage guaranty insurance, if any, on an individual Mortgage Loan, as evidenced by a policy or certificate.
 
“Principal Balance”: As to any Mortgage Loan, other than a Liquidated Mortgage Loan, and any day, the related Cut-off Date Principal Balance, minus all collections credited against the Principal Balance of such Mortgage Loan after the Cut-off Date, as increased by the amount of any Deferred Interest added to the outstanding Principal Balance of such Mortgage Loan pursuant to the terms of the related Mortgage Note. For purposes of this definition, a Liquidated Mortgage Loan shall be deemed to have a Principal Balance equal to the Principal Balance of the related Mortgage Loan as of the final recovery of related Liquidation Proceeds and a Principal Balance of zero thereafter. As to any REO Property and any day, the Principal Balance of the related Mortgage Loan immediately prior to such Mortgage Loan becoming REO Property.

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“Principal Distribution Amount”: With respect to any Distribution Date, the sum of (a) each scheduled payment of principal collected or advanced on the related Mortgage Loans (before taking into account any Deficient Valuations or Debt Service Reductions) by the related Servicer or the Master Servicer in respect of the related Due Period, (b) that portion of the Purchase Price, representing principal of any repurchased or purchased Mortgage Loan, deposited to the Distribution Account during the related Prepayment Period, (c) the principal portion of any related Substitution Adjustments deposited in the Distribution Account during the related Prepayment Period, (d) the principal portion of all Insurance Proceeds received during the related Prepayment Period with respect to Mortgage Loans that are not yet Liquidated Mortgage Loans, (e) the principal portion of all Net Liquidation Proceeds received during the related Prepayment Period with respect to Liquidated Mortgage Loans (other than Recoveries), (f) all Principal Prepayments (net of Deferred Interest) in part or in full on Mortgage Loans applied by the Servicers or the Master Servicer during the related Prepayment Period, (g) all Recoveries received during the related Prepayment Period and (h) on the Distribution Date on which the Trust is to be terminated pursuant to Section 10.01 hereof, that portion of the Termination Price in respect of principal.
 
“Principal Prepayment”: Any payment of principal made by the Mortgagor on a Mortgage Loan that is received in advance of its scheduled Due Date and that is not accompanied by an amount of interest representing the full amount of scheduled interest due on any Due Date in any month or months subsequent to the month of prepayment.
 
“Private Certificates”: The Class B-4, Class B-5 and Class B-6 Certificates.
 
“Private Placement Memorandum”: The Private Placement Memorandum dated February 14, 2006, relating to the initial sale of the Class B-4, Class B-5 and Class B-6 Certificates.
 
“Pro Rata Share”: As to any Distribution Date and any Class of Subordinate Certificates, the portion of the Subordinate Principal Distribution Amount allocable to such Class, equal to the product of the (a) Subordinate Principal Distribution Amount on such date and (b) a fraction, the numerator of which is the related Class Principal Balance of that Class and the denominator of which is the aggregate of the Class Principal Balances of all the Classes of Subordinate Certificates.
 
“Prospectus”: The Prospectus Supplement, together with the accompanying prospectus, dated September 26, 2005, relating to the Senior Certificates and the Class B-1, Class B-2 and Class B-3 Certificates.
 
“Prospectus Supplement”: That certain Prospectus Supplement, dated February 14, 2006, relating to the initial sale of the Senior Certificates and the Class B-1, Class B-2 and Class B-3 Certificates.
 
“Purchase Agreement”: The purchase agreements relating to the underlying sale of the Mortgage Loans as set forth on Exhibit M hereto.
 
“Purchase Price”: With respect to any Mortgage Loan or REO Property to be purchased pursuant to or as contemplated by Section 2.03 hereof, an amount equal to the sum of (i) 100% of the Stated Principal Balance thereof as of the date of purchase (or such other price as provided in Section 10.01), plus (ii) in the case of (x) a Mortgage Loan, accrued interest on such Stated Principal Balance at the applicable Loan Rate minus the Servicing Fee Rate from the Due Date as to which interest was last covered by a payment by the Mortgagor or an Advance by a Servicer or the Master Servicer through the end of the calendar month in which the purchase is to be effected, and (y) an REO Property, the sum of (1) accrued interest on such Stated Principal Balance at the applicable Loan Rate minus the Servicing Fee Rate from the Due Date as to which interest was last covered by a payment by the Mortgagor or an Advance by a Servicer or the Master Servicer plus (2) REO Imputed Interest for such REO Property for each calendar month commencing with the calendar month in which such REO Property was acquired and ending with the calendar month in which such purchase is to be effected, net of the total of all net rental income, Insurance Proceeds, Liquidation Proceeds and Advances that as of the date of purchase had been distributed as or to cover REO Imputed Interest, plus (iii) in the case of a Mortgage Loan required to be purchased pursuant to Section 2.03 hereof, expenses reasonably incurred or to be incurred by the Trustee in respect of the breach or defect giving rise to the purchase obligation and plus (iv) any costs and damages incurred by the Trust in connection with any violation by such Mortgage Loan of any predatory- or abusive-lending laws.

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“Qualified Insurer”: A mortgage guaranty insurance company duly qualified as such under the laws of the state of its principal place of business and each state having jurisdiction over such insurer in connection with the insurance policy issued by such insurer, duly authorized and licensed in such states to transact a mortgage guaranty insurance business in such states and to write the insurance provided by the insurance policy issued by it, approved as a Xxxxxx Xxx-approved mortgage insurer and having a claims paying ability rating of at least “AA” or equivalent rating by a nationally recognized statistical rating organization. Any replacement insurer with respect to a Mortgage Loan must have at least as high a claims paying ability rating as the insurer it replaces had on the Closing Date.
 
“Qualified Substitute Mortgage Loan”: A mortgage loan substituted for a Deleted Mortgage Loan pursuant to the terms of this Agreement which must, on the date of such substitution, (i) have an outstanding principal balance, after application of all scheduled payments of principal and interest due during or prior to the month of substitution, not in excess of, and not more than 5% less than, the Principal Balance of the Deleted Mortgage Loan as of the Due Date in the calendar month during which the substitution occurs, (ii) have a maximum loan rate not less than the Maximum Loan Rate of the Deleted Mortgage Loan, (iii)  have a gross margin equal to or greater than the Gross Margin of the Deleted Mortgage Loan, (iv) have the same Index as the Deleted Mortgage Loan, (v) have its next adjustment date not more than two months after the next Adjustment Date of the Deleted Mortgage Loan, (vi) have a remaining term to maturity not greater than (and not more than one year less than) that of the Deleted Mortgage Loan, (vii) be current as of the date of substitution, (viii) have a Loan-to-Value Ratio as of the date of substitution equal to or lower than the Loan-to-Value Ratio of the Deleted Mortgage Loan as of such date, (ix) have been underwritten or re-underwritten in accordance with the same or substantially similar underwriting criteria and guidelines as the Deleted Mortgage Loan, (x) is of the same or better credit quality as the Deleted Mortgage Loan and (xi) conform to each representation and warranty set forth in Section 2.04 hereof applicable to the Deleted Mortgage Loan. In the event that one or more mortgage loans are substituted for one or more Deleted Mortgage Loans, the amounts described in clause (i) hereof shall be determined on the basis of aggregate principal balances, the terms described in clause (vi) hereof shall be determined on the basis of weighted average remaining term to maturity and the Loan-to-Value Ratio described in clause (viii) hereof shall be satisfied as to each such mortgage loan and, except to the extent otherwise provided in this sentence, the representations and warranties described in clause (x) hereof must be satisfied as to each Qualified Substitute Mortgage Loan or in the aggregate, as the case may be.

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“Rating Agency”: Each of S&P and Xxxxx’x and any respective successors thereto. If Xxxxx’x, S&P or their respective successors shall no longer be in existence, “Rating Agency” shall include such nationally recognized statistical rating agency or agencies, or other comparable Person or Persons, as shall have been designated by the Depositor, notice of which designation shall be given to the Trustee and the Master Servicer.
 
“Realized Loss”: With respect to any Liquidated Mortgage Loan, the amount of loss realized equal to the portion of the Principal Balance remaining unpaid after application of all Net Liquidation Proceeds in respect of such Liquidated Mortgage Loan.
 
“Record Date”: With respect to each Distribution Date (other than the initial Distribution Date) and the Interest-Only Certificates and the Class A-R Certificates, the last Business Day of the calendar month immediately preceding the month in which that Distribution Date occurs. With respect to each Distribution Date (other than the initial Distribution Date) and the LIBOR Certificates, the last Business Day immediately preceding that Distribution Date, unless any LIBOR Certificates are no longer Book-Entry Certificates, in which case the Record Date for the related Class of LIBOR Certificates shall be the last Business Day of the calendar month immediately preceding the month in which that Distribution Date occurs. With respect to the initial Distribution Date and all Classes of Certificates, the Closing Date.
 
“Recovery”: With respect to any Distribution Date and a Mortgage Loan that became a Liquidated Mortgage Loan in a month preceding the related Prepayment Period to such Distribution Date and with respect to which the related Realized Loss was allocated to one or more Classes of Certificates, an amount received in respect of such Liquidated Mortgage Loan during the related Prepayment Period, net of any reimbursable expenses.
 
“Reference Bank” shall be a leading bank engaged in transactions in Eurodollar deposits in the international Eurocurrency market, which shall not control, be controlled by, or be under common control with, the Securities Administrator and shall have an established place of business in London. Until all of the LIBOR Certificates are paid in full, the Securities Administrator will at all times retain at least four Reference Banks for the purpose of determining LIBOR with respect to each LIBOR Determination Date. The Securities Administrator initially shall designate the Reference Banks (after consultation with the Depositor). If any such Reference Bank should be unwilling or unable to act as such or if the Trustee should terminate its appointment as Reference Bank, the Securities Administrator shall promptly appoint or cause to be appointed another Reference Bank (after consultation with the Depositor). The Securities Administrator shall have no liability or responsibility to any Person for (i) the selection of any Reference Bank for purposes of determining LIBOR or (ii) any inability to retain at least four Reference Banks which is caused by circumstances beyond its reasonable control.

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“Refinancing Mortgage Loan”: Any Mortgage Loan originated in connection with the refinancing of an existing mortgage loan.
 
“Regular Certificate”: Any Class A1A, Class A1B, Class A1C, Class X, Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Certificate.
 
“Regulation AB”: 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 clarifications and interpretations 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.
 
“Regulation S”: Regulation S promulgated under the Securities Act or any successor provision thereto, in each case as the same may be amended from time to time; and all references to any rule, section or subsection of, or definition or term contained in, Regulation S means such rule, section, subsection, definition or term, as the case may be, or any successor thereto, in each case as the same may be amended from time to time.
 
“Regulation S Global Security”: The meaning specified in Section 6.01.
 
“Relevant Servicing Criteria”: The Servicing Criteria applicable to each party to this Agreement, as set forth on Exhibit Q attached hereto. 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 each Servicer, the term “Relevant Servicing Criteria” may refer to a portion of the Relevant Servicing Criteria applicable to such parties.
 
“Relief Act”: The Servicemembers Civil Relief Act, as amended, or any similar state or local law.
 
“Relief Act Reductions”: With respect to any Distribution Date and any Mortgage Loan as to which there has been a reduction in the amount of interest collectible thereon for the most recently ended Due Period as a result of the application of the Relief Act, the amount, if any, by which (i) interest collectible on that Mortgage Loan during such Due Period is less than (ii) one month’s interest on the Stated Principal Balance of such Mortgage Loan at the Loan Rate for such Mortgage Loan before giving effect to the application of the Relief Act.
 
“REMIC”: A “real estate mortgage investment conduit” within the meaning of Section 860D of the Code.
 
“REMIC Opinion”: An Independent Opinion of Counsel, to the effect that the proposed action described therein would not cause an Adverse REMIC Event.
 
“REMIC Provisions”: Provisions of the federal income tax law relating to real estate mortgage investment conduits which appear at Section 860A through 860G of Subchapter M of Chapter 1 of the Code, and related provisions, and regulations and rulings promulgated thereunder, as the foregoing may be in effect from time to time.

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“Remittance Report”: The Master Servicer’s Remittance Report to the Securities Administrator providing information with respect to each Mortgage Loan which is provided no later than the second Business Day following each Determination Date and which shall contain such information as may be agreed upon by the Master Servicer and the Securities Administrator and which shall be sufficient to enable the Securities Administrator to prepare the related Distribution Date Statement.
 
“Rents from Real Property”: With respect to any REO Property, gross income of the character described in Section 856(d) of the Code.
 
“REO Account”: The account or accounts maintained by a Servicer in respect of an REO Property pursuant to the related Servicing Agreement.
 
“REO Disposition”: The sale or other disposition of an REO Property on behalf of the Trust.
 
“REO Imputed Interest”: As to any REO Property, for any calendar month during which such REO Property was at any time part of the Trust Fund, one month’s interest at the applicable Net Loan Rate for such REO Property on the Principal Balance of such REO Property (or, in the case of the first such calendar month, of the related Mortgage Loan if appropriate) as of the Close of Business on the Due Date in such calendar month.
 
“REO Principal Amortization”: With respect to any REO Property, for any calendar month, the excess, if any, of (a) the aggregate of all amounts received in respect of such REO Property during such calendar month, whether in the form of rental income, sale proceeds (including, without limitation, that portion of the Termination Price paid in connection with a purchase of all of the Mortgage Loans and REO Properties pursuant to Section 10.01 hereof that is allocable to such REO Property) or otherwise, net of any portion of such amounts (i) payable pursuant to the applicable provisions of the related Servicing Agreement in respect of the proper operation, management and maintenance of such REO Property or (ii) payable or reimbursable to the applicable Servicer pursuant to the applicable provisions of the related Servicing Agreement for unpaid Master Servicing Fees and Servicing Fees in respect of the related Mortgage Loan and unreimbursed Servicing Advances and Advances in respect of such REO Property or the related Mortgage Loan, over (b) the REO Imputed Interest in respect of such REO Property for such calendar month.
 
“REO Property”: A Mortgaged Property acquired by the applicable Servicer on behalf of the Trust Fund through foreclosure or deed-in-lieu of foreclosure in accordance with the applicable provisions of the related Servicing Agreement.
 
“Reportable Event”: As defined in Section 3.19(c).
 
“Reporting Servicer”: As defined in Section 3.19(b).
 
“Request for Release”: A release signed by a Servicing Officer, in the form of Exhibit F attached hereto.

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“Required Reserve Fund Deposit”: With respect to the Class X Certificates and any Distribution Date, an amount equal to the lesser of (i) the Interest Distributable Amount for the Class X Certificates for such Distribution Date (after giving effect to such Certificate’s share of any Net Deferred Interest and after any reduction in the Interest Distributable Amount due to Net Interest Shortfalls on such Distribution Date) and (ii) the amount required to bring the balance on deposit in the Basis Risk Reserve Fund up to an amount equal to the Basis Risk Shortfalls for such Distribution Date with respect to the Class A1A, Class A1B and Class A1C Certificates and the Subordinate Certificates.
 
“Residential Dwelling”: Any one of the following: (i) a detached one-family dwelling, (ii) a detached two- to four-family dwelling, (iii) a one-family dwelling unit in a condominium project, (iv) a manufactured home or (v) a detached one-family dwelling in a planned unit development, none of which is a mobile home.
 
“Residual Certificate”: The Class A-R Certificate.
 
“Responsible Officer”: When used with respect to the Trustee or the Securities Administrator, any director, the president, any vice president, any assistant vice president, any associate assigned to the Corporate Trust Office (or similar group) or any other officer of the Trustee customarily performing functions similar to those performed by any of the above designated officers and, with respect to a particular matter, to whom such matter is referred because of such officer’s knowledge of and familiarity with the particular subject.
 
“Restricted Classes”: As defined in Section 5.01(d).
 
“Restricted Global Security”: As defined in Section 6.01.
 
“S&P”: Standard & Poor’s Ratings Services, a division of The XxXxxx-Xxxx Companies, Inc. or any successor thereto.
 
“Sarbanes Oxley Act”: The Xxxxxxxx-Xxxxx Act of 2002 and the rules and regulations of the Commission promulgated thereunder (including any interpretations thereof by the Commission’s staff).
 
“Xxxxxxxx-Xxxxx Certification”: A written certification signed by an officer of the Master Servicer that complies with (i) the Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx 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 Securities and Exchange Commission from time to time pursuant to the Xxxxxxxx-Xxxxx 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 Xxxxxxxx-Xxxxx Certification shall be as agreed to by the Master Servicer and the Depositor following a negotiation in good faith to determine how to comply with any such new requirements.

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“Securities Act”: The Securities Act of 1933, as amended.
 
“Securities Administrator”: Xxxxx Fargo Bank, N.A., or its successor in interest, or any successor securities administrator appointed as herein provided.
 
“Seller”: Maia Mortgage Finance Statutory Trust.
 
“Senior Certificate”: Any one of the Class A1A, Class A1B, Class A1C, Class X or Class A-R Certificates.
 
“Senior Certificateholder”: Any Holder of a Senior Certificate.
 
“Senior Credit Support Depletion Date”: The date on which the Class Principal Balance of each Class of Subordinate Certificates has been reduced to zero.
 
“Senior Percentage”: With respect to any Distribution Date, the percentage equivalent of a fraction the numerator of which is the aggregate of the Class Principal Balances of the Class or Classes of Senior Certificates immediately prior to such Distribution Date and the denominator of which is the Pool Balance for such Distribution Date.
 
“Senior Prepayment Percentage”: With respect to any Distribution Date before March 2016, 100%. Except as provided herein, the Senior Prepayment Percentage for any Distribution Date occurring on or after the eleventh anniversary of the first Distribution Date will be as follows: (i) from March 2016 through February 2017, the related Senior Percentage plus 70% of the related Subordinate Percentage for such Distribution Date; (ii) from March 2017 through February 2018, the related Senior Percentage plus 60% of the related Subordinate Percentage for such Distribution Date; (iii) from March 2018 through February 2019, the related Senior Percentage plus 40% of the related Subordinate Percentage for such Distribution Date; (iv) from March 2019 through February 2020, the related Senior Percentage plus 20% of the related Subordinate Percentage for such Distribution Date; and (v) from and after February 2020, the related Senior Percentage for such Distribution Date; provided, however, that there shall be no reduction in the Senior Prepayment Percentage on a Distribution Date, unless the Step Down Conditions are satisfied with respect to such Distribution Date; and provided, further, that if on any Distribution Date occurring on or after the Distribution Date in March 2016, the Senior Percentage exceeds the initial Senior Percentage, the related Senior Prepayment Percentage for such Distribution Date will again equal 100%.
 
Notwithstanding the above, (i) if on any Distribution Date prior to March 2009 the Two Times Test is satisfied, the Senior Prepayment Percentage will equal the related Senior Percentage for such Distribution Date plus 50% of an amount equal to 100% minus the related Senior Percentage for such Distribution Date and (ii) if on any Distribution Date in or after March 2009 the Two Times Test is satisfied, the Senior Prepayment Percentage will equal the related Senior Percentage for such Distribution Date.
 
“Senior Principal Distribution Amount”: With respect to any Distribution Date, the sum of:

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(1)           the related Senior Percentage of all amounts described in clauses (a) through (d) of the definition of “Principal Distribution Amount” for such Distribution Date; plus
 
(2)           with respect to each Mortgage Loan which became a Liquidated Mortgage Loan during the related Prepayment Period, the lesser of
 
 
(x)
the related Senior Percentage of the Stated Principal Balance of that Mortgage Loan; and
 
 
(y)
the related Senior Prepayment Percentage of the amount of the Net Liquidation Proceeds allocable to principal received with respect to that Mortgage Loan; plus
 
(3) the related Senior Prepayment Percentage of the amounts described in clause (f) of the definition of “Principal Distribution Amount.”
 
“Servicer”: Countrywide Servicing and Xxxx Financial and any successors thereto.
 
“Servicer Remittance Date”: With respect to each Mortgage Loan, the 18th day of each month, or the next Business Day if such 18th day is not a Business Day or if provided in the related Servicing Agreement, the preceding Business Day if such 18th day is not a Business Day.
 
“Service(s)(ing)”: In accordance with Regulation AB, the act of servicing and administering the Mortgage Loans or any other assets of the Trust 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. Any uncapitalized occurrence of this term shall have the meaning commonly understood by participants in the residential mortgage-backed securitization market.
 
“Servicing Account”: Any account established and maintained for the benefit of the Master Servicer or the Trust Fund by a Servicer with respect to the related Mortgage Loans and any REO Property, pursuant to the terms of the respective Servicing Agreement.
 
“Servicing Advances”: With respect to any Servicer or the Master Servicer (including the Trustee in its capacity as successor Master Servicer), all customary, reasonable and necessary “out of pocket” costs and expenses (including reasonable attorneys’ fees and expenses) incurred by any Servicer or the Master Servicer in the performance of its servicing obligations hereunder, including, but not limited to, the cost of (i) the preservation, restoration, inspection and protection of the Mortgaged Property, (ii) any enforcement or judicial proceedings, including foreclosures, (iii) the management and liquidation of the REO Property and (iv) compliance with the obligations under Article III hereof or the related Servicing Agreements.
 
“Servicing Agreements”: The servicing agreements relating to the servicing of the Mortgage Loans as set forth in Exhibit M hereto.
 
“Servicing Criteria”: The criteria set forth in paragraph (d) of Item 1122 of Regulation AB, as such may be amended from time to time.

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“Servicing Fee”: With respect to each Servicer and each Mortgage Loan serviced by such Servicer and for any calendar month, the fee payable to such Servicer determined pursuant to the related Servicing Agreement.
 
“Servicing Fee Rate”: With respect to each Mortgage Loan, the per annum servicing fee rate set forth on the Mortgage Loan Schedule.
 
“Servicing Function Participant”: Any Sub-Servicer or Subcontractor, other than each Servicer, the Master Servicer, the Trustee, the Custodian and the Securities Administrator, that is participating in the servicing function within the meaning of Regulation AB, unless such Person’s activities relate only to 5% or less of the Mortgage Loans.
 
“Servicing Officer”: Any officer of a Master Servicer or Servicer involved in, or responsible for, the administration and servicing of Mortgage Loans, whose name and specimen signature appear on a list of servicing officers furnished by the Master Servicer to the Trustee and the Depositor on the Closing Date, as such list may from time to time be amended.
 
“Sponsor”: Luminent Mortgage Capital, Inc. and any successors thereto.
 
“Startup Day”: As defined in Section 9.01(b) hereof.
 
“Stated Principal Balance”: With respect to any Mortgage Loan: (a) as of any date of determination up to and including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, the Cut-off Date Principal Balance of such Mortgage Loan minus, in the case of each Mortgage Loan, the sum of (i) the principal portion of each Monthly Payment due on a Due Date subsequent to the Cut-off Date and on or before the Due Date in the related Due Period, whether or not received, (ii) all Principal Prepayments received after the applicable Cut-off Date, to the extent distributed pursuant to Section 5.01 before such date of determination and (iii) all Liquidation Proceeds and Insurance Proceeds applied by the applicable Servicer as recoveries of principal in accordance with the applicable provisions of the Servicing Agreement, to the extent distributed pursuant to Section 5.01 before such date of determination and (b) as of any date of determination subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such Mortgage Loan would be distributed, zero; provided that, such Stated Principal Balance shall be increased by the amount of any Deferred Interest added to the outstanding Principal Balance of such Mortgage Loan pursuant to the terms of the related Mortgage Note. With respect to any REO Property: (x) as of any date of determination up to and including the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, an amount (not less than zero) equal to the Stated Principal Balance of the related Mortgage Loan as of the date on which such REO Property was acquired on behalf of the Trust, minus the aggregate amount of REO Principal Amortization in respect of such REO Property for all previously ended calendar months, to the extent distributed pursuant to Section 5.01 before such date of determination; and (y) as of any date of determination subsequent to the Distribution Date on which the proceeds, if any, of a Liquidation Event with respect to such REO Property would be distributed, zero.

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“Step Down Conditions”: As of any Distribution Date on which any decrease in any Senior Prepayment Percentage may apply, (i) the outstanding Principal Balance of all Mortgage Loans 60 days or more Delinquent (including Mortgage Loans in REO and foreclosure), averaged over the preceding six month period, as a percentage of the aggregate of the Class Principal Balances of the Classes of Subordinate Certificates on such Distribution Date, does not equal or exceed 50% and (ii) cumulative Realized Losses with respect to all of the Mortgage Loans do not exceed:
 
 
·
for any Distribution Date on or after the tenth anniversary of the first Distribution Date, 30% of the aggregate Class Principal Balance of the Subordinate Certificates as of the Closing Date,
 
 
·
for any Distribution Date on or after the eleventh anniversary of the first Distribution Date, 35% of the aggregate Class Principal Balance of the Subordinate Certificates as of the Closing Date,
 
 
·
for any Distribution Date on or after the twelfth anniversary of the first Distribution Date, 40% of the aggregate Class Principal Balance of the Subordinate Certificates as of the Closing Date,
 
 
·
for any Distribution Date on or after the thirteenth anniversary of the first Distribution Date, 45% of the aggregate Class Principal Balance of the Subordinate Certificates as of the Closing Date, and
 
 
·
for any Distribution Date on or after the fourteenth anniversary of the first Distribution Date, 50% of the aggregate Class Principal Balance of the Subordinate Certificates as of the Closing Date.
 
“Subcontractor”: Any vendor, subcontractor or other Person that 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 any Servicer (or a Sub-Servicer of any Servicer), the Master Servicer, the Trustee or the Securities Administrator.
 
“Subordinate Certificate”: Any one of the Class B-1, Class B-2, Class B-3, Class B-4, Class B-5 or Class B-6 Certificates.
 
“Subordinate Class Expense Share”: For each Class of Subordinate Certificates and each Accrual Period, the Subordinate Class Expense Share shall be allocated in reverse order of their respective numerical Class designations (beginning with the Class of Subordinate Certificates with the highest numerical Class designation) and will be an amount equal to (i) the sum of, without duplication, (a) the amounts paid to the Trustee from the Trust Fund during such Accrual Period pursuant to Section 8.05 hereof to the extent such amounts were paid for ordinary or routine expenses and were not taken into account in computing the Net Loan Rate of any Mortgage Loan and (b) amounts described in clause (y) of the definition of Available Funds herein to the extent such amounts were paid for ordinary or routine expenses and were not taken into account in computing the Net Mortgage Rate of any Mortgage Loan minus (ii) amounts taken into account under clause (i) of this definition in determining the Subordinate Class Expense Share of any Class of Subordinate Certificates having a higher numeric designation. In no event, however, shall the Subordinate Class Expense Share for any Class of Subordinate Certificates and any Accrual Period exceed the product of (i) (a) the lesser of the Pass-Through Rate for such Class or the applicable Adjusted Cap Rate, divided by (b) 12 and (ii) the Class Certificate Principal Amount of such Class of Subordinate Certificates as of the beginning of the related Accrual Period.

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“Subordinate Percentage”: With respect to any Distribution Date, the difference between 100% and the Senior Percentage for such Distribution Date.
 
“Subordinate Prepayment Percentage”: With respect to any Distribution Date, the difference between 100% and the Senior Prepayment Percentage for such Distribution Date.
 
“Subordinate Principal Distribution Amount”: With respect to any Distribution Date, an amount equal to the sum of:
 
(1)        the Subordinate Percentage of all amounts described in clauses (a) through (d) of the definition of “Principal Distribution Amount” for such Distribution Date;
 
(2)       with respect to each Mortgage Loan that became a Liquidated Mortgage Loan during the related Prepayment Period, the amount of the Net Liquidation Proceeds allocated to principal received with respect thereto remaining after application thereof pursuant to clause (2) of the definition of “Senior Principal Distribution Amount” for such Distribution Date, up to the related Subordinate Percentage of the Stated Principal Balance of such Mortgage Loan; and
 
(3)       the related Subordinated Prepayment Percentage of all amounts described in clause (f) of the definition of “Principal Distribution Amount” for such Distribution Date;
 
“Sub-Servicer”: Any Person that (i) services Mortgage Loans on behalf of any Servicer, the Master Servicer, the Securities Administrator, the Trustee or the Custodian and (ii) is responsible for the performance (whether directly or through sub-servicers or Subcontractors) of Servicing functions required to be performed under this Agreement, any related Servicing Agreement or any sub-servicing agreement that are identified in Item 1122(d) of Regulation AB.
 
“Substitution Adjustment”: As defined in Section 2.03(d) hereof.
 
“Tax Returns”: The federal income tax return on Internal Revenue Service Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return, including Schedule Q thereto, Quarterly Notice to Residual Interest Holders of the REMIC Taxable Income or Net Loss Allocation, or any successor forms, to be filed on behalf of each of the REMICs created hereunder under the REMIC Provisions, together with any and all other information reports or returns that may be required to be furnished to the Certificateholders or filed with the Internal Revenue Service or any other governmental taxing authority under any applicable provisions of federal, state or local tax laws.

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“Telerate Page 3750”: The display currently so designated as “Page 3750” on the Bridge Telerate Service (or such other page selected by the Master Servicer as may replace Page 3750 on that service for the purpose of displaying daily comparable rates on prices).
 
“10-K Filing Deadline”: As defined in Section 3.19(b).
 
“Termination Price”: As defined in Section 10.01(a) hereof.
 
“Transfer”: Any direct or indirect transfer or sale of any Ownership Interest in a Residual Certificate.
 
“Transfer Affidavit”: As defined in Section 6.02(e)(ii) hereof.
 
“Transferee”: Any Person who is acquiring by Transfer any Ownership Interest in a Certificate.
 
“Trust”: Luminent Mortgage Trust 2006-2, the trust created hereunder.
 
“Trust Fund”: 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, such Trust Fund consisting of: (i) such Mortgage Loans as from time to time are subject to this Agreement, together with the Mortgage Files relating thereto, and together with all collections thereon and proceeds thereof, excluding Prepayment Penalty Amounts, (ii) any REO Property, together with all collections thereon and proceeds thereof, (iii) the Trustee’s rights with respect to the Mortgage Loans under all insurance policies required to be maintained pursuant to this Agreement and any proceeds thereof, (iv) the Depositor’s rights under the Mortgage Loan Purchase Agreement (including any security interest created thereby); (v) the Distribution Account (subject to the last sentence of this definition), any REO Account and such assets that are deposited therein from time to time and any investments thereof, together with any and all income, proceeds and payments with respect thereto; (vi) all right, title and interest of the Seller in and to the Servicing Agreements; (vii) the Basis Risk Reserve Fund; (viii) the Financial Guaranty Insurance Policy and (ix) all proceeds of the foregoing. Notwithstanding the foregoing, however, the Trust Fund specifically excludes (1) all payments and other collections of interest and principal due on the Mortgage Loans on or before the applicable Cut-off Date and principal received before the applicable Cut-off Date (except any principal collected as part of a payment due after the applicable Cut-off Date) and (2) all income and gain realized from Permitted Investments of funds on deposit in the Distribution Account.
 
“Trustee”: HSBC Bank USA, National Association, a national banking association, not in its individual capacity but solely as trustee, its successors or assigns, or any successor trustee appointed as herein provided.
 
“Trustee Fee”: The annual on-going fee payable by the Master Servicer on behalf of the Trust to the Trustee from the Master Servicer Fee and pursuant to the terms of the separate fee letter agreement between the Trustee and the Master Servicer relating to the Luminent Mortgage Trust 2006-2.

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“Two Times Test”: As to any Distribution Date, a test that will be satisfied if all of the following conditions are satisfied: (i) the Aggregate Subordinate Percentage is at least two times the Aggregate Subordinate Percentage as of the Closing Date; (ii) the aggregate of the Principal Balances of all Mortgage Loans Delinquent 60 days or more (including Mortgage Loans in REO and foreclosure), averaged over the preceding six-month period, as a percentage of the aggregate of the Class Principal Balances of the Subordinate Certificates, does not equal or exceed 50%; and (iii) on or after the Distribution Date in March 2009, cumulative Realized Losses do not exceed 30% of the Original Subordinated Principal Balance, or prior to the Distribution Date in March 2009, cumulative Realized Losses do not exceed 20% of the Original Subordinated Principal Balance.
 
“Underwriter’s Exemption”: Prohibited Transaction Exemption 90-59 (Exemption Application No. D-8374), as amended by PTE 97-34 (Exemption Application No. D-10245 and D-10246) and by PTE 2000-58 (Exemption Application No. D-10829) and PTE 2002-41 (Exemption Application No. D-11077), as amended (or any successor thereto), or any substantially similar administrative exemption granted by the U.S. Department of Labor.
 
“Uninsured Cause”: Any cause of damage to a Mortgaged Property such that the complete restoration of such property is not fully reimbursable by the hazard insurance policies required to be maintained on such Mortgaged Property.
 
“United States Person” or “U.S. Person”: A citizen or resident of the United States, a corporation, partnership or other entity treated as a corporation or partnership for federal income tax purposes (other than a partnership that is not treated as a U.S. Person pursuant to any applicable Treasury regulations) created or organized in, or under the laws of, the United States, any state thereof or the District of Columbia, or an estate the income of which 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 trust. The term “United States” shall have the meaning set forth in Section 7701 of the Code or successor provisions.
 
“Unpaid Interest Shortfall Amount”: With respect to each Class of Certificates (other than the Class PO Certificates) and (i) the first Distribution Date, zero, and (ii) any Distribution Date after the first Distribution Date, the amount, if any, by which (1)(a) the Monthly Interest Distributable Amount for that Class for the immediately preceding Distribution Date exceeds (b) the aggregate amount distributed on that Class in respect of such Monthly Interest Distributable Amount on the preceding Distribution Date plus (2) any such shortfalls remaining unpaid from prior Distribution Dates.
 
“Upper Tier REMIC”: As described in the Preliminary Statement.
 
“Value”: With respect to any Mortgage Loan and the related Mortgaged Property, the lesser of:

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(i)       the value of such Mortgaged Property as determined by an appraisal made for the originator of the Mortgage Loan at the time of origination of the Mortgage Loan by an appraiser who met the minimum requirements of Xxxxxx Xxx and Xxxxxxx Mac; and
 
(ii)       the purchase price paid for the related Mortgaged Property by the Mortgagor with the proceeds of the Mortgage Loan;
 
provided, however, that in the case of a Refinancing Mortgage Loan, such value of the Mortgaged Property is based solely upon the value determined by an appraisal made for the originator of such Refinancing Mortgage Loan at the time of origination by an appraiser who met the minimum requirements of Xxxxxx Mae and Xxxxxxx Mac.
 
“Voting Rights”: The portion of the voting rights of all of the Certificates which is allocated to any Certificate. 98% of the voting rights shall be allocated among the Classes of Regular Certificates (other than the Interest-Only Certificates and the Class A-R Certificate), pro rata, based on a fraction, expressed as a percentage, the numerator of which is the Class Principal Balance of such Class and the denominator of which is the aggregate of the Class Principal Balances then outstanding, 1% of the voting rights shall be allocated to the Class X Certificates and 1% of the voting rights shall be allocated to the Class A-R Certificate; provided, however, that when none of the Regular Certificates is outstanding, 100% of the voting rights shall be allocated to the Holder of the Class A-R Certificate. The voting rights allocated to a Class of Certificates shall be allocated among all Holders of such Class, pro rata, based on a fraction the numerator of which is the Certificate Principal Balance or Certificate Notional Balance, as applicable, of each Certificate of such Class and the denominator of which is the Class Principal Balance or Class Notional Balance, as applicable, of such Class; provided, however, that any Certificate registered in the name of the Trustee or any of its affiliates shall not be included in the calculation of Voting Rights.
 
“Xxxxx Custodial Agreement”: The Custodial Agreement dated as of February 1, 2006, between the Trustee and the Xxxxx Fargo Bank, N.A., as custodian.
 
“Writedown Amount”: The reduction described in Section 5.03(c).
 
 
SECTION 1.02.
Accounting.
 
Unless otherwise specified herein, for the purpose of any definition or calculation, whenever amounts are required to be netted, subtracted or added or any distributions are taken into account such definition or calculation and any related definitions or calculations shall be determined without duplication of such functions.

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ARTICLE II
 
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
 
 
SECTION 2.01.
Conveyance of Mortgage Loans.
 
(a) The Depositor, concurrently with the execution and delivery hereof, does hereby transfer, assign, set over and otherwise convey to the Trustee without recourse for the benefit of the Certificateholders and the Certificate Insurer all the right, title and interest of the Depositor, including any security interest therein for the benefit of the Depositor, in and to (i) each Mortgage Loan (other than any Prepayment Penalty Amounts) identified on the Mortgage Loan Schedule, including the related Cut-off Date Principal Balance, all interest due thereon after the Cut-off Date and all collections in respect of interest and principal due after the Cut-off Date; (ii) all the Depositor’s right, title and interest in and to the Distribution Account and all amounts from time to time credited to and the proceeds of the Distribution Account; (iii) any real property that secured each such Mortgage Loan and that has been acquired by foreclosure or deed in lieu of foreclosure; (iv) the Depositor’s interest in any insurance policies in respect of the Mortgage Loans; (v) all proceeds of any of the foregoing and (vi) all other assets included or to be included in the Trust Fund. Such assignment includes all interest and principal due to the Depositor or the Master Servicer after the Cut-off Date with respect to the Mortgage Loans. In exchange for such transfer and assignment, the Depositor shall receive the Certificates.
 
It is agreed and understood by the Depositor, the Sponsor and the Trustee that it is not intended that any Mortgage Loan be included in the Trust Fund that is a “High-Cost Home Loan” as defined in the New Jersey Home Ownership Act, effective as of November 27, 2003, or The Home Loan Protection Act of New Mexico, effective as of January 1, 2004, or that is a “High Cost Home Mortgage Loan” as defined in the Massachusetts Predatory Home Loan Practices Act, effective as of November 7, 2004, or that is an “Indiana High Cost Home Mortgage Loan” as defined in the Indiana High Cost Home Loan Act, effective as of January 1, 2005.
 
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, including all rights of the Seller and the Sponsor under the Servicing Agreements and Purchase Agreements to the extent assigned in the Mortgage Loan Purchase 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 all rights of the Seller under the Servicing Agreements as if, for such purpose, it were the Depositor or the Seller, as applicable, including the Seller’s right to enforce remedies for breaches of representations and warranties and delivery of Mortgage Loan documents. 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 Seller or any other Person in connection with the Mortgage Loans or any other agreement or instrument relating thereto except as specifically set forth herein.

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In connection with such transfer and assignment, (i) the Depositor directs the Trustee to appoint Xxxxx Fargo Bank, N.A. as Custodian, and (ii) the Seller, on behalf of the Depositor, shall cause the custodian under each applicable Purchase Agreement to deliver and deposit with the Trustee, or the Custodian as its designated agent, on the Closing Date, unless otherwise specified in this Section 2.01 or the Xxxxx Custodial Agreement, the following documents or instruments with respect to each Mortgage Loan (a “Mortgage File”) so transferred and assigned only to the extent that the Seller received such items from the applicable Originator:
 
 
(i)
the original Mortgage Note, endorsed either on its face or by allonge attached thereto in blank or in the following form: “Pay to the order of HSBC Bank USA, National Association, as Trustee for Luminent Mortgage Trust 2006-2, Mortgage Loan Pass-Through Certificates, Series 2006-2, without recourse” and all intervening endorsements showing a complete chain of endorsements from the Originator to the Seller;
 
 
(ii)
except as provided below, for each Mortgage Loan that is not a MERS Mortgage Loan, the original recorded Mortgage, and in the case of each MERS Mortgage Loan, the original Mortgage, noting the presence of the MIN for that Mortgage Loan and either language indicating that the Mortgage Loan is a MOM Loan if the Mortgage Loan is a MOM Loan, or if such Mortgage Loan was not a MOM Loan at origination, the original Mortgage and the assignment to MERS, in each case with evidence of recording thereon, and the original recorded power of attorney, if the Mortgage was executed pursuant to a power of attorney, with evidence of recording thereon or, if such Mortgage or power of attorney has been submitted for recording but has not been returned from the applicable public recording office, has been lost or is not otherwise available, a copy of such Mortgage or power of attorney, as the case may be, together with an Officer’s Certificate of the applicable Originator certifying that the copy of such Mortgage delivered to the Trustee (or its Custodian) is a true copy and that the original of such Mortgage has been forwarded to the public recording office, or, in the case of a Mortgage that has been lost, a copy thereof (certified as provided for under the laws of the appropriate jurisdiction) and a written Opinion of Counsel (delivered at the applicable Originator’s expense) acceptable to the Trustee and the Depositor that an original recorded Mortgage is not required to enforce the Trustee’s interest in the Mortgage Loan;
 
 
(iii)
with respect to Mortgage Loans originated by Countrywide, originals of each assumption, modification, written assurance or substitution of liability agreement, if any, and with respect to Mortgage Loans originated by Xxxx Financial, the original or certified true copies of any document sent for recordation of all assumption, modification, consolidation or extension agreements, with evidence of recording thereon, or, if the original of any such agreement with evidence of recording thereon has not been returned by the public recording office where such agreement has been delivered for recordation or such agreement has been lost or such public recording office retains the original recorded agreement, a photocopy of such agreement, certified by Xxxx Financial or its agent to be a true and correct copy of the agreement delivered to the appropriate public recording office for recordation. The original recorded agreement or, in the case of an agreement where a public recording office retains the original recorded agreement or in the case where an agreement is lost after recordation in a public recording office, a copy of such agreement certified by such public recording office to be a true and complete copy of the original recorded agreement will be promptly delivered to the Custodian upon receipt thereof by Xxxx Financial;
 
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(iv)
in the case of each Mortgage Loan that is not a MERS Mortgage Loan, an original duly executed Assignment of Mortgage, in form and substance acceptable for recording. The Mortgage shall be assigned either (A) to “HSBC Bank USA, National Association, as Trustee for Luminent Mortgage Trust 2006-2, Mortgage Loan Pass-Through Certificates, Series 2006-2, without recourse” or (B) in blank, without recourse;
 
 
(v)
in the case of each Mortgage Loan that is not a MERS Mortgage Loan, an original or a certified true copy of any intervening Assignment of Mortgage showing a complete chain of title from the Originator to the Seller, and, in the case of a Mortgage Loan originated by Xxxx Financial, upon receipt of a required custodial certification from the Custodian indicating that any such intervening assignment has not been returned from the applicable recording office or has been lost or if such public recording office retains the original recorded assignments of mortgage, the Trustee shall cause Xxxx Financial to deliver or cause to be delivered to the Custodian, a photocopy of such intervening assignment, together with (i) in the case of a delay caused by the public recording office, an Officer’s Certificate of Xxxx Financial stating that such intervening Assignment of Mortgage has been dispatched to the appropriate public recording office for recordation and that such original recorded intervening Assignment of Mortgage or a copy of such intervening Assignment of Mortgage certified by the appropriate public recording office or by the title insurance company that issued the title policy to be a true and complete copy of the original recorded intervening Assignment of Mortgage will be promptly delivered to the Custodian upon receipt thereof by Xxxx Financial; or (ii) in the case of an intervening assignment where a public recording office retains the original recorded intervening Assignment of Mortgage or in the case where an intervening Assignment of Mortgage is lost after recordation in a public recording office, a copy of such intervening Assignment of Mortgage certified by such public recording office to be a true and complete copy of the original recorded intervening Assignment of Mortgage and, with respect to any Mortgage Loan that was originated by either Countrywide or Xxxx Financial and an intervening Assignment of Mortgage that has been lost, a written Opinion of Counsel (delivered at the applicable Originator’s expense) acceptable to the Trustee that such original intervening Assignment of Mortgage is not required to enforce the Trustee’s interest in the Mortgage Loans;
 
 
(vi)
with respect to any Mortgage Loan, the original Primary Insurance Policy, if any, or certificate, if any; and
 
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(vii)
the original lender’s title insurance policy.

In connection with the assignment of any MERS Mortgage Loan, the Master Servicer shall cause the applicable Servicer to take, at the expense of the Sponsor (to the extent not paid by the applicable Originator under the related Purchase Agreement) (with the cooperation of the Depositor, the Sponsor and the Master Servicer), such actions as are necessary to cause the MERS® System to indicate that such Mortgage Loans have been assigned by the Seller to the Trustee in accordance with this Agreement for the benefit of the Certificateholders and the Certificate Insurer by including (or deleting, in the case of Mortgage Loans that are repurchased in accordance with this Agreement) in such computer files the information required by the MERS® System to identify the series of the Certificates issued in connection with the transfer of such Mortgage Loans to the Luminent Mortgage Trust 2006-2.
 
Assignments of each Mortgage with respect to each Mortgage Loan that is not a MERS Mortgage Loan shall be recorded; provided, however, that such assignments need not be recorded if, in the Opinion of Counsel (which must be from Independent Counsel and not at the expense of the Trust Fund or the Trustee) acceptable to the Trustee, each Rating Agency and the Master Servicer, recording in such states is not required to protect the Trustee’s interest in the related Mortgage Loans; provided, further, notwithstanding the delivery of any Opinion of Counsel, the Master Servicer shall cause the Servicers to submit each Assignment of Mortgage for recording, in the manner described above, at no expense to the Trust or Trustee, upon the earliest to occur of (1) reasonable direction by the Majority Certificateholders, (2) the occurrence of a bankruptcy or insolvency relating to the Seller, the Sponsor or the Depositor, or (3) with respect to any one Assignment of Mortgage, the occurrence of a bankruptcy, insolvency or foreclosure relating to the Mortgagor under the related Mortgage. Subject to the preceding sentence, as soon as practicable after the Closing Date (but in no event more than three months thereafter except to the extent delays are caused by the applicable recording office), the Master Servicer shall cause the applicable Servicer to properly record (with the cooperation of the Depositor, the Trustee (or the Custodian on behalf of the Trustee) and the Master Servicer), in each public recording office where the related Mortgages are recorded, each assignment referred to in Section 2.01(v) above with respect to a Mortgage Loan that is not a MERS Mortgage Loan. To the extent not paid by the applicable Originator under the related Purchase Agreement, (x) any expense relating to an Assignment of Mortgage shall be an expense of the Sponsor in connection with an event described in (1) above and, only to the extent relating to a bankruptcy or insolvency of the Seller or the Sponsor, in connection with an event described in (2) above, (y) any expense relating to an Assignment of Mortgage shall be an expense of the Depositor in connection with an event described in (2) above to the extent that it is related to the bankruptcy or insolvency of the Depositor, and (z) any expense relating to an Assignment of Mortgage in connection with an event described in (3) above shall be covered by a Servicing Advance from the applicable Servicer.

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Upon receipt of a required custodial certification from the Custodian indicating that the original lender’s title insurance policy, or a certified copy thereof, was not delivered pursuant to Section 2.01(x) above, the Trustee shall cause the applicable Originator to deliver to it the original or a copy of a written commitment or interim binder or preliminary report of title issued by the title insurance or escrow company, with the original or a certified copy thereof to be delivered to the Trustee, promptly upon receipt thereof, but in any case within 175 days of the Closing Date. The Sponsor shall deliver or cause to be delivered to the Trustee, promptly upon receipt thereof, any other documents constituting a part of a Mortgage File received by it or the Seller with respect to any Mortgage Loan sold to the Depositor by the Seller, including, but not limited to, any original documents evidencing an assumption or modification of any Mortgage Loan.
 
For Mortgage Loans (if any) that have been prepaid in full after the Cut-off Date and prior to the Closing Date, in lieu of the Seller delivering the above documents, the Sponsor shall cause the applicable Servicer to deliver to the Trustee, or to the Custodian on behalf of the Trustee, prior to the first Distribution Date, an Officer’s Certificate, which shall include a statement to the effect that all amounts received in connection with such prepayment that are required to be deposited in the Distribution Account have been so deposited. All original documents that are not delivered to the Trustee on behalf of the Trust will be held by the Servicer in trust for the Trustee, for the benefit of the Trust and the Certificateholders.
 
All original documents that are not delivered to the Custodian on behalf of the Trust Fund shall be held by the Servicer in trust for the Trustee, for the benefit of the Trust Fund and the Certificateholders.
 
The Depositor herewith delivers to the Trustee an executed copy of the Mortgage Loan Purchase Agreement.
 
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 custodial certifications described in Section 2.02 shall be performed by the Custodian pursuant to the terms and conditions of the Custodial Agreement.
 
 
SECTION 2.02.
Acceptance by Trustee.
 
The Trustee, by execution and delivery hereof, acknowledges receipt by it or by the Custodian on its behalf of the Mortgage Files pertaining to the Mortgage Loans listed on the Mortgage Loan Schedule, subject to review thereof by the Custodian on behalf of the Trustee and declares that it holds or will hold all other assets included in the definition of “Trust Fund” in trust for the exclusive use and benefit of all present and future Certificateholders and the Certificate Insurer.
 
The Trustee (or the Custodian, on behalf of the Trustee) shall execute and deliver to the Depositor on or prior to the Closing Date an acknowledgment of receipt of the original Mortgage Note (with any exceptions noted), substantially in the form attached as Exhibit G-1 hereto.
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The Trustee (or the Custodian on behalf of the Trustee) shall, for the benefit of the Certificateholders and the Certificate Insurer, review each Mortgage File delivered to it and to certify and deliver to the Depositor, the Sponsor and each Rating Agency an interim certification in substantially the form attached hereto as Exhibit G-2, within 90 days after the Closing Date (or, with respect to any document delivered after the Startup Day, within 45 days of receipt and with respect to any Qualified Substitute Mortgage, within five Business Days after the assignment thereof) that, as to each Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan paid in full or any Mortgage Loan specifically identified in the exception report annexed thereto as not being covered by such certification), (i) all documents required to be delivered to it pursuant to Section 2.01 of this Agreement are in its possession, (ii) such documents have been reviewed by it and have not been mutilated, damaged or torn and relate to such Mortgage Loan and (iii) based on its examination and only as to the foregoing, the information set forth in the Mortgage Loan Schedule that corresponds to items (i), (ii) and (iii) of the Mortgage Loan Schedule accurately reflects information set forth in the Mortgage File. It is herein acknowledged that, in conducting such review, the Trustee and the Custodian on its behalf are under no duty or obligation to inspect, review or examine any such documents, instruments, certificates or other papers to determine that they are genuine, enforceable, or appropriate for the represented purpose or that they have actually been recorded or that they are other than what they purport to be on their face.
 
No later than 180 days after the Closing Date, the Trustee (or the Custodian on behalf of the Trustee) shall deliver to the Depositor and the Sponsor a final certification in the form annexed hereto as Exhibit G-3 evidencing the completeness of the Mortgage Files, with any applicable exceptions noted thereon.
 
Upon the discovery by the Sponsor or the Depositor (or upon receipt by the Trustee of written notification of such breach) of a breach of any of the representations and warranties made by the Sponsor or the Seller in the Mortgage Loan Purchase Agreement in respect of any Mortgage Loan that materially adversely affects such Mortgage Loan or the interests of the related Certificateholders or the Certificate Insurer in such Mortgage Loan, the party discovering such breach shall give prompt written notice to the other parties to this Agreement.
 
The Depositor and the Trustee intend that the assignment and transfer herein contemplated constitute a sale of the Mortgage Loans, the related Mortgage Notes and the related documents, conveying good title thereto free and clear of any liens and encumbrances, from the Depositor to the Trustee in trust for the benefit of the Certificateholders and the Certificate Insurer and that such property not be part of the Depositor’s estate or property of the Depositor in the event of any insolvency by the Depositor. In the event that such conveyance is deemed to be, or to be made as security for, a loan, the parties intend that the Depositor shall be deemed to have granted and does hereby grant to the Trustee a first priority perfected security interest in all of the Depositor’s right, title and interest in and to the Mortgage Loans, the related Mortgage Notes and the related documents, and that this Agreement shall constitute a security agreement under applicable law.

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SECTION 2.03.
Repurchase or Substitution of Mortgage Loans by the Originators and the Sponsor.
 
(a) Upon its discovery or receipt of written notice of any materially defective document in, or that a document is missing from, a Mortgage File or of the breach by an Originator of any representation, warranty or covenant under the applicable Purchase Agreement in respect of any Mortgage Loan which materially adversely affects the value of that Mortgage Loan or the interest therein of the Certificateholders or the Certificate Insurer, the Trustee shall promptly notify such Originator of such defect, missing document or breach and request that such Originator deliver such missing document or cure such defect or breach within 90 days from the date that such Originator was notified of such missing document, defect or breach, and if such Originator does not deliver such missing document or cure such defect or breach in all material respects during such period, the Trustee shall enforce such Originator’s obligation under the applicable Purchase Agreement and cause such Originator to repurchase that Mortgage Loan from the Trust Fund at the Repurchase Price (as defined in the applicable Purchase Agreement) on or prior to the Determination Date following the expiration of such 90 day period. It is understood and agreed that the obligation of an Originator to cure or to repurchase or to substitute for (or, with respect to any costs and damages incurred by the Trust Fund in connection with any violation of any anti-predatory or anti-abusive lending laws, indemnify for) any Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy against such Originator respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders.
 
(b) Upon discovery or receipt of written notice of the breach by an Originator of any representation, warranty or covenant under the related Purchase Agreement in respect of any Mortgage Loan which materially adversely affects the value of that Mortgage Loan or the interest therein of the Certificateholders or the Certificate Insurer, the Trustee shall promptly notify the related Originator of such breach and request that the Originator cure such breach within 90 days from the date that the related Originator was notified of such breach, and if the related Originator does not cure such breach in all material respects during such period, the Trustee shall enforce the Originator’s obligation under the related Purchase Agreement and cause the Originator to repurchase that Mortgage Loan from the Trust Fund at the Purchase Price (as defined in the related Purchase Agreement) on or prior to the Determination Date following the expiration of such 90 day period (subject to Section 2.03(e) below); provided, however, that, in connection with any such breach that could not reasonably have been cured within such 90 day period, if the related Originator shall have commenced to cure such breach within such 90 day period, the related Originator shall be permitted to proceed thereafter diligently and expeditiously to cure the same within the additional period provided under the related Purchase Agreement.
 
Upon discovery or receipt of written notice of the breach by the Seller or the Sponsor of any representation, warranty or covenant under the Mortgage Loan Purchase Agreement or in Section 2.04 or Section 2.08 hereof in respect of any Mortgage Loan which materially adversely affects the value of that Mortgage Loan or the interest therein of the Certificateholders or the Certificate Insurer, the Trustee shall promptly notify the Sponsor of such breach and request that the Sponsor cure such breach (including breaches by the Seller) within 90 days from the date that the Sponsor was notified of such breach, and if the Seller or the Sponsor does not cure such breach in all material respects during such period, the Sponsor shall repurchase that Mortgage Loan from the Trust Fund at the Purchase Price on or prior to the Determination Date following the expiration of such 90 day period (subject to Section 2.03(e) below); provided, however, that, in connection with any such breach that could not reasonably have been cured within such 90 day period, if the Sponsor shall have commenced to cure such breach within such 90 day period, the Sponsor shall be permitted to proceed thereafter diligently and expeditiously to cure the same within the additional period provided under the Mortgage Loan Purchase Agreement; and, provided further, that, in the case of the breach of any representation, warranty or covenant made by the Seller in Section 2.04(iii) hereof, the Sponsor shall be obligated to cure such breach or purchase the affected Mortgage Loans for the Purchase Price or, if the Mortgage Loan or the related Mortgaged Property acquired with respect thereto has been sold, then the Sponsor shall pay, in lieu of the Purchase Price, any excess of the Purchase Price over the Net Liquidation Proceeds received upon such sale.

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(c) The Purchase Price or Repurchase Price (as defined in the applicable Purchase Agreement) for a Mortgage Loan purchased or repurchased under this Section 2.03 or such other amount due shall be deposited in the Distribution Account on or prior to the next Determination Date after the obligation of an Originator or the Sponsor to repurchase such Mortgage Loan arises. Upon receipt of a Request for Release confirming that the Purchase Price or Repurchase Price, as applicable, has been deposited to the Distribution Account, the Trustee shall cause the Custodian to release to the applicable Originator or the Sponsor, as applicable, the related Mortgage File and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, representation or warranty, as the related Originator or Sponsor, as applicable, shall furnish to it and as shall be necessary to vest in the related Originator or Sponsor, as applicable, any Mortgage Loan released pursuant hereto and the Trustee and the Custodian shall have no further responsibility with regard to such Mortgage File (it being understood that the Trustee and Custodian shall have no responsibility for determining the sufficiency of such assignment for its intended purpose). In lieu of repurchasing any such Mortgage Loan as provided above, the Sponsor or the related Originator may cause such Mortgage Loan to be removed from the Trust Fund (in which case it shall become a Deleted Mortgage Loan) and substitute one or more Qualified Substitute Mortgage Loans in the manner and subject to the limitations set forth in Section 2.03(d) below. It is understood and agreed that the obligation of the Sponsor or the related Originator to cure or to repurchase or to substitute for (or, with respect to any costs and damages incurred by the Trust Fund in connection with any violation of any anti-predatory or anti-abusive lending laws, indemnify for) any Mortgage Loan as to which a document is missing, a material defect in a constituent document exists or as to which such a breach has occurred and is continuing shall constitute the sole remedy against the Sponsor or related Originator, as applicable, respecting such omission, defect or breach available to the Trustee on behalf of the Certificateholders. Any Mortgage Loan released pursuant to this subsection, subsection (g) or subsection (h) shall be released on a servicing-retained basis.
 
(d) Notwithstanding anything to the contrary set forth above, with respect to any breach by the Sponsor of a representation or warranty made by the Sponsor herein or in the Mortgage Loan Purchase Agreement that materially and adversely affects the value of a Mortgage Loan or the Mortgage Loans or the interest therein of the Certificateholders or the Certificate Insurer, if the Sponsor would not be in breach of such representation or warranty but for a breach by the applicable Originator of a representation and warranty made by such Originator in the related Purchase Agreement, then the Originator thereunder, in the manner and to the extent set forth therein, and not the Sponsor, shall be required to remedy such breach (other than a remedy provided for under subsection (i) relating to Xxxx Financial’s failure to remedy a breach of its representations and warranties). In addition to such repurchase or substitution obligation, the Sponsor shall indemnify the Trust Fund and hold it harmless against any losses, damages, penalties, fines, forfeitures, reasonable and necessary legal fees and related costs, judgments, and other costs and expenses resulting from any claim, demand, defense or assertion based on or grounded upon, or resulting from, a breach of the Sponsor’s representations and warranties contained in Section 2.04(i) (only to the extent that it relates to predatory and abusive lending laws) or Section 2.04(ii).

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The Trustee shall enforce the obligations of the Seller and the Sponsor under the Mortgage Loan Purchase Agreement including, without limitation, any obligation of the Sponsor to purchase a Mortgage Loan on account of a breach of a representation, warranty or covenant as described in this Section 2.03(d) and its obligation to indemnify the Trust Fund with respect to any such breach. In addition, the Trustee shall enforce the obligations of the Originators under the Purchase Agreements including, without limitation, any obligation of the Originators to purchase a Mortgage Loan on account of a breach of a representation, warranty or covenant as described in this Section 2.03(d).
 
(e) If pursuant to the provisions of Section 2.03(b), the Sponsor or the applicable Originator (under the terms of the related Purchase Agreement) repurchases or otherwise removes from the Trust Fund a Mortgage Loan that is a MERS Mortgage Loan, the Master Servicer shall cause the applicable Servicer to take, at the expense of the Sponsor or the applicable Originator (under the terms of the related Purchase Agreement) (with the cooperation of the Depositor, the Master Servicer, the Sponsor and the applicable Originator), such actions as are necessary either (i) cause MERS to execute and deliver an Assignment of Mortgage in recordable form to transfer the Mortgage from MERS to the Sponsor or the applicable Originator and shall cause such Mortgage to be removed from registration on the MERS® System in accordance with MERS’ rules and regulations or (ii) cause MERS to designate on the MERS® System the Sponsor, the applicable Originator or its respective designee, as the case may be, as the beneficial holder of such Mortgage Loan.
 
(f) [Reserved]

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(g) Any substitution of Qualified Substitute Mortgage Loans for Deleted Mortgage Loans made pursuant to Section 2.03(a) above must be effected prior to the last Business Day that is within two years after the Closing Date. As to any Deleted Mortgage Loan for which the Sponsor substitutes a Qualified Substitute Mortgage Loan or Loans, such substitution shall be effected by the Sponsor or the related Originator, as applicable, delivering to the Custodian, on behalf of the Trustee, for such Qualified Substitute Mortgage Loan or Loans, the Mortgage Note, the Mortgage, the Assignment to the Trustee, and such other documents and agreements, with all necessary endorsements thereon, as are required by Section 2.01 hereof, together with an Officers’ Certificate stating that each such Qualified Substitute Mortgage Loan satisfies the definition thereof and specifying the Substitution Adjustment (as described below), if any, in connection with such substitution; provided, however, that, in the case of any Qualified Substitute Mortgage Loan that is a MERS Mortgage Loan, the Sponsor or the applicable Originator shall provide such documents and take such other action with respect to such Qualified Substitute Mortgage Loans as are required pursuant to Section 2.01 hereof. The Custodian, on behalf of the Trustee, shall acknowledge receipt for such Qualified Substitute Mortgage Loan or Loans and, within five Business Days thereafter, shall review such documents as specified in Section 2.02 hereof and deliver to the Servicer, with respect to such Qualified Substitute Mortgage Loan or Loans, a certification substantially in the form attached hereto as Exhibit G-2, with any exceptions noted thereon. Within 180 days of the date of substitution, the Custodian, on behalf of the Trustee, shall deliver to the Sponsor and the Master Servicer a certification substantially in the form of Exhibit G-3 hereto with respect to such Qualified Substitute Mortgage Loan or Loans, with any exceptions noted thereon. Monthly Payments due with respect to Qualified Substitute Mortgage Loans in the month of substitution are not part of the Trust Fund and will be retained by the Sponsor or the applicable Originator, as the case may be. For the month of substitution, distributions to Certificateholders will reflect the collections and recoveries in respect of such Deleted Mortgage Loan in the Due Period preceding the month of substitution and the Depositor or the Sponsor, as the case may be, shall thereafter be entitled to retain all amounts subsequently received in respect of such Deleted Mortgage Loan. The Depositor shall give or cause to be given written notice to the Certificateholders that such substitution has taken place, shall amend the Mortgage Loan Schedule to reflect the removal of such Deleted Mortgage Loan from the terms of this Agreement and the substitution of the Qualified Substitute Mortgage Loan or Loans and shall deliver a copy of such amended Mortgage Loan Schedule to the Trustee. Upon such substitution, such Qualified Substitute Mortgage Loan or Loans shall constitute part of the Trust Fund and shall be subject in all respects to the terms of this Agreement and, in the case of a substitution effected by the Sponsor, the Mortgage Loan Purchase Agreement, including, in the case of a substitution effected by the Sponsor all representations and warranties thereof included in the Mortgage Loan Purchase Agreement and all representations and warranties thereof set forth in Section 2.04 hereof, in each case as of the date of substitution, and, in the case of a substitution effected by an Originator, the date of the related Purchase Agreement, including, in the case of a substitution effected by such Originator all representations and warranties thereof included in the Mortgage Loan Purchase Agreement and all representations and warranties thereof set forth in Section 2.04 hereof, in each case as of the date of substitution.
 
For any month in which the Sponsor substitutes one or more Qualified Substitute Mortgage Loans for one or more Deleted Mortgage Loans, the Sponsor shall determine, and provide written certification to the Trustee and the Sponsor as to the amount (each, a “Substitution Adjustment”), if any, by which the aggregate Purchase Price of all such Deleted Mortgage Loans exceeds the aggregate, as to each such Qualified Substitute Mortgage Loan, of the principal balance thereof as of the date of substitution, together with one month’s interest on such principal balance at the applicable Net Loan Rate. On or prior to the next Determination Date after the Sponsor’s obligation to repurchase the related Deleted Mortgage Loan arises, the Sponsor will deliver or cause to be delivered to the Securities Administrator for deposit in the Distribution Account an amount equal to the related Substitution Adjustment, if any, and the Custodian, on behalf of the Trustee, upon receipt of the related Qualified Substitute Mortgage Loan or Loans, shall release to the Sponsor or its designee the related Mortgage File or Files and the Trustee shall execute and deliver such instruments of transfer or assignment, in each case without recourse, as the Sponsor shall deliver to it and as shall be necessary to vest therein any Deleted Mortgage Loan released pursuant hereto.

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In addition, the Sponsor shall obtain at its own expense and deliver to the Trustee an Opinion of Counsel to the effect that such substitution (either specifically or as a class of transactions) will not cause an Adverse REMIC Event. If such Opinion of Counsel cannot be delivered, then such substitution may only be effected at such time as the required Opinion of Counsel can be given.
 
(h) Upon discovery by the Sponsor, the Depositor or the Trustee 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 within two Business Days give written notice thereof to the other parties. In connection therewith, the Sponsor shall repurchase (to the extent that the failure to constitute a “qualified mortgage” as described in the preceding sentence results from a breach of a representation or warranty of the Sponsor hereunder or in the Mortgage Loan Purchase Agreement or, in the case of a Mortgage Loan originated by Xxxx Financial, results from a breach of a representation or warranty of Xxxx Financial under the related Purchase Agreement if Xxxx Financial fails to remedy such breach), or the Trustee shall cause the applicable Originator to repurchase, such Mortgage Loan, or, subject to the limitations set forth in Section 2.03(e), the Sponsor shall substitute (to the extent that the failure to constitute a “qualified mortgage” as described in the preceding sentence results from a breach of a representation or warranty of the Sponsor hereunder or in the Mortgage Loan Purchase Agreement or, in the case of a Mortgage Loan originated by Xxxx Financial, results from a breach of a representation or warranty of Xxxx Financial under the related Purchase Agreement if Xxxx Financial fails to remedy such breach), or the Trustee shall cause the applicable Originator to substitute, one or more Qualified Substitute Mortgage Loans for the affected Mortgage Loan within 90 days of the earlier of discovery or receipt of such notice with respect to such affected Mortgage Loan. Any such repurchase or substitution shall be made in the same manner as set forth in Section 2.03(b) above, if made by the Sponsor. The Trustee shall reconvey to the Sponsor or its designee 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.
 
(i) Notwithstanding the foregoing, (A) to the extent that any fact, condition or event with respect to a Mortgage Loan constitutes a breach of both (i) a representation or warranty of Countrywide under the related Purchase Agreement and (ii) a representation or warranty of the Sponsor under Section 2.04(i) or Section 2.04(ii) of this Agreement or under Section 3.02(a)(vii) (only to the extent that this representation and warranty relates to the absence of notice or actual knowledge of any title impairment with respect to any Mortgage Loan) of the Mortgage Loan Purchase Agreement, in each case, which materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders or the Certificate Insurer, the Trustee shall request that Countrywide cure such breach or repurchase such Mortgage Loan and if Countrywide fails to cure such breach or repurchase such Mortgage Loan within 60 days of receipt of such request from the Trustee, the Trustee shall then request that the Sponsor cure such breach or repurchase such Mortgage Loan, and (B) to the extent that any fact, condition or event with respect to a Mortgage Loan constitutes a breach of a representation or warranty of Xxxx Financial under the related Purchase Agreement which materially adversely affects the value of such Mortgage Loan or the interest therein of the Certificateholders or the Certificate Insurer, the Trustee shall request that Xxxx Financial cure such breach or repurchase such Mortgage Loan and if Xxxx Financial fails to cure such breach or repurchase such Mortgage Loan within 60 days of receipt of such request from the Trustee, the Trustee shall then request that the Sponsor cure such breach or repurchase such Mortgage Loan.
 
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SECTION 2.04.
Representations and Warranties of the Sponsor with Respect to the Mortgage Loans.
 
The Sponsor hereby makes the following representations and warranties to the Trustee on behalf of the Certificateholders and the Certificate Insurer as of the Closing Date with respect to the Mortgage Loans:
 
(i) Each Mortgage Loan at the time it was made complied in all material respects with applicable local, state, and federal laws, including, but not limited to, all applicable predatory and abusive lending laws.
 
(ii) No Mortgage Loan is a “High Cost Loan” or “Covered Loan,” as applicable, (as such terms are defined in the then current Standard & Poor’s LEVELS® Glossary, Appendix E, in effect as of the Closing Date) and no Mortgage Loan originated on or after October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending Act; and
 
(iii) With respect to each representation and warranty with respect to any Mortgage Loan made by the Originators in the Purchase Agreements that is made as of the related Closing Date (as defined in the applicable Purchase Agreement), no event has occurred since the related Closing Date (as defined in the applicable Purchase Agreement) that would render such representations and warranties to be untrue in any material respect as of the Closing Date.
 
It is understood and agreed that the representations and warranties in this Section 2.04 shall survive delivery of the Mortgage Files to the Trustee and shall inure to the benefit of the Certificateholders and the Certificate Insurer notwithstanding any restrictive or qualified endorsement or assignment. Upon discovery by any of the Depositor, the Seller, the Master Servicer, the Certificate Insurer or the Trustee of a breach of any of the foregoing representations and warranties which materially and adversely affects the value of any Mortgage Loan or the interests therein of the Certificateholders or the Certificate Insurer, the party discovering such breach shall give prompt written notice to the other parties, and in no event later than two Business Days from the date of such discovery. It is understood and agreed that the obligations of the Seller set forth in Section 2.03(b) hereof to cure, substitute for or repurchase (or, with respect to any costs and damages incurred by the Trust Fund in connection with any violation of any anti-predatory or anti-abusive lending laws, indemnify for) a related Mortgage Loan pursuant to the Mortgage Loan Purchase Agreement constitute the sole remedies available to the Certificateholders or to the Trustee on their behalf respecting a breach of the representations and warranties incorporated in this Section 2.04.

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SECTION 2.05.
[Reserved]
 
 
SECTION 2.06.
Representations and Warranties of the Depositor.
 
The Depositor represents and warrants to the Trustee on behalf of the Certificateholders and the Certificate Insurer as follows:
 
(i) this agreement constitutes a legal, valid and binding obligation of the Depositor, enforceable against the Depositor in accordance with its terms, except as enforceability may be limited by applicable bankruptcy, insolvency, reorganization, moratorium or other similar laws now or hereafter in effect affecting the enforcement of creditors’ rights in general an except as such enforceability may be limited by general principles of equity (whether considered in a proceeding at law or in equity);
 
(ii) immediately prior to the sale and assignment by the Depositor to the Trustee on behalf of the Trust of each Mortgage Loan, the Depositor had good and marketable title to each Mortgage Loan (insofar as such title was conveyed to it by the Seller) subject to no prior lien, claim, participation interest, mortgage, security interest, pledge, charge or other encumbrance or other interest of any nature;
 
(iii) as of the Closing Date, the Depositor has transferred all right, title and interest in the Mortgage Loans to the Trustee on behalf of the Trust;
 
(iv) the Depositor has not transferred the Mortgage Loans to the Trustee on behalf of the Trust with any intent to hinder, delay or defraud any of its creditors;
 
(v) the Depositor has been duly incorporated and is validly existing as a corporation in good standing under the laws of Delaware, with full corporate power and authority to own its assets and conduct its business as presently being conducted;
 
(vi) the Depositor is not in violation of its certificate of incorporation or by-laws or in default in the performance or observance of any material obligation, agreement, covenant or condition contained in any contract, indenture, mortgage, loan agreement, note, lease or other instrument to which the Depositor is a party or by which it or its properties may be bound, which default might result in any material adverse changes in the financial condition, earnings, affairs or business of the Depositor or which might materially and adversely affect the properties or assets, taken as a whole, of the Depositor;
 
(vii) the execution, delivery and performance of this Agreement by the Depositor, and the consummation of the transactions contemplated hereby, do not and will not result in a material breach or violation of any of the terms or provisions of, or, to the knowledge of the Depositor, constitute a default under, any indenture, mortgage, deed of trust, loan agreement or other agreement or instrument to which the Depositor is a party or by which the Depositor is bound or to which any of the property or assets of the Depositor is subject, nor will such actions result in any violation of the provisions of the certificate of incorporation or by-laws of the Depositor or, to the best of the Depositor’s knowledge without independent investigation, any statute or any order, rule or regulation of any court or governmental agency or body having jurisdiction over the Depositor or any of its properties or assets (except for such conflicts, breaches, violations and defaults as would not have a material adverse effect on the ability of the Depositor to perform its obligations under this Agreement);

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(viii) to the best of the Depositor’s knowledge without any independent investigation, no consent, approval, authorization, order, registration or qualification of or with any court or governmental agency or body of the United States or any other jurisdiction is required for the issuance of the Certificates, or the consummation by the Depositor of the other transactions contemplated by this Agreement, except such consents, approvals, authorizations, registrations or qualifications as (a) may be required under State securities or “blue sky” laws, (b) have been previously obtained or (c) the failure of which to obtain would not have a material adverse effect on the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement; and
 
(ix) there are no actions, proceedings or investigations pending before or, to the Depositor’s knowledge, threatened by any court, administrative agency or other tribunal to which the Depositor is a party or of which any of its properties is the subject: (a) which if determined adversely to the Depositor would have a material adverse effect on the business, results of operations or financial condition of the Depositor; (b) asserting the invalidity of this Agreement or the Certificates; (c) seeking to prevent the issuance of the Certificates or the consummation by the Depositor of any of the transactions contemplated by this Agreement, as the case may be; or (d) which might materially and adversely affect the performance by the Depositor of its obligations under, or the validity or enforceability of, this Agreement.
 
 
SECTION 2.07.
Issuance of Certificates.
 
The Trustee acknowledges the assignment to it of the Mortgage Loans and the delivery to it or to the Custodian of the Mortgage Files, subject to the provisions of Sections 2.01 and 2.02 hereof, together with the assignment to it of all other assets included in the Trust Fund, receipt of which is hereby acknowledged. Concurrently with such assignment and delivery and in exchange therefor, the Securities Administrator, pursuant to the written request of the Depositor executed by an officer of the Depositor, has caused to be executed, authenticated and delivered to or upon the order of the Depositor, the Certificates in authorized denominations. The interests evidenced by the Certificates constitute the entire beneficial ownership interest in the Trust Fund.
 
 
SECTION 2.08.
Representations and Warranties of the Seller and the Sponsor.
 
Each of the Seller and the Sponsor hereby represents and warrants to the Trustee on behalf of the Certificateholders and the Certificate Insurer that, as of the Closing Date or as of such date specifically provided herein:
 
(i) Each of the Seller and the Sponsor is duly organized, validly existing and in good standing and has the power and authority to own its assets and to transact the business in which it is currently engaged. Each of the Seller and the Sponsor is duly qualified to do business and is in good standing in each jurisdiction in which the character of the business transacted by it or properties owned or leased by it requires such qualification and in which the failure to so qualify would have a material adverse effect on (a) its business, properties, assets or condition (financial or other), (b) the performance of its obligations under this Agreement, or (c) the value or marketability of the Mortgage Loans.

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(ii) Each of the Seller and the Sponsor has the power and authority to make, execute, deliver and perform this Agreement and to consummate all of the transactions contemplated hereunder and has taken all necessary action to authorize the execution, delivery and performance of this Agreement which is part of its official records. When executed and delivered, this Agreement will constitute such party’s legal, valid and binding obligations enforceable in accordance with its terms, except as enforcement of such terms may be limited by (1) bankruptcy, insolvency, reorganization, receivership, moratorium or similar laws affecting the enforcement of creditors’ rights generally and the rights of creditors of federally insured financial institutions and by the availability of equitable remedies, (2) general equity principles (regardless of whether such enforcement is considered in a proceeding in equity or at law) or (3) public policy considerations underlying the securities laws, to the extent that such policy considerations limit the enforceability of the provisions of this Agreement which purport to provide indemnification from securities laws liabilities.
 
(iii) Each of the Seller and the Sponsor holds all necessary licenses, certificates and permits from all governmental authorities necessary for conducting its business as it is currently conducted. It is not required to obtain the consent of any other party or any consent, license, approval or authorization from, or registration or declaration with, any governmental authority, bureau or agency in connection with the execution, delivery, performance, validity or enforceability of this Agreement, except for such consents, licenses, approvals or authorizations, or registrations or declarations as shall have been obtained or filed, as the case may be, prior to the Closing Date.
 
(iv) The execution, delivery and performance of this Agreement by the Seller and the Sponsor will not conflict with or result in a breach of, or constitute a default under, any provision of any existing law or regulation or any order or decree of any court applicable to either the Seller or the Sponsor or any of their respective properties or any provision of its articles of incorporation, certificate of formation, trust agreement, charter or by-laws, as applicable, or constitute a material breach of, or result in the creation or imposition of any lien, charge or encumbrance upon any of their respective properties pursuant to any mortgage, indenture, contract or other agreement to which it is a party or by which it may be bound.
 
(v) No certificate of an officer, written statement or written report delivered pursuant to the terms hereof of the Seller or the Sponsor contains any untrue statement of a material fact or omits to state any material fact necessary to make the certificate, statement or report not misleading.

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(vi) Neither the Seller nor the Sponsor is insolvent, nor will the Seller be made insolvent by the transfer of the Mortgage Loans to the Depositor.
 
(vii) Neither the Seller nor the Sponsor is aware of any pending insolvency of the Seller or the Sponsor.
 
(viii) Neither the Seller nor the Sponsor is in violation of, and the execution and delivery of this Agreement by it and its performance and compliance with the terms of this Agreement will not constitute a violation with respect to, any order or decree of any court, or any order or regulation of any federal, state, municipal or governmental agency having jurisdiction, which violation would materially and adversely affect the Seller’s or the Sponsor’s, as applicable, financial condition (financial or otherwise) or operations, or materially and adversely affect the performance of any of its duties hereunder.
 
(ix) There are no actions or proceedings against the Seller or the Sponsor, or pending or, to its knowledge, threatened, before any court, administrative agency or other tribunal; nor, to the Seller’s or Sponsor’s knowledge, are there any investigations (i) that, if determined adversely, would prohibit the Seller or the Sponsor from entering into this Agreement, (ii) seeking to prevent the consummation of any of the transactions contemplated by this Agreement or (iii) that, if determined adversely, would prohibit or materially and adversely affect the Seller’s or the Sponsor’s ability to perform any of its respective obligations under, or the validity or enforceability of, this Agreement.
 
(x) The Seller did not transfer the Mortgage Loans to the Depositor with any intent to hinder, delay or defraud any of its creditors.
 
(xi) The Seller acquired title to the Mortgage Loans in good faith, without notice of any adverse claims.
 
(xii) The transfer, assignment and conveyance of the Mortgage Notes and the Mortgages by the Seller to the Depositor are not subject to the bulk transfer laws or any similar statutory provisions in effect in any applicable jurisdiction.
 
 
SECTION 2.09.
Covenants of the Seller and Sponsor.  
 
The Seller hereby covenants that, except for the transfer hereunder, the Seller will not sell, pledge, assign or transfer to any other Person, or grant, create, incur or assume any lien on any Mortgage Loan, or any interest therein; the Sponsor will notify the Trustee, as assignee of the Depositor and the Certificate Insurer, of the existence of any lien on any Mortgage Loan immediately upon discovery thereof, and the Sponsor will defend the right, title and interest of the Trustee, as assignee of the Depositor, in, to and under the Mortgage Loans, against all claims of third parties claiming through or under the Seller; provided, however, that nothing in this Section 2.09 shall prevent or be deemed to prohibit the Seller from suffering to exist upon any of the Mortgage Loans any liens for municipal or other local taxes and other governmental charges if such taxes or governmental charges shall not at the time be due and payable or if the Seller shall currently be contesting the validity thereof in good faith by appropriate proceedings and shall have set aside on its books adequate reserves with respect thereto.

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ARTICLE III
 
ADMINISTRATION AND SERVICING
OF THE MORTGAGE LOANS
 
 
SECTION 3.01.
Master Servicer to Service and Administer the Mortgage Loans. 
 
The Master Servicer shall supervise, monitor and oversee the obligation of the Servicers to service and administer their respective Mortgage Loans in accordance with the terms of the applicable 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 each 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 each Servicer and shall cause each Servicer to perform and observe the covenants, obligations and conditions to be performed or observed by such Servicer under the applicable Servicing Agreement. The Master Servicer shall independently and separately monitor each Servicer’s servicing activities with respect to each related 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 Servicers’ and Master Servicer’s records, and based on such reconciled and corrected information, prepare the statements specified in Section 5.04 and any other information and statements required hereunder. The Master Servicer shall reconcile the results of its Mortgage Loan monitoring with the actual remittances of the Servicers to the related Servicing Accounts pursuant to the applicable Servicing Agreements.
 
The Trustee shall furnish the Servicers and the Master Servicer with any limited powers of attorney and other documents in form acceptable to the Trustee, necessary or appropriate to enable the Servicers and the Master Servicer to service and administer the related Mortgage Loans and REO Property, which limited powers of attorney shall provide that the Trustee will not be liable for the actions or omissions of the Servicers or Master Servicer in exercising such powers.
 
The Master Servicer shall not without the Trustee’s written consent (i) initiate any action, suit or proceeding solely under the Trustee’s name without indicating the Master Servicer’s representative capacity or (ii) take any action with the intent to cause, and which actually does cause, the Trustee to be registered to do business in any state. The Master Servicer shall indemnify the Trustee for any and all costs, liabilities and expenses incurred by the Trustee in connection with the negligent or willful misuse of such powers of attorney by the Master Servicer.

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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, upon the written request of the Master Servicer, shall execute and deliver to the related Servicer and the Master 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 or Mortgage; (iii) obtain a deficiency judgment against the Mortgagor; or (iv) enforce any other rights or remedies provided by the Mortgage Note or Mortgage or otherwise available at law or equity.
 
 
SECTION 3.02.
REMIC-Related Covenants.
 
For as long as each REMIC created hereunder shall exist, the Trustee and the Securities Administrator shall act in accordance herewith to treat each such REMIC as a REMIC, and the Trustee and the Securities Administrator shall comply with any directions of the Depositor, the related Servicer or the Master Servicer to assure such continuing treatment. In particular, the Trustee, the Securities Administrator and the Master Servicer shall not (a) sell or knowingly 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 or is otherwise permitted 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 2.03 or 2.04 of this Agreement or as otherwise provided in this Agreement, as applicable, accept any contribution to any REMIC after the Startup Day without receipt of a REMIC Opinion.
 
 
SECTION 3.03.
Monitoring of Servicers.
 
(a) The Master Servicer shall be responsible for reporting to the Trustee (on behalf of the Trust Fund) and the Depositor the compliance by each Servicer with its duties under the related Servicing Agreement. In the review of each Servicer’s activities, the Master Servicer may rely upon an officer’s certificate of the Servicer with regard to such Servicer’s compliance with the terms of its Servicing Agreement. In the event that the Master Servicer, in its judgment, determines that a Servicer should be terminated in accordance with its Servicing Agreement, or that a notice should be sent pursuant to such 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 Depositor and the Trustee thereof and the Master Servicer shall issue such notice or take such other action as it deems appropriate.
 

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(b) The Master Servicer, for the benefit of the Trust Fund, the Certificate Insurer and the Certificateholders, shall (acting as agent of the Trust Fund when enforcing the Trust Fund’s rights under each Servicing Agreement) (i) enforce the obligations of each Servicer under the related Servicing Agreement, and (ii) in the event that a Servicer fails to perform its obligations in accordance with the related Servicing Agreement, subject to the preceding paragraph, terminate the rights and obligations of such Servicer thereunder and act as servicer of the related Mortgage Loans thereunder or enter into a new Servicing Agreement having comparable terms with a successor Servicer selected by the Master Servicer which the Master Servicer shall cause the Trustee to acknowledge; provided, however, 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 such successor Servicer. Such enforcement, including, without limitation, the legal prosecution of claims, termination of Servicing Agreements 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 related 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 reasonable indemnity for its costs and expenses in pursuing such action.
 
(c) To the extent that the costs and expenses of the Master Servicer related to any termination of a Servicer, appointment of a successor Servicer or the transfer and assumption of servicing by the Master Servicer with respect to any 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 such 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 related Servicing Agreement) are not fully and timely reimbursed by the terminated Servicer, the Master Servicer shall be entitled to reimbursement of such costs and expenses from the Distribution Account.
 
(d) The Master Servicer shall require each Servicer to comply with the remittance requirements and other obligations set forth in the related Servicing Agreement.
 
(e) If the Master Servicer acts as Servicer, it will not assume liability for the representations and warranties of the Servicer, if any, that it replaces.
 
(f)  In the event that the Depositor becomes aware of any Event of Default (as defined in the applicable Servicing Agreement) with respect to any Servicer, it shall promptly provide the Master Servicer with written notice of such Event of Default.
 
 
SECTION 3.04.
Fidelity Bond.
 
The Master Servicer, at its expense, shall maintain in effect a blanket fidelity bond and an errors and omissions insurance policy, 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. The errors and omissions insurance policy and the fidelity bond shall be in such form and amount generally acceptable for entities serving as master servicers or trustees.
 
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SECTION 3.05.
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 Article X 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, the Certificate Insurer, the Trust Fund 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, Liquidation Proceeds and Recoveries and (iv) to effectuate, in its own name, on behalf the Trust Fund, or in the name of the Trust Fund, foreclosure or other conversion of the ownership of the Mortgaged Property securing any Mortgage Loan, in each case, in accordance with the provisions of this Agreement and the related Servicing Agreement, as applicable; provided, however, that the Master Servicer shall not (and, consistent with its responsibilities under Section 3.03, shall not permit any 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 result in an Adverse REMIC Event 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 result in an Adverse REMIC Event. The Trustee shall furnish the Master Servicer, upon written request from a Servicing Officer, with any limited powers of attorney (in a form reasonably acceptable to the Trustee) empowering the Master Servicer or any 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 applicable Servicing Agreement and this Agreement, and the Trustee shall execute and deliver such other documents, as the Master 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 misuse of any such powers of attorney by the Master Servicer or any Servicer). In instituting foreclosures or similar proceedings, the Master Servicer shall institute such proceedings either in its own name on behalf of the Trust Fund or in the name of the Trust Fund (or cause the related Servicer, pursuant to the related Servicing Agreement, to institute such proceedings either in the name of such Servicer on behalf of the Trust Fund or in the name of the Trust Fund), unless otherwise required by law or otherwise appropriate. 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 Trust Fund or the Trustee on its behalf or that the Trust Fund or the Trustee, as applicable, 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, on behalf of the Trust Fund, in the appointment of a co-trustee pursuant to Section 8.10 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 in the name of the Trustee, be deemed to be the agent of the Trustee on behalf of the Trust Fund.
 
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SECTION 3.06.
Due-on-Sale Clauses; Assumption Agreements.
 
To the extent provided in the applicable Servicing Agreement and to the extent Mortgage Loans contain enforceable due-on-sale clauses, the Master Servicer shall cause the Servicers to enforce such clauses in accordance with the applicable 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 applicable Servicing Agreement, and, as a consequence, a Mortgage Loan is assumed, the original Mortgagor may be released from liability in accordance with the applicable Servicing Agreement.
 
 
SECTION 3.07.
Release of Mortgage Files.
 
(a) Upon becoming aware of the payment in full of any Mortgage Loan, or the receipt by any 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, if required under the applicable Servicing Agreement, promptly furnish to the Custodian, on behalf of the Trustee, two copies of a certification substantially in the form of Exhibit F hereto signed by a Servicing Officer or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Servicing Officer (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 related Servicing Account maintained by the applicable Servicer pursuant to Section 4.01 or by the applicable Servicer pursuant to its Servicing Agreement have been or will be so deposited) and shall request that the Trustee (or the Custodian, on behalf of the Trustee) deliver to the applicable Servicer the related Mortgage File. Upon receipt of such certification and request, the Trustee (or the Custodian, on behalf of the Trustee), shall promptly release the related Mortgage File to the applicable Servicer and the Trustee (and the Custodian, if applicable) shall have no further responsibility with regard to such Mortgage File. Upon any such payment in full, each Servicer is authorized, to give, as agent for the Trustee, as the mortgagee under the Mortgage that secured the 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 related Servicing Account.
 
(b) From time to time and as appropriate for the servicing or foreclosure of any Mortgage Loan and in accordance with the applicable Servicing Agreement, the Trustee shall execute such documents as shall be prepared and furnished to the Trustee by a Servicer or the Master Servicer (in form reasonably acceptable to the Trustee) and as are necessary to the prosecution of any such proceedings. The Trustee (or the Custodian, on behalf of the Trustee), shall, upon the request of a Servicer or the Master Servicer, and delivery to the Trustee (the Custodian, on behalf of the Trustee), of two copies of a request for release signed by a Servicing Officer substantially in the form of Exhibit F (or in a mutually agreeable electronic format which will, in lieu of a signature on its face, originate from a Servicing Officer), release the related Mortgage File held in its possession or control to the Servicer or the Master Servicer, as applicable. Such trust receipt shall obligate the Servicer or the Master Servicer to return the Mortgage File to the Trustee (or the Custodian on behalf of the Trustee) when the need therefor by the Servicer or the Master Servicer no longer exists unless the Mortgage Loan shall be liquidated, in which case, upon receipt of a certificate of a Servicing Officer similar to that hereinabove specified, the Mortgage File shall be released by the Trustee (or the Custodian on behalf of the Trustee), to the Servicer or the Master Servicer.
 
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SECTION 3.08.
Documents, Records and Funds in Possession of Master Servicer To Be Held for Trust.
 
(a) The Master Servicer shall transmit and each Servicer (to the extent required by the related Servicing Agreement) shall transmit to the Trustee (or Custodian) such documents and instruments coming into the possession of the Master Servicer or such Servicer from time to time as are required by the terms hereof, or in the case of the Servicers, the applicable Servicing Agreement, to be delivered to the Trustee (or Custodian). Any funds received by the Master Servicer or by a Servicer in respect of any Mortgage Loan or which otherwise are collected by the Master Servicer or by a Servicer as Liquidation Proceeds, Insurance Proceeds or Recoveries in respect of any Mortgage Loan shall be held for the benefit of the Trust Fund, the Certificate Insurer and the Certificateholders subject to the Master Servicer’s right to retain or withdraw from the Distribution Account the Master Servicing Fee, any additional compensation pursuant to Section 3.14 and any other amounts provided in this Agreement, and to the right of each Servicer to retain its Servicing Fee and any other amounts as provided in the applicable Servicing Agreement. The Master Servicer shall, and (to the extent provided in the applicable Servicing Agreement) shall cause each Servicer 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, to the Certificate Insurer and to Certificateholders that are savings and loan associations, banks or insurance companies, the Office of Thrift Supervision, 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 Office of Thrift Supervision 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.
 
(b) 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, Insurance Proceeds or Recoveries, shall be held by the Master Servicer for and on behalf of the Trust Fund, the Certificate Insurer and the Certificateholders and shall be and remain the sole and exclusive property of the Trust Fund distributable in accordance with the provisions of this Agreement.
 
 
SECTION 3.09.
Standard Hazard Insurance and Flood Insurance Policies.
 
(a) For each Mortgage Loan, the Master Servicer shall enforce any obligation of the Servicers under the related Servicing Agreements 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 related Servicing Agreements. It is understood and agreed that such insurance shall be with insurers meeting the eligibility requirements set forth in the applicable 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.
 
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(b) Pursuant to Section 4.01 and 4.02, any amounts collected by the Servicers or the Master Servicer, or by any 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 applicable Servicing Agreement) shall be deposited into the Distribution Account, subject to withdrawal pursuant to Section 4.02 and 4.03. Any cost incurred by the Master Servicer or any 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 Master Servicer or such Servicer pursuant to Section 4.02 and 4.03.
 
 
SECTION 3.10.
Presentment of Claims and Collection of Proceeds.
 
The Master Servicer shall (to the extent provided in the applicable Servicing Agreement) cause the related Servicer to, prepare and present on behalf of the Trustee, the Trust Fund, the Certificate Insurer and the Certificateholders all claims under the 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 a 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 3.11.
Maintenance of the Primary Insurance Policies.
 
(a) The Master Servicer shall not take, or permit any Servicer (to the extent such action is prohibited under the applicable Servicing Agreement) to take, any action that would result in noncoverage under any applicable Primary Insurance Policy of any loss which, but for the actions of such Master Servicer or Servicer, would have been covered thereunder. The Master Servicer shall use its best reasonable efforts to cause each Servicer (to the extent required under the related Servicing Agreement) to keep in force and effect (to the extent that the Mortgage Loan requires the Mortgagor to maintain such insurance), primary mortgage insurance applicable to each Mortgage Loan (including any lender-paid Primary Insurance Policy) in accordance with the provisions of this Agreement and the related Servicing Agreement, as applicable. The Master Servicer shall not, and shall not permit any Servicer (to the extent required under the related Servicing Agreement) to, cancel or refuse to renew any such Primary 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 related Servicing Agreement, as applicable.
 
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(b) The Master Servicer agrees to cause each Servicer (to the extent required under the related Servicing Agreement) to present, on behalf of the Trustee, the Trust Fund, the Certificate Insurer and the Certificateholders, claims to the insurer under any Primary Insurance Policies and, in this regard, to take such reasonable action as shall be necessary to permit recovery under any Primary Insurance Policies respecting defaulted Mortgage Loans. Pursuant to Section 4.01 and 4.02, any amounts collected by the Servicer under any Primary Insurance Policies shall be deposited in the Distribution Account, subject to withdrawal pursuant to Section 4.03.
 
 
SECTION 3.12.
Trustee to Retain Possession of Certain Insurance Policies and Documents.
 
The Trustee or its Custodian shall retain possession and custody of the originals (to the extent available and delivered) of any Primary Insurance Policies, or certificate of insurance if applicable and available, and any certificates of renewal as to the foregoing as may be issued from time to time as contemplated by this Agreement and which come into its possession. Until all amounts distributable in respect of the Certificates have been distributed in full and the Master Servicer otherwise has fulfilled its obligations under this Agreement, the Trustee (or its Custodian) shall also retain possession and custody of each Mortgage File in accordance with and subject to the terms and conditions of this Agreement. The Master Servicer shall promptly deliver or cause to be delivered to the Trustee (or its Custodian), upon the execution or receipt thereof the originals of any Primary Insurance Policies, any certificates of renewal, and such other documents or instruments that constitute portions of the Mortgage File that come into the possession of the Master Servicer from time to time.
 
 
SECTION 3.13.
Realization Upon Defaulted Mortgage Loans.
 
The Master Servicer shall cause each Servicer (to the extent required under the related 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 applicable Servicing Agreement.
 
 
SECTION 3.14.
Additional Compensation to the Master Servicer. 
 
On each Distribution Date, the Master Servicer shall be entitled to retain from funds in the Distribution Account the Master Servicing Fee for such Distribution Date. Servicing compensation in the form of assumption fees, if any, late payment charges, as collected, if any, or otherwise (but, unless otherwise specifically permitted in a Servicing Agreement, not including any Prepayment Penalty Amounts) shall be retained by the applicable Servicer, or the Master Servicer, and shall not be deposited in the related Servicing Account or 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 aggregate compensation payable as set forth in this Section 3.14 plus the Master Servicing Fee due to the Master Servicer in respect of any Distribution Date shall be reduced in accordance with Section 5.06. The Master Servicing Fee shall also be reduced by the amount of the Trustee Fee, if any, payable on any Distribution Date and the fee payable to the Securities Administrator, if any, payable on any Distribution Date.
 
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SECTION 3.15.
REO Property.
 
(a) In the event the Trust Fund (or the Trustee on its behalf) acquires ownership of any REO Property in respect of any related Mortgage Loan, the deed or certificate of sale shall be issued to the Trust Fund, or if required under applicable law, to the Trustee, or to its nominee, on behalf of the Trust. The Master Servicer shall, to the extent provided in the applicable Servicing Agreement, cause the applicable Servicer to sell, any REO Property as expeditiously as possible (and in no event later than three years after acquisition) and in accordance with the provisions of this Agreement and the related Servicing Agreement, as applicable. Pursuant to its efforts to sell such REO Property, the Master Servicer shall cause the applicable Servicer to protect and conserve, such REO Property in the manner and to the extent required by the applicable 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.
 
(b) The Master Servicer shall, to the extent required by the related Servicing Agreement, cause the applicable Servicer to deposit all funds collected and received in connection with the operation of any REO Property in the related Servicing Account.
 
(c) The Master Servicer and the applicable 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 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.
 
(d) To the extent provided in the related Servicing Agreement, the Liquidation Proceeds from the final disposition of the REO Property, net of any payment to the Master Servicer and the applicable Servicer as provided above shall be deposited in the related Servicing Account on or prior to the applicable Determination Date in the month following receipt thereof and be remitted by wire transfer in immediately available funds to the Master Servicer for deposit into the related Distribution Account on the next succeeding Servicer Remittance Date.
 
 
SECTION 3.16.
Assessments of Compliance and Attestation Reports.
 
(a) Assessments ofCompliance.
 
(i)       By March 10 (with a 5 calendar day cure period) of each year (subject to the later date referred to in Section 3.16(a)(iii)), commencing in March 2007, the Master Servicer, the Securities Administrator and the Custodian, each at its own expense, shall furnish, and each such party shall cause any Servicing Function Participant engaged by it to furnish, each at its own expense, to the Securities Administrator and the Depositor (provided that the Master Servicer shall furnish copies of each such report received by it from the Servicers to 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 Servicing Criteria to assess compliance with the Relevant Servicing Criteria, (C) such party’s assessment of compliance with the Relevant Servicing Criteria as of and for the fiscal year covered by the Form 10-K required to be filed pursuant to Section 3.19(b) and for each fiscal year thereafter, whether or not a Form 10-K is required to be filed, 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 as of and for such period.

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(ii)       No later than the end of each fiscal year for the Trust Fund for which a 10-K is required to be filed, the Master Servicer and the Custodian, shall each forward to the Securities Administrator 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. When the Master Servicer, the Custodian, and the Securities Administrator submit their assessments to the Securities Administrator, such parties will also at such time include the assessment (and attestation pursuant to subsection (b) of this Section 3.16) of each Servicing Function Participant engaged by it.

(iii)       Promptly after receipt of each such report on assessment of compliance, (i) the Depositor shall review each such report and, if applicable, consult with the Master Servicer, the Securities Administrator, the Custodian, 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 Q and on any similar exhibit set forth in each Servicing Agreement in respect of each Servicer and notify the Depositor of any exceptions. None of such parties shall be required to deliver any such assessments until April 15 in any given year so long as it has received written confirmation from the Depositor that a Form 10-K is not required to be filed in respect of the Trust Fund for the preceding calendar year; provided that the Custodian shall only be required to deliver such an assessment of compliance with respect to any fiscal year for which a Form 10-K is required to be filed in respect of the Trust Fund.

(b) Attestation Reports.
 
(i)       By March 10 (with a 5 calendar day cure period) of each year (subject to the later date referred to in Section 3.16(b)(ii)), commencing in March 2007, the Master Servicer, the Securities Administrator, the Custodian, each at its own expense, shall cause, and each such party shall cause any Servicing Function Participant engaged by it to cause, each at its own expense, a registered public accounting firm (which may also render other services to the Master Servicer, the Securities Administrator, or such other Servicing Function Participants, as the case may be) and that is a member of the American Institute of Certified Public Accountants to furnish a report to the Securities Administrator and the Depositor, 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. 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.

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(ii)       Promptly after receipt of such report from the Master Servicer, the Custodian, the Securities Administrator or any Servicing Function Participant engaged by such parties, (i) the Depositor shall review the report and, if applicable, consult with such parties as to the nature of any defaults by such parties, in the fulfillment of any of each such party’s obligations hereunder or under any other applicable agreement, and (ii) the Securities Administrator shall confirm that each assessment submitted pursuant to subsection (a) of this Section 3.16 is coupled with an attestation meeting the requirements of this Section and notify the Depositor of any exceptions. None of the Master Servicer, the Securities Administrator, the Custodian, or any Servicing Function Participant engaged by such parties shall be required to deliver or cause the delivery of such reports until April 15 in any given year so long as it has received written confirmation from the Depositor that a 10-K is not required to be filed in respect of the Trust Fund for the preceding fiscal year, provided that the Custodian shall only be required to deliver or cause to be delivered such report with respect to any fiscal year for which a Form 10-K is required to be filed in respect of the Trust Fund. 
 
 
SECTION 3.17.
Annual Compliance Statement.
 
The Master Servicer and the Securities Administrator shall deliver (and the Master Servicer and Securities Administrator shall cause any Additional Servicer or Servicing Function Participant 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 10 (with a 5 calendar day cure period) 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, 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. Promptly after receipt of each such Officer’s Certificate, the Depositor shall review such Officer’s Certificate and, if applicable, consult with each such party, as applicable, as to the nature of any failures by such party, in the fulfillment of any of such party’s obligations hereunder or, in the case of an Additional Servicer, under such other applicable agreement.
 
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SECTION 3.18.
Xxxxxxxx-Xxxxx Certification.
 
Each Form 10-K shall include the Xxxxxxxx-Xxxxx Certification, which shall be signed by the senior officer of the Master Servicer in charge of the master servicing function on behalf of the Trust Fund.
 
 
SECTION 3.19.
Reports Filed with Securities and Exchange Commission.
 
(a) Reports Filed on Form 10-D. 
 
(i)       Within 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 Distribution Date Statement attached thereto. Any disclosure in addition to the Distribution Date Statement that is required to be included on Form 10-D (“Additional Form 10-D Disclosure”) shall be determined and prepared by and at the direction of 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 Additional Form 10-D Disclosure, except as set forth in the next two paragraphs.

(ii)       As set forth on Exhibit R hereto, within 5 calendar days after the related Distribution Date, (i) the parties to the Luminent Mortgage Trust 2006-2 transaction shall be required to provide to the Securities Administrator and the Depositor, to the extent known by a responsible officer thereof, in XXXXX-compatible form (which may be Word or Excel documents easily convertible to XXXXX format), 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 U 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 Sponsor 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 in Form 10-D pursuant to this paragraph.

(iii)       After preparing the Form 10-D, the Securities Administrator shall forward electronically a draft copy of the Form 10-D to the Depositor (provided that such Form 10-D includes any Additional Form 10-D Disclosure) and the Master Servicer for review. No later than the Business Day prior to the date specified in the next sentence, the Depositor and the Master Servicer shall notify the Securities Administrator of any changes to or approval of such Form 10-D. No later than 2 Business Days prior to the 15th calendar day after the related Distribution Date, a senior officer of the Master Servicer in charge of the master servicing function shall sign the Form 10-D and return an electronic or fax copy of such signed Form 10-D (with an original executed hard copy to follow by overnight mail) to the Securities Administrator. 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 subsection (d)(ii) of this Section 3.19. 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 10-D. Each party to this Agreement acknowledges that the performance by the Master Servicer and the Securities Administrator of their respective duties under this Section 3.19(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 under this Section 3.19(a). 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.

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(b) Reports Filed on Form 10-K.
 
(i)       Within 90 days (including the 90th day) after the end of each fiscal year of the Trust in which a Form 10-K is required to be filed 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 31st 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 and the related Servicing Agreement, (i) an annual compliance statement for each Servicer, each Additional Servicer, the Master Servicer and the Securities Administrator and any Servicing Function Participant engaged by such parties (each, a “Reporting Servicer”) as described under Section 3.17, (ii)(A) the annual reports on assessment of compliance with servicing criteria for each Reporting Servicer, as described under Section 3.16(a), and (B) if each Reporting Servicer’s report on assessment of compliance with servicing criteria described under Section 3.16(a) identifies any material instance of noncompliance, disclosure identifying such instance of noncompliance, or if each Reporting Servicer’s report on assessment of compliance with servicing criteria described under Section 3.16(a) 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 Reporting Servicer, as described under Section 3.16(b), and (B) if any registered public accounting firm attestation report described under Section 3.16(b) 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 Xxxxxxxx-Xxxxx 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 (“Additional Form 10-K Disclosure”) shall be determined and prepared by and at the direction of 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 Additional Form 10-K Disclosure, except as set forth in the next two paragraphs.

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(ii)       As set forth on Exhibit S hereto, no later than March 10 (with a 5 calendar day cure period) of each year that the Trust is subject to the Exchange Act reporting requirements, commencing in 2007, (i) the parties to the Luminent Mortgage Trust 2006-2 transaction shall be required to provide to the Securities Administrator and the Depositor, to the extent known by a responsible officer thereof, in XXXXX-compatible form (which may be Word or Excel documents easily convertible to XXXXX format), 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 Sponsor 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 in Form 10-K pursuant to this paragraph.

(iii)       After preparing the Form 10-K, the Securities Administrator shall forward electronically a draft copy of the Form 10-K to the Master Servicer and Depositor for review. No later than the Business Day prior to the date specified in the next sentence, the Depositor and the Master Servicer shall notify the Securities Administrator of any changes to or approval of such Form 10-K. .No later than noon New York City time on the 4th Business Day prior to the 10-K Filing Deadline, a senior officer of the Master Servicer in charge of the master servicing function shall sign the Form 10-K and return an electronic or fax copy of such signed Form 10-K (with an original executed hard copy to follow by overnight mail) to the Securities Administrator. 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 subsection (d) of this Section 3.19. 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 10-K. The parties to this Agreement acknowledge that the performance by the Master Servicer and the Securities Administrator of its duties under this Section 3.19(b) related to the timely preparation, execution and filing of Form 10-K is contingent upon such parties (and any Additional Servicer or Servicing Function Participant) strictly observing all applicable deadlines in the performance of their duties under this Section 3.19(b), Section 3.18, Section 3.17, Section 3.16(a) and Section 3.16(b). 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, execute 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.

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(c) Reports Filed on Form 8-K.
 
(i)       Within four (4) Business Days after the occurrence of an event requiring disclosure on Form 8-K (each such event, a “Reportable Event”), and if requested by the Depositor, the Securities Administrator shall prepare and file on behalf of the Trust Fund a 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 in Form 8-K (“Form 8-K Disclosure Information”) shall be determined and prepared by and at the direction of 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 two paragraphs.

(ii)       As set forth on Exhibit T hereto, for so long as the Trust is subject to the Exchange Act reporting requirements, no later than noon on the 2nd Business Day after the occurrence of a Reportable Event (i) the parties to the Luminent Mortgage Trust 2006-2 transaction shall be required to provide to the Securities Administrator and the Depositor, to the extent known by a responsible officer thereof, in XXXXX-compatible form (which may be Word or Excel documents easily convertible to XXXXX format), 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 Sponsor 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 in Form 8-K pursuant to this paragraph.

(iii)       After preparing the Form 8-K, the Securities Administrator shall forward electronically a draft copy of the Form 8-K to the Master Servicer and Depositor for review. No later than the Business Day prior to the date specified in the next sentence, the Depositor and the Master Servicer shall notify the Securities Administrator of any changes to or approval of such Form 8-K. No later than Noon New York City time on the 4th Business Day after the Reportable Event, a senior officer of the Master Servicer in charge of the master servicing function shall sign the Form 8-K and return an electronic or fax copy of such signed Form 8-K (with an original executed hard copy to follow by overnight mail) to the Securities Administrator. 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 subsection (d) of this Section 3.19. 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. The parties to this Agreement acknowledge that the performance by the Master Servicer and the Securities Administrator of their respective duties under this Section 3.19(c) 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 Section 3.19(c). Neither the Securities Administrator nor the Master Servicer 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.

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(d) Suspension of Reporting; Amendments; Late Filings.
 
(i)       Prior to January 30 in of the first year in which the Securities Administrator is able to do so under applicable law, unless otherwise directed by the Depositor, the Securities Administrator shall prepare and file a Form 15 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 becomes aware that it will be 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 the Depositor. In the case of Form 10-D and 10-K, the parties to this Agreement and each Servicer 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, and such amendment includes any Additional Form 10-D Disclosure, any Additional Form 10-K Disclosure or any Form 8-K Disclosure Information or any amendment to such disclosure, the Securities Administrator will notify the Depositor and the parties affected thereby and such parties will cooperate to prepare any necessary 8-KA, 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 senior officer of the Master Servicer in charge of the master servicing function. The parties to this Agreement acknowledge that the performance by the Master Servicer and the Securities Administrator of their respective duties under this Section 3.19(d) 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.
 
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SECTION 3.20.
Additional Information.
 
Each of the parties agrees to provide to the Securities Administrator such additional information related to such party as the Securities Administrator may reasonably request, including evidence of the authorization of the person signing any certification or statement, financial information and reports, and such other information related to such party or its performance hereunder.
 
 
SECTION 3.21.
Intention of the Parties and Interpretation.
 
Each of the parties acknowledges and agrees that the purpose of Section 3.16 through Section 3.22 of this Agreement is to facilitate compliance by the Securities Administrator and the Depositor with the provisions of Regulation AB promulgated by the Commission under the Exchange Act (17 C.F.R. §§ 229.1100 - 229.1123), as such may be amended from time to time and subject to such clarification and interpretive advice as may be issued by the staff of the Commission 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 the reasonable requests made by the Securities Administrator or the Depositor for delivery of such additional or different information as the Securities Administrator or the Depositor may determine in good faith is necessary to comply with the provisions of Regulation AB, which information is available to such party without unreasonable effort or expense and within such timeframe as may be reasonably requested, 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 3.22.
Indemnification. 
 
Each party required to deliver an assessment of compliance and attestation report pursuant to Section 3.16 (each, an “Item 1122 Responsible Party”) shall indemnify and hold harmless the Securities Administrator, the Master Servicer, the Seller, the Sponsor, the Trustee and the Depositor and each of their 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 Item 1122 Responsible Party of any of its obligations hereunder relating to its obligations as an Item 1122 Responsible Party, including particularly its obligations to provide any assessment of compliance, attestation report or compliance statement required under Section 3.16(a), 3.16(b) or 3.17, respectively, or any information, data or materials required to be included in any Exchange Act report, (b) any material misstatement or material omission in any information, data or materials provided by such Item 1122 Responsible Party (or, in the case of the Securities Administrator or Master Servicer, any material misstatement or material omission in (x) any compliance certificate delivered by it, or by any Servicing Function Participant engaged by it, pursuant to this Agreement, (y) any assessment or attestation delivered by or on behalf of it, or by any Servicing Function Participant engaged by it, pursuant to this Agreement, or (z) any Additional Form 10-D Disclosure, Additional Form 10-K Disclosure or Form 8-K Disclosure Information concerning the Securities Administrator or the Master Servicer and provided by either of them), or (c) the negligence, bad faith or willful misconduct of such Item 1122 Responsible Party in connection with its performance hereunder relating to its obligations as an Item 1122 Responsible Party. If the indemnification provided for herein is unavailable or insufficient to hold harmless the Securities Administrator, the Depositor, the Seller or the Sponsor, then each Item 1122 Responsible Party agrees that it shall contribute to the amount paid or payable by the Securities Administrator, the Master Servicer, the Seller, the Sponsor and the Depositor as a result of any claims, losses, damages or liabilities incurred by the Securities Administrator, the Master Servicer, the Seller, the Sponsor or the Depositor in such proportion as is appropriate to reflect the relative fault of the Securities Administrator, the Master Servicer, the Seller, the Sponsor or the Depositor on the one hand and such Item 1122 Responsible Party on the other. This indemnification shall survive the termination of this Agreement or the termination of any party to this Agreement.
 
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SECTION 3.23.
[Reserved]. 
 
 
SECTION 3.24.
[Reserved].
 
 
SECTION 3.25.
[Reserved].
 
 
SECTION 3.26.
[Reserved].
 
 
SECTION 3.27.
Closing Certificate and Opinion.
 
On or before the Closing Date, the Master Servicer shall cause to be delivered to the Depositor, the Seller, the Sponsor, the Certificate Insurer, the Trustee, and Greenwich Capital Markets, Inc. an Opinion of Counsel, dated the Closing Date, in form and substance reasonably satisfactory to the Depositor, Greenwich Capital Markets, Inc., and the Seller as to the due authorization, execution and delivery of this Agreement by the Master Servicer and the enforceability thereof.
 
 
SECTION 3.28.
Liabilities of the Master Servicer.
 
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 3.29.
Merger or Consolidation of the Master Servicer.
 
(a) The Master Servicer will keep in full force and effect its existence, rights and franchises as a corporation under the laws of the state of its incorporation, and 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 Mortgage Loans and to perform its duties under this Agreement.
 
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(b) Any Person into which the Master Servicer may be merged or consolidated, or any corporation resulting from any merger or consolidation to which the Master Servicer shall be a party, or any Person succeeding to the business of the Master Servicer, shall be the successor of 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 3.30.
Indemnification of the Trustee, the Master Servicer and the Securities Administrator.
 
(a) In addition to any indemnity required pursuant to Section 3.22 hereof, the Master Servicer agrees to indemnify the Indemnified Persons for, and to hold them harmless against, any loss, liability or expense (except as otherwise provided herein with respect to expenses) (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 or the Certificates (i) related to the Master Servicer’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 Master Servicer’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, provided, in each case, that with respect to any such claim or legal action (or pending or threatened claim or legal action), an Indemnified Person shall have given the Master Servicer and the Depositor written notice thereof promptly after such Indemnified Person shall have with respect to such claim or legal action knowledge thereof. The Indemnified Person’s failure to give such notice shall not affect the Indemnified Person’s right to indemnification hereunder. This indemnity shall survive the resignation or removal of the Trustee, the Master Servicer or the Securities Administrator and the termination of this Agreement.
 
(b) The Trust Fund will indemnify any Indemnified Person for any loss, liability or expense of any Indemnified Person not otherwise indemnified by the Master Servicer as referred to in Subsection (a) above.
 
(c) In addition to any indemnity required pursuant to Section 3.22 hereof, the Securities Administrator agrees to indemnify the Indemnified Persons (other than the Securities Administrator) for, and to hold them harmless against, any loss, liability or expense (except as otherwise provided herein with respect to expenses) (including reasonable legal fees and disbursements of counsel) incurred on their part (i) in connection with, arising out of, or relating to the Securities Administrator’s failure to file any Exchange Act report which the Securities Administrator is responsible for filing in accordance with Section 3.19, (ii) by reason of the Securities Administrator’s negligence or willful misconduct in the performance of such obligations pursuant to Section 3.19 or (iii) by reason of the Securities Administrator’s reckless disregard of such obligations pursuant to Section 3.19, provided, in each case, that with respect to any such claim or legal action (or pending or threatened claim or legal action), an Indemnified Person shall have given the Securities Administrator written notice thereof promptly after such Indemnified Person shall have with respect to such claim or legal action knowledge thereof. The Indemnified Person’s failure to give such notice shall not affect the Indemnified Person’s right to indemnification hereunder. This indemnity shall survive the resignation or removal of the Trustee, the Master Servicer or the Securities Administrator and the termination of this Agreement.
 
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SECTION 3.31.
Limitations on Liability of the Master Servicer and Others; Indemnification of Trustee and Others.
 
Subject to the obligation of the Master Servicer to indemnify the Indemnified Persons pursuant to Section 3.30:
 
(a) Neither the Master Servicer nor any of the directors, officers, employees or agents of the Master Servicer shall be under any liability to the Indemnified Persons, the Depositor, the Trust or the Certificateholders for taking any action or for refraining from taking any action in good faith pursuant to this Agreement, or for errors in judgment; provided, however, that this provision shall not protect the Master Servicer or any such Person against any breach of warranties or representations made herein or 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.
 
(b) The Master Servicer and any director, officer, employee or agent of 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.
 
(c) The Master Servicer, the Trustee (in its individual corporate capacity and as Trustee), the Custodian and any director, officer, employee or agent of the Master Servicer, the Trustee or the Custodian shall be indemnified by the Trust Fund and held harmless thereby against any loss, liability or expense (except as otherwise provided herein with respect to expenses) (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 Xxxxx Custodial Agreement, the Certificates or any Servicing Agreement or the transactions contemplated hereby or thereby (except, with respect to the Master Servicer, to the extent that the Master Servicer is indemnified by the Servicer thereunder), other than (i) with respect to the Master Servicer only, any such loss, liability or expense related to the Master Servicer’s failure to perform its duties in compliance with this Agreement or (ii) with respect to the Master Servicer or Custodian only, any such loss, liability or expense incurred by reason of the Master Servicer’s or the Custodian’s willful misfeasance, bad faith or gross negligence in the performance of its own duties hereunder or by reason of reckless disregard of its own obligations and duties hereunder or under a custodial agreement.
 
(d) 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 and that in its opinion may involve it in any expense or liability; provided, however, 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 rights and duties of the parties hereto and the interests of the Trust and the Certificateholders hereunder. In such event, the legal expenses and costs of such action and any liability resulting therefrom shall be expenses, costs and liabilities of the Trust Fund, and the Master Servicer shall be entitled to be reimbursed therefor out of the Distribution Account as provided by Section 4.03. Nothing in this Subsection 3.31(d) shall affect the Master Servicer’s obligation to supervise, or to take such actions as are necessary to ensure, the servicing and administration of the Mortgage Loans pursuant to Subsection 3.01(a).
 
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(e) In taking or recommending any course of action pursuant to this Agreement, unless specifically required to do so pursuant to this Agreement, the Master Servicer 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 but shall give notice to the Trustee if it has notice of such potential liabilities.
 
(f) The Master Servicer shall not be liable for any acts or omissions of any Servicer, except as otherwise expressly provided herein.
 
 
SECTION 3.32.
Master Servicer Not to Resign. 
 
Except as provided in Section 3.34, the Master Servicer shall not resign from the obligations and duties hereby imposed on it except upon a determination that any such duties hereunder are no longer permissible under applicable law and such impermissibility cannot be cured. Any such determination permitting the resignation of the Master Servicer shall be evidenced by an Independent Opinion of Counsel (delivered at the expense of the Master Servicer) to such effect delivered to the Trustee. No such resignation by the Master Servicer shall become effective until the Trustee or a successor to the Master Servicer reasonably satisfactory to the Trustee shall have assumed the responsibilities and obligations of the Master Servicer in accordance with Section 7.02 hereof. The Trustee shall notify each Rating Agency of the resignation of the Master Servicer.
 
 
SECTION 3.33.
Successor Master Servicer.
 
In connection with the appointment of any successor master servicer or the assumption of the duties of the Master Servicer, the Trustee may make such arrangements for the compensation of such successor master servicer out of payments on the Mortgage Loans as the Trustee and such successor master servicer shall agree which in no case shall exceed the Master Servicing Fee. If the successor master servicer does not agree that the proposed compensation is fair, such successor master servicer shall obtain two quotations of market compensation from third parties actively engaged in the servicing of single-family mortgage loans; provided, however, that each Rating Agency shall confirm in writing that any appointment of a successor Master Servicer (other than the Trustee) will not result in a downgrade in the then current rating of any Class of Certificates. 
 
 
SECTION 3.34.
Sale and Assignment of Master Servicing.
 
The Master Servicer may sell and assign its rights and delegate its duties and obligations in their entirety as Master Servicer under this Agreement, with the written consent of the Depositor, to be given in its sole discretion, and provided further that: (i) the purchaser or transferee accepting such assignment and delegation (a) shall be a Person which shall be qualified to service mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac; (b) shall have a net worth of not less than $15,000,000 (unless otherwise approved by each Rating Agency pursuant to clause (ii) below); (c) shall be reasonably satisfactory to the Depositor and the Trustee (as evidenced in writing signed by the Depositor and the Trustee); and (d) 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 ratings 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 without regard to the Financial Guaranty Insurance Policy, as evidenced by a letter to such effect delivered to the Master Servicer and the Trustee; and (iii) the Master Servicer assigning and selling the master servicing shall deliver to the Trustee an Officer’s Certificate and an Independent Opinion of Counsel, (delivered at the Master Servicer’s expense) 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 prior to the effective date thereof.
 
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SECTION 3.35.
Reporting Requirements of the Commission.
 
To the extent that, following the Closing Date, the content of Forms 8-K, 10-D, 10-K, 15 or other Forms required by the Exchange Act and the Rules and Regulations of the Commission and the time by which such Forms are required to be filed, differs from the provisions of this Agreement, the Master Servicer and the Securities Administrator hereby agree that each shall reasonably cooperate to amend the provisions of this Agreement (in accordance with Section 12.01) in order to comply with such amended reporting requirements and such amendment of this Agreement. Notwithstanding the foregoing, neither the Master Servicer nor the Securities Administrator shall be obligated to enter into any amendment pursuant to this Section that adversely affects its obligations or immunities under this Agreement.
 
ARTICLE IV
 
ACCOUNTS
 
 
SECTION 4.01.
Servicing Accounts.
 
(a) The Master Servicer shall enforce the obligation of each Servicer to establish and maintain one or more custodial accounts (the “Servicing Accounts”) in accordance with the applicable Servicing Agreement, with records to be kept with respect thereto on a Mortgage Loan by Mortgage Loan basis, into which accounts shall be deposited within 48 hours (or as of such other time specified in the related Servicing Agreement) of receipt all collections of principal and interest on any Mortgage Loan and with respect to any REO Property received by a Servicer, including Principal Prepayments, Insurance Proceeds, Liquidation Proceeds, Recoveries and advances made from the Servicer’s own funds (less, in the case of each Servicer, the applicable servicing compensation, in whatever form and amounts as permitted by the applicable Servicing Agreement) and all other amounts to be deposited in each such Servicing Account. The Servicer is hereby authorized to make withdrawals from and deposits to the related Servicing Account for purposes required or permitted by this Agreement and the applicable Servicing Agreement. For the purposes of this Agreement, Servicing Accounts shall also include such other accounts as the Servicer maintains for the escrow of certain payments, such as taxes and insurance, with respect to certain Mortgaged Properties. Each Servicing Agreement sets forth the criteria for the segregation, maintenance and investment of each related Servicing Account, the contents of which are acceptable to the parties hereto as of the date hereof and changes to which shall not be made unless such changes are made in accordance with the provisions of Section 12.01 hereof. 
 
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(b) [Reserved];
 
(c) To the extent provided in the related Servicing Agreement and subject to this Article IV, on or before each Servicer Remittance Date, each Servicer shall withdraw or shall cause to be withdrawn from the related Servicing Accounts and shall immediately deposit or cause to be deposited in the Distribution Account amounts representing the following collections and payments (other than with respect to principal of or interest on the Mortgage Loans due on or before the Cut-off Date) with respect to each of the Mortgage Loans it is servicing:
 
(i) Monthly Payments on the Mortgage Loans received or any related portion thereof advanced by the Servicers pursuant to the Servicing Agreements which were due on or before the related Due Date but net of the amount thereof comprising the Servicing Fees and Lender Paid Mortgage Insurance Fees, if any;
 
(ii) Principal Prepayments in full and any Liquidation Proceeds received by the Servicers with respect to such Mortgage Loans in the related Prepayment Period, with interest to the date of prepayment or liquidation, net of the amount thereof comprising the Servicing Fees and any Recoveries received in the related Prepayment Period;
 
(iii) Principal Prepayments in part received by the Servicers for such Mortgage Loans in the related Prepayment Period; and
 
(iv) any amount to be used as a delinquency advance or to pay any Interest Shortfalls, in each case, as required to be paid under the related Servicing Agreement.
 
(d) Withdrawals may be made from a Servicing Account only to make remittances as provided in Section 4.01(c), 4.02 and 4.03; to reimburse the Master Servicer or a Servicer for Advances which have been recovered by subsequent collection from the related Mortgagor; to remove amounts deposited in error; to remove fees, charges or other such amounts deposited on a temporary basis; or to clear and terminate the account at the termination of this Agreement in accordance with Section 10.01. As provided in Sections 4.01(c) and 4.02(b), certain amounts otherwise due to the Servicers may be retained by them and need not be deposited in the Distribution Account.
 
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SECTION 4.02.
Distribution Account. 
 
(a) The Securities Administrator shall establish and maintain in the name of the Trustee, for the benefit of the Trust Fund, the Certificate Insurer and the Certificateholders, the Distribution Account as a segregated account or accounts, each of which shall be an Eligible Account. The Distribution Account shall constitute a trust account of the Trust Fund segregated on the books of the Securities Administrator and held by the Securities Administrator in trust in its Corporate Trust Office, and the Distribution Account and the funds deposited therein shall not be subject to, and shall be protected from, all claims, liens, and encumbrances of any creditors or depositors of the Trustee, the Securities Administrator or the Master Servicer (whether made directly, or indirectly through a liquidator or receiver of the Trustee, the Securities Administrator or the Master Servicer). The amount at any time credited to the Distribution Account shall be (i) fully insured by the FDIC to the maximum coverage provided thereby or (ii) invested by the Securities Administrator, in Permitted Investments, in accordance with Section 4.02(c). All Permitted Investments shall mature or be subject to redemption or withdrawal on or before, and shall be held until, the immediately succeeding Distribution Date. With respect to the Distribution Account and the funds deposited therein, the Securities Administrator shall take such action as may be necessary to ensure that the Trust Fund, the Certificate Insurer and the Certificateholders shall be entitled to the priorities afforded to such a trust account (in addition to a claim against the estate of the Securities Administrator or the Trust) as provided by 12 U.S.C. § 92a(e), and applicable regulations pursuant thereto, if applicable, or any applicable comparable state statute applicable to state chartered banking corporations, if applicable. The Securities Administrator, Trustee or their affiliates are permitted to receive additional compensation that could be deemed to be in the their economic self-interest for (i) serving as investment adviser, administrator, servicing agent, custodian or sub-custodian with respect to certain of the Permitted Investments, (ii) using affiliates to effect transactions in certain Permitted Investments and (iii) effecting transactions in certain Permitted Investments. The Master Servicer and the Securities Administrator will deposit in the Distribution Account as identified by the Master Servicer or the Securities Administrator and as received by the Master Servicer or the Securities Administrator, the following amounts:
 
(i) any amounts withdrawn from a Servicing Account pursuant to Section 4.01(c);
 
(ii) any amounts required to be deposited by the Master Servicer or the Securities Administrator with respect to the Mortgage Loans pursuant to this Agreement;
 
(iii) any Advance and any Compensating Interest Payments required to be made by the Master Servicer to the extent required but not made by a Servicer;
 
(iv) any Insurance Proceeds, Net Liquidation Proceeds or Recoveries received by or on behalf of the Master Servicer or which were not deposited in a Servicing Account;
 
(v) the Purchase Price with respect to any Mortgage Loans purchased by the Sponsor under this Agreement or by an Originator under the related Purchase Agreement, as applicable, any Substitution Adjustments pursuant to Section 2.03 of this Agreement or pursuant to applicable Purchase Agreement, and all proceeds of any Mortgage Loans or property acquired with respect thereto repurchased by the Sponsor pursuant to Section 10.01;
 
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(vi) the Purchase Price with respect to any Mortgage Loans purchased by an Originator under the related Purchase Agreement, and any Substitution Adjustments pursuant to related Purchase Agreement;
 
(vii) the Purchase Price with respect to any Mortgage Loans purchased by the majority holder of the most subordinate Class of Certificates under the related Servicing Agreement with respect to certain special foreclosure rights;
 
(viii) any amounts required to be deposited with respect to losses on investments of deposits in the Distribution Account; and
 
(ix) any other amounts received by or on behalf of the Master Servicer or the Trustee 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 Trust Fund, the Certificateholders and the Certificate Insurer 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 (i) late payment charges or assumption fees, tax service fees, statement account charges or payoff charges, substitution, satisfaction, release and other like fees and charges, including all Prepayment Penalty Amounts, and (ii) the items enumerated in Subsections 4.03(a)(i), (ii), (iii), (iv), (vi), (vii), (ix) and (x) with respect to the Securities Administrator, need not be credited by the Master Servicer or the related Servicer to the Distribution Account. In the event that the Master Servicer shall deposit or cause to be deposited to the Distribution Account any amount not required to be credited thereto, the Securities Administrator, upon receipt of a written request therefor signed by a Servicing Officer of the Master Servicer, shall promptly transfer such amount to the Master Servicer, any provision herein to the contrary notwithstanding.
 
(c) The amount at any time credited to the Distribution Account shall be invested, in the name of the Trustee, or its nominee, for the benefit of the Certificateholders and the Certificate Insurer, in Permitted Investments as follows. All Permitted Investments shall be for the benefit of the holder of the Residual Certificate. All Permitted Investments made for the benefit of the holder of the Residual Certificate shall be made at the written direction of the holder of the Residual Certificate to the Master Servicer (or, if no such written direction is received, in investments of the type specified in clause (vi) of the definition of Permitted Investments), shall mature or be subject to redemption or withdrawal on or before, and shall be held until, the Business Day prior to the next succeeding Distribution Date. Any and all investment earnings from such Permitted Investments shall be paid to the holder of the Residual Certificate, and the risk of loss of moneys resulting from such investments shall be borne by and be the risk of the holder of the Residual Certificate. The holder of the Residual Certificate shall deposit the amount of any such loss in the Distribution Account within two Business Days of receipt of notification of such loss but not later than the next succeeding Distribution Date. As of the Closing Date, the holder of the Residual Certificate is the Sponsor.
 
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SECTION 4.03.
Permitted Withdrawals and Transfers from the Distribution Account.
 
(a) The Master Servicer will, from time to time on demand of a Servicer, the Securities Administrator, the Certificate Insurer or for its own account as set forth below, make or cause to be made such withdrawals or transfers from the Distribution Account, in the case of a demand by a Servicer, as the applicable Servicer has designated for such transfer or withdrawal pursuant to the applicable Servicing Agreement, or in the case of a demand by the Securities Administrator, as the Securities Administrator has demanded pursuant hereto, or in the case of the Certificate Insurer, as the Certificate Insurer has demanded pursuant to this Agreement, or as the Master Servicer has determined to be appropriate in accordance herewith, for the following purposes:
 
(i) to reimburse the Master Servicer or any Servicer for any Advance of its own funds or of such Servicer’s own funds, the right of the Master Servicer or a Servicer to reimbursement pursuant to this subclause (i) being limited to amounts received on a particular Mortgage Loan (including, for this purpose, the Purchase Price therefor, Insurance Proceeds and Liquidation Proceeds) which represent late payments or recoveries of the principal of or interest on such Mortgage Loan respecting which such Advance was made;
 
(ii) to reimburse the Master Servicer or any Servicer from Insurance Proceeds or Liquidation Proceeds relating to a particular Mortgage Loan for amounts expended by the Master Servicer or such 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;
 
(iii) to reimburse the Master Servicer or any 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 or such Servicer from Liquidation Proceeds from a particular Mortgage Loan for Liquidation Expenses incurred with respect to such Mortgage Loan;
 
(iv) to pay the Master Servicer or any Servicer, as appropriate, from Liquidation Proceeds or Insurance Proceeds received in connection with the liquidation of any Mortgage Loan, the amount which it or such Servicer would have been entitled to receive under subclause (viii) of this Subsection 4.03(a) as servicing compensation on account of each defaulted scheduled payment on such Mortgage Loan if paid in a timely manner by the related Mortgagor;
 
(v) to pay the Master Servicer or any Servicer from the Purchase Price for any Mortgage Loan, the amount which it or such Servicer would have been entitled to receive under subclause (viii) of this Subsection (a) as servicing compensation;
 
(vi) to reimburse the Master Servicer or any Servicer for servicing related advances of funds, 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 and Liquidation Proceeds) which represent late recoveries of the payments for which such servicing advances were made;
 
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(vii) to reimburse the Master Servicer or any 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 (i) and (vi);
 
(viii) to pay the Master Servicer its monthly Master Servicing Fee and any investment income and other additional servicing compensation payable pursuant to Section 3.14;
 
(ix) to pay the Trustee Fee to the extent not paid by the Master Servicer on behalf of the Trust Fund;
 
(x) to reimburse the Master Servicer or the Securities Administrator for any expenses recoverable by the Master Servicer or the Securities Administrator pursuant to Sections 3.03 and 3.31;
 
(xi) to reimburse or pay any Servicer any such amounts as are due thereto under the applicable Servicing Agreement and have not been retained by or paid to the Servicer, to the extent provided in the related Servicing Agreement;
 
(xii) to reimburse the Trustee, the Custodian (including those related to the Xxxxx Custodial Agreement, to pay any fees, expenses or other amounts payable to Xxxxx Fargo Bank, N.A., as Custodian) and the Securities Administrator for expenses, costs and liabilities incurred by or reimbursable to it from funds of the Trust Fund pursuant to Sections 3.30, 3.31 or 8.05, and to reimburse the Trustee for any fees, costs and expenses costs incurred by or reimbursable to it pursuant to Section 2.03(a), 7.01(b), 8.02, 8.05 or 8.07, to the extent not otherwise reimbursed to it;
 
(xiii) to pay the Certificate Insurer its Aggregate Premium Amount;
 
(xiv) to pay to the holder of the Residual Certificate all investment earnings on amounts on deposit in the Distribution Account to which it is entitled under Section 4.02(c);
 
(xv) to remove amounts deposited in error; and
 
(xvi) to clear and terminate the Distribution Account pursuant to Section 10.01.
 
Notwithstanding the foregoing, the Master Servicer shall make or cause to be made withdrawals or transfers from the Distribution Account to the Certificate Insurer to pay the Certificate Insurer its Aggregate Premium Amount.
 
Notwithstanding the foregoing, amounts received in connection with the Termination Price shall not be used to reimburse amounts to any Servicer or the Master Servicer with respect to clause (i) or clause (vii) above.

(b) In addition, on or before the Business Day immediately preceding each Distribution Date, the Master Servicer shall deposit in the Distribution Account (or remit to the Securities Administrator for deposit therein) any Advances or Compensating Interest Payments, to the extent required but not made by the related Servicer and required to be made by the Master Servicer with respect to the Mortgage Loans.
 
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(c) The Securities Administrator or the Master Servicer shall keep and maintain separate accounting, on a Mortgage Loan by Mortgage Loan basis, for the purpose of accounting for any payments or reimbursements from the Distribution Account pursuant to subclauses (i) through (vii), inclusive, (x) and (xi) or with respect to any such amounts which would have been covered by such subclauses had the amounts not been retained by the Master Servicer without being deposited in the Distribution Account under Section 4.02(b).