EXHIBIT 4.1
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XXXXX FARGO ASSET SECURITIES CORPORATION,
Depositor
XXXXX FARGO BANK, N.A.,
Servicer
XXXXX FARGO BANK, N.A.,
Securities Administrator
and
HSBC Bank USA, National Association,
Trustee
POOLING AND SERVICING AGREEMENT
Dated as of June 29, 2006
Home Equity Asset-Backed Certificates, Series 2006-2
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TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
Section 1.01 Defined Terms.
Section 1.02 Accounting.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
ORIGINAL ISSUANCE OF CERTIFICATES
Section 2.01 Conveyance of Mortgage Loans.
Section 2.02 Acceptance by Custodian.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the Depositor.
Section 2.04 Representations and Warranties of the Depositor with respect to
the Mortgage Loans.
Section 2.05 Representations, Warranties and Covenants of the Servicer.
Section 2.06 Representations and Warranties of the Depositor.
Section 2.07 Issuance of Certificates and the REMIC Regular Interests.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer.
Section 3.02 Collection of Mortgage Loan Payments.
Section 3.03 Realization Upon Defaulted Mortgage Loans.
Section 3.04 Collection Account, Distribution Account, Excess Reserve Fund
Account and Supplemental Interest Trust Account.
Section 3.05 Permitted Withdrawals from the Collection Account.
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow Accounts.
Section 3.07 Permitted Withdrawals From Escrow Account.
Section 3.08 Payment of Taxes, Insurance and Other Charges; Collections
Thereunder; Primary Mortgage Insurance.
Section 3.09 Transfer of Accounts.
Section 3.10 Maintenance of Hazard Insurance.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance.
Section 3.13 Title, Management and Disposition of REO Property.
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution Agreements.
Section 3.15 Duties of the Credit Risk Manager.
Section 3.16 Optional Purchases of 60+ Day Delinquent Loans.
Section 3.17 Custodian to Cooperate; Release of Files.
Section 3.18 Servicing Compensation.
Section 3.19 Annual Statement as to Compliance.
Section 3.20 Assessment of Servicing Compliance; Registered Public Accounting
Firm Attestation Reports.
Section 3.21 Access to Certain Documentation and Information Regarding the
Mortgage Loans.
Section 3.22 Obligations of the Servicer in Respect of Compensating Interest.
Section 3.23 Investment of Funds in the Collection Account and the
Distribution Account.
Section 3.24 Liability of Servicer; Indemnification.
Section 3.25 Reports of Foreclosure and Abandonment of Mortgaged Properties.
Section 3.26 Limitation of Liability of the Credit Risk Manager.
Section 3.27 No Personal Solicitation.
Section 3.28 Exchange Act Reports.
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions.
Section 4.02 Distributions of Principal and Monthly Excess Cashflow Amounts.
Section 4.03 Allocation of Losses.
Section 4.04 Method of Distribution.
Section 4.05 Distributions on Book-Entry Certificates.
Section 4.06 Statements.
Section 4.07 Remittance Reports; Advances.
Section 4.08 Tax Treatment of Cap Carryover Amounts, the Supplemental Interest
Trust and the Interest Rate Swap Agreement.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.
Section 5.02 Registration of Transfer and Exchange of Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
Section 5.04 Persons Deemed Owners.
Section 5.05 Appointment of Paying Agent.
ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Servicer and the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the Obligations of,
the Servicer or the Depositor.
Section 6.03 Limitation on Liability of the Servicer and Others.
Section 6.04 Servicer Not to Resign.
Section 6.05 Delegation of Duties.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination.
Section 7.02 Trustee to Act; Appointment of Successor.
Section 7.03 Waiver of Defaults.
Section 7.04 Notification to Certificateholders.
Section 7.05 Survival of Servicer Liabilities.
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities Administrator.
Section 8.02 Certain Matters Affecting the Trustee and the Securities
Administrator.
Section 8.03 Trustee and Securities Administrator Not Liable for Certificates
or Mortgage Loans.
Section 8.04 Trustee and Securities Administrator May Own Certificates.
Section 8.05 Trustee and Securities Administrator Fees and Expenses.
Section 8.06 Eligibility Requirements for Trustee and Securities
Administrator.
Section 8.07 Resignation or Removal of Trustee and Securities Administrator.
Section 8.08 Successor Trustee and Successor Securities Administrator.
Section 8.09 Merger or Consolidation of Trustee or Securities Administrator.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Section 8.11 Limitation of Liability.
Section 8.12 Trustee or Securities Administrator May Enforce Claims Without
Possession of Certificates.
Section 8.13 Suits for Enforcement.
Section 8.14 Waiver of Bond Requirement.
Section 8.15 Waiver of Inventory, Accounting and Appraisal Requirement.
Section 8.16 Appointment of Custodian.
Section 8.17 Indemnification of the Securities Administrator and Depositor by
the Trustee
Section 8.18 Trustee Errors and Omissions Policy.
Section 8.19 Securities Administrator Errors and Omissions Policy.
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration.
Section 9.02 Prohibited Transactions and Activities.
Section 9.03 Indemnification with Respect to Certain Taxes and Loss of REMIC
Status.
Section 9.04 [Reserved].
Section 9.05 Grantor Trust Administration.
ARTICLE X
TERMINATION
Section 10.01 Termination.
Section 10.02 Additional Termination Requirements.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment.
Section 11.02 Recordation of Agreement; Counterparts.
Section 11.03 Limitation on Rights of Certificateholders.
Section 11.04 Governing Law; Jurisdiction.
Section 11.05 Notices.
Section 11.06 Severability of Provisions.
Section 11.07 Article and Section References.
Section 11.08 Notice to the Rating Agencies.
Section 11.09 Further Assurances.
Section 11.10 Benefits of Agreement.
Section 11.11 Acts of Certificateholders.
Section 11.12 Recharacterization.
Section 11.13 Regulation AB Compliance; Intent of Parties; Reasonableness.
EXHIBITS:
Exhibit A-1 Form of Class A-1 Certificates
Exhibit A-2 Form of Class A-2 Certificates
Exhibit A-3 Form of Class A-3 Certificates
Exhibit A-4 Form of Class A-4 Certificates
Exhibit B-1 Form of Class M-1 Certificates
Exhibit B-2 Form of Class M-2 Certificates
Exhibit B-3 Form of Class M-3 Certificates
Exhibit B-4 Form of Class M-4 Certificates
Exhibit B-5 Form of Class M-5 Certificates
Exhibit B-6 Form of Class M-6 Certificates
Exhibit B-7 Form of Class M-7 Certificates
Exhibit B-8 Form of Class M-8 Certificates
Exhibit B-9 Form of Class M-9 Certificates
Exhibit B-10 Form of Class M-10 Certificates
Exhibit C-1 Form of Class CE Certificates
Exhibit C-2 Form of Class P Certificates
Exhibit C-3 Form of Class R-1 Certificates
Exhibit C-4 Form of Class R-2 Certificates
Exhibit D Addresses for Requesting Mortgage Loan Schedule
Exhibit E Form of Request for Release
Exhibit F-1 Form of Custodian's Initial Certification
Exhibit F-2 Form of Custodian's Final Certification
Exhibit G Form of Mortgage Loan Purchase Agreement
Exhibit H Form of Lost Note Affidavit
Exhibit I Form of ERISA Representation Letter
Exhibit J Form of Rule 144A Investment Letter
Exhibit K Form of Residual Certificate Transfer Affidavit
Exhibit L Form of Transferor Certificate for the M-10, Class CE and Class
P Certificates
Exhibit M [Reserved]
Exhibit N Form of Interest Rate Swap Agreement
Exhibit O Form of Xxxxxxxx-Xxxxx Certification
Exhibit P Form of Certification of the Securities Administrator
to be Provided to Servicer
Exhibit Q List of Recordation States
Exhibit R Form of Custodial Agreement
Exhibit S Servicing Criteria to be Addressed in Assessment of Compliance
Exhibit T Additional Form 10-D Disclosure
Exhibit U Additional Form 10-K Disclosure
Exhibit V Form 8-K Disclosure Information
Exhibit W Additional Disclosure Notification
Exhibit X Prepayment Penalty Matrices
This Pooling and Servicing Agreement is dated as of June 29, 2006
(the "Agreement"), among XXXXX FARGO ASSET SECURITIES CORPORATION, as depositor
(the "Depositor"), XXXXX FARGO BANK, N.A., as servicer (the "Servicer"), XXXXX
FARGO BANK, N.A., as securities administrator (the "Securities Administrator")
and HSBC BANK USA, NATIONAL ASSOCIATION, as trustee (the "Trustee").
PRELIMINARY STATEMENT
The Depositor intends to sell pass-through certificates
(collectively, the "Certificates"), to be issued hereunder in multiple Classes,
which in the aggregate will evidence the entire beneficial ownership interest in
the Trust Fund created hereunder. The Certificates will consist of eighteen
Classes of Certificates, designated as (i) the Class A-1, Class A-2, Class A-3
and Class A-4 Certificates, (ii) the Class M-1, Class M-2, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates, (iii) the Class CE Certificates, (iv) the Class P Certificates and
(v) the Class R-1 and Class R-2 Certificates.
The Trustee shall elect that five segregated asset pools within
the Trust Fund (exclusive of (i) the Prepayment Penalties, the Servicer
Prepayment Penalty Payment Amounts and the Originator Prepayment Penalty Payment
Amounts, (ii) the Interest Rate Swap Agreement, (iii) the Supplemental Interest
Trust, (iv) the Excess Reserve Fund Account and (v) the right of the Regular
Certificates to receive Cap Carryover Amounts and the obligation of the Regular
Certificates to pay Class IO Shortfalls) be treated for federal income tax
purposes as comprising five REMICs (each, a "Trust REMIC" or, in the
alternative, "Pooling-Tier REMIC-1," "Pooling-Tier REMIC-2," "Lower-Tier REMIC,"
"Upper-Tier REMIC" and "Class XX XXXXX," respectively). The Class CE Interest,
Class IO Interest and each Class of Regular Certificates (other than (i) the
right of each Class of Regular Certificates to receive Cap Carryover Amounts and
the obligation to pay Class IO Shortfalls and (ii) the right of the Class CE
Certificates to receive Net Swap Payments from the Swap Provider and the
obligation to pay Cap Carryover Amounts to Holders of the Regular Certificates
and to pay Net Swap Payments and Swap Termination Payments to the Swap Provider)
represent ownership of one or more regular interests in a REMIC for purposes of
the REMIC Provisions.
The Class R-1 Certificates represent the sole class of residual
interest in the Class XX XXXXX for purposes of the REMIC Provisions. The Class
R-2 Certificates represent ownership of the sole class of residual interest in
each of Xxxxxx-Tier REMIC 1, Pooling-Tier REMIC-2, the Lower-Tier REMIC and the
Upper-Tier REMIC for purposes of the REMIC Provisions.
The Start-up Day for each Trust REMIC is the Closing Date. The
latest possible maturity date for each regular interest is the latest date
referenced in Section 9.01.
The Class XX XXXXX shall hold as assets the Class UT-X Interest
and the Class UT-IO Interest as set out below. The Upper-Tier REMIC shall hold
as assets the several classes of uncertificated Lower-Tier Regular Interests,
set out below. The Lower-Tier REMIC shall hold as assets the several classes of
uncertificated Pooling-Tier REMIC-2 Regular Interests. Pooling-Tier REMIC-2
shall hold as assets the several classes of uncertificated Pooling-Tier REMIC-1
Regular Interests. Pooling-Tier REMIC-1 shall hold as assets the assets of the
Trust Fund (exclusive of (i) the Prepayment Penalties, the Servicer Prepayment
Penalty Payment Amounts and the Originator Prepayment Penalty Payment Amounts,
(ii) the Interest Rate Swap Agreement, (iii) the Supplemental Interest Trust,
(iv) the Excess Reserve Fund Account, and (v) the right of the Regular
Certificates to receive Cap Carryover Amounts and the obligation of the Regular
Certificates to pay Class IO Shortfalls).
For federal income tax purposes, each Class of Regular
Certificates, the Class CE Certificates and the Class P Certificates represent
beneficial ownership of portions of the Trust Fund which shall be treated as a
grantor trust in accordance with Section 9.05.
Pooling-Tier REMIC-1
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Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest is hereby designated as a regular
interest in the Pooling-Tier REMIC-1. The Class PT1-R Interest is hereby
designated as the sole class of residual interest in Pooling-Tier REMIC-1. The
Class PT1-R Interest shall have no principal balance and no interest rate.
Pooling-Tier Pooling-Tier Initial Pooling-Tier
REMIC-1 REMIC-1 REMIC-1
Regular Interest Interest Rate Principal Amount
Class PT1-1 (1) $40,435,086.90
Class PT1-2A (2) $11,748,500.00
Class PT1-2B (3) $11,748,500.00
Class PT1-3A (2) $11,400,000.00
Class PT1-3B (3) $11,400,000.00
Class PT1-4A (2) $11,060,500.00
Class PT1-4B (3) $11,060,500.00
Class PT1-5A (2) $10,732,000.00
Class PT1-5B (3) $10,732,000.00
Class PT1-6A (2) $10,412,500.00
Class PT1-6B (3) $10,412,500.00
Class PT1-7A (2) $10,103,000.00
Class PT1-7B (3) $10,103,000.00
Class PT1-8A (2) $9,802,500.00
Class PT1-8B (3) $9,802,500.00
Class PT1-9A (2) $9,511,000.00
Class PT1-9B (3) $9,511,000.00
Class PT1-10A (2) $9,227,000.00
Class PT1-10B (3) $9,227,000.00
Class PT1-11A (2) $8,953,000.00
Class PT1-11B (3) $8,953,000.00
Class PT1-12A (2) $8,686,500.00
Class PT1-12B (3) $8,686,500.00
Class PT1-13A (2) $8,682,500.00
Class PT1-13B (3) $8,682,500.00
Class PT1-14A (2) $10,657,500.00
Class PT1-14B (3) $10,657,500.00
Class PT1-15A (2) $10,551,500.00
Class PT1-15B (3) $10,551,500.00
Class PT1-16A (2) $10,426,500.00
Class PT1-16B (3) $10,426,500.00
Class PT1-17A (2) $10,283,000.00
Class PT1-17B (3) $10,283,000.00
Class PT1-18A (2) $10,122,500.00
Class PT1-18B (3) $10,122,500.00
Class PT1-19A (2) $9,946,000.00
Class PT1-19B (3) $9,946,000.00
Class PT1-20A (2) $9,754,000.00
Class PT1-20B (3) $9,754,000.00
Class PT1-21A (2) $9,548,500.00
Class PT1-21B (3) $9,548,500.00
Class PT1-22A (2) $9,330,000.00
Class PT1-22B (3) $9,330,000.00
Class PT1-23A (2) $9,099,500.00
Class PT1-23B (3) $9,099,500.00
Class PT1-24A (2) $31,357,000.00
Class PT1-24B (3) $31,357,000.00
Class PT1-25A (2) $16,852,500.00
Class PT1-25B (3) $16,852,500.00
Class PT1-26A (2) $14,730,000.00
Class PT1-26B (3) $14,730,000.00
Class PT1-27A (2) $11,198,500.00
Class PT1-27B (3) $11,198,500.00
Class PT1-28A (2) $8,731,000.00
Class PT1-28B (3) $8,731,000.00
Class PT1-29A (2) $6,932,000.00
Class PT1-29B (3) $6,932,000.00
Class PT1-30A (2) $5,576,000.00
Class PT1-30B (3) $5,576,000.00
Class PT1-31A (2) $4,526,500.00
Class PT1-31B (3) $4,526,500.00
Class PT1-32A (2) $3,694,500.00
Class PT1-32B (3) $3,694,500.00
Class PT1-33A (2) $3,022,500.00
Class PT1-33B (3) $3,022,500.00
Class PT1-34A (2) $2,874,500.00
Class PT1-34B (3) $2,874,500.00
Class PT1-35A (2) $2,732,000.00
Class PT1-35B (3) $2,732,000.00
Class PT1-36A (2) $2,598,500.00
Class PT1-36B (3) $2,598,500.00
Class PT1-37A (2) $2,471,000.00
Class PT1-37B (3) $2,471,000.00
Class PT1-38A (2) $2,350,000.00
Class PT1-38B (3) $2,350,000.00
Class PT1-39A (2) $2,234,500.00
Class PT1-39B (3) $2,234,500.00
Class PT1-40A (2) $2,125,000.00
Class PT1-40B (3) $2,125,000.00
Class PT1-41A (2) $2,021,000.00
Class PT1-41B (3) $2,021,000.00
Class PT1-42A (2) $1,922,000.00
Class PT1-42B (3) $1,922,000.00
Class PT1-43A (2) $1,828,000.00
Class PT1-43B (3) $1,828,000.00
Class PT1-44A (2) $1,737,500.00
Class PT1-44B (3) $1,737,500.00
Class PT1-45A (2) $1,653,000.00
Class PT1-45B (3) $1,653,000.00
Class PT1-46A (2) $1,572,000.00
Class PT1-46B (3) $1,572,000.00
Class PT1-47A (2) $1,494,500.00
Class PT1-47B (3) $1,494,500.00
Class PT1-48A (2) $1,421,500.00
Class PT1-48B (3) $1,421,500.00
Class PT1-49A (2) $1,352,000.00
Class PT1-49B (3) $1,352,000.00
Class PT1-50A (2) $1,285,500.00
Class PT1-50B (3) $1,285,500.00
Class PT1-51A (2) $1,222,000.00
Class PT1-51B (3) $1,222,000.00
Class PT1-52A (2) $1,162,500.00
Class PT1-52B (3) $1,162,500.00
Class PT1-53A (2) $1,105,000.00
Class PT1-53B (3) $1,105,000.00
Class PT1-54A (2) $1,051,500.00
Class PT1-54B (3) $1,051,500.00
Class PT1-55A (2) $999,500.00
Class PT1-55B (3) $999,500.00
Class PT1-56A (2) $950,500.00
Class PT1-56B (3) $950,500.00
Class PT1-57A (2) $904,500.00
Class PT1-57B (3) $904,500.00
Class PT1-58A (2) $860,000.00
Class PT1-58B (3) $860,000.00
Class PT1-59A (2) $820,500.00
Class PT1-59B (3) $820,500.00
Class PT1-60A (2) $15,799,000.00
Class PT1-60B (3) $15,799,000.00
----------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (such rate, the "Pooling-Tier REMIC-1 Interest Rate" for such Class)
equal to the Pooling-Tier REMIC-1 WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (such rate, the "Pooling-Tier REMIC-1 Interest Rate" for such Class)
equal to the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 WAC Rate,
subject to a maximum rate equal to the PT1 Cap.
(3) For any Distribution Date (and the related Interest Accrual Period) this
Pooling-Tier REMIC-1 Regular Interest shall bear interest at a per annum
rate (such rate, the "Pooling-Tier REMIC-1 Interest Rate" for such Class)
equal to the excess, if any, of (A) the product of (i) 2 and (ii) the
Pooling-Tier REMIC-1 WAC Rate over (B) the PTI Cap.
On each Distribution Date, the Securities Administrator shall
first pay from the Trust Fund and charge as an expense of Pooling-Tier REMIC-1
all expenses of the Trust for such Distribution Date. Such expense, other than
the Servicing Fee, shall be allocated in the same manner as Realized Losses.
On each Distribution Date, the interest distributable in respect
of the Mortgage Loans for such Distribution Date shall be deemed to be
distributed to the Pooling-Tier REMIC-1 Regular Interests at the rates shown
above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Mortgage Loans shall be allocated to
the outstanding Pooling-Tier REMIC-1 Regular Interest with the lowest numerical
denomination until the Pooling-Tier REMIC-1 Principal Amount of such interest or
interests, as the case may be, is reduced to zero, provided that, with respect
to Pooling-Tier REMIC-1 Regular Interests with the same numerical denomination,
such Realized Losses, Subsequent Recoveries and payments of principal shall be
allocated pro rata between such Pooling-Tier REMIC-1 Regular Interests.
Pooling-Tier REMIC-2
--------------------
Pooling-Tier REMIC-2 shall issue the following interests in
Pooling-Tier REMIC-2, and each such interest, other than the Class PT2-R
Interest, is hereby designated as a regular interest in Pooling-Tier REMIC-2.
The Class PT2-R Interest is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-2 and shall be represented by the Class R-2
Certificates. The Class PT2-R Interest shall have no principal balance and no
interest rate.
Initial Corresponding Corresponding Corresponding
Pooling-Tier Pooling-Tier Pooling-Tier Pooling-Tier Pooling-Tier Scheduled
REMIC-2 REMIC-2 REMIC-2 REMIC-2 IO REMIC-1 Regular Crossover
Regular Interest Interest Rate Principal Amount Interest Interest Distribution Date
Class PT2-1 (1) $40,435,086.90 N/A N/A N/A
Class PT2-2A (2) $11,748,500.00 Class PT2-IO-2 N/A N/A
Class PT2-2B (3) $11,748,500.00 N/A N/A N/A
Class PT2-3A (2) $11,400,000.00 Class PT2-IO-3 N/A N/A
Class PT2-3B (3) $11,400,000.00 N/A N/A N/A
Class PT2-4A (2) $11,060,500.00 Class PT2-IO-4 N/A N/A
Class PT2-4B (3) $11,060,500.00 N/A N/A N/A
Class PT2-5A (2) $10,732,000.00 Class PT2-IO-5 N/A N/A
Class PT2-5B (3) $10,732,000.00 N/A N/A N/A
Class PT2-6A (2) $10,412,500.00 Class PT2-IO-6 N/A N/A
Class PT2-6B (3) $10,412,500.00 N/A N/A N/A
Class PT2-7A (2) $10,103,000.00 Class PT2-IO-7 N/A N/A
Class PT2-7B (3) $10,103,000.00 N/A N/A N/A
Class PT2-8A (2) $9,802,500.00 Class PT2-IO-8 N/A N/A
Class PT2-8B (3) $9,802,500.00 N/A N/A N/A
Class PT2-9A (2) $9,511,000.00 Class PT2-IO-9 N/A N/A
Class PT2-9B (3) $9,511,000.00 N/A N/A N/A
Class PT2-10A (2) $9,227,000.00 Class PT2-IO-10 N/A N/A
Class PT2-10B (3) $9,227,000.00 N/A N/A N/A
Class PT2-11A (2) $8,953,000.00 Class PT2-IO-11 N/A N/A
Class PT2-11B (3) $8,953,000.00 N/A N/A N/A
Class PT2-12A (2) $8,686,500.00 Class PT2-IO-12 N/A N/A
Class PT2-12B (3) $8,686,500.00 N/A N/A N/A
Class PT2-13A (2) $8,682,500.00 Class PT2-IO-13 N/A N/A
Class PT2-13B (3) $8,682,500.00 N/A N/A N/A
Class PT2-14A (2) $10,657,500.00 Class PT2-IO-14 N/A N/A
Class PT2-14B (3) $10,657,500.00 N/A N/A N/A
Class PT2-15A (2) $10,551,500.00 Class PT2-IO-15 N/A N/A
Class PT2-15B (3) $10,551,500.00 N/A N/A N/A
Class PT2-16A (2) $10,426,500.00 Class PT2-IO-16 N/A N/A
Class PT2-16B (3) $10,426,500.00 N/A N/A N/A
Class PT2-17A (2) $10,283,000.00 Class PT2-IO-17 N/A N/A
Class PT2-17B (3) $10,283,000.00 N/A N/A N/A
Class PT2-18A (2) $10,122,500.00 Class PT2-IO-18 N/A N/A
Class PT2-18B (3) $10,122,500.00 N/A N/A N/A
Class PT2-19A (2) $9,946,000.00 Class PT2-IO-19 N/A N/A
Class PT2-19B (3) $9,946,000.00 N/A N/A N/A
Class PT2-20A (2) $9,754,000.00 Class PT2-IO-20 N/A N/A
Class PT2-20B (3) $9,754,000.00 N/A N/A N/A
Class PT2-21A (2) $9,548,500.00 Class PT2-IO-21 N/A N/A
Class PT2-21B (3) $9,548,500.00 N/A N/A N/A
Class PT2-22A (2) $9,330,000.00 Class PT2-IO-22 N/A N/A
Class PT2-22B (3) $9,330,000.00 N/A N/A N/A
Class PT2-23A (2) $9,099,500.00 Class PT2-IO-23 N/A N/A
Class PT2-23B (3) $9,099,500.00 N/A N/A N/A
Class PT2-24A (2) $31,357,000.00 Class PT2-IO-24 N/A N/A
Class PT2-24B (3) $31,357,000.00 N/A N/A N/A
Class PT2-25A (2) $16,852,500.00 Class PT2-IO-25 N/A N/A
Class PT2-25B (3) $16,852,500.00 N/A N/A N/A
Class PT2-26A (2) $14,730,000.00 Class PT2-IO-26 N/A N/A
Class PT2-26B (3) $14,730,000.00 N/A N/A N/A
Class PT2-27A (2) $11,198,500.00 Class PT2-IO-27 N/A N/A
Class PT2-27B (3) $11,198,500.00 N/A N/A N/A
Class PT2-28A (2) $8,731,000.00 Class PT2-IO-28 N/A N/A
Class PT2-28B (3) $8,731,000.00 N/A N/A N/A
Class PT2-29A (2) $6,932,000.00 Class PT2-IO-29 N/A N/A
Class PT2-29B (3) $6,932,000.00 N/A N/A N/A
Class PT2-30A (2) $5,576,000.00 Class PT2-IO-30 N/A N/A
Class PT2-30B (3) $5,576,000.00 N/A N/A N/A
Class PT2-31A (2) $4,526,500.00 Class PT2-IO-31 N/A N/A
Class PT2-31B (3) $4,526,500.00 N/A N/A N/A
Class PT2-32A (2) $3,694,500.00 Class PT2-IO-32 N/A N/A
Class PT2-32B (3) $3,694,500.00 N/A N/A N/A
Class PT2-33A (2) $3,022,500.00 Class PT2-IO-33 N/A N/A
Class PT2-33B (3) $3,022,500.00 N/A N/A N/A
Class PT2-34A (2) $2,874,500.00 Class PT2-IO-34 N/A N/A
Class PT2-34B (3) $2,874,500.00 N/A N/A N/A
Class PT2-35A (2) $2,732,000.00 Class PT2-IO-35 N/A N/A
Class PT2-35B (3) $2,732,000.00 N/A N/A N/A
Class PT2-36A (2) $2,598,500.00 Class PT2-IO-36 N/A N/A
Class PT2-36B (3) $2,598,500.00 N/A N/A N/A
Class PT2-37A (2) $2,471,000.00 Class PT2-IO-37 N/A N/A
Class PT2-37B (3) $2,471,000.00 N/A N/A N/A
Class PT2-38A (2) $2,350,000.00 Class PT2-IO-38 N/A N/A
Class PT2-38B (3) $2,350,000.00 N/A N/A N/A
Class PT2-39A (2) $2,234,500.00 Class PT2-IO-39 N/A N/A
Class PT2-39B (3) $2,234,500.00 N/A N/A N/A
Class PT2-40A (2) $2,125,000.00 Class PT2-IO-40 N/A N/A
Class PT2-40B (3) $2,125,000.00 N/A N/A N/A
Class PT2-41A (2) $2,021,000.00 Class PT2-IO-41 N/A N/A
Class PT2-41B (3) $2,021,000.00 N/A N/A N/A
Class PT2-42A (2) $1,922,000.00 Class PT2-IO-42 N/A N/A
Class PT2-42B (3) $1,922,000.00 N/A N/A N/A
Class PT2-43A (2) $1,828,000.00 Class PT2-IO-43 N/A N/A
Class PT2-43B (3) $1,828,000.00 N/A N/A N/A
Class PT2-44A (2) $1,737,500.00 Class PT2-IO-44 N/A N/A
Class PT2-44B (3) $1,737,500.00 N/A N/A N/A
Class PT2-45A (2) $1,653,000.00 Class PT2-IO-45 N/A N/A
Class PT2-45B (3) $1,653,000.00 N/A N/A N/A
Class PT2-46A (2) $1,572,000.00 Class PT2-IO-46 N/A N/A
Class PT2-46B (3) $1,572,000.00 N/A N/A N/A
Class PT2-47A (2) $1,494,500.00 Class PT2-IO-47 N/A N/A
Class PT2-47B (3) $1,494,500.00 N/A N/A N/A
Class PT2-48A (2) $1,421,500.00 Class PT2-IO-48 N/A N/A
Class PT2-48B (3) $1,421,500.00 N/A N/A N/A
Class PT2-49A (2) $1,352,000.00 Class PT2-IO-49 N/A N/A
Class PT2-49B (3) $1,352,000.00 N/A N/A N/A
Class PT2-50A (2) $1,285,500.00 Class PT2-IO-50 N/A N/A
Class PT2-50B (3) $1,285,500.00 N/A N/A N/A
Class PT2-51A (2) $1,222,000.00 Class PT2-IO-51 N/A N/A
Class PT2-51B (3) $1,222,000.00 N/A N/A N/A
Class PT2-52A (2) $1,162,500.00 Class PT2-IO-52 N/A N/A
Class PT2-52B (3) $1,162,500.00 N/A N/A N/A
Class PT2-53A (2) $1,105,000.00 Class PT2-IO-53 N/A N/A
Class PT2-53B (3) $1,105,000.00 N/A N/A N/A
Class PT2-54A (2) $1,051,500.00 Class PT2-IO-54 N/A N/A
Class PT2-54B (3) $1,051,500.00 N/A N/A N/A
Class PT2-55A (2) $999,500.00 Class PT2-IO-55 N/A N/A
Class PT2-55B (3) $999,500.00 N/A N/A N/A
Class PT2-56A (2) $950,500.00 Class PT2-IO-56 N/A N/A
Class PT2-56B (3) $950,500.00 N/A N/A N/A
Class PT2-57A (2) $904,500.00 Class PT2-IO-57 N/A N/A
Class PT2-57B (3) $904,500.00 N/A N/A N/A
Class PT2-58A (2) $860,000.00 Class PT2-IO-58 N/A N/A
Class PT2-58B (3) $860,000.00 N/A N/A N/A
Class PT2-59A (2) $820,500.00 Class PT2-IO-59 N/A N/A
Class PT2-59B (3) $820,500.00 N/A N/A N/A
Class PT2-60A (2) $15,799,000.00 Class PT2-IO-60 N/A N/A
Class PT2-60B (3) $15,799,000.00 N/A N/A N/A
Class PT2-IO-2 (4) (4) N/A Class PT1-2A August 2006
Class PT2-IO-3 (4) (4) N/A Class PT1-3A September 2006
Class PT2-IO-4 (4) (4) N/A Class PT1-4A October 2006
Class PT2-IO-5 (4) (4) N/A Class PT1-5A November 2006
Class PT2-IO-6 (4) (4) N/A Class PT1-6A December 2006
Class PT2-IO-7 (4) (4) N/A Class PT1-7A January 2007
Class PT2-IO-8 (4) (4) N/A Class PT1-8A February 2007
Class PT2-IO-9 (4) (4) N/A Class PT1-9A March 2007
Class PT2-IO-10 (4) (4) N/A Class PT1-10A April 2007
Class PT2-IO-11 (4) (4) N/A Class PT1-11A May 2007
Class PT2-IO-12 (4) (4) N/A Class PT1-12A June 2007
Class PT2-IO-13 (4) (4) N/A Class PT1-13A July 2007
Class PT2-IO-14 (4) (4) N/A Class PT1-14A August 2007
Class PT2-IO-15 (4) (4) N/A Class PT1-15A September 2007
Class PT2-IO-16 (4) (4) N/A Class PT1-16A October 2007
Class PT2-IO-17 (4) (4) N/A Class PT1-17A November 2007
Class PT2-IO-18 (4) (4) N/A Class PT1-18A December 2007
Class PT2-IO-19 (4) (4) N/A Class PT1-19A January 2008
Class PT2-IO-20 (4) (4) N/A Class PT1-20A February 2008
Class PT2-IO-21 (4) (4) N/A Class PT1-21A March 2008
Class PT2-IO-22 (4) (4) N/A Class PT1-22A April 2008
Class PT2-IO-23 (4) (4) N/A Class PT1-23A May 2008
Class PT2-IO-24 (4) (4) N/A Class PT1-24A June 2008
Class PT2-IO-25 (4) (4) N/A Class PT1-25A July 2008
Class PT2-IO-26 (4) (4) N/A Class PT1-26A August 2008
Class PT2-IO-27 (4) (4) N/A Class PT1-27A September 2008
Class PT2-IO-28 (4) (4) N/A Class PT1-28A October 2008
Class PT2-IO-29 (4) (4) N/A Class PT1-29A November 2008
Class PT2-IO-30 (4) (4) N/A Class PT1-30A December 2008
Class PT2-IO-31 (4) (4) N/A Class PT1-31A January 2009
Class PT2-IO-32 (4) (4) N/A Class PT1-32A February 2009
Class PT2-IO-33 (4) (4) N/A Class PT1-33A March 2009
Class PT2-IO-34 (4) (4) N/A Class PT1-34A April 2009
Class PT2-IO-35 (4) (4) N/A Class PT1-35A May 2009
Class PT2-IO-36 (4) (4) N/A Class PT1-36A June 2009
Class PT2-IO-37 (4) (4) N/A Class PT1-37A July 2009
Class PT2-IO-38 (4) (4) N/A Class PT1-38A August 2009
Class PT2-IO-39 (4) (4) N/A Class PT1-39A September 2009
Class PT2-IO-40 (4) (4) N/A Class PT1-40A October 2009
Class PT2-IO-41 (4) (4) N/A Class PT1-41A November 2009
Class PT2-IO-42 (4) (4) N/A Class PT1-42A December 2009
Class PT2-IO-43 (4) (4) N/A Class PT1-43A January 2010
Class PT2-IO-44 (4) (4) N/A Class PT1-44A February 2010
Class PT2-IO-45 (4) (4) N/A Class PT1-45A March 2010
Class PT2-IO-46 (4) (4) N/A Class PT1-46A April 2010
Class PT2-IO-47 (4) (4) N/A Class PT1-47A May 2010
Class PT2-IO-48 (4) (4) N/A Class PT1-48A June 2010
Class PT2-IO-49 (4) (4) N/A Class PT1-49A July 2010
Class PT2-IO-50 (4) (4) N/A Class PT1-50A August 2010
Class PT2-IO-51 (4) (4) N/A Class PT1-51A September 2010
Class PT2-IO-52 (4) (4) N/A Class PT1-52A October 2010
Class PT2-IO-53 (4) (4) N/A Class PT1-53A November 2010
Class PT2-IO-54 (4) (4) N/A Class PT1-54A December 2010
Class PT2-IO-55 (4) (4) N/A Class PT1-55A January 2011
Class PT2-IO-56 (4) (4) N/A Class PT1-56A February 2011
Class PT2-IO-57 (4) (4) N/A Class PT1-57A March 2011
Class PT2-IO-58 (4) (4) N/A Class PT1-58A April 2011
Class PT2-IO-59 (4) (4) N/A Class PT1-59A May 2011
Class PT2-IO-60 (4) (4) N/A Class PT1-60A June 2011
------------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (such rate, the "Pooling-Tier REMIC-2 Interest Rate" for such Class)
equal to the Pooling-Tier REMIC-1 WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (such rate, the "Pooling-Tier REMIC-2 Interest Rate" for such Class)
equal to the weighted average of the Pooling-Tier REMIC-1 Interest Rates on
the Pooling-Tier REMIC-1 Regular Interests having an "A" in their class
designation, provided that, on each Distribution Date on which interest is
distributable on the Corresponding Pooling-Tier REMIC-2 IO Interest, this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate equal to Swap LIBOR subject to a maximum rate equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests having an "A" in their class designation.
(3) For any Distribution Date (and the related Interest Accrual Period) this
Pooling-Tier REMIC-2 Regular Interest shall bear interest at a per annum
rate (such rate, the "Pooling-Tier REMIC-2 Interest Rate" for such Class)
equal to the weighted average of the Pooling-Tier REMIC-1 Interest Rates on
the Pooling-Tier REMIC-1 Regular Interests having a "B" in their class
designation.
(4) Each Pooling-Tier REMIC-2 IO Interest is an interest-only interest and does
not have a principal balance. From the Closing Date through and including
the Corresponding Scheduled Crossover Distribution Date, each Pooling-Tier
REMIC-2 IO Interest shall be entitled to receive interest that accrues on
the Corresponding Pooling-Tier REMIC-1 Regular Interest at a rate equal to
the excess, if any, of (i) the Pooling-Tier REMIC-1 Interest Rate for the
Corresponding Pooling-Tier REMIC-1 Regular Interest over (ii) Swap LIBOR.
After the Corresponding Scheduled Crossover Distribution Date, the
Pooling-Tier REMIC-2 IO Interest shall not accrue interest.
On each Distribution Date, the interest distributable in respect
of the Mortgage Loans for such Distribution Date shall be distributed to the
Pooling-Tier REMIC-2 Regular Interests at the Pooling-Tier REMIC-2 Interest
Rates shown above.
On each Distribution Date, Realized Losses, Subsequent Recoveries
and payments of principal in respect of the Mortgage Loans shall be allocated to
the outstanding Pooling-Tier REMIC-2 Regular Interests (other than the
Pooling-Tier REMIC-2 IO Interests) with the lowest numerical denomination until
the Pooling-Tier REMIC-2 Principal Amount of such interest or interests, as the
case may be, is reduced to zero, provided however that, for Pooling-Tier REMIC-2
Regular Interests with the same numerical denomination, such Realized Losses,
Subsequent Recoveries and payments of principal shall be allocated pro rata
between such Pooling-Tier REMIC-2 Regular Interests.
Lower-Tier REMIC
----------------
The Lower-Tier REMIC shall issue the following interests, and
each such interest, other than the Class LT-R Interest, is hereby designated as
a regular interest in the Lower-Tier REMIC. The Class LT-R Interest is hereby
designated as the sole class of residual interest in the Lower-Tier REMIC and
shall be represented by the Class R-2 Certificates. The Class LT-R Interest
shall have no principal balance and no interest rate.
Corresponding
Lower-Tier Lower-Tier Initial Lower-Tier Upper-Tier REMIC
Regular Interest Interest Rate Principal Amount Regular Interest
Class LT-A-1 (1) 1/2 Principal Balance of Corresponding A-1
Upper-Tier REMIC Regular Interest
Class LT-A-2 (1) 1/2 Principal Balance of Corresponding A-2
Upper-Tier REMIC Regular Interest
Class LT-A-3 (1) 1/2 Principal Balance of Corresponding A-3
Upper-Tier REMIC Regular Interest
Class LT-A-4 (1) 1/2 Principal Balance of Corresponding A-4
Upper-Tier REMIC Regular Interest
Class LT-M-1 (1) 1/2 Principal Balance of Corresponding M-1
Upper-Tier REMIC Regular Interest
Class LT-M-2 (1) 1/2 Principal Balance of Corresponding M-2
Upper-Tier REMIC Regular Interest
Class LT-M-3 (1) 1/2 Principal Balance of Corresponding M-3
Upper-Tier REMIC Regular Interest
Class LT-M-4 (1) 1/2 Principal Balance of Corresponding M-4
Upper-Tier REMIC Regular Interest
Class LT-M-5 (1) 1/2 Principal Balance of Corresponding M-5
Upper-Tier REMIC Regular Interest
Class LT-M-6 (1) 1/2 Principal Balance of Corresponding M-6
Upper-Tier REMIC Regular Interest
Class LT-M-7 (1) 1/2 Principal Balance of Corresponding M-7
Upper-Tier REMIC Regular Interest
Class LT-M-8 (1) 1/2 Principal Balance of Corresponding M-8
Upper-Tier REMIC Regular Interest
Class LT-M-9 (1) 1/2 Principal Balance of Corresponding M-9
Upper-Tier REMIC Regular Interest
Class LT-M-10 (1) 1/2 Principal Balance of Corresponding M-10
Upper-Tier REMIC Regular Interest
Class LT-Accrual (1) 1/2 Pool Balance plus 1/2 N/A
Overcollateralization Amount
Class LT-IO (2) (2) N/A
-------------------
(1) The interest rate with respect to any Distribution Date for these interests
is a per annum variable rate equal to the weighted average of the
Pooling-Tier REMIC-2 Interest Rates of the Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests).
(2) This Lower-Tier Regular Interest is an interest-only interest and does not
have a Lower-Tier Principal Amount. On each Distribution Date, this
Lower-Tier Regular Interest shall be entitled to receive all interest
distributable on the Pooling-Tier REMIC-2 IO Interests.
Each Lower-Tier Regular Interest is hereby designated as a
regular interest in the Lower-Tier REMIC. The Class LT-A-1, Class LT-A-2, Class
LT-A-3, Class LT-A-4, Class LT-M-1, Class LT-M-2, Class LT-M-3, Class LT-M-4,
Class LT-M-5, Class LT-M-6, Class LT-M-7, Class LT-M-8, Class LT-M-9 and Class
LT-M-10 Interests are hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed Classes").
On each Distribution Date, 50% of the increase in the
Overcollateralization Amount shall be payable as a reduction of the Lower-Tier
Principal Amount of the LT-Accretion Directed Classes (each such Class will be
reduced by an amount equal to 50% of any increase in the Overcollateralization
Amount that is attributable to a reduction in the Principal Balance of its
Corresponding Class) and shall be accrued and added to the Lower-Tier Principal
Amount of the Class LT-Accrual Interest. On each Distribution Date, the increase
in the Lower-Tier Principal Amount of the Class LT-Accrual Interest shall not
exceed interest accruals for such Distribution Date for the Class LT-Accrual
Interest. In the event that: (i) 50% of the increase in the
Overcollateralization Amount exceeds (ii) interest accruals on the Class
LT-Accrual Interest for such Distribution Date, the excess for such Distribution
Date (accumulated with all such excesses for all prior Distribution Dates) will
be added to any increase in the Overcollateralization Amount for purposes of
determining the amount of interest accrual on the Class LT-Accrual Interest
payable as principal on the LT-Accretion Directed Classes on the next
Distribution Date pursuant to the first sentence of this paragraph. All payments
of scheduled principal and prepayments of principal generated by the Mortgage
Loans and all Subsequent Recoveries allocable to principal shall be allocated
(i) 50% to the Class LT-Accrual Interest and (ii) 50% to the LT-Accretion
Directed Classes (such principal payments and Subsequent Recoveries shall be
allocated among such LT-Accretion Directed Classes in an amount equal to 50% of
the principal amounts and Subsequent Recoveries allocated to their respective
Corresponding Classes), until paid in full. Notwithstanding the above, principal
payments allocated to the Class UT-X Interest that result in the reduction in
the Overcollateralization Amount shall be allocated to the Class LT-Accrual
Interest (until paid in full). Realized Losses shall be applied so that after
all distributions have been made on each Distribution Date (i) the Lower-Tier
Principal Amount of each of the LT-Accretion Directed Classes is equal to 50% of
the Principal Balance of their Corresponding Class, and (ii) the Class
LT-Accrual Interest is equal to 50% of the Pool Balance plus 50% of the
Overcollateralization Amount. Any increase in the Principal Balance of a Class
of Regular Certificates as a result of a Subsequent Recovery shall increase the
Lower-Tier Principal Amount of the Corresponding Lower-Tier Regular Interest by
50% of such increase, and the remaining 50% of such increase shall increase the
Lower-Tier Principal Amount of the Class LT-Accrual Interest.
Upper-Tier REMIC
----------------
The Upper-Tier REMIC shall issue the following interests, and
each such interest, other than the Class UT-R Interest, is hereby designated as
a regular interest in the Upper-Tier REMIC. The Class UT-R Interest is hereby
designated as the sole class of residual interests in the Upper-Tier REMIC and
shall be represented by the Class R-2 Certificates. The Class UT-R Interest
shall have no principal balance and no interest rate.
Upper-Tier REMIC Upper-Tier Initial Principal Corresponding Class
Regular Interest Interest Rate Upper-Tier Amount of Certificates
Class A-1 (1) $369,249,000.00 Class A-1
Class A-2 (1) $89,966,000.00 Class A-2
Class A-3 (1) $134,092,000.00 Class A-3
Class A-4 (1) $66,317,000.00 Class A-4
Class M-1 (1) $30,001,000.00 Class M-1
Class M-2 (1) $25,542,000.00 Class M-2
Class M-3 (1) $14,595,000.00 Class M-3
Class M-4 (1) $12,974,000.00 Class M-4
Class M-5 (1) $12,974,000.00 Class M-5
Class M-6 (1) $11,757,000.00 Class M-6
Class M-7 (1) $11,352,000.00 Class M-7
Class M-8 (1) $8,919,000.00 Class M-8
Class M-9 (1) $4,460,000.00 Class M-9
Class M-10 (1) $8,108,000.00 Class M-10
Class UT-IO (2) (2) N/A
Class UT-X (3) (3) N/A
-----------------
(1) For any Distribution Date (and the related Interest Accrual Period), this
interest shall bear interest at the lesser of (i) the Pass-Through Rate
(determined without regard to the Pool Cap) for the Corresponding Class of
Certificates, and (ii) the Upper-Tier REMIC WAC Rate.
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date, the Class UT-IO Interest shall be
entitled to receive all interest distributable on the Class LT-IO Interest.
(3) The Class UT-X Interest has an initial principal balance of $10,541,086.90
but will not accrue interest on such balance but will accrue interest on a
notional amount. As of any Distribution Date, the Class UT-X Interest shall
have a notional amount equal to the aggregate of the Lower-Tier Principal
Amounts of the Lower-Tier Regular Interests (other than the Class LT-IO
Interest) as of the first day of the related Interest Accrual Period. With
respect to any Interest Accrual Period, the Class UT-X Interest shall bear
interest at a rate equal to the excess, if any, of the Upper-Tier REMIC WAC
Rate over the product of (i) 2 and (ii) the weighted average of the
Lower-Tier Interest Rates of the Lower-Tier REMIC Interests (other than the
Class LT-IO Interest), where the Lower-Tier Interest Rate on the Class
LT-Accrual Interest is subject to a cap equal to zero and each LT Accretion
Directed Class is subject to a cap equal to the Upper-Tier Interest Rate on
its Corresponding Class of Upper-Tier Regular Interest. With respect to any
Distribution Date, interest that so accrues on the notional amount of the
Class UT-X Interest shall be deferred in an amount equal to any increase in
the Overcollateralization Amount on such Distribution Date. Such deferred
interest shall not itself bear interest.
On each Distribution Date, interest distributable in respect of
the Lower-Tier Interests for such Distribution Date shall be deemed to be
distributed on the interests in the Upper-Tier REMIC at the rates shown above,
provided that the Class UT-IO Interest shall be entitled to receive interest
before any other interest in the Upper-Tier REMIC.
On each Distribution Date, all Realized Losses, Subsequent
Recoveries and all payments of principal shall be allocated to the Upper-Tier
Interests until the outstanding principal balance of each such interest equals
the outstanding Principal Balance of the Corresponding Class of Certificates as
of such Distribution Date.
Class XX XXXXX
--------------
The Class XX XXXXX shall issue the following classes of
interests. The Class CE Interest and the Class IO Interest shall each represent
a regular interest in the Class XX XXXXX and the Class R-1 Certificate shall
represent the sole class of residual interest in the Class XX XXXXX.
Class XX XXXXX Interest Class XX XXXXX
Designation Rate Principal Amount
Class CE Interest (1) (1)
Class IO Interest (2) (2)
Class R-1 Certificate (3) (3)
------------------
(1) The Class CE Interest has an initial principal balance equal to the initial
principal balance of the Class UT-X Interest and is entitled to 100% of the
interest and principal on the Class UT-X Interest on each Distribution Date.
(2) This interest is an interest-only interest and does not have a principal
balance. On each Distribution Date the Class IO Interest shall be entitled
to receive 100% of the interest distributable on the Class UT-IO Interest.
(3) The Class R-1 Certificate does not have a principal balance or an interest
rate.
Certificates
------------
The following table sets forth (or describes) the Class
designation, Original Principal Balance, the Pass-Through Rate and the Final
Scheduled Distribution Date for each Class of Certificates comprising the
interests in the Trust Fund created hereunder:
Original Principal Pass-Through Final Scheduled
Class Balance Rate Distribution Date*
A-1 $369,249,000.00 (1) July 25, 2036
A-2 $89,966,000.00 (2) July 25, 2036
A-3 $134,092,000.00 (3) July 25, 2036
A-4 $66,317,000.00 (4) July 25, 2036
M-1 $30,001,000.00 (5) July 25, 2036
M-2 $25,542,000.00 (6) July 25, 2036
M-3 $14,595,000.00 (7) July 25, 2036
M-4 $12,974,000.00 (8) July 25, 2036
M-5 $12,974,000.00 (9) July 25, 2036
M-6 $11,757,000.00 (10) July 25, 2036
M-7 $11,352,000.00 (11) July 25, 2036
M-8 $8,919,000.00 (12) July 25, 2036
M-9 $4,460,000.00 (13) July 25, 2036
M-10 $8,108,000.00 (14) July 25, 2036
CE (15) (15) N/A
P X/X X/X X/X
X-0 X/X X/X N/A
R-2 N/A N/A N/A
Total $800,306,000.00 N/A N/A
---------------
* Solely for purposes of Treasury Regulations Section 1.860G-1(a)(4)(iii),
the Distribution Date following the maturity date for the Mortgage Loan
with the latest maturity date has been designated as the "latest possible
maturity date" for each Class of Regular Certificates, the Class CE
Interest and the Class IO Interest that represents one or more of the
"regular interests" in the Upper-Tier REMIC.
(1) The Pass-Through Rate for the Class A-1 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class A-1 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(2) The Pass-Through Rate for the Class A-2 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class A-2 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(3) The Pass-Through Rate for the Class A-3 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class A-3 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(4) The Pass-Through Rate for the Class A-4 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class A-4 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(5) The Pass-Through Rate for the Class M-1 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-1 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(6) The Pass-Through Rate for the Class M-2 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-2 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(7) The Pass-Through Rate for the Class M-3 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-3 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(8) The Pass-Through Rate for the Class M-4 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-4 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(9) The Pass-Through Rate for the Class M-5 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-5 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(10) The Pass-Through Rate for the Class M-6 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-6 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(11) The Pass-Through Rate for the Class M-7 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-7 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(12) The Pass-Through Rate for the Class M-8 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-8 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(13) The Pass-Through Rate for the Class M-9 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-9 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(14) The Pass-Through Rate for the Class M-10 Certificates during each Interest
Accrual Period is equal to the lesser of: (i) the Class M-10 Formula Rate
and (ii) the Pool Cap for such Distribution Date.
(15) The Class CE Certificates will represent beneficial ownership of (i) the
Class CE Interest, (ii) the Class IO Interest, (iii) the right to receive
Class IO Shortfalls, (iv) amounts in the Supplemental Interest Trust,
including the Interest Rate Swap Agreement subject to the obligation to
pay Net Swap Payments and Swap Termination Payments to the Swap Provider
and Cap Carryover Amounts to the Regular Certificates and (v) amounts in
the Excess Reserve Fund Account, subject to the obligation to make
payments from the Excess Reserve Fund Account in respect of Cap Carryover
Amounts to the Regular Certificates. For federal income tax purposes, the
Class CE Certificateholder's obligation to make payments of Cap Carryover
Amounts to the Regular Certificates from the Excess Reserve Fund Account
and the Supplemental Interest Trust shall be treated as payments made
pursuant to an interest rate cap contract written by the Class CE
Certificateholders in favor of each Class of Regular Certificates. Such
rights of the Class CE Certificateholders and Regular Certificateholders
shall be treated as held in a portion of the Trust Fund that is treated as
a grantor trust under subpart E, Part I of subchapter J of the Code.
ARTICLE I
DEFINITIONS
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. Interest
on all Regular Certificates will be calculated on the basis of the actual number
of days in the related Interest Accrual Period and a 360-day year.
"1933 Act" The Securities Act of 1933, as amended.
"60+ Day Delinquent Loan" Each Mortgage Loan (including each
Mortgage Loan in foreclosure and each Mortgage Loan for which the Mortgagor has
filed for bankruptcy after the Closing Date) with respect to which any portion
of a Monthly Payment is, as of the last day of the prior Collection Period, two
months or more past due and each Mortgage Loan relating to an REO Property.
"Account" Any of the Collection Account, the Distribution
Account, the Supplemental Interest Trust Account, the Excess Reserve Fund
Account or the Escrow Account.
"Accrued Certificate Interest" With respect to each Distribution
Date and Class of Certificates (other than the Class CE, Class P and Residual
Certificates), an amount equal to the interest accrued at the Pass-Through Rate
set forth or described for such Class in the table in the Preliminary Statement
under the caption "Certificates" during the related Interest Accrual Period on
the Principal Balance of such Class of Certificates, reduced by such Class'
Interest Percentage of any Current Interest Shortfall for such Distribution
Date.
"Additional Form 10-D Disclosure" As defined in Section 3.28(a).
"Additional Form 10-K Disclosure" As defined in Section 3.28(b).
"Additional Servicer" As defined in Section 6.05.
"Adjustable Rate Mortgage Loan" A Mortgage Loan which has a rate
at which interest accrues that adjusts based on the Index plus a related Gross
Margin, as set forth and subject to the limitations in the related Mortgage
Note.
"Adjustment Date" With respect to each Adjustable Rate Mortgage
Loan, each adjustment date on which the Mortgage Interest Rate changes pursuant
to the related Mortgage Note. The first Adjustment Date following the applicable
Cut-off Date as to each Adjustable Rate Mortgage Loan is set forth in the
Mortgage Loan Schedule.
"Advance" As to any Mortgage Loan, any advance made by the
Servicer in respect of any Distribution Date pursuant to Section 4.07 or if the
Servicer fails to make any advance, by the Trustee pursuant to Section 7.01.
"Adverse REMIC Event" As defined in Section 9.01(f) hereof.
"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.
"Agreement" This Pooling and Servicing Agreement and all
amendments and supplements hereto.
"Applicable Regulations" As to any Mortgage Loan, all federal,
state and local laws, statutes, rules and regulations applicable thereto.
"Applied Realized Loss Amount" With respect to each Distribution
Date, the excess, if any, of (a) the aggregate of the Principal Balances of the
Certificates (other than the Class CE, Class P and Residual Certificates and
after giving effect to all distributions on such Distribution Date and the
increase of any Principal Balances as a result of Subsequent Recoveries) over
(b) the Pool Balance as of the end of the related Collection Period.
"Assignment" An assignment of Mortgage, notice of transfer or
equivalent instrument, in recordable form, which is sufficient under the laws of
the jurisdiction wherein the related Mortgaged Property is located to reflect or
record the sale of the Mortgage.
"Available Funds" As to any Distribution Date, an amount equal to
the excess of (i) the sum of: (a) the aggregate of the Monthly Payments due
during the related Collection Period and received on or prior to the related
Determination Date by the Servicer, (b) Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds, Principal Prepayments, Substitution Adjustment
Amounts, the Purchase Price for any repurchased Mortgage Loan, the Termination
Price with respect to the termination of the Trust pursuant to Section 10.01
hereof and other unscheduled recoveries of principal and interest (excluding
Prepayment Penalties, Originator Prepayment Penalty Payment Amounts and Servicer
Prepayment Penalty Payment Amounts) in respect of the Mortgage Loans during the
related Prepayment Period, (c) the aggregate of any amounts received in respect
of an REO Property deposited in the Collection Account for such Distribution
Date, (d) any Compensating Interest for such Distribution Date, (e) the
aggregate of any Advances made by the Servicer or the Trustee for such
Distribution Date and (f) any Reimbursement Amount or Subsequent Recovery
deposited into the Collection Account during the related Prepayment Period over
(ii) the sum of (a) amounts reimbursable or payable to the Servicer pursuant to
Sections 3.05 or 6.03, (b) amounts reimbursable or payable to the Trustee
pursuant to Section 7.01 or Section 8.05 and amounts reimbursable or payable to
the Securities Administrator pursuant to Section 8.05 or Section 9.01(c), (c)
Stayed Funds, (d) the Servicing Fee and (e) amounts deposited in the Collection
Account or the Distribution Account, as the case may be, in error.
"Balloon Loan" A Mortgage Loan that provides for the payment of
the unamortized principal balance of such Mortgage Loan in a single payment at
the maturity of such Mortgage Loan that is substantially greater than the
preceding monthly payment.
"Balloon Payment" A payment of the unamortized principal balance
of a Mortgage Loan in a single payment at the maturity of such Mortgage Loan
that is substantially greater than the preceding Monthly Payment.
"Bankruptcy Code" Title 11 of the United States Code, as amended.
"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 5.02 hereof. On the Closing
Date, the Class A-1, Class X-0, Xxxxx X-0, Class A-4, Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and
Class M-10 Certificates shall be Book-Entry Certificates.
"Business Day" Any day other than (i) a Saturday or a Sunday or
(ii) a legal holiday in the State of New York.
"Cap Carryover Amount" For any Distribution Date, the sum of (a)
if the Accrued Certificate Interest for any Certificate is based upon the Pool
Cap, the excess of (i) the amount of interest such Certificate would have been
entitled to receive on such Distribution Date based on the related Formula Rate,
over (ii) the amount of interest such Certificate received on such Distribution
Date based on the Pool Cap, and (b) if the Pool Cap exceeds the Upper-Tier REMIC
WAC Rate, the excess of (i) the lesser of the amount in clause (a)(i) or clause
(a)(ii) over (ii) the amount of interest such Certificate would have received on
such Distribution Date based on the Upper-Tier REMIC WAC Rate, in each case
together with the unpaid portion of any such excess from prior Distribution
Dates (and interest accrued thereon at the then applicable Formula Rate on such
Certificate).
"Certificate" Any Regular Certificate, Class CE Certificate or
Residual Certificate.
"Certificate Custodian" Initially, Xxxxx Fargo Bank; thereafter
any other Certificate Custodian acceptable to the Depository and selected by the
Securities Administrator.
"Certificate Owner" With respect to each Book-Entry Certificate,
any beneficial owner thereof.
"Certificate Register" and "Certificate Registrar" The register
maintained and registrar appointed pursuant to Section 5.02 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.
"Class" Collectively, Certificates or REMIC Regular Interests
which 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 A Certificate" Any one of the Certificates with an "A"
designated on the face thereof substantially in the form annexed hereto as
Exhibit X-0, Xxxxxxx X-0, Exhibit A-3 and Exhibit A-4, executed by the
Securities Administrator on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein.
"Class A Certificateholders" Collectively, the Holders of the
Class A Certificates.
"Class A-1 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.070% per annum, and (ii) following
the Optional Termination Date, 0.140% per annum.
"Class A-1 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class A-1 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class A-2 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.100% per annum, and (ii) following
the Optional Termination Date, 0.200% per annum.
"Class A-2 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class A-2 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class A-3 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.140% per annum, and (ii) following
the Optional Termination Date, 0.280% per annum.
"Class A-3 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class A-3 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class A-4 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.250% per annum, and (ii) following
the Optional Termination Date, 0.500% per annum.
"Class A-4 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class A-4 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class CE Certificates" Any one of the Class CE Certificates as
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-1, executed by the Securities Administrator on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.
"Class CE Distributable Amount" With respect to any Distribution
Date, the sum of (i) the interest accrued on the Class CE Interest at its
Pass-Through Rate calculated on its Notional Amount less the amount of Cap
Carryover Amounts paid pursuant to Section 4.02(b)(xxxiii), any Net Swap
Payments paid to the Swap Provider and any Swap Termination Payments paid to the
Swap Provider pursuant to Section 4.02(b)(xxxiv), and (ii) any remaining
Overcollateralization Release Amounts.
"Class CE Interest" As defined in the Preliminary Statement.
"Class XX XXXXX" As defined in the Preliminary Statement.
"Class IO Interest" As defined in the Preliminary Statement.
"Class IO Shortfalls" As defined in Section 4.08. For the
avoidance of doubt, the Class IO Shortfall for any Distribution Date shall equal
the amount payable by the Class CE Certificates in respect of amounts due to the
Swap Provider on such Distribution Date (other than any Swap Termination Payment
resulting from a Swap Provider Trigger Event) in excess of the amount payable on
the Class CE Interest (prior to any reduction for Cap Carryover Amounts or Swap
Termination Payments) and the Class IO Interest on such Distribution Date, all
as further provided in Section 4.08.
"Class LT-A-1 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-A-1 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-A-2 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-A-2 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-A-3 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-A-3 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-A-4 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-A-4 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-Accrual Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-Accrual
Interest shall accrue interest at the related Pass-Through Rate in effect from
time to time, and shall be entitled to distributions of principal, subject to
the terms and conditions hereof, in an aggregate amount equal to 1/2 of the Pool
Balance plus 1/2 of the Overcollateralization Amount, as set forth in the
Preliminary Statement hereto.
"Class LT-M-1 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-1 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-2 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-2 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-3 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-3 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-4 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-4 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-5 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-5 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-6 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-6 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-7 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-7 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-8 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-8 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-9 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-9 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-M-10 Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. Class LT-M-10 Interest
shall accrue interest at the related Pass-Through Rate in effect from time to
time, and shall be entitled to distributions of principal, subject to the terms
and conditions hereof, in an aggregate amount equal to 1/2 of the initial
Principal Balance of the Corresponding Upper-Tier REMIC Regular Interest as set
forth in the Preliminary Statement hereto.
"Class LT-IO Interest" One of the separate non-certificated
beneficial ownership interests in the Lower-Tier REMIC issued hereunder and
designated as a Regular Interest in the Lower-Tier REMIC. The Class LT-IO
Interest is an interest-only interest and does not have a Lower-Tier Principal
Amount. On each Distribution Date, the Class LT-IO Interest shall be entitled to
receive all interest distributable on the Pooling-Tier REMIC-2 IO Interest.
"Class LT-R Interest" The residual interest in the Lower-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
"Class M Certificate" Any one of the Certificates with an "M"
designated on the face thereof substantially in the form annexed hereto as
Exhibit X-0, Xxxxxxx X-0, Xxxxxxx X-0, Exhibit X-0, Xxxxxxx X-0, Xxxxxxx X-0,
Exhibit B-7, Exhibit B-8, Exhibit B-9 and Exhibit B-10, executed by the
Securities Administrator on behalf of the Trust and authenticated and delivered
by the Certificate Registrar, representing the right to distributions as set
forth herein and therein.
"Class M Certificateholders" Collectively, the Holders of the
Class M Certificates.
"Class M-1 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.270% per annum, and (ii) following
the Optional Termination Date, 0.405% per annum.
"Class M-1 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-1 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-1 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date) and (ii) the Principal
Balance of the Class M-1 Certificates immediately prior to such Distribution
Date over (y) the lesser of (A) the product of (i) 70.10% and (ii) the Pool
Balance as of the last day of the related Collection Period and (B) the
Overcollateralization Floor.
"Class M-1 Realized Loss Amortization Amount" As to the Class M-1
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-1 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxii) hereof, in each
case for such Distribution Date.
"Class M-2 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.290% per annum, and (ii) following
the Optional Termination Date, 0.435% per annum.
"Class M-2 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-2 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-2 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date) and (iii)
the Principal Balance of the Class M-2 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 76.40% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Overcollateralization Floor.
"Class M-2 Realized Loss Amortization Amount" As to the Class M-2
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-2 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxiii) hereof, in each
case for such Distribution Date.
"Class M-3 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.320% per annum, and (ii) following
the Optional Termination Date, 0.480% per annum.
"Class M-3 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-3 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-3 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), and (iv) the Principal Balance of the Class M-3 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
80.00% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the Overcollateralization Floor.
"Class M-3 Realized Loss Amortization Amount" As to the Class M-3
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-3 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxiv) hereof, in each
case for such Distribution Date.
"Class M-4 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.350% per annum, and (ii) following
the Optional Termination Date, 0.525% per annum.
"Class M-4 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-4 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-4 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date) and (v) the Principal Balance of the Class M-4 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 83.20% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Overcollateralization Floor.
"Class M-4 Realized Loss Amortization Amount" As to the Class M-4
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-4 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxv) hereof, in each
case for such Distribution Date.
"Class M-5 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.400% per annum, and (ii) following
the Optional Termination Date, 0.600% per annum.
"Class M-5 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-5 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-5 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date) and (vi) the Principal Balance of the Class
M-5 Certificates immediately prior to such Distribution Date over (y) the lesser
of (A) the product of (i) 86.40% and (ii) the Pool Balance as of the last day of
the related Collection Period and (B) the Overcollateralization Floor.
"Class M-5 Realized Loss Amortization Amount" As to the Class M-5
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-5 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxvi) hereof, in each
case for such Distribution Date.
"Class M-6 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.450% per annum, and (ii) following
the Optional Termination Date, 0.675% per annum.
"Class M-6 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-6 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-6 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date) and (vii) the Principal Balance
of the Class M-6 Certificates immediately prior to such Distribution Date over
(y) the lesser of (A) the product of (i) 89.30% and (ii) the Pool Balance as of
the last day of the related Collection Period and (B) the Overcollateralization
Floor.
"Class M-6 Realized Loss Amortization Amount" As to the Class M-6
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-6 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxvii) hereof, in each
case for such Distribution Date.
"Class M-7 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 0.850% per annum, and (ii) following
the Optional Termination Date, 1.275% per annum.
"Class M-7 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-7 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-7 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date) and (viii) the
Principal Balance of the Class M-7 Certificates immediately prior to such
Distribution Date over (y) the lesser of (A) the product of (i) 92.10% and (ii)
the Pool Balance as of the last day of the related Collection Period and (B) the
Overcollateralization Floor.
"Class M-7 Realized Loss Amortization Amount" As to the Class M-7
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-7 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxviii) hereof, in each
case for such Distribution Date.
"Class M-8 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.000% per annum, and (ii) following
the Optional Termination Date, 1.500% per annum.
"Class M-8 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-8 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-8 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date), (vii) the
Principal Balance of the Class M-7 Certificates (after taking into account the
payment of the Class M-7 Principal Distribution Amount on such Distribution
Date) and (viii) the Principal Balance of the Class M-8 Certificates immediately
prior to such Distribution Date over (y) the lesser of (A) the product of (i)
94.30% and (ii) the Pool Balance as of the last day of the related Collection
Period and (B) the Overcollateralization Floor.
"Class M-8 Realized Loss Amortization Amount" As to the Class M-8
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-8 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxix) hereof, in each
case for such Distribution Date.
"Class M-9 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 1.800% per annum, and (ii) following
the Optional Termination Date, 2.700% per annum.
"Class M-9 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-9 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-9 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date), (viii) the
Principal Balance of the Class M-7 Certificates (after taking into account the
payment of the Class M-7 Principal Distribution Amount on such Distribution
Date), (ix) the Principal Balance of the Class M-8 Certificates (after taking
into account the payment of the Class M-8 Principal Distribution Amount on such
Distribution Date) and (x) the Principal Balance of the Class M-9 Certificates
immediately prior to such Distribution Date over (y) the lesser of (A) the
product of (i) 95.40% and (ii) the Pool Balance as of the last day of the
related Collection Period and (B) the Overcollateralization Floor.
"Class M-9 Realized Loss Amortization Amount" As to the Class M-9
Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-9 Certificates as of such Distribution Date
and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the sum
of the amounts described in Section 4.02(b)(i) through (xxx) hereof, in each
case for such Distribution Date.
"Class M-10 Certificate Margin" For each Distribution Date (i) on
or prior to the Optional Termination Date, 2.500% per annum, and (ii) following
the Optional Termination Date, 3.750% per annum.
"Class M-10 Formula Rate" For each Distribution Date, a rate per
annum equal to the lesser of (a) One-Month LIBOR applicable to the related
Interest Accrual Period, plus the Class M-10 Certificate Margin and (b) the Pool
Maximum Rate Cap.
"Class M-10 Principal Distribution Amount" As of any Distribution
Date on or after the Stepdown Date and as long as a Trigger Event is not in
effect, the excess of (x) the sum of (i) the sum of the Principal Balances of
the Senior Certificates (after taking into account the payment of the Senior
Principal Distribution Amount on such Distribution Date), (ii) the Principal
Balance of the Class M-1 Certificates (after taking into account the payment of
the Class M-1 Principal Distribution Amount on such Distribution Date), (iii)
the Principal Balance of the Class M-2 Certificates (after taking into account
the payment of the Class M-2 Principal Distribution Amount on such Distribution
Date), (iv) the Principal Balance of the Class M-3 Certificates (after taking
into account the payment of the Class M-3 Principal Distribution Amount on such
Distribution Date), (v) the Principal Balance of the Class M-4 Certificates
(after taking into account the payment of the Class M-4 Principal Distribution
Amount on such Distribution Date), (vi) the Principal Balance of the Class M-5
Certificates (after taking into account the payment of the Class M-5 Principal
Distribution Amount on such Distribution Date), (vii) the Principal Balance of
the Class M-6 Certificates (after taking into account the payment of the Class
M-6 Principal Distribution Amount on such Distribution Date), (viii) the
Principal Balance of the Class M-7 Certificates (after taking into account the
payment of the Class M-7 Principal Distribution Amount on such Distribution
Date), (ix) the Principal Balance of the Class M-8 Certificates (after taking
into account the payment of the Class M-8 Principal Distribution Amount on such
Distribution Date), (x) the Principal Balance of the Class M-9 Certificates
(after taking into account the payment of the Class M-9 Principal Distribution
Amount on such Distribution Date) and (xi) the Principal Balance of the Class
M-10 Certificates immediately prior to such Distribution Date over (y) the
lesser of (A) the product of (i) 97.40% and (ii) the Pool Balance as of the last
day of the related Collection Period and (B) the Overcollateralization Floor.
"Class M-10 Realized Loss Amortization Amount" As to the Class
M-10 Certificates and as of any Distribution Date, the lesser of (x) the Unpaid
Realized Loss Amount for the Class M-10 Certificates as of such Distribution
Date and (y) the excess of (i) the Monthly Excess Cashflow Amount over (ii) the
sum of the amounts described in Section 4.02(b)(i) through (xxxi) hereof, in
each case for such Distribution Date.
"Class P Certificate" Any one of the Certificates with a "P"
designated on the face thereof substantially in the form annexed hereto as
Exhibit C-2, executed by the Securities Administrator on behalf of the Trust and
authenticated and delivered by the Certificate Registrar, representing the right
to distributions as set forth herein and therein.
"Class PT1-R Interest" The residual interest in Pooling-Tier
REMIC-1 as described in the Preliminary Statement and the related footnote
thereto.
"Class PT2-R Interest" The residual interest in Pooling-Tier
REMIC-2 as described in the Preliminary Statement and the related footnote
thereto.
"Class P Certificateholders" The holders of the Class P
Certificates.
"Class R-1 Certificate" The Class R-1 Certificate executed by the
Securities Administrator on behalf of the Trust, and authenticated and delivered
by the Certificate Registrar, substantially in the form annexed hereto as
Exhibit C-3 and representing the sole Class of Residual Interest in the Class XX
XXXXX.
"Class R-2 Certificate" The Class R-2 Certificate executed by the
Securities Administrator on behalf of the Trust, and authenticated and delivered
by the Certificate Registrar, substantially in the form annexed hereto as
Exhibit C-4 and evidencing the ownership of the Class PT1-R Interest, the Class
PT2-R Interest, the Class LT-R interest and the Class UT-R Interest.
"Class UT-IO Interest" A regular interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
"Class UT-R Interest" The residual interest in the Upper-Tier
REMIC as described in the Preliminary Statement and the related footnote
thereto.
"Class UT-X Interest" A regular interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
"Closing Date" June 29, 2006.
"Code" The Internal Revenue Code of 1986, as it may be amended
from time to time.
"Collection Account" The segregated account or accounts created
and maintained by the Servicer pursuant to Section 3.04(a), which shall be
entitled "Collection Account, Xxxxx Fargo Bank, N.A., as Servicer for HSBC Bank
USA, National Association, as Trustee, in trust for registered Holders of Xxxxx
Fargo Home Equity Asset-Backed Securities 2006-2 Trust, Home Equity Asset-Backed
Certificates, Series 2006-2," and which must be an Eligible Account.
"Collection Period" With respect to any Distribution Date, the
period from the second day of the calendar month preceding the month in which
such Distribution Date occurs through the first day of the month in which such
Distribution Date occurs.
"Commission" The United States Securities and Exchange
Commission.
"Compensating Interest" As defined in Section 3.22 hereof.
"Condemnation Proceeds" All awards or settlements in respect of a
taking of a Mortgaged Property by exercise of the power of eminent domain or
condemnation.
"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, Xxx Xxxx 00000, Attention: WFHET 2006-2
or at such other address as the Trustee may designate from time to time by
notice to the Certificateholders, the Depositor, the Securities Administrator
and the Servicer. With respect to the Securities Administrator, the corporate
trust office of the Securities Administrator 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 (i) for certificate transfer purposes, Xxxxx Fargo Center, Xxxxx
Xxxxxx xxx Xxxxxxxxx Xxxxxx, Xxxxxxxxxxx, Xxxxxxxxx, 00000-0000, Attention:
Client Manager-WFHET, Series 2006-2 and (ii) for all other purposes, 0000 Xxx
Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client Manager-WFHET,
Series 2006-2 or at such other address as the Securities Administrator may
designate from time to time by notice to the Certificateholders, the Depositor,
the Trustee and the Servicer.
"Corresponding Class" The Class of interests in one Trust REMIC
created under this Agreement that corresponds to the Class of interests in the
other Trust REMIC or to a Class of Certificates in the manner set out below:
Corresponding
Lower-Tier Class Upper-Tier Corresponding
Designation REMIC Regular Interest Class of Certificates
---------------- ---------------------- ---------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2 Class A-2 Class A-2
Class LT-A-3 Class A-3 Class A-3
Class LT-A-4 Class A-4 Class A-4
Class LT-M-1 Class M-1 Class M-1
Class LT-M-2 Class M-2 Class M-2
Class LT-M-3 Class M-3 Class M-3
Class LT-M-4 Class M-4 Class M-4
Class LT-M-5 Class M-5 Class M-5
Class LT-M-6 Class M-6 Class M-6
Class LT-M-7 Class M-7 Class M-7
Class LT-M-8 Class M-8 Class M-8
Class LT-M-9 Class M-9 Class M-9
Class LT-M-10 Class M-10 Class M-10
"Corresponding Pooling-Tier REMIC-2 IO Interest" As defined in
the Preliminary Statement.
"Corresponding Scheduled Crossover Distribution Date" The
Distribution Date, if any, in the month and year specified in the Preliminary
Statement corresponding to a Pooling-Tier REMIC-2 IO Interest.
"Credit Risk Management Agreement" The Credit Risk Management
Agreement between the Servicer and the Credit Risk Manager dated June 29, 2006.
"Credit Risk Manager" Xxxxxxx Fixed Income Services Inc., a
Colorado corporation.
"Credit Risk Manager Fee" The fee payable to the Credit Risk
Manager on each Distribution Date for its services as Credit Risk Manager, in an
amount equal to the product of (i) one-twelfth of the Credit Risk Manager Fee
Rate and (ii) the Pool Balance as of the opening of business on the first day of
the related Collection Period.
"Credit Risk Manager Fee Rate" With respect to any Distribution
Date, 0.011% per annum.
"Current Interest Shortfall" With respect to any Distribution
Date, the sum of (i) the aggregate amount of Relief Act Interest Shortfalls,
(ii) the aggregate amount of Prepayment Interest Shortfalls attributable to
partial Principal Prepayments and (iii) the amount, if any, by which (x) the
aggregate amount of Prepayment Interest Shortfalls attributable to Principal
Prepayments in full exceeds (y) the Compensating Interest for such Distribution
Date.
"Custodial Agreement" That certain Custodial Agreement, dated as
of June 29, 2006, among the Custodian, the Depositor, the Servicer and the
Trustee, in the form of Exhibit R attached hereto.
"Custodian" Xxxxx Fargo Bank, as custodian pursuant to the
Custodial Agreement, and any successor custodian, if any, hereafter appointed by
the Trustee pursuant to Section 8.16. The Custodian may (but need not) be the
Trustee, the Securities Administrator or the Servicer or any Person directly or
indirectly controlling or controlled by or under common control of any of them.
"Cut-off Date" With respect to each Mortgage Loan, the Due Date
occurring in June 1, 2006.
"Cut-off Date Principal Balance" With respect to any Mortgage
Loan, the unpaid principal balance thereof as of the applicable Cut-off Date
after giving effect to any Monthly Payment due on such date and to the
application of funds received or advanced on or before such date (or as of the
applicable date of substitution with respect to an Eligible Substitute Mortgage
Loan).
"Debt Service Reduction" With respect to any Mortgage Loan, a
reduction in the scheduled Monthly Payment for such Mortgage Loan by a court of
competent jurisdiction in a proceeding under the Bankruptcy Code, except such a
reduction resulting from a Deficient Valuation.
"Defective Mortgage Loan" A Mortgage Loan replaced or to be
replaced by one or more Eligible Substitute Mortgage Loans.
"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, or any reduction in the amount of principal to be paid in connection with
any scheduled Monthly Payment that results in a permanent forgiveness of
principal, which valuation results from a proceeding initiated under the
Bankruptcy Code.
"Definitive Certificates" As defined in Section 5.02(c) hereof.
"Delinquent" Any Mortgage Loan with respect to which the Monthly
Payment due on a Due Date is not made by the close of business on the next
scheduled Due Date for such Mortgage Loan.
"Depositor" Xxxxx Fargo Asset Securities Corporation, 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(a)(5) 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.
"Determination Date" With respect to any Distribution Date, the
17th day of the calendar month in which such Distribution Date occurs or, if
such 17th day is not a Business Day, the Business Day immediately preceding such
17th day.
"Disqualified Organization" A "disqualified organization" under
Section 860E of the Code, which as of the Closing Date is any of: (i) the United
States, any state or political subdivision thereof, any possession of the United
States, any foreign government, any international organization, or any agency or
instrumentality of any of the foregoing, (ii) any organization (other than a
cooperative described in Section 521 of the Code) which is exempt from the tax
imposed by Chapter 1 of the Code unless such organization is subject to the tax
imposed by Section 511 of the Code, (iii) any organization described in Section
1381(a)(2)(C) of the Code, or (iv) any other Person so designated by the
Securities Administrator based upon an Opinion of Counsel provided by nationally
recognized counsel to the Securities Administrator that the holding of an
ownership interest in a Class R-1 or Class R-2 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 a Class R-1 or Class R-2 Certificate to such Person.
A corporation will not be treated as an instrumentality of the United States or
of any state or political subdivision thereof if all of its activities are
subject to tax and a majority of its board of directors is not selected by a
governmental unit. The term "United States," "state" and "international
organization" shall have the meanings set forth in Section 7701 of the Code.
"Distribution Account" The segregated trust account or accounts
created and maintained by the Securities Administrator pursuant to Section
3.04(b), which shall be entitled "Distribution Account, Xxxxx Fargo Bank, N.A.,
as Securities Administrator, in trust for the registered Holders of Xxxxx Fargo
Home Equity Asset-Backed Securities 2006-2 Trust, Home Equity Asset-Backed
Certificates, Series 2006-2," and which must be an Eligible Account.
"Distribution Date" The 25th day of any calendar month, or if
such 25th day is not a Business Day, the Business Day immediately following such
25th day, commencing in July 2006.
"Distribution Date Statement" As defined in Section 4.06(a)
hereof.
"Document Transfer Date" The 60th day following the occurrence of
a Document Transfer Event.
"Document Transfer Event" The occurrence of either of the
following: (i) Xxxxx Fargo Bank is no longer the Servicer of any of the Mortgage
Loans or (ii) the senior, unsecured long-term debt rating of Xxxxx Fargo &
Company is less than "BBB-" by Fitch.
"Due Date" With respect to each Mortgage Loan, the day of the
calendar month on which the Monthly Payment for such Mortgage Loan was due in
accordance with the terms of the related Mortgage Note, exclusive of any grace
period.
"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 "A-1+" by S&P, "F-1" by Fitch and "P-1" by Xxxxx'x (or comparable ratings
if S&P, Fitch and Xxxxx'x are not the Rating Agencies) by each of the Rating
Agencies 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, (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 their then current ratings of
the Certificates as evidenced by a letter from each Rating Agency to the
Securities Administrator and the Trustee. Eligible Accounts may bear interest.
"Eligible 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 Servicer, the
Securities Administrator, the Trustee or any of their respective Affiliates or
for which an Affiliate of the Trustee or the Securities Administrator 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, the Securities Administrator or their respective 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 S&P and Moody's
and the highest available rating category of Fitch and provided
that each such investment has an original maturity of no more
than 365 days and (B) any other demand or time deposit or deposit
which is fully insured by the FDIC;
(iii) repurchase obligations with a term not to exceed 30
days 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 or higher by S&P and Fitch and A2
or higher by Moody's, provided, however, that collateral
transferred pursuant to such repurchase obligation must be of the
type described in clause (i) above and must (A) be valued daily
at current market prices plus accrued interest or (B) pursuant to
such valuation, be equal, at all times, to 105% of the cash
transferred by the Trustee or the Securities Administrator in
exchange for such collateral and (C) be delivered to the Trustee,
the Securities Administrator or, if the Trustee or the Securities
Administrator is supplying the collateral, an agent for the
Trustee or the Securities Administrator, as the case may be, in
such a manner as to accomplish perfection of a security interest
in the collateral by possession of certificated securities;
(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 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;
(v) commercial paper (including both non-interest-bearing
discount obligations and interest-bearing obligations payable on
demand or on a specified date not more than 30 days after the
date of acquisition thereof) 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 registered under the
Investment Company Act of 1940 (including funds managed or
advised by the Trustee or the Securities Administrator or
affiliates thereof) that, if rated by each Rating Agency, are
rated in its highest rating category (if so rated by such Rating
Agency); and
(vii) if previously confirmed in writing to the Trustee
and the Securities Administrator, any other demand, money market
or time deposit, or any other obligation, security or investment,
as may be acceptable to the Rating Agencies in writing as an
eligible investment of funds backing securities having ratings
equivalent to its highest initial rating of the Senior
Certificates;
provided, 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.
"Eligible Substitute Mortgage Loan" A mortgage loan substituted
for a Defective 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, the
outstanding principal balance of the Defective Mortgage Loan as of the Due Date
in the calendar month during which the substitution occurs, (ii) have a Mortgage
Interest Rate, with respect to a Fixed Rate Mortgage Loan, not less than the
Mortgage Interest Rate of the Defective Mortgage Loan and not more than 1% in
excess of the Mortgage Interest Rate of such Defective Mortgage Loan, (iii) if
an Adjustable Rate Mortgage Loan, have a Rate Ceiling not less than the Rate
Ceiling for the Defective Mortgage Loan, (iv) if an Adjustable Rate Mortgage
Loan, have a Minimum Mortgage Interest Rate not less than the Minimum Mortgage
Interest Rate of the Defective Mortgage Loan, (v) if an Adjustable Rate Mortgage
Loan, have a Gross Margin equal to or greater than the Gross Margin of the
Defective Mortgage Loan, (vi) if an Adjustable Rate Mortgage Loan, have the same
Index and frequency of adjustment as the Defective Mortgage Loan (vii) if an
Adjustable Rate Mortgage Loan, have a next Adjustment Date not more than three
months later than the next Adjustment Date on the Defective Mortgage Loan,
(viii) have an original term to maturity not greater than (and not more than one
year less than) that of the Defective Mortgage Loan, (ix) be current as of the
date of substitution, (x) have a Loan-to-Value Ratio equal to or lower than the
Loan-to-Value Ratio of the Defective Mortgage Loan, (xi) have a risk grading at
least equal to the risk grading assigned on the Defective Mortgage Loan, (xii)
have the same lien priority as the Defective Mortgage Loan; (xiii) have a
Prepayment Penalty at least equal in amount and duration of that of the
Defective Mortgage Loan and (xiv) conform to each representation and warranty
set forth in Section 2.04 hereof applicable to the Defective Mortgage Loan. In
the event that one or more mortgage loans are substituted for one or more
Defective Mortgage Loans, the amounts described in clause (i) hereof shall be
determined on the basis of aggregate principal balance, the Mortgage Interest
Rates described in clause (ii) hereof shall be determined on the basis of
weighted average Mortgage Interest Rates, the risk gradings described in clause
(xi) hereof shall be satisfied as to each such mortgage loan, the terms
described in clause (viii) hereof shall be determined on the basis of weighted
average remaining term to maturity, the Loan-to-Value Ratios described in clause
(x) 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 (xiv) hereof must be satisfied as to each Eligible
Substitute Mortgage Loan or in the aggregate, as the case may be.
"ERISA" The Employee Retirement Income Security Act of 1974, as
amended.
"ERISA Restricted Certificates" Any of the Class M-10, Class CE,
Class P, Class R-1 and Class R-2 Certificates.
"Escrow Account" The account or accounts created and maintained
pursuant to Section 3.06.
"Escrow Agreement" An agreement between a Mortgagor and the
Servicer relating to accounts constituting taxes and/or fire and hazard
insurance premiums required to be escrowed.
"Escrow Payments" The amounts constituting taxes and/or fire and
hazard insurance premiums required to be escrowed to an Escrow Agreement.
"Estate in Real Property" A fee simple estate in a parcel of real
property.
"Excess Reserve Fund Account" The segregated trust account
created and maintained by the Securities Administrator pursuant to Section
3.04(g) which shall be entitled "Excess Reserve Fund Account, Xxxxx Fargo Bank,
N.A., as Securities Administrator for HSBC Bank USA, National Association, as
Trustee, in trust for registered Holders of the Class A and M Certificates of
Xxxxx Fargo Home Equity Asset-Backed Securities 2006-2 Trust, Home Equity
Asset-Backed Certificates, Series 2006-2," and which must be an Eligible
Account. Amounts on deposit in the Excess Reserve Fund Account shall not be
invested. The Excess Reserve Fund Account shall not be an asset of any REMIC
formed under this Agreement.
"Exchange Act" The Securities Exchange Act of 1934, as amended.
"Extra Principal Distribution Amount" With respect to any
Distribution Date, the lesser of (x) the Monthly Excess Interest Amount for such
Distribution Date, after reduction (but not below zero) by any Current Interest
Shortfall and (y) the Overcollateralization Deficiency for such Distribution
Date.
"FDIC" Federal Deposit Insurance Corporation or any successor
thereto.
"Fidelity Bond" An insurance policy naming the Trustee, its
successors and assigns as loss payees relative to losses caused by improper or
unlawful acts of the Servicer's personnel.
"Final Scheduled Distribution Date" As to each Class of
Certificates, the date set forth as such in the Preliminary Statement.
"Fitch" Fitch Ratings and its successors, and if such company
shall for any reason no longer perform the functions of a securities rating
agency, "Fitch" shall be deemed to refer to any other "nationally recognized
statistical rating organization" as set forth on the most current list of such
organizations released by the Commission.
"Fixed Rate Mortgage Loan" A Mortgage Loan which has a constant
annual rate at which interest accrues in accordance with the provisions of the
related Mortgage Note.
"Fixed Swap Payment" With respect to any Distribution Date (other
than the initial Distribution Date) up to and including the Distribution Date in
June 2011, an amount equal to the product of (x) the fixed rate for such
Distribution Date set forth on Schedule A to the Interest Rate Swap Agreement,
(y) the notional amount for such Distribution Date set forth on Schedule A to
the Interest Rate Swap Agreement and (z) a fraction, the numerator of which is
the actual number of days elapsed from and including the previous Distribution
Date to but excluding the current Distribution Date, and the denominator of
which is 360.
"Floating Swap Payment" With respect to any Distribution Date
(other than the initial Distribution Date) up to and including the Distribution
Date in June 2011, an amount equal to the product of (i) Swap LIBOR, (ii) the
notional amount for such Distribution Date set forth on Schedule A to the
Interest Rate Swap Agreement and (iii) a fraction, the numerator of which is the
actual number of days elapsed from and including the previous Distribution Date
to but excluding the current Distribution Date, and the denominator of which is
360.
"Foreclosure Price" The amount reasonably expected to be received
from the sale of the related Mortgaged Property net of any expenses associated
with foreclosure proceedings.
"Form 8-K" A Current Report on Form 8-K under the Exchange Act.
"Form 8-K Disclosure Information" As defined in Section 3.28(c).
"Form 10-D" An Asset-Backed Issuer Distribution Report on Form
10-D under the Exchange Act.
"Form 10-K" An Annual Report on Form 10-K under the Exchange Act.
"Form 10-K Filing Deadline" As defined in Section 3.28(b).
"Form 15" A Form 15 Suspension Notification under the Exchange
Act.
"Formula Rate" Any of the Class A-1 Formula Rate, the Class A-2
Formula Rate, the Class A-3 Formula Rate, the Class A-4 Formula Rate, the Class
M-1 Formula Rate, the Class M-2 Formula Rate, the Class M-3 Formula Rate, the
Class M-4 Formula Rate, the Class M-5 Formula Rate, the Class M-6 Formula Rate,
the Class M-7 Formula Rate, the Class M-8 Formula Rate, the Class M-9 Formula
Rate and the Class M-10 Formula Rate.
"Grantor Trust" That portion of the Trust exclusive of
Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, Lower-Tier REMIC, Upper-Tier REMIC,
and Class XX XXXXX consisting of (a) the Prepayment Penalties, any Originator
Prepayment Penalty Payment Amounts, any Servicer Prepayment Penalty Payment
Amounts, proceeds thereof in the Custodial Account or Distribution Account and
the right of the Class P Certificateholders to receive such Prepayment
Penalties, Originator Prepayment Penalty Payment Amounts and Servicer Prepayment
Penalty Payment Amounts, (b) the right of the Certificates (other than the Class
CE, Class P and Residual Certificates) to receive Cap Carryover Amounts, (c) the
Interest Rate Swap Agreement, the Excess Reserve Fund Account and the beneficial
interest of the Class CE Certificates with respect thereto and (d) the
obligation of the Class CE Certificates to pay Cap Carryover Amounts.
"Gross Margin" With respect to each Adjustable Rate Mortgage
Loan, the fixed percentage set forth in the related Mortgage Note that is added
to the Index on each Adjustment Date in accordance with the terms of the related
Mortgage Note used to determine the Mortgage Interest Rate for such Mortgage
Loan.
"Independent" When used with respect to any specified Person, any
such Person who (i) is in fact independent of the Depositor, the Securities
Administrator, the Trustee, the Servicer and their respective Affiliates, (ii)
does not have any direct financial interest in or any material indirect
financial interest in the Depositor, the Securities Administrator, the Trustee
or the Servicer, or any Affiliate thereof, and (iii) is not connected with the
Depositor, the Securities Administrator, the Trustee or the Servicer, or any
Affiliate thereof, as an officer, employee, promoter, underwriter, trustee,
partner, director or Person performing similar functions; provided, however,
that a Person shall not fail to be Independent of the Depositor, the Securities
Administrator, the Trustee or the Servicer, 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, the Securities Administrator, the Trustee or
the Servicer, or any Affiliate thereof, as the case may be.
"Index" With respect to each Adjustable Rate Mortgage Loan and
with respect to each related Adjustment Date, the index as specified in the
related Mortgage Note.
"Initial Overcollateralization Amount" $10,541,086.90.
"Initial Principal Balance" With respect to any Certificate of a
Class other than a Class CE, Class P or Residual Certificate, the amount
designated "Initial Principal Balance" on the face thereof.
"Insurance Proceeds" 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 Mortgagor in accordance with the procedures that the Servicer
would follow in servicing mortgage loans held for its own account, subject to
the terms and conditions of the related Mortgage Note and Mortgage.
"Interest Accrual Period" With respect to any Distribution Date,
the period from and including the preceding Distribution Date to the day prior
to the current Distribution Date (or, in the case of the first Distribution
Date, the period from June 29, 2006 through July 25, 2006).
"Interest Carry Forward Amount" For any Class of Certificates
(other than the Class CE, Class P and Residual Certificates) and any
Distribution Date, the sum of (a) the excess, if any, of the Accrued Certificate
Interest for the prior Distribution Date and any Interest Carry Forward Amount
for the prior Distribution Date, over the amount in respect of interest actually
distributed on such Class on such prior Distribution Date and (b) interest on
such excess at the applicable Pass-Through Rate on the basis of the actual
number of days elapsed since the prior Distribution Date.
"Interest Percentage" With respect to any Class of Certificates
and any Distribution Date, the ratio (expressed as a decimal carried to at least
six places) of the Accrued Certificate Interest for such Class to the sum of the
Accrued Certificate Interest for all Classes, in each case with respect to such
Distribution Date, without regard to Current Interest Shortfalls.
"Interest Rate Swap Agreement" The long-form confirmation (which
incorporates by reference a 1992 ISDA Master Agreement (Multicurrency-Cross
Border)) dated as of June 29, 2006 between IXIS Financial Products Inc. and the
Securities Administrator acting on behalf of the Supplemental Interest Trust,
substantially in the form attached hereto as Exhibit N. The Interest Rate Swap
Agreement shall not be an asset of any REMIC formed under this Agreement.
"Interest Remittance Amount" As of any Distribution Date, an
amount equal to (A) the sum, without duplication, of (i) all interest due and
collected with respect to the related Collection Period on the Mortgage Loans
received by the Servicer on or prior to the Determination Date for such
Distribution Date and any interest advanced by the Servicer or the Trustee on
the Mortgage Loans with respect to the related Collection Period (less the
Servicing Fee, amounts available for reimbursement of Advances and Servicing
Advances pursuant to Section 3.05 and expenses reimbursable pursuant to Section
6.03, amounts reimbursable or payable to the Trustee pursuant to this Agreement,
including, without limitation, Sections 7.01 and 8.05 and amounts reimbursable
or payable to the Securities Administrator pursuant to this Agreement,
including, without limitation, Sections 8.05 and 9.01(c)), (ii) all Compensating
Interest paid by the Servicer on such Distribution Date with respect to such
Mortgage Loans, (iii) the portion of any payment in connection with any
Principal Prepayment, substitution, Purchase Price, Termination Price, Insurance
Proceeds, Subsequent Recoveries or Net Liquidation Proceeds relating to interest
with respect to such Mortgage Loans received during the related Prepayment
Period and (iv) the portion of any Reimbursement Amount relating to interest on
such Mortgage Loans received during the related Prepayment Period less (B) any
amounts payable to the Swap Provider (including any Net Swap Payment and any
Swap Termination Payment owed to the Swap Provider other than any Swap
Termination Payment owed to the Swap Provider resulting from a Swap Provider
Trigger Event).
"Investor-Based Exemption" Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 91-38 (for transactions by bank collective
investment funds), XXXX 00-0 (for transactions by insurance company pooled
separate accounts), PTCE 95-60 (for transactions by insurance company general
accounts) or PTCE 96-23 (for transactions effected by "in-house asset
managers"), or any comparable exemption available under Similar Law.
"Late Collections" With respect to any Mortgage Loan, all amounts
received subsequent to the Determination Date immediately following any related
Collection Period, whether as late payments of Monthly Payments or as Insurance
Proceeds, Condemnation Proceeds, Liquidation Proceeds or otherwise, which
represent late payments or collections of principal and/or interest due (without
regard to any acceleration of payments under the related Mortgage and Mortgage
Note) but delinquent on a contractual basis for such Collection Period and not
previously recovered.
"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 Determination Date" With respect to any Class of Class A
or Class M Certificates, (i) for the initial Distribution Date, the second LIBOR
Business Day preceding the Closing Date and (ii) for each subsequent
Distribution Date, the second LIBOR Business Day prior to the immediately
preceding Distribution Date.
"Liquidated Mortgage Loan" As to any Distribution Date, any
Mortgage Loan in respect of which the Servicer has determined, in accordance
with the servicing procedures specified herein, as of the end of the related
Prepayment Period, that all Liquidation Proceeds, Condemnation Proceeds and
Insurance Proceeds which it expects to recover with respect to the liquidation
of the Mortgage Loan or disposition of the related REO Property have been
recovered.
"Liquidation Proceeds" The amount (other than amounts received in
respect of the rental of any REO Property prior to REO Disposition) received by
the Servicer in connection with (i) the taking of all or a part of a Mortgaged
Property by exercise of the power of eminent domain or condemnation or (ii) the
liquidation of a defaulted Mortgage Loan by means of a trustee's sale,
foreclosure sale or otherwise.
"Liquidation Report" The report with respect to a Liquidated
Mortgage Loan in such form as is agreed to by the Servicer, the Trustee and the
Securities Administrator listing (i) the sale price of the related Mortgaged
Property or amount of the REO Disposition, (ii) the amount of any Realized Loss
(or gain) with respect to such Liquidated Mortgage Loan, (iii) the expenses
relating to the liquidation of such Liquidated Mortgage Loan and (iv) such other
information as is agreed to by the Servicer, the Trustee and the Securities
Administrator.
"Loan-to-Value Ratio" For any Mortgage Loan, the ratio, expressed
as a percentage, the numerator of which is the original loan amount (unless
otherwise indicated) of a particular Mortgage Loan at origination and the
denominator of which is the lesser of (x) the appraised value of the related
Mortgaged Property determined in the appraisal used by the originator at the
time of origination of such Mortgage Loan, and (y) if the Mortgage is originated
in connection with a sale of the Mortgaged Property, the sale price for such
Mortgaged Property.
"Losses" As defined in Section 9.03.
"Lost Note Affidavit" With respect to any Mortgage Loan as to
which the original Mortgage Note has been permanently lost or destroyed and has
not been replaced, an affidavit from the Seller certifying that the original
Mortgage Note has been lost, misplaced or destroyed (together with a copy of the
related Mortgage Note and indemnifying the Trust against any loss, cost or
liability resulting from the failure to deliver the original Mortgage Note) in
the form of Exhibit H hereto.
"Lower-Tier Interest Rate" With respect to each Lower-Tier
Regular Interest, the Lower-Tier Interest Rate described in the Preliminary
Statement.
"Lower-Tier Principal Amount" With respect to each Lower-Tier
Regular Interest, the amount described in the Preliminary Statement under the
caption "Lower-Tier REMIC."
"Lower-Tier Regular Interest" Each of the Class LT-A-1, Class
LT-A-2, Class LT-A-3, Class LT-A-4, Class LT-M-1, Class LT-M-2, Class LT-M-3,
Class LT-M-4, Class LT-M-5, Class LT-M-6, Class LT-M-7, Class LT-M-8, Class
LT-M-9, Class LT-M-10, Class LT-IO and Class LT-Accrual Interests as described
in the Preliminary Statement.
"Lower-Tier REMIC" As defined in the Preliminary Statement.
"LT-Accretion Directed Classes" As defined in the Preliminary
Statement.
"Majority Certificateholders" The Holders of Certificates
evidencing at least 51% of the Voting Interests.
"Majority Class CE Certificateholder" The Holder of Class CE
Certificates evidencing at least a 51% Percentage Interest in the Class CE
Certificates.
"MERS" The Mortgage Electronic Registration Systems, Inc.
"MERS Mortgage Loan" Any MOM Mortgage Loan or any other Mortgage
Loan as to which MERS is (or is intended to be) the mortgagee of record and as
to which a MIN has been assigned.
"MIN" A MERS Mortgage Identification Number assigned to a
Mortgage Loan in accordance with the MERS Procedure Manual.
"Minimum Mortgage Interest Rate" With respect to each Adjustable
Rate Mortgage Loan, the percentage set forth in the related Mortgage Note as the
minimum Mortgage Interest Rate thereunder.
"MOM" A Mortgage Loan where the related Mortgage names MERS as
the original mortgagee thereof, as to which a MIN has been assigned, and which
Mortgage has not been assigned to any other person.
"Monthly Excess Cashflow Amount" The sum of (a) the Monthly
Excess Interest Amount remaining after reduction (but not below zero) by any
Current Interest Shortfall and any amounts used to fund any Extra Principal
Distribution Amount, (b) the Overcollateralization Release Amount and (c) any
portion of the Principal Distribution Amount (without duplication) remaining
after principal distributions on the Certificates (other than the Class CE,
Class P and Residual Certificates).
"Monthly Excess Interest Amount" With respect to each
Distribution Date, the amount, if any, by which the Interest Remittance Amount
for such Distribution Date exceeds the aggregate amount distributed on such
Distribution Date pursuant to paragraphs (i) through (xxiii) of Section 4.01.
"Monthly Payment" With respect to any Mortgage Loan, the
scheduled monthly payment of principal and interest on such Mortgage Loan which
is payable by the related Mortgagor from time to time under the related Mortgage
Note, determined: (a) after giving effect to (i) any Deficient Valuation and/or
Debt Service Reduction with respect to such Mortgage Loan and (ii) any reduction
in the amount of interest collectible from the related Mortgagor pursuant to the
Relief Act or similar state laws; (b) without giving effect to any extension
granted or agreed to by the Servicer pursuant to Section 3.01; 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., and its successors,
and if such company shall for any reason no longer perform the functions of a
securities rating agency, "Moody's" shall be deemed to refer to any other
"nationally recognized statistical rating organization" as set forth on the most
current list of such organizations released by the Commission.
"Mortgage" The mortgage, deed of trust or other instrument
creating a first or second lien on, or first or second priority security
interest in, a Mortgaged Property securing a Mortgage Note.
"Mortgage File" Either of the Owner Mortgage File or Retained
Mortgage File.
"Mortgage Interest Rate" With respect to each Mortgage Loan, the
annual rate at which interest accrues on such Mortgage Loan from time to time in
accordance with the provisions of the related Mortgage Note, which rate (i) in
the case of each Fixed Rate Mortgage Loan shall remain constant at the rate set
forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the applicable Cut-off Date and (ii) in the case of each
Adjustable Rate Mortgage Loan (A) as of any date of determination until the
first Adjustment Date following the applicable Cut-off Date shall be the rate
set forth in the Mortgage Loan Schedule as the Mortgage Interest Rate in effect
immediately following the applicable Cut-off Date and (B) as of any date of
determination thereafter shall be the rate as adjusted on the most recent
Adjustment Date, to equal the sum, rounded as provided in the Mortgage Note, of
the Index, determined as set forth in the related Mortgage Note, plus the
related Gross Margin subject to the limitations set forth in the related
Mortgage Note. With respect to each Mortgage Loan that becomes an REO Property,
as of any date of determination, the annual rate determined in accordance with
the immediately preceding sentence as of the date such Mortgage Loan became an
REO Property.
"Mortgage Loan" Each mortgage loan transferred and assigned to
the Trustee pursuant to Section 2.01 or Section 2.03(d) 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 agreement between the
Seller and the Depositor, dated as of June 29, 2006, regarding the transfer of
the Mortgage Loans by the Seller to or at the direction of the Depositor, in the
form of Exhibit G attached hereto.
"Mortgage Loan Schedule" As of any date with respect to the
Mortgage Loans, the lists of such Mortgage Loans included in the Trust Fund on
such date, separately identifying the Fixed Rate Mortgage Loans and the
Adjustable Rate Mortgage Loans delivered by the Depositor to the Trustee, the
Servicer, the Securities Administrator and the Custodian. The Mortgage Loan
Schedule shall set forth the following information with respect to each Mortgage
Loan:
(1) the Mortgage Loan identifying number;
(2) the city, state and zip code of
the Mortgaged Property;
(3) the type of property;
(4) the Mortgage Interest Rate;
(5) the Net Mortgage Interest Rate;
(6) the Monthly Payment;
(7) the original number of months to maturity;
(8) the scheduled maturity date;
(9) the Cut-off Date Principal Balance;
(10) the Loan-to-Value Ratio at origination;
(11) whether such Mortgage Loan is covered by primary mortgage
insurance;
(12) the applicable Servicing Fee Rate;
(13) the Index;
(14) the Gross Margin;
(15) the Periodic Cap;
(16) the first Adjustment Date;
(17) the Rate Ceiling; and
(18) a code indicating whether the Mortgage Loan has a Prepayment
Penalty and the Prepayment Penalty term.
The Mortgage Loan Schedule shall set forth the following
information, as of the applicable Cut-off Date, with respect to the Mortgage
Loans in the aggregate: (1) the number of Mortgage Loans; (2) the current unpaid
principal balance of the Mortgage Loans; (3) the weighted average Mortgage
Interest Rate of the Mortgage Loans; and (4) the weighted average maturity of
the Mortgage Loans. The Mortgage Loan Schedule shall be amended from time to
time in accordance with the provisions of this Agreement. With respect to any
Eligible Substitute Mortgage Loan, Cut-off Date shall refer to the applicable
date of substitution.
"Mortgage Note" The original executed note or other evidence of
indebtedness evidencing the indebtedness of a Mortgagor under a Mortgage Loan.
"Mortgage Pool" The pool of Mortgage Loans, identified on the
Mortgage Loan Schedule from time to time, and any REO Properties acquired in
respect thereof.
"Mortgaged Property" The underlying property securing a Mortgage
Loan, including any REO Property, consisting of an Estate in Real Property
improved by a Residential Dwelling.
"Mortgagor" The obligor on a Mortgage Note.
"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 unreimbursed Advances,
unreimbursed Servicing Advances, unpaid 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 Mortgage Interest Rate" With respect to any Mortgage Loan,
the Mortgage Interest Rate borne by such Mortgage Loan minus the Servicing Fee
Rate.
"Net Rate Ceiling" With respect to any Adjustable Rate Mortgage
Loan, the applicable Rate Ceiling minus the Servicing Fee Rate.
"Net Swap Payment" In the case of (i) payments made by the
Supplemental Interest Trust to the Swap Provider on any Distribution Date (other
than the initial Distribution Date) up to an including the Distribution Date in
June 2011, the excess, if any, of (x) the Fixed Swap Payment for such
Distribution Date over (y) the Floating Swap Payment for such Distribution Date
and (ii) payments made by the Swap Provider to the Supplemental Interest Trust
on any Distribution Date (other than the initial Distribution Date) up to an
including the Distribution Date in June 2011, the excess, if any, of (x) the
Floating Swap Payment for such Distribution Date over (y) the Fixed Swap Payment
for such Distribution Date.
"Nonrecoverable Advance" Any Advance or Servicing Advance
previously made or proposed to be made in respect of a Mortgage Loan that, in
the good faith business judgment of the Servicer (or the Trustee, in the case of
any Advance made by the Trustee pursuant to Section 7.01), will not or, in the
case of a proposed Advance or Servicing Advance, would not be ultimately
recoverable from Late Collections on such Mortgage Loan as provided herein.
"Notional Amount" With respect to Class CE Interest, an amount
equal to the aggregate of the Lower-Tier Principal Amounts of the Lower-Tier
Regular Interests (other than the Class LT-IO Interest) as of the first day of
the related Interest Accrual Period.
"NYCEMA" A New York Consolidation, Extension and Modification
Agreement.
"Officer's Certificate" A certificate signed by the Chairman of
the Board, the Vice Chairman of the Board, the President, a vice president
(however denominated), and by the Treasurer, the Secretary, or one of the
assistant treasurers or assistant secretaries or any other duly authorized
officer of the Servicer, the Securities Administrator, the Trustee or the
Depositor, as applicable.
"One-Month LIBOR" With respect to the initial Interest Accrual
Period, 5.350% per annum. With respect to each Interest Accrual Period (other
than the initial Interest Accrual Period), the rate determined by the Securities
Administrator on the related LIBOR Determination Date on the basis of the
British Bankers' Association ("BBA") "Interest Settlement Rate" for one-month
deposits in U.S. Dollars as found on Telerate Page 3750 as of 11:00 A.M. London
time on such LIBOR Determination Date. If no such quotations are available on a
LIBOR Determination Date, One-Month LIBOR for the related Interest Accrual
Period will be established by the Securities Administrator as the higher of:
(i) One-Month LIBOR as determined on the previous LIBOR
Determination Date; and
(ii) the rate per annum which the Securities Administrator
determines to be either (A) the arithmetic mean (rounding such arithmetic
mean upwards if necessary to the nearest whole multiple of 1/16%) of the
one-month U.S. Dollar lending rates that New York City banks selected by
the Securities Administrator are quoting, on the relevant LIBOR
Determination Date, to the principal London offices of at least two
leading banks in the London interbank market or (B) in the event that the
Securities Administrator can determine no such arithmetic mean, the
lowest one-month U.S. Dollar lending rate that the New York City banks
selected by the Securities Administrator are quoting on such LIBOR
Determination Date to leading European banks.
"Opinion of Counsel" A written opinion of counsel, who may,
without limitation, be a salaried counsel for the Depositor, the Securities
Administrator, the Trustee or the Servicer except that any opinion of counsel
relating to (a) the qualification of any REMIC as a REMIC or (b) compliance with
the REMIC Provisions must be an opinion of Independent counsel.
"Optional Termination Date" The first Distribution Date on which
the Majority Class CE Certificateholder or, if there is no Majority Class CE
Certificateholder, the Depositor, may opt to terminate the Mortgage Pool
pursuant to Section 10.01.
"Original Principal Balance" With respect to each Class of
Certificates, the Principal Balance thereof on the Closing Date, as set forth
opposite such Class in the table in the Preliminary Statement under the caption
"Certificates," except with respect to (i) the Class P and Residual
Certificates, which have an Original Principal Balance of zero and (ii) the
Class CE Certificates, which, solely for REMIC purposes, have an Original
Principal Balance equal to the Initial Overcollateralization Amount.
"Originator" Xxxxx Fargo Bank and its successors.
"Originator Prepayment Penalty Payment Amount" The amount payable
by the Originator pursuant to Section 5(b) of the Mortgage Loan Purchase
Agreement.
"Overcollateralization Amount" As of any Distribution Date, the
excess, if any, of (x) the Pool Balance as of the last day of the related
Collection Period over (y) the aggregate Principal Balance of all Classes of
Certificates (other than the Class CE, Class P and Residual Certificates) after
taking into account all distributions of principal on such Distribution Date and
the increase of any Principal Balance as a result of Subsequent Recoveries.
"Overcollateralization Deficiency" As of any Distribution Date,
the excess, if any, of (x) the Targeted Overcollateralization Amount for such
Distribution Date over (y) the Overcollateralization Amount for such
Distribution Date, calculated for this purpose after taking into account the
reduction on such Distribution Date of the Principal Balances of all Classes of
Certificates (other than the Class CE, Class P and Residual Certificates)
resulting from the distribution of the Principal Distribution Amount (but not
the Extra Principal Distribution Amount) on such Distribution Date, but prior to
taking into account any Applied Realized Loss Amount on such Distribution Date.
"Overcollateralization Floor" As of any Distribution Date, the
amount by which the Pool Balance as of the last day of the related Collection
Period exceeds the product of (i) 0.50% and (ii) the Pool Balance as of the
Cut-off Date.
"Overcollateralization Release Amount" With respect to any
Distribution Date on or after the Stepdown Date on which a Trigger Event is not
in effect, the lesser of (x) the Principal Remittance Amount and (y) the excess,
if any, of (i) the Overcollateralization Amount for such Distribution Date,
assuming that 100% of the Principal Remittance Amount is applied as a principal
payment on the Certificates (other than the Class CE, Class P and Residual
Certificates) on such Distribution Date, over (ii) the Targeted
Overcollateralization Amount for such Distribution Date. With respect to any
Distribution Date on which a Trigger Event is in effect, the
Overcollateralization Release Amount will be zero.
"Owner Mortgage File" A file maintained by the Custodian for each
Mortgage Loan that contains the documents specified in Section 2.01(a) and any
additional documents required to be added to the Owner Mortgage File pursuant to
this Agreement.
"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" For each Class of Regular Certificates, each
Pooling-Tier REMIC-1 Regular Interest, each Pooling-Tier REMIC-2 Regular
Interest, each Lower-Tier Regular Interest, each Upper-Tier Regular Interest,
and each Class XX XXXXX Regular Interest, the per annum rate set forth or
calculated in the manner described in the Preliminary Statement.
"Paying Agent" Any paying agent appointed pursuant to Section
5.05.
"Paying Agent Agreement" As defined in Section 5.05.
"Percentage Interest" With respect to any Certificate (other than
a Class CE, Class P and Residual Certificate), a fraction, expressed as a
percentage, the numerator of which is the initial Principal Balance, as the case
may be, represented by such Certificate and the denominator of which is the
Original Principal Balance of the related Class. With respect to a Class CE or
Class P Certificate, the portion of the Class evidenced thereby, expressed as a
percentage, as stated on the face of such Certificate; provided, however, that
the sum of all such percentages for each such Class totals 100%. With respect to
each of the Class R-1 and Class R-2 Certificates, 100%.
"Periodic Cap" With respect to each Adjustable Rate Mortgage
Loan, the applicable limit on adjustment of the Mortgage Interest Rate for each
Adjustment Date specified in the applicable Mortgage Note and designated as such
in the Mortgage Loan Schedule.
"Permitted Transferee" Any transferee of a Residual Certificate
other than a Disqualified Organization, a non-U.S. Person or a U.S. Person with
respect to whom income on the Residual Certificate is attributable to a foreign
permanent establishment or fixed base, within the meaning of an applicable
income tax treaty, of such Person or any other U.S. Person.
"Person" Any individual, corporation, partnership, joint venture,
association, joint stock company, trust, limited liability company,
unincorporated organization or government or any agency or political subdivision
thereof.
"Pool Balance" As of any date of determination, the aggregate
unpaid principal balance of the Mortgage Loans.
"Pool Cap" With respect to any Distribution Date and the Class A
and Class M Certificates (a) a per annum rate (subject to adjustment based on
the actual number of days elapsed in the related Interest Accrual Period) equal
to the weighted average of the Net Mortgage Interest Rates for the Mortgage
Loans, weighted on the basis of the unpaid principal balance of the Mortgage
Loans as of the first day of the related Collection Period minus (b) a
percentage, expressed as a per annum rate (subject to an adjustment based on the
actual number of days elapsed in the related Interest Accrual Period),
calculated as a fraction, the numerator of which is the sum of (i) any Net Swap
Payment owed by the Supplemental Interest Trust to the Swap Provider and (ii)
any Swap Termination Payment (other than any Swap Termination Payment resulting
from a Swap Provider Trigger Event) owed by the Supplemental Interest Trust to
the Swap Provider and the denominator of which is the Pool Balance as of the
first day of the related Collection Period.
"Pool Maximum Rate Cap" With respect to any Distribution Date and
the Class A and Class M Certificates (a) a per annum rate (subject to adjustment
based on the actual number of days elapsed in the related Interest Accrual
Period) equal to the weighted average of the Net Rate Ceilings for the
Adjustable Rate Mortgage Loans and the Net Mortgage Interest Rates for the Fixed
Rate Mortgage Loans, weighted on the basis of the unpaid principal balance of
the Mortgage Loans as of the first day of the related Collection Period minus
(b) a percentage, expressed as a per annum rate (subject to an adjustment based
on the actual number of days elapsed in the related Interest Accrual Period),
calculated as a fraction, the numerator of which is the sum of (i) any Net Swap
Payment owed by the Supplemental Interest Trust to the Swap Provider and (ii)
any Swap Termination Payment (other than any Swap Termination Payment resulting
from a Swap Provider Trigger Event) owed by the Supplemental Interest Trust to
the Swap Provider and the denominator of which is the Pool Balance as of the
first day of the related Collection Period plus (c) a percentage, expressed as a
per annum rate, calculated as a fraction, the numerator of which is any Net Swap
Payment owed by the Swap Provider to the Supplemental Interest Trust and the
denominator of which is the Pool Balance as of the first day of the related
Collection Period.
"Pooling-Tier REMIC-1" As described in the Preliminary Statement.
"Pooling-Tier REMIC-1 Interest Rate" As described in the
Preliminary Statement.
"Pooling-Tier REMIC-1 Principal Amount" As described in the
Preliminary Statement.
"Pooling-Tier REMIC-1 Regular Interest" As described in the
Preliminary Statement.
"Pooling-Tier REMIC-1 WAC Rate" As of any Distribution Date, a
per annum rate equal to (a) the weighted average of the Net Mortgage Interest
Rates then in effect on the beginning of the related Collection Period
multiplied by (b) 30 divided by the actual number of days in the related
Interest Accrual Period.
"Pooling-Tier REMIC-2" As described in the Preliminary Statement.
"Pooling-Tier REMIC-2 Interest Rate" As described in the
Preliminary Statement.
"Pooling-Tier REMIC-2 IO Interest" Any of the Pooling-Tier
REMIC-2 Regular Interests with the designation "IO" in its name.
"Pooling-Tier REMIC-2 Principal Amount" As described in the
Preliminary Statement.
"Pooling-Tier REMIC-2 Regular Interest" As described in the
Preliminary Statement.
"Prepayment Interest Shortfall" With respect to any Distribution
Date, for each Mortgage Loan that was the subject of a Principal Prepayment
during the related Prepayment Period that was applied by the Servicer to reduce
the outstanding Principal Balance of such Mortgage Loan on a date preceding the
related Due Date, an amount equal to interest at the applicable Mortgage
Interest Rate (net of the Servicing Fee Rate) on the amount of such Principal
Prepayment for the number of days commencing on the date on which the Principal
Prepayment is applied and ending on the last day of the calendar month in which
applied.
"Prepayment Penalty" With respect to any Prepayment Period, any
Prepayment Penalty, penalty or charge collected by the Servicer from a Mortgagor
in connection with any voluntary Principal Prepayment in full pursuant to the
terms of the related Mortgage Note as from time to time held as a part of the
Trust Fund, the Prepayment Penalties so held being determined in accordance with
the guidelines for Prepayment Penalty provisions set forth in the Seller
underwriting standards. The defined term "Prepayment Penalty" shall not include
any Servicer Prepayment Penalty Payment Amount or Originator Prepayment Penalty
Payment Amount.
"Prepayment Period" With respect to any Distribution Date, the
one month period ending on the last day of the calendar month preceding the
month in which such Distribution Date occurs.
"Prime Rate" The prime rate announced to be in effect from time
to time, as published as the average rate in The Wall Street Journal (Northeast
edition).
"Principal Balance" With respect to any Class of Certificates
(other than the Class CE, Class P and Residual Certificates) and any
Distribution Date, the Original Principal Balance (a) reduced by the sum of (i)
all amounts actually distributed in respect of principal of such Class on all
prior Distribution Dates and (ii) Applied Realized Loss Amounts allocated
thereto for previous Distribution Dates and (b) increased by any Subsequent
Recoveries allocated to such Class for previous Distribution Dates. The Class
CE, Class P and Residual Certificates do not have a Principal Balance. With
respect to any Certificate (other than a Class CE, Class P or Residual
Certificate) of a Class and any Distribution Date, the portion of the Principal
Balance of such Class represented by such Certificate equal to the product of
the Percentage Interest evidenced by such Certificate and the Principal Balance
of such Class.
"Principal Distribution Amount" With respect to any Distribution
Date, (a) the sum of (i) the Principal Remittance Amount and (ii) the Extra
Principal Distribution Amount, if any, minus (b) the Overcollateralization
Release Amount.
"Principal Prepayment" Any payment of principal made by the
Mortgagor on a Mortgage Loan which is received in advance of its scheduled Due
Date and which 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.
"Principal Remittance Amount" With respect to any Distribution
Date, to the extent of funds available therefor, an amount equal to (A) the sum
(less amounts available for reimbursement of Advances and Servicing Advances
pursuant to Section 3.05 and expenses reimbursable pursuant to Section 6.03 and
amounts reimbursable or payable to the Securities Administrator or Trustee
pursuant to this Agreement, including, without limitation, Sections 8.05 and
Section 9.01(c)) of (i) each payment of principal on a Mortgage Loan due during
the related Collection Period and received by the Servicer on or prior to the
related Determination Date, and any Advances with respect thereto (other than
any payment received on an Eligible Substitute Mortgage Loan substituted during
the related Collection Period), (ii) all full and partial Principal Prepayments
received by the Servicer during the related Prepayment Period, (iii) Subsequent
Recoveries, Insurance Proceeds and Net Liquidation Proceeds allocable to
principal actually collected by the Servicer during the related Prepayment
Period, (iv) with respect to Defective Mortgage Loans repurchased with respect
to such Prepayment Period, the portion of the Purchase Price allocable to
principal, (v) any Substitution Adjustment Amounts received during the related
Prepayment Period and (vi) on the Distribution Date on which the Trust is to be
terminated in accordance with Section 10.01 hereof, that portion of the
Termination Price in respect of principal; less (B) to the extent any amounts
payable to the Swap Provider (including any Net Swap Payment and any Swap
Termination Payment owed to the Swap Provider but excluding any Swap Termination
Payment owed to the Swap Provider resulting from a Swap Provider Trigger Event)
exceed the Interest Remittance Amount for such Distribution Date (without giving
effect to clause (B) of the definition of "Interest Remittance Amount"), the
amount of such excess.
"Private Certificates" Any of the Class M-10, Class CE, Class P,
Class R-1 and Class R-2 Certificates.
"Private Placement Memorandum" That certain private placement
memorandum dated June 28, 2006 relating to the private placement of the Class
M-10, Class CE and Class P Certificates.
"Prospectus" That certain Prospectus, dated June 26, 2006, as
supplemented by the Prospectus Supplement.
"Prospectus Supplement" That certain Prospectus Supplement, dated
June 28, 2006 relating to the public offering of the Senior Certificates and the
Class M Certificates (other than the Class M-10 Certificates).
"PT1 Cap" With respect to any Distribution Date, the product of
(x) the fixed rate for such Distribution Date set forth on Schedule A to the
Interest Rate Swap Agreement and (y) 2.
"Purchase Price" With respect to any Mortgage Loan or REO
Property to be purchased pursuant to or as contemplated by Section 2.01, 2.03 or
3.16, an amount equal to the sum of (i) 100% of the unpaid principal balance
thereof as of the date of purchase, (ii) in the case of a Mortgage Loan, accrued
interest on such unpaid principal balance at the applicable Mortgage Interest
Rate in effect from time to time from the Due Date as to which interest was last
covered by a payment by the Mortgagor or an Advance by the Servicer, which
payment or Advance had as of the date of purchase been distributed pursuant to
Section 4.01, through the end of the calendar month in which the purchase is to
be effected, (iii) any unreimbursed Servicing Advances and Advances and any
unpaid Servicing Fees allocable to such Mortgage Loan or REO Property, (iv) any
amounts previously withdrawn from the Collection Account in respect of such
Mortgage Loan or REO Property pursuant to Section 3.13 and (v) in the case of a
Mortgage Loan required to be purchased pursuant to Section 2.03, expenses
reasonably incurred or to be incurred by the Servicer, the Securities
Administrator or the Trustee in respect of the breach or defect giving rise to
the purchase obligation.
"Rate Ceiling" With respect to each Adjustable Rate Mortgage
Loan, the maximum per annum Mortgage Interest Rate permitted under the related
Mortgage Note.
"Rating Agency or Rating Agencies" Xxxxx'x, Fitch and S&P, or
their respective successors. If such agencies or their successors are no longer
in existence, "Rating Agencies" shall be such nationally recognized statistical
rating organizations as set forth on the most current list of such organizations
released by the Commission and designated by the Depositor, notice of which
designation shall be given to the Trustee, the Securities Administrator and the
Servicer.
"Realized Loss" With respect to a Liquidated Mortgage Loan, the
amount by which the remaining unpaid principal balance of the Mortgage Loan
exceeds the amount of Net Liquidation Proceeds applied to the principal balance
of the related Mortgage Loan. With respect to any Mortgage Loan, a Deficient
Valuation or a reduction in the Principal Balance thereof resulting from a
Servicer Modification.
"Realized Loss Amortization Amount" Any of the Class M-1 Realized
Loss Amortization Amount, the Class M-2 Realized Loss Amortization Amount, the
Class M-3 Realized Loss Amortization Amount, the Class M-4 Realized Loss
Amortization Amount, the Class M-5 Realized Loss Amortization Amount, the Class
M-6 Realized Loss Amortization Amount, the Class M-7 Realized Loss Amortization
Amount, the Class M-8 Realized Loss Amortization Amount, the Class M-9 Realized
Loss Amortization Amount and the Class M-10 Realized Loss Amortization Amount.
"Record Date" With respect to any Distribution Date and (i) the
Class CE, Class P and Residual Certificates, the last Business Day of the
preceding month and (ii) any Class of Book-Entry Certificates, the Business Day
immediately preceding such Distribution Date; provided, however, that if any
Book-Entry Certificate becomes a Definitive Certificate, the Record Date for
such Class shall be the last Business Day of the immediately preceding month.
"Reference Banks" Initially, the Reference Banks shall be
Deutsche Bank International, Bank of America, N.A., Citibank, N.A., and The Fuji
Bank, Limited. If any of these banks are not available, the Securities
Administrator shall select from one of the following banks a substitute
Reference Bank: Westdeutsche Landesbank Girozentrale, The X.X. Xxxxxx Chase Bank
or National Westminster Bank Plc. If any of these banks are not available, the
Securities Administrator shall in its discretion select another Reference Bank.
"Regular Certificate" Any of the Class A and Class M
Certificates.
"Regulation AB" Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
publicly 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 FD" Regulation XX, 00 C.F.R. ss.ss.243.100-243.103,
as such may be amended from time to time.
"Reimbursement Amount" With respect to any Mortgage Loan, any
costs or damages incurred by the Trust in connection with a breach of the
Depositor's representations set forth in Section 2.04(i) and (dd) hereof.
"Related Documents" With respect to any Mortgage Loan, the
related Mortgage Notes, Mortgages and other related documents.
"Relevant Servicing Criteria" The Servicing Criteria applicable
to the Securities Administrator, the Trustee, the Custodian or the Servicer, as
set forth on Exhibit S attached hereto. For clarification purposes, multiple
parties can have responsibility for the same Relevant Servicing Criteria. With
respect to a Servicing Function Participant engaged by the Securities
Administrator, the Trustee, the Custodian or the Servicer, the term "Relevant
Servicing Criteria" refers to the portion of the Relevant Servicing Criteria
applicable to the party engaging such Servicing Function Participant insofar as
the functions required to be performed by such party are to be performed by the
Servicing Function Participant.
"Relief Act" The Servicemembers Civil Relief Act, as it may be
amended from time to time.
"Relief Act Interest Shortfall" With respect to any Distribution
Date, for any Mortgage Loan with respect to which there has been a reduction in
the amount of interest collectible thereon for the most recently ended
Collection Period as a result of the application of the Relief Act or similar
state laws, the amount by which (i) interest collectible on such Mortgage Loan
during such Collection Period is less than (ii) one month's interest on the
principal balance of such Mortgage Loan at the Mortgage Interest Rate for such
Mortgage Loan before giving effect to the application of the Relief Act or
similar state laws.
"REMIC" A "real estate mortgage investment conduit" within the
meaning of Section 860D of the Code.
"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.
"REMIC Regular Interest" Any Pooling-Tier REMIC-1 Regular
Interest, Pooling-Tier REMIC-2 Regular Interest, Lower-Tier REMIC Regular
Interest or Upper-Tier REMIC Regular Interest, the Class CE Interest or the
Class IO Interest.
"Remittance Report" A report prepared by the Servicer and
delivered to the Securities Administrator pursuant to Section 4.07, containing
the information agreed to between the Servicer and the Securities Administrator
necessary for the Securities Administrator to prepare each 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 Disposition" The sale or other disposition of an REO
Property on behalf of the Trust.
"REO Disposition Fee" The REO Disposition Fee shall be the
greater of one percent (1%) of the gross sales price of the REO Property or
$1,500.00 up to a maximum fee of $10,000 per REO Property.
"REO Imputed Interest" As to any REO Property, for any Collection
Period, an amount equivalent to interest (at the Net Mortgage Interest Rate that
would have been applicable to the related Mortgage Loan had it been outstanding)
for such Collection Period on the unpaid principal balance of the Mortgage Loan
as of the date of acquisition.
"REO Mortgage Loan" Any Mortgage Loan which is not a Liquidated
Mortgage Loan and as to which the indebtedness evidenced by the related Mortgage
Note is discharged and the related Mortgaged Property is held as part of the
Trust Fund.
"REO Principal Amortization" With respect to any REO Property,
for any calendar month, 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 that is allocable to such REO Property) or
otherwise, net of any portion of such amounts (i) payable pursuant to Section
3.13 in respect of the proper operation, management and maintenance of such REO
Property or (ii) payable or reimbursable to the Servicer pursuant to Section
3.13 for unpaid Servicing Fees in respect of the related Mortgage Loan and
payable and reimbursable to the Servicer or the Trustee for unreimbursed
Servicing Advances and Advances in respect of such REO Property or the related
Mortgage Loan.
"REO Property" A Mortgaged Property acquired by the Servicer on
behalf of the Trust through foreclosure or deed-in-lieu of foreclosure, as
described in Section 3.13.
"Reportable Event" As defined in Section 3.28(c).
"Request for Release" A release signed by a Servicing Officer, in
the form of Exhibit E attached hereto.
"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 co-operative or mobile home.
"Residual Certificate" Either of the Class R-1 or Class R-2
Certificate.
"Residual Interest" The sole Class of "residual interests" in
each REMIC within the meaning of Section 860G(a)(2) of the Code.
"Responsible Officer" When used with respect to the Trustee, the
Securities Administrator, the Custodian or the Paying Agent, any officer of the
Corporate Trust Department of the Trustee, the Securities Administrator, the
Custodian or the Paying Agent having direct responsibility for the
administration of this Agreement, including any Senior Vice President, any Vice
President, any Assistant Vice President, any Assistant Secretary, any Trust
Officer or Assistant Trust Officer, or any other employee of the Trustee, the
Securities Administrator, the Custodian or the Paying Agent customarily
performing functions similar to those performed by any of the above-designated
officers and in each case having direct responsibility for the administration of
this Agreement. When used with respect to a Servicer, a Servicing Officer.
"Retained Mortgage File" A file maintained by Xxxxx Fargo Bank
prior to any Document Transfer Date for each Mortgage Loan that contains the
documents specified in Section 2.01(b) and any additional documents required to
be added to the Retained Mortgage File pursuant to this Agreement.
"S&P" Standard & Poor's, a division of The XxXxxx-Xxxx Companies,
Inc., and its successors, and if such company shall for any reason no longer
perform the functions of a securities rating agency, "S&P" shall be deemed to
refer to any other "nationally recognized statistical rating organization" as
set forth on the most current list of such organizations released by the
Commission.
"Sarbanes Oxley Certification" As defined in Section 3.28(b)
hereof.
"Securities Administrator" Xxxxx Fargo Bank, or any successor
Securities Administrator appointed as herein provided.
"Securities Administrator Errors and Omissions Policy" An
insurance policy covering losses caused by errors or omissions of the Securities
Administrator and its personnel.
"Seller" Xxxxx Fargo Bank, or its successor in interest, in its
capacity as seller under the Mortgage Loan Purchase Agreement.
"Senior Certificates" The Class A Certificates.
"Senior Enhancement Percentage" For any Distribution Date, the
percentage obtained by dividing (x) the sum of (i) the aggregate Principal
Balance of the Class M Certificates before taking into account the distribution
of the Principal Distribution Amount on such Distribution Date and (ii) the
Overcollateralization Amount as of the prior Distribution Date by (y) the Pool
Balance as of the last day of the related Collection Period.
"Senior Principal Distribution Amount" With respect to any
Distribution Date, the excess of (a) the aggregate Principal Balance of the
Senior Certificates immediately prior to such Distribution Date over (b) the
lesser of (x) the product of (1) 62.70% and (2) the aggregate unpaid principal
balance of the Mortgage Loans as of the last day of the related Collection
Period and (y) the Overcollateralization Floor.
"Senior Specified Enhancement Percentage" On any date of
determination thereof, 37.30%.
"Servicer" Xxxxx Fargo Bank, or any successor servicer appointed
as herein provided, in its capacity as Servicer hereunder. Initially the
servicing functions performed by Xxxxx Fargo Bank shall be performed by the
Xxxxx Fargo Home Mortgage division of Xxxxx Fargo Bank.
"Servicer Errors and Omissions Policy" An insurance policy
covering losses caused by errors or omissions of the Servicer and its personnel,
including, but not limited to losses caused by the failure to pay insurance
premiums or taxes, to record or perfect liens, to effect valid transfers of
Mortgage Notes, or to properly service Mortgage Loans.
"Servicer Event of Termination" One or more of the events
described in Section 7.01.
"Servicer Modification" A modification to the terms of a Mortgage
Loan, in accordance with the terms of Section 3.01, as to which the Mortgagor is
in default or as to which, in the judgment of the Servicer, default is
reasonably foreseeable.
"Servicer Prepayment Penalty Payment Amount" The amount payable
by the Servicer in respect of any waived Prepayment Penalties pursuant to
Section 3.01, which amount shall be equal to the difference between the amount
of Prepayment Penalty due by a Mortgagor before any waiver and the actual amount
of the Prepayment Penalty that was paid by the Mortgagor.
"Servicer Remittance Date" With respect to any Distribution Date,
three Business Days prior to such Distribution Date.
"Servicing Advances" All customary, reasonable and necessary "out
of pocket" costs and expenses incurred by the Servicer (including reasonable
attorneys' fees and disbursements) in the performance of its servicing
obligations, 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 Section 3.08.
"Servicing Criteria" The "servicing criteria" set forth in Item
1122(d) of Regulation AB, as such may be amended from time to time.
"Servicing Fee" With respect to each Mortgage Loan (including
each REO Property) and for any calendar month, an amount equal to one month's
interest (or in the event of any payment of interest which accompanies a
Principal Prepayment in full made by the Mortgagor during such calendar month,
interest for the number of days covered by such payment of interest) at the
Servicing Fee Rate on the same principal amount on which interest on such
Mortgage Loan accrues for such calendar month.
"Servicing Fee Rate" With respect to each Mortgage Loan, 0.50%
per annum.
"Servicing Function Participant" Any Subservicer, Subcontractor
or any other Person, other than the Securities Administrator, the Trustee, the
Custodian and the Servicer, that is performing activities addressed by the
Servicing Criteria.
"Servicing Officer" Any officer of the 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
Servicer to the Trustee, the Securities Administrator and the Depositor, as such
list may from time to time be amended.
"Servicing Standards" The standards set forth in Section 3.01.
"Similar Law" As defined in Section 5.02(d) hereof.
"Startup Day" As defined in Section 9.01(b) hereof.
"Stayed Funds" Any payment required to be made under the terms of
the Certificates and this Agreement but which is not remitted by the Servicer
because the Servicer is the subject of a proceeding under the Bankruptcy Code
and the making of such remittance is prohibited by Section 362 of the Bankruptcy
Code.
"Stepdown Date" The earlier to occur of (i) the Distribution Date
following the Distribution Date on which the aggregate Principal Balance of the
Senior Certificates is reduced to zero and (ii) the later to occur of (x) the
Distribution Date in July 2009 and (y) the Distribution Date on which the Senior
Enhancement Percentage is greater than or equal to the Senior Specified
Enhancement Percentage.
"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 the Servicer (or a
Subservicer of the Servicer), the Securities Administrator, the Trustee or the
Custodian.
"Subordination Depletion Date" The Distribution Date on which the
aggregate Principal Balance of the Class M Certificates is reduced to zero.
"Subsequent Recovery" Any amount (net of reimbursable expenses)
received on a Mortgage Loan subsequent to such Mortgage Loan being determined to
be a Liquidated Mortgage Loan that resulted in a Realized Loss in a prior month.
"Subservicer" Any Person that (i) services Mortgage Loans on
behalf of the Servicer, and (ii) is responsible for the performance (whether
directly or through Subservicers or Subcontractors) of a substantial portion of
the material servicing functions required to be performed under this Agreement
or any sub-servicing agreement that are identified in Item 1122(d) of Regulation
AB.
"Substitution Adjustment Amount" As defined in Section 2.03(d)
hereof.
"Supplemental Interest Trust" The corpus of a trust created
pursuant to this Agreement, consisting of the Supplemental Interest Trust
Account created pursuant to Section 3.04(h) of this Agreement, the Interest Rate
Swap Agreement, the Class IO Interest and the right to receive Class IO
Shortfalls, subject to the obligation to pay amounts specified in Section
3.04(h).
"Supplemental Interest Trust Account" The segregated trust
account created and maintained by the Securities Administrator pursuant to
Section 3.04(h) which shall be entitled "Supplemental Interest Trust Account,
Xxxxx Fargo Bank, N.A., as Securities Administrator for HSBC Bank USA, National
Association, as Trustee, in trust for registered Holders of the Class A and M
Certificates of Xxxxx Fargo Home Equity Asset-Backed Securities 2006-2 Trust,
Home Equity Asset-Backed Certificates, Series 2006-2," and which must be an
Eligible Account. Amounts on deposit in the Supplemental Interest Trust Account
shall not be invested. The Supplemental Interest Trust Account shall not be an
asset of any REMIC formed under this Agreement.
"Swap Early Termination" The occurrence of an early termination
under the Interest Rate Swap Agreement.
"Swap LIBOR" As to any Distribution Date, LIBOR (as determined
pursuant to the Interest Rate Swap Agreement with respect to such Distribution
Date).
"Swap Provider" IXIS Financial Products Inc.
"Swap Provider Trigger Event" The occurrence of any of the
following: (i) an "Event of Default" under the Interest Rate Swap Agreement with
respect to the Swap Provider, (ii) a Termination Event under the Interest Rate
Swap Agreement (other than illegality or a tax event) with respect to which the
Swap Provider is the sole Affected Party (as defined in the Interest Rate Swap
Agreement) or (iii) an "Additional Termination Event" under the Interest Rate
Swap Agreement with respect to which the Swap Provider is the sole "Affected
Party."
"Swap Termination Payment" The amount, if any, owed by the
Supplemental Interest Trust to the Swap Provider or by the Swap Provider to the
Supplemental Interest Trust upon a Swap Early Termination.
"Targeted Overcollateralization Amount" As of any Distribution
Date, (x) prior to the Stepdown Date, 1.30% of the Pool Balance as of the
Cut-off Date and (y) on and after the Stepdown Date, (i) if a Trigger Event has
not occurred for such Distribution Date, the greater of (A) the lesser of (1)
1.30% of the Pool Balance on the Cut-off Date and (2) 2.60% of the Pool Balance
as of the last day of the related Collection Period and (B) 0.50% of the Pool
Balance as of the Cut-off Date and (ii) if a Trigger Event has occurred for such
Distribution Date, the Targeted Overcollateralization Amount for the immediately
preceding Distribution Date.
"Tax Matters Person" With respect to each Trust REMIC, the Person
designated as the "tax matters person" for each such Trust REMIC in Section
9.01(e) hereof, in each case in the manner provided under Treasury Regulations
Section 1.860F-4(d) and Treasury Regulations Section 301.6231(a)(7)-1.
"Tax Returns" The federal income tax returns 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 the Trust for each of the five REMICs created
pursuant to this Agreement 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.
"Telerate Page 3750" The display page currently so designated on
the Moneyline Telerate Service (or such other page as may replace the Telerate
Page 3750 page on the Moneyline Telerate Service for the purpose of displaying
London interbank offered rates of major banks).
"Termination Price" As defined in Section 10.01(a) hereof.
"Trigger Event" With respect to any Distribution Date, if (i) the
three-month rolling average of 60+ Day Delinquent Loans (as a percentage of the
Pool Balance as of the last day of the related Collection Period) equals or
exceeds 40.85% of the Senior Enhancement Percentage or (ii) the aggregate amount
of Realized Losses incurred since the applicable Cut-off Date through the last
day of the related Collection Period (reduced by the aggregate amount of
Subsequent Recoveries received since the applicable Cut-off Date through the end
of the last day of the related Collection Period) divided by the Pool Balance on
the Cut-off Date exceeds the applicable percentages set forth below with respect
to such Distribution Date:
Distribution Date Occurring In Percentage
------------------------------ ---------------------------------------------
July 2008 through June 2009 1.30% for the first month, plus an additional
1/12th of 1.60% for each month thereafter
July 2009 through June 2010 2.90% for the first month, plus an additional
1/12th of 1.60% for each month thereafter
July 2010 through June 2011 4.50% for the first month, plus an additional
1/12th of 1.25% for each month thereafter
July 2011 through June 2012 5.75% for the first month, plus an additional
1/12th of 0.25% for each month thereafter
July 2012 and thereafter... 6.00%
"Trust" Xxxxx Fargo Home Equity Asset-Backed Securities 2006-2
Trust, the New York common law trust created hereunder.
"Trustee Errors and Omissions Policy" An insurance policy
covering losses caused by errors or omissions of the Trustee and its personnel.
"Trust Fund" The segregated pool of assets subject hereto,
constituting the primary trust created hereby and to be administered hereunder,
with respect to a portion of which five REMIC elections are to be made, such
entire 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, (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 Securities
Administrator's rights under the Interest Rate Swap Agreement, (vi) the Interest
Rate Swap Agreement and (vii) the Collection Account, the Distribution Account,
the Excess Reserve Fund Account, the Supplemental Interest Trust 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.
"Trust REMIC" As defined in the Preliminary Statement.
"Trustee" HSBC Bank USA, National Association, a national banking
association, in its capacity as trustee hereunder, or any successor Trustee
appointed as herein provided.
"United States Person" or "U.S. Person" (i) A citizen or resident
of the United States, (ii) a corporation, partnership or other entity treated as
a corporation or partnership for United States federal income tax purposes
organized in or under the laws of the United States or any state thereof or the
District of Columbia (unless, in the case of a partnership, Treasury Regulations
provide otherwise), (iii) an estate the income of which is includible in gross
income for United States tax purposes, regardless of its source, or (iv) 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. Notwithstanding the
preceding sentence, to the extent provided in Treasury Regulations, certain
Trusts in existence on August 20, 1996, and treated as United States persons
prior to such date, that elect to continue to be treated as United States
persons will also be a U.S. Person; provided, that for purposes of the
definition of a "Permitted Transferee," a U.S. Person shall not include any
person whose income is attributable to a foreign permanent establishment or
fixed base, within the meaning of an applicable income tax treaty, of such
Person or any other Person.
"Unpaid Realized Loss Amount" For any Class of Class M
Certificates and as to any Distribution Date, the excess of (x) the aggregate
Applied Realized Loss Amounts applied with respect to such Class for all prior
Distribution Dates over (y) the sum of (a) the cumulative amount of any
Subsequent Recoveries allocated to such Class and (b) the cumulative amount of
related Realized Loss Amortization Amounts with respect to such Class for all
prior Distribution Dates.
"Upper-Tier Interest Rate" As described in the Preliminary
Statement.
"Upper-Tier Regular Interest" As described in the Preliminary
Statement.
"Upper-Tier REMIC" As described in the Preliminary Statement.
"Upper-Tier REMIC WAC Rate" For any Distribution Date, the
weighted average of the Lower-Tier Interest Rates on the Lower-Tier Regular
Interests (other than the Class LT-IO Interest), as of the first day of the
related Interest Accrual Period, weighted on the basis of the Lower-Tier
Principal Amounts of such Lower-Tier Regular Interests as of the first day of
the related Interest Accrual Period.
"Value" With respect to any Mortgaged Property, the value thereof
as determined by an independent appraisal made at the time of the origination of
the related Mortgage Loan or the sale price, if the appraisal is not available.
"Voting Interests" The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. The Voting Interests
allocated among Holders of the Certificates (other than the Class CE, Class P
and Residual Certificates) shall be 98%, and shall be allocated among each such
Class according to the fraction, expressed as a percentage, the numerator of
which is the aggregate Principal Balance of all the Certificates of such Class
then outstanding and the denominator of which is the aggregate Principal Balance
of all the Certificates (other than the Class CE, Class P and Residual
Certificates) then outstanding. The Voting Interests allocated to each such
Class of Certificates shall be allocated among all holders of each such Class in
proportion to the outstanding Principal Balance of such Certificates; provided,
however, that any Certificate registered in the name of the Servicer, the
Depositor, the Securities Administrator or the Trustee or any of their
respective affiliates shall not be included in the calculation of Voting
Interests; provided that only such Certificates as are known by a Responsible
Officer of the Securities Administrator to be so registered will be so excluded.
One percent of all the Voting Interests will be allocated to the Holders of each
of the Class CE and Class P Certificates. The Class R-1 and Class R-2
Certificates shall have no Voting Interests.
"Xxxxx Fargo Bank" Xxxxx Fargo Bank, N.A., a national banking
association, or its successor in interest.
"Xxxxx Fargo Bank Correspondents" The entities identified on a
list provided by Xxxxx Fargo Bank to the Servicer, from which Xxxxx Fargo Bank
purchased the Mortgage Loans.
"Written Order to Authenticate" A written order of the Depositor
directing the Securities Administrator to execute, authenticate and deliver the
Certificates.
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.
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, on behalf of the Trust,
without recourse for the benefit of the Certificateholders 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 identified on the
Mortgage Loan Schedule, including the related Cut-off Date Principal Balance,
all interest accruing thereon after the applicable Cut-off Date and all
collections in respect of interest and principal due after the applicable
Cut-off Date; (ii) property which secured each such Mortgage Loan and which has
been acquired by foreclosure or deed in lieu of foreclosure; (iii) its interest
in any insurance policies in respect of the Mortgage Loans; (iv) all other
assets included or to be included in the Trust Fund; (v) all proceeds of any of
the foregoing; and (vi) the rights of the Depositor under the Mortgage Loan
Purchase Agreement. Such assignment includes all interest and principal due to
the Depositor or the Servicer after the applicable Cut-off Date with respect to
the Mortgage Loans. It is agreed and understood by the Depositor 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 (i) the New Jersey Home Ownership
Act effective November 27, 2003, (ii) the New Mexico Home Loan Protection Act
effective January 1, 2004, (iii) the Massachusetts Predatory Home Loan Practices
Act, effective November 7, 2004 or (iv) the Indiana Home Loan Practices Act,
effective January 1, 2005.
In connection with such assignment, the Depositor shall, with
respect to each Mortgage Loan, deliver, or cause to be delivered, to the
Custodian, on or before the Closing Date the following documents or instruments
with respect to each Mortgage Loan:
(i) The original Mortgage Note either (A) endorsed in blank or
(B) endorsed as provided in Section 2.01(d), with all prior and
intervening endorsements as may be necessary to show a complete chain of
endorsements or with respect to any Mortgage Loan as to which the
original Mortgage Note has been permanently lost or destroyed and has not
been replaced, a lost note affidavit with a copy of the Mortgage Note
and, in the case of any Mortgage Loan originated in the State of New York
documented by a NYCEMA, the NYCEMA, the new Mortgage Note, if applicable,
the consolidated Mortgage Note and the consolidated Mortgage;
(ii) A recorded original assignment of the related Mortgage from
Xxxxx Fargo Bank assigning the related Mortgage to the Trustee, certified
by the recording office, or, if such assignment is in the process of
being recorded, a copy of the related Mortgage transmitted for
recordation certified by an officer of Xxxxx Fargo Bank or applicable
Xxxxx Fargo Bank Correspondent to be a true and correct copy of such
assignment submitted for recordation; provided, however, if recordation
is not required as described below, an assignment in recordable form
(which may be assigned in blank) with respect to the related Mortgage;
(iii) The original of each assumption agreement, modification,
written assurance or substitution agreement pertaining to such Mortgage
Note, if any; and
(iv) For each Mortgage Loan secured by Co-op Shares, the
originals of the following documents or instruments:
(A) The loan security agreement;
(B) The stock certificate;
(C) The stock power, executed in blank;
(D) The executed proprietary lease;
(E) The executed recognition agreement;
(F) The executed UCC-1 financing statement with evidence of
recording thereon; and
(G) The executed UCC-3 financing statements or other
appropriate UCC financing statements required by state law,
evidencing a complete and unbroken chain from the mortgagee to
the Trustee with evidence of recording thereon (or in a form
suitable for recordation).
(b) The Securities Administrator shall promptly notify the
Depositor, the Trustee and the Custodian of the occurrence of any Document
Transfer Event of which the Securities Administrator had knowledge. Following
the receipt of such notice, the Depositor shall, with respect to each Mortgage
Loan, deliver, or cause to be delivered, to the Custodian, no later than the
Document Transfer Date, copies (which may be in electronic form mutually agreed
upon by the Depositor and the Custodian) of the following additional documents
or instruments with respect to each Mortgage Loan; provided, however, that
originals of such documents or instruments shall be delivered to the Custodian
if originals are required under the law in which the related Mortgaged Property
is located in order to exercise all remedies available to the Trust under
applicable law following default by the related Mortgagor:
(i) The original recorded Mortgage with evidence of recordation
noted thereon or attached thereto, together with any addenda or riders
thereto, or a copy of such recorded Mortgage with such evidence of
recordation certified to be true and correct by the appropriate
governmental recording office; or a copy of such recorded Mortgage with
such evidence of recordation, or if the original Mortgage has been
submitted for recordation but has not been returned from the applicable
public recording office, a copy of the Mortgage certified by an officer
of Xxxxx Fargo Bank or the applicable Xxxxx Fargo Bank Correspondent to
be a true and correct copy of the original Mortgage submitted for
recordation;
(ii) The original of each assumption agreement, modification,
written assurance or substitution agreement pertaining to such Mortgage,
if any, or, if such document is in the process of being recorded, a copy
of such document, certified by an officer of Xxxxx Fargo Bank or the
applicable Xxxxx Fargo Bank Correspondent of such Mortgage Loan or by the
applicable title insurance company, closing agent, settlement agent,
escrow agent or closing attorney to be a true and correct copy of such
document transmitted for recordation, if any;
(iii) For each MERS Mortgage Loan that is not a MOM Mortgage
Loan, the original assignment showing MERS as the assignee of the
Mortgage, with evidence of recording thereon or copies thereof certified
by an officer of Xxxxx Fargo Bank or the applicable Xxxxx Fargo Bank
Correspondent to have been submitted for recordation;
(iv) Each original recorded intervening assignment of the
Mortgage as may be necessary to show a complete chain of title from the
Mortgage Loan originator to Xxxxx Fargo Bank or Xxxxx Fargo Home
Mortgage, Inc., with evidence of recordation noted thereon or attached
thereto, or a copy of such assignment with such evidence of recordation
to be true and correct by the appropriate governmental recording office,
or, if any such assignment has been submitted for recordation but has not
been returned from the applicable public recording office or is not
otherwise available, a copy of such assignment certified by an officer of
Xxxxx Fargo Bank or the applicable Xxxxx Fargo Bank Correspondent to be a
true and correct copy of the recorded assignment submitted for
recordation; and
(v) The original policy of the title insurance or certificate of
title insurance or a written commitment to issue such a title insurance
policy or certificate of title insurance, or a copy of such title
insurance certified as true and correct by the applicable insurer or any
attorney's certificate of title with an Officer's Certificate of Xxxxx
Fargo Bank or the applicable Xxxxx Fargo Bank Correspondent that such
attorney's certificate of title is customarily used in lieu of a title
insurance policy in the jurisdiction in which the related mortgage
property is located.
(c) If any assignment of a Mortgage to the Trustee is in the
process of being recorded on the Closing Date, the Depositor shall use its best
efforts to cause each such original recorded document or certified copy thereof
to be delivered to the Custodian promptly following its recordation, but in no
event later than one (1) year following the Closing Date. If any Mortgage has
been recorded in the name of MERS or its designee, no assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the Servicer shall take all actions as are necessary to cause the Trust Fund to
be shown as the owner of the related Mortgage Loan on the records of MERS for
the purpose of the system of recording transfers of beneficial ownership of
mortgages maintained by MERS. The Depositor shall also cause to be delivered to
the Custodian any other original mortgage loan document included in the Owner
Mortgage File (and, if applicable, the Retained Mortgage File) if a copy thereof
has been delivered. The Depositor shall pay from its own funds, without any
right of reimbursement therefor, the amount of any costs, liabilities and
expenses incurred by the Trust by reason of the failure of the Depositor to
cause to be delivered to the Custodian within one (1) year following the Closing
Date any assignment of a Mortgage (except with respect to any Mortgage recorded
in the name of MERS) not delivered to the Custodian on the Closing Date.
In lieu of recording an assignment of any Mortgage the Depositor
may, deliver or cause to be delivered to the Custodian the assignment of the
Mortgage Loan to the Trustee in a form suitable for recordation, if (i) with
respect to a particular state the Trustee and the Custodian have received an
Opinion of Counsel acceptable to it that such recording is not required to make
the assignment effective against the parties to the Mortgage or subsequent
purchasers or encumbrancers of the Mortgaged Property or (ii) the Depositor has
been advised by each Rating Agency that non recordation in a state will not
result in a reduction of the rating assigned by that Rating Agency at the time
of initial issuance of the Certificates. Set forth on Exhibit Q attached hereto
is a list of all states where recordation is required by any Rating Agency to
obtain the initial ratings of the Certificates. The Custodian may rely and shall
be protected in relying upon the information contained in such Exhibit Q. In the
event that the Custodian receives notice that recording is required to protect
the right, title and interest of the Trustee in and to any such Mortgage Loan
for which recordation of an assignment has not previously been required, the
Custodian shall promptly notify the Trustee and the Custodian shall within five
Business Days (or such other reasonable period of time mutually agreed upon by
the Custodian and the Trustee) of its receipt of such notice deliver each
previously unrecorded assignment to the related Servicer for recordation.
(d) Except for Mortgage Notes endorsed in blank, endorsements
shall comply with the following format:
WITHOUT RECOURSE
PAY TO THE ORDER OF:
HSBC BANK USA, NATIONAL ASSOCIATION, AS
TRUSTEE under the pooling and servicing
agreement dated as of June 29, 2006.
and its successors and assigns,
[Xxxxx Fargo Bank, N.A.][Xxxxx Fargo Home Mortgage, Inc.]
[Signature of Officer]
[Officer's Name and Title]
Except where assignments in blank are authorized or in the case
of any Mortgage registered in the name of MERS, assignments of any Mortgage
shall comply with the following:
HSBC BANK USA, NATIONAL ASSOCIATION, AS
TRUSTEE
and its successors and assigns
(e) Concurrently with the execution and delivery of this
Agreement, the Depositor shall deliver the Mortgage Loan Schedule to the
Trustee, the Securities Administrator, the Servicer and the Custodian. The
Depositor and the Securities Administrator shall provide a copy of the Mortgage
Loan Schedule to any Certificateholders upon written request made to it at the
addresses set forth on Exhibit D, as the same may be amended from time to time
by written notice from such party to the other parties hereto.
(f) The Securities Administrator shall monitor the rating of
Xxxxx Fargo & Company and upon the occurrence of a Document Transfer Event
relating to such rating, shall promptly notify the Servicer, Depositor, Trustee
and Custodian of the occurrence of such Document Transfer Event.
Section 2.02 Acceptance by Custodian. The Custodian, on behalf of
the Trustee, acknowledges the receipt of, subject to the provisions of Section
2.01 and subject to the review described below and any exceptions noted on the
exception report described in the next paragraph below, the documents referred
to in Section 2.01 above and all other assets included in the definition of
"Trust Fund" and declares that it holds and will hold such documents and the
other documents delivered to it constituting the Owner Mortgage File (and in the
case of a Document Transfer Event, the Retained Mortgage File), and that it
holds or will hold all such assets and such other assets included in the
definition of "Trust Fund" in trust for the exclusive use and benefit of all
present and future Certificateholders.
The Custodian, for the benefit of the Certificateholders, shall
execute and deliver to the Servicer, the Securities Administrator, the Trustee
and the Depositor on or prior to the Closing Date an initial certification in
the form attached hereto as Exhibit F-1 hereto, to the effect that, except as
may be specified in a list of exceptions attached thereto, it has received the
original Mortgage Notes (described in Section 2.01(a)(i)) relating to each
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
that has been paid in full, liquidated or otherwise released as of the date of
such certification, and subject to any exceptions specifically identified in the
exception report annexed to such certification).
The Custodian will review each Owner Mortgage File within 45 days
after execution of this Agreement. The Custodian will deliver no later than 30
days after completion of such review to the Servicer, the Securities
Administrator, the Trustee and the Depositor a final certification in the form
of Exhibit F-2 hereto to the effect that, except as may be specified in a list
of exceptions attached thereto, all required documents set forth in Section
2.01(a) have been executed and received and appear regular on their face, and
that such documents relate to the Mortgage Loans identified in the Mortgage Loan
Schedule based on a comparison of the Mortgage Loan identifying number,
Mortgagor name and street address, and in so doing the Custodian may rely on the
purported due execution and genuineness of any such document and on the
purported genuineness of any signature thereon.
If in the process of reviewing the Mortgage Files and making or
preparing, as the case may be, the certifications referred to above, the
Custodian finds any document or documents constituting a part of a Mortgage File
to be missing or defective in any material respect, at the conclusion of its
review the Custodian shall so notify the Depositor, the Trustee, the Securities
Administrator and the Servicer.
The Securities Administrator is hereby directed to execute and
deliver, on behalf of the Supplemental Interest Trust, the Interest Rate Swap
Agreement.
Section 2.03 Repurchase or Substitution of Mortgage Loans by the
Depositor. (a) Upon discovery or receipt of written notice of any materially
defective document in, or that a document is missing from, an Owner Mortgage
File (or, if applicable, a Retained Mortgage File) or of a breach of a
representation of warranty of the Depositor in Section 2.04 hereof, in respect
of any Mortgage Loan and such breach materially adversely affects the value of
such Mortgage Loan, Prepayment Penalty or the interest therein of the
Certificateholders, the Trustee (or the Custodian) shall promptly (and in no
event more than 30 days after completion of the review) notify the Depositor and
the Servicer of such defect, missing document or breach and request that the
Depositor cure such defect or breach or deliver such missing document within 60
days from the date the Depositor was notified of such missing document, breach
or defect. If the Depositor does not deliver such missing document or cure such
defect or cure such breach in all material respects during such period, the
Depositor shall repurchase such Mortgage Loan from the Trust Fund at the
Purchase Price on or prior to the Determination Date following the expiration of
such period (subject to Section 2.03(d) and the last paragraph of this Section
2.03(a)). The Purchase Price for the repurchased Mortgage Loan shall be
deposited in the Collection Account, and the Custodian, upon receipt of written
notice from the Servicer of such deposit, shall release to the Depositor the
Owner Mortgage File (and, if applicable, Retained Mortgage File) of the Mortgage
Loan being repurchased. The Trustee shall execute and deliver such instruments
of transfer or assignment (or, in the case of a Mortgage Loan registered in the
name of MERS or its designee, the Servicer shall reflect such assignment on the
records of MERS), in each case without recourse, as the Depositor shall furnish
to it and as shall be necessary to vest in the Depositor any Mortgage Loan
released pursuant hereto and the Custodian and the Trustee shall have no further
responsibility with regard to such Owner Mortgage File (and, if applicable,
Retained Mortgage File). In lieu of repurchasing any such Mortgage Loan as
provided above, the Depositor may cause such Mortgage Loan to be removed from
the Trust Fund (in which case it shall become a Defective Mortgage Loan) and
substitute one or more Eligible Substitute Mortgage Loans in the manner and
subject to the limitations set forth in Section 2.03(d).
It is understood and agreed that the representations and
warranties set forth in Section 2.04 hereof shall survive delivery of the Owner
Mortgage Files (and, if applicable, Retained Mortgage Files) to the Custodian
and shall inure to the benefit of the Certificateholders notwithstanding any
restrictive or qualified endorsement or assignment. It is understood and agreed
that the obligations of the Depositor set forth in this Section 2.03(a) to cure,
substitute for or repurchase a Mortgage Loan and to pay the Reimbursement Amount
constitute the sole remedies available to the Certificateholders and to the
Trustee on their behalf respecting a breach of the representations and
warranties in Section 2.04 hereof.
Notwithstanding anything to the contrary in this Section 2.03,
with respect to any breach by the Depositor of the representation and warranty
set forth in Section 2.04(z), which breach materially and adversely affects the
value of any Prepayment Penalty or the interest of the Trust therein, the
Depositor shall not be required to repurchase such Mortgage Loans as set forth
in this Section 2.03(a). However, the Originator shall remedy such breach as
follows: Upon any Principal Prepayment with respect to the affected Mortgage
Loan, the Originator shall pay to the Trust the excess, if any, of (x) the
amount of such Prepayment Penalty calculated as set forth in the matrices
attached hereto as Exhibit X over (y) the amount collected from the Mortgagor in
respect of such Prepayment Penalty. Such amount payable by the Originator shall
be paid by the Servicer Remittance Date in the month following the month in
which the related Principal Prepayment occurred.
(b) In addition to the foregoing, in the case of a breach of the
Depositor's representation set forth in Section 2.04(i) and (dd) hereof, the
Depositor shall pay to the Trust the Reimbursement Amount. The Reimbursement
Amount shall be delivered to the Servicer for deposit into the Collection
Account within 10 days from the date the Depositor was notified by the Trustee
of the amount of such costs and damages.
(c) Within 90 days of the earlier of discovery by the Servicer or
receipt of notice by the Servicer of the breach of any representation, warranty
or covenant of the Servicer set forth in Section 2.05 which materially and
adversely affects the interests of the Certificateholders in any Mortgage Loan,
the Servicer shall cure such breach in all material respects.
(d) Any substitution of Eligible Substitute Mortgage Loans for
Defective Mortgage Loans made pursuant to Section 2.03(a) must be effected prior
to the last Business Day that is within two years after the Closing Date. As to
any Defective Mortgage Loan for which the Depositor substitutes an Eligible
Substitute Mortgage Loan or Loans, such substitution shall be effected by the
Depositor delivering to the Custodian, on the Trustee's behalf for such Eligible
Substitute Mortgage Loan or Loans, the documents required by Section 2.01,
together with an Officer's Certificate providing that each such Eligible
Substitute Mortgage Loan satisfies the definition thereof and specifying the
Substitution Adjustment Amount, if any, in connection with such substitution.
The Custodian shall acknowledge receipt for such Eligible Substitute Mortgage
Loan or Loans and, within ten Business Days thereafter, the Custodian shall
review such documents as specified in Section 2.02 and deliver to the Servicer
and the Trustee, with respect to such Eligible Substitute Mortgage Loan or
Loans, a certification substantially in the form attached hereto as Exhibit F-1,
with any applicable exceptions noted thereon. Within one year of the date of
substitution, the Custodian shall deliver to the Servicer and the Trustee a
certification substantially in the form of Exhibit F-2 hereto with respect to
such Eligible Substitute Mortgage Loan or Loans, with any applicable exceptions
noted thereon. Monthly Payments due with respect to Eligible Substitute Mortgage
Loans in the month of substitution are not part of the Trust Fund and will be
retained by the Depositor. For the month of substitution, distributions to
Certificateholders will reflect the collections and recoveries in respect of
such Defective Mortgage Loan in the Collection Period or Prepayment Period, as
applicable, preceding the date of substitution and the Depositor shall
thereafter be entitled to retain all amounts subsequently received in respect of
such Defective 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 Defective
Mortgage Loan from the terms of this Agreement and the substitution of the
Eligible Substitute Mortgage Loan or Loans and shall deliver a copy of such
amended Mortgage Loan Schedule to the Trustee, the Servicer, the Securities
Administrator and the Custodian. Upon such substitution, such Eligible
Substitute Mortgage Loan or Loans shall constitute part of the Mortgage Pool and
shall be subject in all respects to the terms of this Agreement, including all
applicable representations and warranties as of the date of substitution.
For any month in which the Depositor substitutes one or more
Eligible Substitute Mortgage Loans for one or more Defective Mortgage Loans, the
Servicer will determine the amount (the "Substitution Adjustment Amount"), if
any, by which the aggregate Purchase Price of all such Defective Mortgage Loans
exceeds the aggregate, as to each such Eligible 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 Mortgage
Interest Rate. On the date of such substitution, the Depositor will deliver or
cause to be delivered to the Servicer for deposit in the Collection Account an
amount equal to the Substitution Adjustment Amount, if any, and the Custodian,
on behalf of the Trustee, upon receipt of the related Eligible Substitute
Mortgage Loan or Loans and notice by the Servicer of such deposit, shall release
to the Depositor the related Owner Mortgage File (and, if applicable, Retained
Mortgage File) and the Trustee shall execute and deliver such instruments of
transfer or assignment, in each case without recourse, as the Depositor shall
deliver to it and as shall be necessary to vest therein any Defective Mortgage
Loan released pursuant hereto.
The Depositor shall determine the Purchase Price or the
eligibility of any Eligible Substitute Mortgage Loan and the Trustee shall be
protected in relying on such determination.
(e) Upon discovery by the Depositor, the Seller, the Servicer,
the Securities Administrator, the Custodian 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 Depositor shall repurchase or, subject to the limitations set
forth in Section 2.03(d), substitute one or more Eligible Substitute Mortgage
Loans for the affected Mortgage Loan within 60 days of the earlier of discovery
or receipt of such notice with respect to such affected Mortgage Loan. In
addition, upon discovery that a Mortgage Loan is defective in a manner that
would cause it to be a "defective obligation" within the meaning of Treasury
Regulations relating to REMICs, the Depositor shall cure the defect or make the
required purchase or substitution no later than 60 days after the discovery of
the defect. Any such repurchase or substitution shall be made in the same manner
as set forth in Section 2.03(a). The Trustee shall reconvey to the Depositor 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.
(f) The Trustee shall be responsible for enforcing the
Depositor's obligations under this Section 2.03. If the Trustee receives written
notice from the Custodian or the Securities Administrator that the defect is not
cured by the Depositor within 60 days after the Trustee's notice, the Trustee
shall enforce the Depositor's obligation to repurchase such Mortgage Loan or
substitute for such Mortgage Loan in accordance with the provisions of this
Section 2.03. In connection with any substitution permitted by this Section
2.03, the Trustee shall verify that the unpaid principal balance and the
Loan-to-Value Ratio of the Eligible Substitute Mortgage Loan satisfy the
requirements of this Section 2.03.
Section 2.04 Representations and Warranties of the Depositor with
respect to the Mortgage Loans. The Depositor hereby represents and warrants to
the Trustee for the benefit of the Certificateholders that as of the Closing
Date or as of such other date specifically provided herein:
(a) The information set forth in the Mortgage Loan Schedule was
true and correct in all material respects, including, without limitation, the
information regarding any Prepayment Penalty, at the date or dates respecting
which such information was furnished as specified in the Mortgage Loan Schedule;
(b) Immediately prior to the transfer and assignment contemplated
herein, the Depositor was the sole owner and holder of the Mortgage Loan free
and clear of any and all liens, pledges, charges or security interests of any
nature and has full right and authority to sell and assign the same;
(c) All payments required to be made up to the Due Date for such
Mortgage Loan immediately preceding the Closing Date under the terms of the
related Mortgage Note have been made and no Mortgage Loan had more than one
delinquency in the 12 months preceding the applicable Cut-off Date;
(d) The Mortgage Note, the related Mortgage and other agreements
executed in connection therewith are genuine, and each is the legal, valid and
binding obligation of the maker thereof, enforceable in accordance with its
terms, except as such enforcement may be limited by bankruptcy, insolvency,
reorganization or other similar laws affecting the enforcement of creditors'
rights generally and by general equity principles (regardless of whether such
enforcement is considered in a proceeding in equity or at law); and, to the best
of the Depositor's knowledge, all parties to the Mortgage Note and the Mortgage
had legal capacity to execute the Mortgage Note and the Mortgage and each
Mortgage Note and Mortgage has been duly and properly executed by the Mortgagor;
(e) All taxes, governmental assessments, insurance premiums, and
water, sewer and municipal charges, which previously became due and owing have
been paid, or an escrow of funds has been established, to the extent permitted
by law, in an amount sufficient to pay for every such item which remains unpaid;
and neither the Servicer nor the Depositor has advanced funds, or received any
advance of funds by a party other than the Mortgagor, directly or indirectly for
the payment of any amount required by the Mortgage, except for interest accruing
from the date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is later, to the day which precedes by thirty days the first
Due Date under the related Mortgage Note;
(f) Neither the Depositor nor any prior holder of the Mortgage or
the related Mortgage Note has modified the Mortgage or the related Mortgage Note
in any material respect, satisfied, canceled or subordinated the Mortgage in
whole or in part, released the Mortgaged Property in whole or in part from the
lien of the Mortgage, or executed any instrument of release, cancellation,
modification or satisfaction, except in each case as is reflected in an
agreement delivered to the Trustee or the Custodian pursuant to Section 2.01;
(g) No Mortgage Note or Mortgage is subject to any right of
rescission, set-off, counterclaim or defense, including the defense of usury,
nor will the operation of any of the terms of the Mortgage Note or Mortgage, or
the exercise of any right thereunder, render the Mortgage Note or Mortgage
unenforceable, in whole or in part, or subject it to any right of rescission,
set-off, counterclaim or defense, including the defense of usury, and no such
right of rescission, set-off, counterclaim or defense has been asserted with
respect thereto;
(h) The Mortgage is a valid, subsisting and enforceable first
lien on the property therein described, and the Mortgaged Property is free and
clear of all encumbrances and liens having priority over the first lien of the
Mortgage except for liens for real estate taxes and special assessments not yet
due and payable and liens or interests arising under or as a result of any
federal, state or local law, regulation or ordinance relating to hazardous
wastes or hazardous substances, and, if the related Mortgaged Property is a
condominium unit, any lien for common charges permitted by statute or homeowners
association fees; and any security agreement, chattel mortgage or equivalent
document related to, and delivered to the Trustee or to the Custodian with, any
Mortgage establishes in the Depositor a valid and subsisting first lien on the
property described therein and the Depositor has full right to sell and assign
the same to the Trustee;
(i) Each Mortgage Loan at the time it was originated complied in
all material respects with applicable federal, state and local laws including,
without limitation, truth-in-lending, real estate settlement procedures,
consumer credit protection, equal credit opportunity, predatory and abusive
lending laws and disclosure laws;
(j) Each Mortgaged Property is located in the United States and
consists of a one- to four-unit residential property, which may include a
detached home, townhouse, condominium unit, a unit in a planned unit development
or a manufacturing housing unit which constitutes real property for purposes of
the applicable state law;
(k) Except for Mortgage Loans secured by residential long-term
leases, the Mortgaged Property consists of a fee simple estate in real property;
all of the improvements which are included for the purpose of determining the
appraised value of the Mortgaged Property lie wholly within the boundaries and
building restriction lines of such property and no improvements on adjoining
properties encroach upon the Mortgaged Property (unless insured against under
the related title insurance policy); and to the best of the Depositor's
knowledge, the Mortgaged Property and all improvements thereon comply with all
requirements of any applicable zoning and subdivision laws and ordinances;
(l) With respect to each Mortgage where a lost note affidavit has
been delivered to the Custodian on the Trustee's behalf in place of the related
Mortgage Note, the related Mortgage Note is no longer in existence;
(m) The proceeds of the Mortgage Loans have been fully disbursed,
there is no requirement for future advances thereunder and any and all
requirements as to completion of any on-site or off-site improvements and as to
disbursements of any escrow funds therefor have been complied with (except for
escrow funds for exterior items which could not be completed due to weather and
escrow funds for the completion of swimming pools); and all costs, fees and
expenses incurred in making, closing or recording the Mortgage Loan have been
paid, except recording fees with respect to Mortgages not recorded as of the
Closing Date;
(n) The Mortgage Loan (except any Mortgage Loan secured by a
Mortgaged Property located in any jurisdiction, as to which an opinion of
counsel of the type customarily rendered in such jurisdiction in lieu of title
insurance is instead received) is covered by an American Land Title Association
mortgagee title insurance policy or other generally acceptable form of policy or
insurance acceptable to Xxxxxx Mae or Xxxxxxx Mac, issued by a title insurer
acceptable to Xxxxxx Mae or Xxxxxxx Mac insuring the originator, its successors
and assigns, as to the first priority lien of the Mortgage in the original
principal amount of the Mortgage Loan and subject only to (A) the lien of
current real property taxes and assessments not yet due and payable, (B)
covenants, conditions and restrictions, rights of way, easements and other
matters of public record as of the date of recording of such Mortgage acceptable
to mortgage lending institutions in the area in which the Mortgaged Property is
located or specifically referred to in the appraisal performed in connection
with the origination of the related Mortgage Loan, (C) liens created pursuant to
any federal, state or local law, regulation or ordinance affording liens for the
costs of clean-up of hazardous substances or hazardous wastes or for other
environmental protection purposes and (D) such other matters to which like
properties are commonly subject which do not individually, or in the aggregate,
materially interfere with the benefits of the security intended to be provided
by the Mortgage; the Depositor is the sole insured of such mortgagee title
insurance policy, the assignment to the Trustee of the Depositor's interest in
such mortgagee title insurance policy does not require any consent of or
notification to the insurer which has not been obtained or made, such mortgagee
title insurance policy is in full force and effect and will be in full force and
effect and inure to the benefit of the Trustee, no claims have been made under
such mortgagee title insurance policy, and no prior holder of the related
Mortgage, including the Depositor, has done, by act or omission, anything which
would impair the coverage of such mortgagee title insurance policy;
(o) To the best of the Depositor's knowledge, there is no
default, breach, violation or event of acceleration existing under the Mortgage
or the related Mortgage Note and no event which, with the passage of time or
with notice and the expiration of any grace or cure period, would constitute a
default, breach, violation or event of acceleration; the Depositor has not
waived any default, breach, violation or event of acceleration; and no
foreclosure action is currently threatened or has been commenced with respect to
the Mortgage Loan;
(p) The Mortgaged Property is free and clear of all mechanics'
and materialmen's liens or liens in the nature thereof; provided, however, that
this warranty shall be deemed not to have been made at the time of the initial
issuance of the Certificates if a title policy affording, in substance, the same
protection afforded by this warranty is furnished to the Trustee by the
Depositor;
(q) The Mortgage Loan meets, or is exempt from, applicable state
or federal laws, regulations and other requirements, pertaining to usury, and
the Mortgage Loan is not usurious;
(r) To the best of the Depositor's knowledge, all inspections,
licenses and certificates required to be made or issued with respect to all
portions of the Mortgaged Property and, with respect to the use and occupancy of
the same, including, but not limited to, certificates of occupancy and fire
underwriting certificates, have been made or obtained from the appropriate
authorities;
(s) Each Mortgage Note (other than with respect to any Balloon
Loans) is payable in monthly payments, resulting in complete amortization of the
Mortgage Loan over a term of not more than 360 months;
(t) Each Mortgage contains customary and enforceable provisions
such as to render the rights and remedies of the holder thereof adequate for the
realization against the Mortgaged Property of the benefits of the security,
including realization by judicial foreclosure (subject to any limitation arising
from any bankruptcy, insolvency or other law for the relief of debtors), and
there is no homestead or other exemption available to the Mortgagor which would
interfere with such right of foreclosure;
(u) The Mortgaged Property is undamaged by water, fire,
earthquake, earth movement other than earthquake, windstorm, flood, tornado or
similar casualty (excluding casualty from the presence of hazardous wastes or
hazardous substances, as to which the Depositor makes no representations), in a
matter which would adversely affect the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were intended
and to the best of the Depositor's knowledge, there is no proceeding pending or
threatened for the total or partial condemnation of the Mortgaged Property;
(v) The Mortgaged Property securing each Mortgage Loan is insured
by an insurer acceptable to Xxxxxx Xxx or Xxxxxxx Mac against loss by fire and
such hazards as are covered under a standard extended coverage endorsement, in
an amount which is not less than the lesser of 100% of the insurable value of
the Mortgaged Property and the outstanding principal balance of the Mortgage
Loan, but in no event less than the minimum amount necessary to fully compensate
for any damage or loss on a replacement cost basis; if the Mortgaged Property is
a condominium unit, it is included under the coverage afforded by a blanket
policy for the project; if upon origination of the Mortgage Loan, the
improvements on the Mortgaged Property were in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards, a flood insurance policy meeting the requirements of the current
guidelines of the Federal Insurance Administration is in effect with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (A) the outstanding principal balance of the Mortgage Loan, (B) the
full insurable value of the Mortgaged Property and (C) the maximum amount of
insurance which was available under the National Flood Insurance Act of 1968, as
amended; and each Mortgage obligates the Mortgagor thereunder to maintain all
such insurance at the Mortgagor's cost and expense;
(w) To the best of the Depositor's knowledge, no Mortgagor is a
debtor in any state or federal bankruptcy or insolvency proceeding;
(x) If the Mortgage Loan is secured by a long-term residential
lease, (1) the lessor under the lease holds a fee simple interest in the land;
(2) the terms of such lease expressly permit the mortgaging of the leasehold
estate, the assignment of the lease without the lessor's consent and the
acquisition by the holder of the Mortgage of the rights of the lessee upon
foreclosure or assignment in lieu of foreclosure or provide the holder of the
Mortgage with substantially similar protections; (3) the terms of such lease do
not (a) allow the termination thereof upon the lessee's default without the
holder of the Mortgage being entitled to receive written notice of, and
opportunity to cure, such default, (b) allow the termination of the lease in the
event of damage or destruction as long as the Mortgage is in existence, (c)
prohibit the holder of the Mortgage from being insured (or receiving proceeds of
insurance) under the hazard insurance policy or policies relating to the
Mortgaged Property or (d) permit any increase in rent other than pre-established
increases set forth in the lease; (4) the original term of such lease is not
less than 15 years; (5) the term of such lease does not terminate earlier than
five years after the maturity date of the Mortgage Note; and (6) the Mortgaged
Property is located in a jurisdiction in which the use of leasehold estates in
transferring ownership in residential properties is a widely accepted practice;
(y) None of the Mortgage Loans are classified as "high cost"
Mortgage Loans under Section 32 of the Home Ownership and Equity Protection Act
of 1994 as amended or any comparable state law;
(z) With respect to each Mortgage Loan that has a Prepayment
Penalty, each such Prepayment Penalty shall be enforceable, and each Prepayment
Penalty shall be permitted pursuant to federal, state and local law. Each such
Prepayment Penalty is in an amount less than or equal to the maximum amount
permitted under applicable law. Each such Prepayment Penalty actually charged to
the related borrower is in accordance with the Prepayment Penalty matrices set
forth in Exhibit X;
(aa) Each Mortgage Loan is a "qualified mortgage" within the
meaning of Section 860G of the Code and Treas. Reg. ss.1.860G-2;
(bb) No Mortgage Loan is a "high cost" loan as defined under any
federal, state or local law applicable to such Mortgage Loan at the time of its
origination;
(cc) No Mortgage Loan is serviced by the Trustee or an affiliate
of the Trustee; and
(dd) No Mortgage Loan (other than a Mortgage Loan that is a New
Jersey covered purchase loan) is a High Cost Loan or Covered Loan, as applicable
(as such terms are defined in the then current S&P's LEVELS(R) Glossary which is
now Version 5.6(d), Appendix E) and no Mortgage Loan originated on or after
October 1, 2002 through March 6, 2003 is governed by the Georgia Fair Lending
Act.
Notwithstanding the foregoing, no representations or warranties
are made by the Depositor as to the environmental condition of any Mortgaged
Property; the absence, presence or effect of hazardous wastes or hazardous
substances on any Mortgaged Property; any casualty resulting from the presence
or effect of hazardous wastes or hazardous substances on, near or emanating from
any Mortgaged Property; the impact on Certificateholders of any environmental
condition or presence of any hazardous substance on or near any Mortgaged
Property; or the compliance of any Mortgaged Property with any environmental
laws, nor is any agent, person or entity otherwise affiliated with the Depositor
authorized or able to make any such representation, warranty or assumption of
liability relative to any Mortgaged Property. In addition, no representations or
warranties are made by the Depositor with respect to the absence or effect of
fraud in the origination of any Mortgage Loan.
It is understood and agreed that the representations and
warranties set forth in this Section 2.04 shall survive delivery of the
respective Owner Mortgage Files (and, if applicable, Retained Mortgage Files) to
the Custodian and shall inure to the benefit of the Trustee notwithstanding any
restrictive or qualified endorsement or assignment.
Section 2.05 Representations, Warranties and Covenants of the
Servicer. The Servicer hereby represents, warrants and covenants to the Trustee,
for the benefit of each of the Trustee and the Certificateholders and to the
Depositor and the Securities Administrator that as of the Closing Date or as of
such date specifically provided herein:
(i) The Servicer is a national banking association duly chartered
and validly existing in good standing under the laws of the United States
and has all licenses necessary to carry on its business as now being
conducted, except for such licenses, certificates and permits the absence
of which, individually or in the aggregate, would not have a material
adverse effect on the ability of the Servicer to conduct its business as
it is presently conducted, and is licensed, qualified and in good
standing in the states where the Mortgaged Property is located if the
laws of such state require licensing or qualification in order to conduct
business of the type conducted by the Servicer or to ensure the
enforceability or validity of each Mortgage Loan; the Servicer has the
power and authority to execute and deliver this Agreement and to perform
in accordance herewith; the execution, delivery and performance of this
Agreement (including all instruments of transfer to be delivered pursuant
to this Agreement) by the Servicer and the consummation of the
transactions contemplated hereby have been duly and validly authorized;
and all requisite corporate action has been taken by the Servicer to make
this Agreement valid and binding upon the Servicer in accordance with its
terms;
(ii) The consummation of the transactions contemplated by this
Agreement are in the ordinary course of business of the Servicer and will
not result in the breach of any term or provision of the articles of
incorporation or by-laws of the Servicer or result in the breach of any
term or provision of, or conflict with or constitute a default under or
result in the acceleration of any obligation under, any agreement,
indenture or loan or credit agreement or other instrument to which the
Servicer or its property is subject, or result in the violation of any
law, rule, regulation, order, judgment or decree to which the Servicer or
its property is subject;
(iii) The Servicer is an approved seller/servicer of conventional
residential mortgage loans for Xxxxxx Xxx or Xxxxxxx Mac, with the
facilities, procedures, and experienced personnel necessary for the sound
servicing of mortgage loans of the same type as the Mortgage Loans. The
Servicer is a HUD approved mortgagee pursuant to Section 203 of the
National Housing Act and is in good standing to sell mortgage loans to
and service mortgage loans for Xxxxxx Mae or Xxxxxxx Mac, and no event
has occurred, including but not limited to a change in insurance
coverage, which would make the Servicer unable to comply with Xxxxxx Mae
or Xxxxxxx Mac eligibility requirements or which would require
notification to either Xxxxxx Mae or Xxxxxxx Mac;
(iv) This Agreement, and all documents and instruments
contemplated hereby which are executed and delivered by the Servicer,
constitute and will constitute valid, legal and binding obligations of
the Servicer, enforceable in accordance with their respective terms,
except as the enforcement thereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting the enforcement of creditors' rights generally (whether
considered in a proceeding at law or in equity);
(v) The Servicer does not believe, nor does it have any reason or
cause to believe, that it cannot perform each and every covenant
contained in this Agreement;
(vi) There is no action, suit, proceeding or investigation
pending or, to its knowledge, threatened against the Servicer that,
either individually or in the aggregate, may result in any material
adverse change in the business, operations, financial condition,
properties or assets of the Servicer, or in any material impairment of
the right or ability of the Servicer to carry on its business
substantially as now conducted, or in any material liability on the part
of the Servicer, or that would draw into question the validity or
enforceability of this Agreement or of any action taken or to be taken in
connection with the obligations of the Servicer contemplated herein, or
that would be likely to impair materially the ability of the Servicer to
perform under the terms of this Agreement;
(vii) No consent, approval or order of any court or governmental
agency or body is required for the execution, delivery and performance by
the Servicer of or compliance by the Servicer with this Agreement or the
consummation of the transactions contemplated by this Agreement, except
for such consents, approvals, authorizations and orders, if any, that
have been obtained;
(viii) No information in this Agreement provided by the Servicer
nor any information, certificate of an officer, statement furnished in
writing or report delivered to the Trustee or the Securities
Administrator by the Servicer in connection with the transactions
contemplated hereby contains or will contain any untrue statement of a
material fact or omits or will omit to state a material fact necessary in
order to make the statements contained therein, in light of the
circumstances under which they were made, not misleading;
(ix) The Servicer has fully furnished, and shall continue to
fully furnish for so long as it is servicing the Mortgage Loans
hereunder, in accordance with the Fair Credit Reporting Act and its
implementing regulations, accurate and complete information on the
Mortgagor credit files to Equifax, Experian and Trans Union Credit
Information Company on a monthly basis;
(x) Except as otherwise disclosed in the Prospectus, no legal or
governmental proceedings are pending (or known to be contemplated)
against the Servicer that would be material to Certificateholders;
(xi) Except as otherwise disclosed in the Prospectus, the
Servicer is not aware and has not received notice that any default, early
amortization or other performance triggering event has occurred as to any
other securitization due to any act or failure to act of the Servicer
under such securitization;
(xii) Except as otherwise disclosed in the Prospectus, the
Servicer has not been terminated as servicer in a residential mortgage
loan securitization, either due to a servicing default or to application
of a servicing performance test or trigger;
(xiii) Except as otherwise disclosed in the Prospectus, no
material noncompliance with the applicable servicing criteria with
respect to other securitizations of residential mortgage loans involving
the Servicer as a servicer has been disclosed or reported by the Servicer
within the past three (3) years;
(xiv) Except as otherwise disclosed in the Prospectus, no
material changes to the Servicer's policies or procedures with respect to
the servicing function it will perform under this Agreement for mortgage
loans of a type similar to the Mortgage Loans have occurred during the
three-year period immediately preceding the date of this Agreement;
(xv) Except as otherwise disclosed in the Prospectus, there is no
material risk that the Servicer's financial condition could affect one or
more aspects of the performance by the Servicer of its servicing
obligations under this Agreement in a manner that could have a material
impact on the performance of the Mortgage Loans or the Certificates; and
(xvi) Except as disclosed in the Prospectus, there are no
affiliations, relationships or transactions relating to the Servicer and
any party identified in Item 1119 of Regulation AB of the type described
therein.
It is understood and agreed that the representations, warranties
and covenants set forth in this Section 2.05 shall survive delivery of the
Mortgage Files to the Custodian and shall inure to the benefit of the Trustee,
the Depositor, the Securities Administrator and the Certificateholders. Upon
discovery by any of the Depositor, the Servicer, the Securities Administrator or
the Trustee of a breach of any of the foregoing representations, warranties and
covenants which materially and adversely affects the value of any Mortgage Loan,
Prepayment Penalty or the interests therein of the Certificateholders, the party
discovering such breach shall give prompt written notice (but in no event later
than two Business Days following such discovery) to the other parties hereto.
Upon discovery by any of the Depositor, the Servicer, the
Securities Administrator or the Trustee of a breach of any of the
representations and warranties set forth in this Section 2.05, the party
discovering such breach shall give prompt written notice, which shall not exceed
two days, to the other parties. The Securities Administrator shall consult with
the Depositor to determine if any such breach is material and any breach
determined by the Depositor to be material shall be included by the Securities
Administrator on the next Distribution Date Statement prepared pursuant to
Section 4.06.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor represents and warrants to the Trust and the Trustee on behalf of the
Certificateholders and to the Servicer and Securities Administrator 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 and 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 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 the State 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
thereby, 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);
(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 and the REMIC Regular
Interests. The Trustee acknowledges the assignment to it of the Mortgage Loans
and the delivery to the Custodian on its behalf of the Mortgage Files, subject
to the provisions of Sections 2.01 and 2.02, and the Trustee acknowledges 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
Order to Authenticate executed by an officer of the Depositor, has executed, and
the Certificate Registrar has authenticated and delivered to or upon the order
of the Depositor, each Class of Certificates in the minimum dollar denominations
and integral dollar multiples in excess thereof or minimum Percentage Interests
set forth in Section 5.01 hereof. The Trustee acknowledges the issuance of the
Pooling-Tier REMIC-1 Regular Interests and declares that it holds such regular
interests as assets of Pooling-Tier REMIC-2. The Trustee acknowledges the
issuance of the Pooling-Tier REMIC-2 Regular Interests and declares that it
holds such regular interests as assets of the Lower-Tier REMIC. The Trustee
acknowledges the issuance of the Lower-Tier REMIC Regular Interests and declares
that it hold such regular interests as assets of the Upper-Tier REMIC. The
Trustee acknowledges the issuance of the Class UT-IO Interest and Class UT-X
Interest and declares that it holds such regular interests as assets of Class XX
XXXXX. The Trustee acknowledges the issuance of the Class PT1-R Interest, the
Class PT2-R Interest, Class LT-R Interest and Class UT-R Interest, represented
by the Class R-2 Certificate. The Trustee acknowledges that the obligation of
the Class CE Certificates to pay Cap Carryover Amounts, and declares that it
hold the same as assets of the Grantor Trust on behalf of the Holders of the
Class A-1, Class A-2, Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates, respectively. In addition to the assets described in the preceding
sentence, the assets of the Grantor Trust shall also include (i) Prepayment
Penalties, any Servicer Prepayment Penalty Payment Amounts, any Originator
Prepayment Penalty Payment Amounts and the beneficial interest of the Class P
Certificates with respect thereto and (ii) the Interest Rate Swap Agreement, the
Supplemental Interest Trust Account, the Excess Reserve Fund Account and the
beneficial interest of the Class CE Certificates with respect thereto, subject
to the obligation to pay Cap Carryover Amounts, Net Swap Payments to the Swap
Provider and Swap Termination Payments to the Swap Provider. The interests
evidenced by the Certificates constitute the entire beneficial ownership
interest in the Trust Fund.
ARTICLE III
ADMINISTRATION AND SERVICING
OF THE TRUST FUND
Section 3.01 Servicer to Act as Servicer. The Servicer, as
independent contract servicer, shall service and administer the Mortgage Loans
in accordance with this Agreement and the normal and usual standards of practice
of sub-prime mortgage servicers servicing similar mortgage loans in the same
respective jurisdictions as the Mortgaged Properties, and shall have full power
and authority, acting alone, to do or cause to be done any and all things in
connection with such servicing and administration which the Servicer may deem
necessary or desirable and consistent with the terms of this Agreement (the
"Servicing Standards").
Consistent with the terms of this Agreement, the Servicer may
waive, modify or vary any term of any Mortgage Loan or consent to the
postponement of strict compliance with any such term or in any manner grant
indulgence to any Mortgagor if in the Servicer's reasonable determination such
waiver, modification, postponement or indulgence is not materially adverse to
the Certificateholders; provided, however, that the Servicer shall not make
future advances (other than Servicing Advances) and (unless the Mortgagor is in
default with respect to the Mortgage Loan or such default is, in the judgment of
the Servicer, reasonably foreseeable) the Servicer shall not permit any
modification with respect to any Mortgage Loan that would (i) change the
Mortgage Interest Rate, defer or forgive the payment thereof of any principal or
interest payments, reduce or increase the outstanding principal amount (except
for actual payments of principal) or extend the final maturity date with respect
to such Mortgage Loan, (ii) affect adversely the status of any Trust REMIC as a
REMIC or (iii) cause any REMIC created hereunder to be subject to a tax on
"prohibited transactions" or "contributions" pursuant to the REMIC Provisions.
Notwithstanding the foregoing, the Servicer shall not permit any modification
with respect to any Mortgage Loan that would both (x) effect an exchange or
reissuance of such Mortgage Loan under Section 1.860G-2(b) of the Treasury
Regulations and (y) cause any Trust REMIC to fail to qualify as a REMIC under
the Code or the imposition of any tax on "prohibited transactions" or
"contributions" after the Startup Day under the REMIC Provisions. Without
limiting the generality of the foregoing, the Servicer shall continue, and is
hereby authorized and empowered to execute and deliver on behalf of itself and
the Trustee, all instruments of satisfaction or cancellation, or of partial or
full release, discharge and all other comparable instruments, with respect to
the Mortgage Loans and with respect to the Mortgaged Properties. The Servicer
shall make all required Servicing Advances and shall service and administer the
Mortgage Loans in accordance with Applicable Regulations, and shall provide to
the Mortgagor any reports required to be provided to them thereby. By the
execution of this Agreement, the Trustee hereby grants to the Servicer, a power
of attorney to enable the Servicer to carry out its servicing and administrative
duties hereunder; provided, however, that the Trustee shall not be held liable
for any misuse of any such power of attorney by the Servicer. Notwithstanding
anything contained herein to the contrary, the 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 Servicer's representative
capacity; or (ii) take any action with the intent to cause, and that actually
causes, the Trustee to be registered to do business in any state.
In servicing and administering the Mortgage Loans, the Servicer
shall employ procedures including collection procedures and exercise the same
care that it customarily employs and exercises in servicing and administering
mortgage loans for its own account giving due consideration to accepted mortgage
servicing practices of prudent lending institutions and the Certificateholders'
reliance on the Servicer.
Notwithstanding anything in this Agreement to the contrary, in
the event of a voluntary Principal Prepayment in full of a Mortgage Loan, the
Servicer may not waive any Prepayment Penalty or portion thereof required by the
terms of the related Mortgage Note unless (i)(a) the Servicer determines that
such waiver is standard and customary in servicing similar mortgage loans, (b)
such waiver relates to a default or a reasonably foreseeable default and (c)
would, in the reasonable judgment of the Servicer, maximize recovery of
Liquidation Proceeds for such Mortgage Loan, taking into account the value of
such Prepayment Penalty, or (ii) the enforceability thereof is limited (1) by
bankruptcy, insolvency, moratorium, receivership, or other similar law relating
to creditors' rights generally or (2) due to acceleration in connection with a
foreclosure or other involuntary payment. If the Servicer has waived or does not
collect all or a portion of a Prepayment Penalty relating to a voluntary
Principal Prepayment in full due to any action or omission of the Servicer,
other than as provided above, the Servicer shall, on the date on which the
Principal Prepayment in full is remitted to the Securities Administrator,
deliver to the Securities Administrator the Servicer Prepayment Penalty Amount
with respect to such Mortgage Loan for distribution in accordance with the terms
of this Agreement. If the Servicer waives a Prepayment Penalty, the Servicer
shall notify the Securities Administrator of such waiver.
In the event that a Prepayment Penalty due with respect to any
Mortgage Loan is not timely received by the Servicer, the Servicer shall use
commercially reasonable efforts to determine whether the Originator is obligated
to pay a related Originator Prepayment Penalty Payment Amount, and if the
Servicer determines that a Originator Prepayment Penalty Payment Amount is due,
the Servicer shall promptly notify the Originator, and the Servicer shall
enforce the Originator's obligations as set forth in the Mortgage Loan Purchase
Agreement to pay any such Originator Prepayment Penalty Payment Amounts and, to
the extent that such amounts are received by the Servicer, shall cause such
amounts to be deposited into the Collection Account within one Business Day of
receipt.
Section 3.02 Collection of Mortgage Loan Payments. Continuously
from the date hereof until the principal and interest on all Mortgage Loans are
paid in full or as long as the Mortgage Loan remains subject to this Agreement,
the Servicer will diligently collect all payments due under each Mortgage Loan
when the same shall become due and payable and shall, to the extent such
procedures shall be consistent with the Servicing Standards and Applicable
Regulations, follow such collection procedures as it follows with respect to
mortgage loans comparable to the Mortgage Loans and held for its own account.
Further, where applicable, the Servicer will take special care in ascertaining
and estimating annual Escrow Payments that, as provided in the Escrow Agreement,
will become due and payable to that end that the installments payable by the
Mortgagors will be sufficient to pay such charges as and when they become due
and payable.
Section 3.03 Realization Upon Defaulted Mortgage Loans. In the
event that any payment due under any Mortgage Loan is not paid when the same
becomes due and payable, or in the event the Mortgagor fails to perform any
other covenant or obligation under the Mortgage Loan and such failure continues
beyond any applicable grace period, the Servicer shall take such action as it
shall deem to be in the best interest of the Certificateholders.
In connection with a foreclosure or other conversion, the
Servicer shall exercise such rights and powers vested in it hereunder and use
the same degree of care and skill in its exercise as it would exercise or use
under the circumstances in the conduct of its own affairs and consistent with
Applicable Regulations and the Servicing Standards, including, without
limitation, advancing funds for the payment of taxes and insurance premiums with
respect to first lien Mortgage Loans.
Notwithstanding the foregoing provisions of this Section 3.03,
with respect to any Mortgage Loan as to which the Servicer has received actual
notice of, or has actual knowledge of, the presence of any toxic or hazardous
substance on the related Mortgaged Property, the Servicer shall not either (i)
obtain title to such Mortgaged Property as a result of or in lieu of foreclosure
or otherwise, or (ii) otherwise acquire possession of, or take any other action
with respect to, such Mortgaged Property if, as a result of any such action, the
Trust would be considered to hold title to, to be a mortgagee-in-possession of,
or to be an owner or operator of such Mortgaged Property within the meaning of
the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, or any comparable law, unless the Servicer
has also previously determined, based on its reasonable judgment and a report
prepared by a Person who regularly conducts environmental audits using customary
industry standards, stating that:
A. such Mortgaged Property is in compliance with applicable
environmental laws or, if not, that it would be in the best economic interest of
the Certificateholders to take such actions as are necessary to bring the
Mortgaged Property into compliance therewith; and
B. there are no circumstances present at such Mortgaged Property
relating to the use, management or disposal of any hazardous substances,
hazardous materials, hazardous wastes, or petroleum-based materials for which
investigation, testing, monitoring, containment, clean-up or remediation could
be required under any federal, state or local law or regulation, or that if any
such materials are present for which such action could be required, that it
would be in the best economic interest of the Certificateholders to take such
actions with respect to the affected Mortgaged Property.
Notwithstanding the foregoing, if such environmental audit
reveals, or if the Servicer has actual knowledge or notice, that such Mortgaged
Property contains such wastes or substances, the Servicer shall not foreclose or
accept a deed in lieu of foreclosure.
The cost of the environmental audit report contemplated by this
Section 3.03 shall be advanced by the Servicer, subject to the Servicer's right
to be reimbursed therefor from the Collection Account as provided in Section
3.05(ii).
If the Servicer determines, as described above, that it is in the
best economic interest of the Certificateholders to take such actions as are
necessary to bring any such Mortgaged Property into compliance with applicable
environmental laws, or to take such action with respect to the containment,
clean-up or remediation of hazardous substances, hazardous materials, hazardous
wastes, or petroleum-based materials affecting any such Mortgaged Property, then
the Servicer shall take such action as it deems to be in the best economic
interest of the Certificateholders. The cost of any such compliance,
containment, cleanup or remediation shall be advanced by the Servicer, subject
to the Servicer's right to be reimbursed therefor from the Collection Account as
provided in Section 3.05(ii).
Section 3.04 Collection Account, Distribution Account, Excess
Reserve Fund Account and Supplemental Interest Trust Account. (a) The Servicer
shall segregate and hold all funds collected and received pursuant to each
Mortgage Loan separate and apart from any of its own funds and general assets
and shall establish and maintain one or more accounts (such account or accounts,
the "Collection Account"). Each Collection Account shall be an Eligible Account.
The Servicer shall deposit in the Collection Account within two
Business Days of receipt, and retain therein, the following payments and
collections received or made by it after the applicable Cut-off Date with
respect to the Mortgage Loans, without duplication:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest on the Mortgage Loans
adjusted to the Mortgage Interest Rate less the Servicing Fee Rate;
(iii) all Net Liquidation Proceeds and Subsequent Recoveries;
(iv) all Insurance Proceeds including amounts required to be
deposited pursuant to Section 3.10, other than proceeds to be held in the
Escrow Account and applied to the restoration or repair of the Mortgaged
Property or released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, the loan documents or applicable law;
(v) all Condemnation Proceeds affecting any Mortgaged Property
which are not released to the Mortgagor in accordance with the Servicer's
normal servicing procedures, the loan documents or applicable law;
(vi) any amounts required to be deposited by the Servicer in
connection with any REO Property pursuant to Section 3.13;
(vii) all Prepayment Penalties collected by the Servicer in
connection with the voluntary Principal Prepayment in full of any of the
Mortgage Loans, all Originator Prepayment Penalty Payment Amounts paid by
the Originator and all Servicer Prepayment Penalty Payment Amounts
required to be paid by the Servicer pursuant to Section 3.01 in
connection with any such Principal Prepayment; and
(viii) all amounts required to be deposited by the Servicer
pursuant to Section 2.03.
Any interest paid on funds deposited in the Collection Account,
subject to Section 3.23, shall accrue to the benefit of the Servicer and the
Servicer shall be entitled to retain and withdraw such interest from the
Collection Account pursuant to Section 3.05(v). In addition, the Servicer shall
deposit in the Collection Account any amounts required to be deposited pursuant
to Section 3.23(b) in connection with losses realized on Permitted Investments
with respect to funds held in the Collection Account. The foregoing requirements
for deposit from the Collection Account shall be exclusive, it being understood
and agreed that, without limiting the generality of the foregoing, payments in
the nature of late payment charges, bad check fees, prepayment penalties that
are not Prepayment Penalties, Originator Prepayment Penalty Payment Amounts or
Servicer Prepayment Penalty Payment Amounts, assumption fees and other similar
fees need not be deposited by the Servicer in the Collection Account. Amounts
deposited into the Collection Account in error may be withdrawn at any time.
(b) On behalf of the Trust Fund, the Securities Administrator
shall establish and maintain one or more accounts (such account or accounts, the
"Distribution Account"), on behalf of the Trustee, held in trust for the benefit
of the Certificateholders. On behalf of the Trust Fund, the Servicer shall
deliver (or cause the Originator to deliver in the case of clause (iii) below)
to the Securities Administrator in immediately available funds for deposit in
the Distribution Account on the Servicer Remittance Date (i) that portion of the
Available Funds (calculated without regard to the references in the definition
thereof to amounts that may be deposited to the Distribution Account from a
different source as provided herein) then on deposit in the Collection Account,
(ii) the amount of all Prepayment Penalties collected by the Servicer in
connection with the voluntary Principal Prepayment in full of any of the
Mortgage Loans then on deposit in the Collection Account (other than any such
Prepayment Penalties received after the related Prepayment Period), (iii) any
Originator Prepayment Penalty Payment Amount or Servicer Prepayment Penalty
Payment Amount that became due during the related Prepayment Period and (iv)
amounts reimbursable or payable to the Trustee pursuant to Section 7.01 and
Section 8.05 and amounts reimbursable or payable to the Securities Administrator
pursuant to Section 8.05 or Section 9.01(c). Except as otherwise provided in
Section 3.04(f), amounts in the Distribution Account shall be deemed to be held
on behalf of the related REMICs in accordance with the REMIC distributions set
forth in the Preliminary Statement. The Securities Administrator or the Paying
Agent, as applicable, may, from time to time, withdraw from the Distribution
Account for the following purposes:
(i) to pay to the Securities Administrator and to the Trustee any
amounts owed to the Securities Administrator and the Trustee pursuant to
Section 8.05, any amounts owed to the Securities Administrator pursuant
to Section 9.01(c) and any amounts owed to the Trustee pursuant to
Section 7.01;
(ii) to pay to the Securities Administrator as compensation any
interest earned on funds in the Distribution Account (all such interest
to be withdrawn monthly on each Distribution Date);
(iii) to remit Net Swap Payments and Swap Termination Payments to
the Supplemental Interest Trust Account;
(iv) to remit funds to Certificateholders in the amounts and the
manner provided for herein; and
(v) to clear and terminate the Distribution Account upon the
termination of this Agreement.
The Securities Administrator shall notify the Depositor and the Trustee
of the amount, purpose and party paid pursuant to Section 3.04(b)(i).
(c) Funds in the Collection Account and the Distribution Account
may be invested in Permitted Investments in accordance with the provisions set
forth in Section 3.23. The Servicer shall give notice to the Securities
Administrator (and the Securities Administrator shall give such notice to the
Trustee) of the location of the Collection Account maintained by it when
established upon request and prior to any change thereof. The Securities
Administrator shall give notice to the Servicer, the Trustee and the Depositor
of the location of the Distribution Account when established and prior to any
change thereof.
(d) In the event the Servicer delivers to the Securities
Administrator for deposit in the Distribution Account any amount not required to
be deposited therein, it may at any time request that the Securities
Administrator withdraw such amount from the Distribution Account and remit to
the Servicer any such amount, any provision herein to the contrary
notwithstanding. In addition, the Servicer shall deliver to the Securities
Administrator from time to time for deposit, and the Securities Administrator
shall so deposit, in the Distribution Account in respect of Pooling-Tier REMIC-1
(other than amounts described in clause (iii), which shall be held in the
Grantor Trust):
(i) any Advances, as required pursuant to Section 4.07;
(ii) any Stayed Funds, as soon as permitted by the federal
bankruptcy court having jurisdiction in such matters;
(iii) any Prepayment Penalties, Servicer Prepayment Penalty
Payment Amounts or amounts in connection with the waiver of such
Prepayment Penalties, in each case required to be deposited pursuant to
Section 3.01;
(iv) any amounts required to be deposited in the Distribution
Account pursuant to Sections 2.03, 3.04, 3.16, 3.23 or 4.07; and
(v) any amounts required to be deposited by the Servicer pursuant
to Section 3.11 in connection with the deductible clause in any blanket
hazard insurance policy, such deposit being made from the Servicer's own
funds, without reimbursement therefor.
(e) Promptly upon receipt of any Stayed Funds, whether from the
Servicer, a trustee in bankruptcy, or federal bankruptcy court or other source,
the Securities Administrator shall, unless such funds have been received from
the Servicer, notify the Servicer of such receipt and deposit such funds in the
Distribution Account, subject to withdrawal thereof as permitted hereunder. In
addition, the Securities Administrator shall deposit in the Distribution Account
any amounts required to be deposited pursuant to Section 3.23(b) in connection
with losses realized on Permitted Investments with respect to funds held in the
Distribution Account.
(f) Any Prepayment Penalties, Originator Prepayment Penalty
Payment Amounts and Servicer Prepayment Penalty Payment Amounts deposited
pursuant to Section 3.04(a)(vii) shall not be assets of any REMIC created
hereunder, but shall be considered assets of the Grantor Trust held by the
Securities Administrator, on behalf of the Trustee, for the benefit of the Class
P Certificateholders. In addition, any Cap Carryover Amounts that are paid with
respect to the Class A or Class M Certificates will be treated as first having
been distributed with respect to the Class CE Certificates and then having been
paid outside of the Trust REMICs to the Class A or Class M Certificateholders.
(g) The Securities Administrator shall establish and maintain the
Excess Reserve Fund Account, held in trust for the benefit of the Holders of the
Regular Certificates. On each Distribution Date, Cap Carryover Amounts available
pursuant the Section 4.02(b)(xxxiii) will be deposited into the Excess Reserve
Fund Account. On such Distribution Date, the Securities Administrator shall
withdraw such Cap Carryover Amounts on deposit and apply them, sequentially, as
follows:
(i) concurrently, to the Class A Certificates, pro rata (based on
the Cap Carryover Amount of each such Class) any Cap Carryover Amount for
such Class; and
(ii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates, any Cap Carryover Amount for such Class.
(h) (i) The Securities Administrator shall establish and maintain
the Supplemental Interest Trust Account, held in trust for the benefit of the
Swap Provider and the Holders of the Regular Certificates and Class CE
Certificates. On the Business Day prior to each Distribution Date, the
Securities Administrator shall deposit into the Supplemental Interest Trust
Account from Available Funds, any Net Swap Payment and Swap Termination Payment
for such Distribution Date prior to distributions to Certificateholders. On the
Business Day prior to each Distribution Date, in the case of clauses first and
seventh, and on each Distribution Date, in the case of clauses second, third,
fourth, fifth, sixth and eighth, the Securities Administrator shall withdraw
from the Supplemental Interest Trust Account any amounts on deposit and apply
them, sequentially, as follows:
first, to the Swap Provider, any Net Swap Payment owed to the
Swap Provider and Swap Termination Payment (other than a Swap Termination
Payment resulting from a Swap Provider Trigger Event) owed to the Swap Provider
pursuant to the Interest Rate Swap Agreement for such Distribution Date;
second, concurrently, to the Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates, pro rata, the Accrued Certificate Interest and Interest
Carry Forward Amounts, to the extent remaining undistributed after the
distributions pursuant to Sections 4.01 and 4.02(b);
third, sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates, the Accrued Certificate Interest and Interest Carry Forward
Amount, to the extent remaining undistributed after distributions pursuant to
Sections 4.01 and 4.02(b);
fourth, to the Certificates (other than the Class CE, Class P and
Residual Certificates) to pay principal as described in Sections 4.02(a)(i) and
(ii), but only to the extent necessary to restore the Overcollateralization
Amount to the Targeted Overcollateralization Amount as a result of current or
prior Realized Losses not previously reimbursed, after giving effect to
distributions pursuant to Sections 4.01 and 4.02(a);
fifth, sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates, to pay the applicable Realized Loss Amortization Amounts, after
payment of such amounts pursuant to Section 4.02(b);
sixth, to the Certificates (other than the Class CE, Class P and
Residual Certificates) to pay remaining Cap Carryover Amounts in the following
order of priority (after giving effect to payments made pursuant to Section
3.04(g)(i) and (ii)):
(i) concurrently, to the Class A Certificates, pro rata (based on the
remaining Cap Carryover Amount of each such Class) any remaining Cap
Carryover Amount for such Class; and
(ii) sequentially, to the Class X-0, Xxxxx X-0, Class M-3, Class M-4,
Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates, any remaining Cap Carryover Amount for such Class.
seventh, to the Swap Provider, any Swap Termination Payment
resulting from a Swap Provider Trigger Event owed to the Swap Provider pursuant
to the Interest Rate Swap Agreement for such Distribution Date; and
eighth, any remaining amount to the Class CE Certificates.
(ii) As described in Section 3.04(h)(i) above, Net Swap Payments
owed to the Swap Provider and Swap Termination Payments (other than Swap
Termination Payments resulting from a Swap Provider Trigger Event) owed to the
Swap Provider shall be payable from the Supplemental Interest Trust to the Swap
Provider from Available Funds prior to any distributions to Certificateholders.
Prior to each Distribution Date, such amounts will be remitted from the
Distribution Account to the Supplemental Interest Trust, first to make any Net
Swap Payment owed to the Swap Provider on the Business Day prior to each
Distribution Date pursuant to the Interest Rate Swap Agreement, and second to
make any Swap Termination Payment (other than a Swap Termination Payment
resulting from a Swap Provider Trigger Event) owed to the Swap Provider on the
Business Day prior to each Distribution Date pursuant to the Interest Rate Swap
Agreement. Any Swap Termination Payment triggered by a Swap Provider Trigger
Event owed to the Swap Provider pursuant to the Interest Rate Swap Agreement
will be subordinated to distributions to the holders of the Class A and Class M
Certificates and shall be paid pursuant to Section 3.04(h)(i) priority seventh.
(i) The Securities Administrator shall account for the Excess
Reserve Fund Account and Supplemental Interest Trust Account as assets of a
grantor trust under subpart E, part I of subchapter J of the Code and not as
assets of any REMIC created pursuant to this Agreement. The beneficial owner of
the Excess Reserve Fund Account and the Supplemental Interest Trust Account is
the Class CE Certificateholder. For federal income tax purposes, Net Swap
Payments and Swap Termination Payments payable to the Swap Provider shall be
deemed to be paid to the Supplemental Interest Trust first, from the Class XX
XXXXX, by the Holder of the Class CE Certificates (in respect of the Class IO
Interest and, if applicable, Class CE Interest) and second, other than any Swap
Termination Payment resulting from a Swap Provider Trigger Event, from the
Upper-Tier REMIC by the Holders of the applicable Class or Classes of Regular
Certificates (in respect of Class IO Shortfalls).
(j) Any Cap Carryover Amounts paid by the Securities
Administrator pursuant to Sections 3.04(g) and (h) to the Regular Certificates
shall be accounted for by the Securities Administrator as amounts paid first to
the Class CE Certificates in respect of the Class CE Interest or from Net Swap
Payments received from the Swap Provider and then to the respective Class or
Classes of Regular Certificates. In addition, the Securities Administrator shall
account for each Class of Regular Certificates' rights to receive payments of
Cap Carryover Amounts as rights in a separate limited recourse interest rate cap
contract written by the Class CE Certificateholders in favor of the holders of
the Regular Certificates of each such Class.
(k) [Reserved].
(l) With respect to the failure of the Swap Provider to perform
any of its obligations under the Interest Rate Swap Agreement, the breach by the
Swap Provider of any of its representations and warranties made pursuant to the
Interest Rate Swap Agreement, or the termination of the Interest Rate Swap
Agreement, the Securities Administrator shall send any notices and make any
demands, on behalf of the Trust, as are required under the Interest Rate Swap
Agreement. The Securities Administrator shall cause any replacement swap
provider to provide a copy of the related replacement interest rate swap
agreement to the Securities Administrator and the Depositor.
(m) Upon the occurrence of a Swap Early Termination (i) to the
extent that the Securities Administrator, on behalf of the Supplement Interest
Trust, receives a Swap Termination Payment from the Swap Provider, if the
Securities Administrator acquires a replacement interest rate swap agreement,
the Securities Administrator shall apply all or a portion of such Swap
Termination Payment as may be necessary to acquire a replacement swap provider
under the replacement interest rate swap agreement prior to distribution of such
Swap Termination Payment in accordance with the priorities set forth in this
Agreement and (ii) to the extent that a Swap Termination Payment is owed to the
Swap Provider, if the Securities Administrator acquires a replacement interest
rate swap agreement, the Securities Administrator shall apply all or a portion
of the amount received from any replacement swap provider under a replacement
interest rate swap agreement to pay the Swap Termination Payment owed to the
Swap Provider.
Section 3.05 Permitted Withdrawals from the Collection Account.
The Servicer may, from time to time, withdraw from the Collection Account for
the following purposes:
(i) to remit to the Securities Administrator for deposit in the
Distribution Account the amounts required to be so remitted pursuant to
Section 3.04(b) or permitted to be so remitted pursuant to the first
sentence of Section 3.04(d);
(ii) first, to the extent the Servicer has not previously
reimbursed the Trustee pursuant to Section 4.07(e), to reimburse the
Trustee for any unreimbursed Advances made by the Trustee and second, to
reimburse itself for any unreimbursed Advances and Servicing Advances;
the Servicer's right to reimburse itself and the Trustee pursuant to this
subclause (ii) being limited to amounts received on the related Mortgage
Loan which represent payments of (a) principal and/or interest respecting
which any such Advance was made or (b) Condemnation Proceeds, Insurance
Proceeds or Liquidation Proceeds respecting which any such Servicing
Advance was made;
(iii) first, to the extent the Servicer has not previously
reimbursed the Trustee pursuant to Section 4.07(e), to reimburse the
Trustee for any unreimbursed Advances made by the Trustee and second to
reimburse itself for any unreimbursed Servicing Advances, any unpaid
Servicing Fees and for unreimbursed Advances, in each case, to the extent
that such amounts are deemed to be Nonrecoverable Advances, and to
reimburse itself and the Trustee for such amounts to the extent that such
amounts are nonrecoverable from the disposition of REO Property pursuant
to Section 3.03 or Section 3.13 hereof;
(iv) to reimburse itself for any amounts paid or expenses
incurred pursuant to Section 3.03 (and not otherwise previously
reimbursed);
(v) to pay to itself as servicing compensation (a) any interest
earned on funds in the Collection Account (all such interest to be
withdrawn monthly not later than each Servicer Remittance Date) and (b)
the Servicing Fee from that portion of any payment or recovery as to
interest to a particular Mortgage Loan to the extent not retained
pursuant to Section 3.04(a)(ii);
(vi) to reimburse itself for any amounts paid pursuant to Section
6.03 (and not otherwise previously reimbursed);
(vii) to reimburse the Servicer (if the Servicer is not an
Affiliate of the repurchasing party), the Securities Administrator or the
Trustee, as the case may be, for enforcement expenses reasonably incurred
in respect of the breach or defect giving rise to the purchase obligation
under Section 2.03 of this Agreement that were included in the Purchase
Price of the Mortgage Loan, including any expenses arising out of the
enforcement of the purchase obligation;
(viii) to reimburse the Depositor or the Servicer for expenses
and costs reimbursable to them pursuant to Section 3.24(b); and
(ix) to clear and terminate the Collection Account upon the
termination of this Agreement.
The foregoing requirements for withdrawal from the Collection
Account shall be exclusive. In the event the Servicer shall deposit in the
Collection Account any amount not required to be deposited therein, it may at
any time withdraw such amount from the Collection Account, any provision herein
to the contrary notwithstanding. The Servicer shall notify the Securities
Administrator of the amount, purpose and party of any payment or reimbursement
of expenses made pursuant to Sections 3.05(iv), (vi), (vii) and (viii).
Section 3.06 Establishment of Escrow Accounts; Deposits in Escrow
Accounts. The Servicer shall segregate and hold all funds collected and received
pursuant to each Mortgage Loan which constitute Escrow Payments separate and
apart from any of its own funds and general assets and shall establish and
maintain one or more Escrow Accounts, in the form of time deposit or demand
accounts. A copy of such account certification agreement shall be furnished to
the Trustee upon request. The Escrow Account shall be an Eligible Account.
The Servicer shall deposit in the Escrow Account or Accounts
within two Business Days of receipt, and retain therein, (i) all Escrow Payments
collected on account of the Mortgage Loans, for the purpose of effecting timely
payment of any such items as required under the terms of this Agreement, and
(ii) all Insurance Proceeds which are to be applied to the restoration or repair
of any Mortgaged Property. The Servicer shall make withdrawals therefrom only to
effect such payments as are required under this Agreement, and for such other
purposes as shall be set forth in, or in accordance with, Section 3.07. The
Servicer shall be entitled to retain any interest paid on funds deposited in the
Escrow Account by the depository institution other than interest on escrowed
funds required by law to be paid to the Mortgagor and, to the extent required by
the related Mortgage Loan or Applicable Regulations, the Servicer shall pay
interest on escrowed funds to the Mortgagor notwithstanding that the Escrow
Account is non-interest bearing or that interest paid thereon is insufficient
for such purposes.
Section 3.07 Permitted Withdrawals From Escrow Account.
Withdrawals from the Escrow Account may be made by the Servicer (i) to effect
timely payments of Escrow Payments, (ii) to reimburse the Servicer for any
Servicing Advance made by the Servicer with respect to a related Mortgage Loan
but only from amounts received on the related Mortgage Loan which represent late
payments or Late Collections of Escrow Payments thereunder, (iii) to refund to
the Mortgagor any funds as may be determined to be overages, (iv) for transfer
to the Collection Account in accordance with the terms of this Agreement, (v)
for application to restoration or repair of the Mortgaged Property, (vi) to pay
to the Servicer, or to the Mortgagor to the extent required by the related
Mortgage Loan or Applicable Regulations, any interest paid on the funds
deposited in the Escrow Account, (vii) to clear and terminate the Escrow Account
on the termination of this Agreement, or (viii) to transfer to the Collection
Account any Insurance Proceeds. As part of its servicing duties, the Servicer
shall pay to the Mortgagor interest on funds in the Escrow Account, to the
extent required by the related Mortgage Loan or Applicable Regulations, and to
the extent that interest earned on funds in the Escrow Account is insufficient,
shall pay such interest from its own funds, without any reimbursement therefor.
In the event the Servicer shall deposit in the Escrow Account any
amount not required to be deposited therein, it may at any time withdraw such
amount from the Escrow Account, any provision herein to the contrary
notwithstanding.
Section 3.08 Payment of Taxes, Insurance and Other Charges;
Collections Thereunder; Primary Mortgage Insurance. (a) With respect to each
Mortgage Loan subject to an Escrow Agreement, the Servicer shall maintain
accurate records reflecting the status of taxes, which are or may become a lien
upon the Mortgaged Property and the status of fire, flood (if applicable) and
hazard insurance coverage and shall obtain, from time to time, all bills for the
payment of such charges (including renewal premiums) and shall effect payment
thereof prior to the applicable penalty or termination date and at a time
appropriate for securing maximum discounts allowable, employing for such purpose
deposits of the Mortgagor in the Escrow Account which shall have been estimated
and accumulated by the Servicer in amounts sufficient for such purposes, as
allowed under the terms of the Escrow Agreement or Applicable Regulations. To
the extent that a Mortgage Loan is not subject to an Escrow Agreement, the
Servicer shall determine that any such payments are made by the Mortgagor. The
Servicer assumes full responsibility for the payment of all such bills and shall
effect payments of all such bills irrespective of the Mortgagor's faithful
performance in the payment of same or the making of the Escrow Payments and
shall make Servicing Advances from its own funds to effect such payments.
(b) For any Mortgage Loan with a Loan-to-Value Ratio at
origination of greater than 80%, if the Mortgage Loan Schedule indicates that
such Mortgage Loan has primary mortgage insurance, the Servicer shall maintain
coverage under a primary mortgage insurance policy until the Loan-to-Value Ratio
on any such Mortgage Loan is reduced to 78% or lower as a result of principal
payments on such Mortgage Loan or based upon an appraisal of the related
Mortgaged Property after the Closing Date. Notwithstanding anything to the
contrary herein, the Servicer shall be responsible for the payment of all
primary mortgage insurance premiums out of the Servicer's own funds, without any
right to reimbursement therefor. The Servicer shall not assign its obligation
under any primary mortgage insurance policy without the consent of each Rating
Agency and the related primary insurance policy provider. In the event that
Xxxxx Fargo Bank is no longer Servicer hereunder, Xxxxx Fargo Bank agrees to
continue to pay all primary mortgage insurance premiums for the Mortgage Loans.
Section 3.09 Transfer of Accounts. The Servicer may transfer the
Collection Account or the Escrow Account to a different depository institution
from time to time. Upon such transfer, the Servicer shall deliver to the
Securities Administrator (and the Securities Administrator shall provide to the
Depositor and the Trustee), a certification or letter agreement, as the case may
be, as required pursuant to Sections 3.04 and 3.06.
Section 3.10 Maintenance of Hazard Insurance. The Servicer shall
cause to be maintained for each Mortgage Loan fire and hazard insurance with
extended coverage as is customary in the area where the Mortgaged Property is
located in an amount which is at least equal to the lesser of (i) the amount
necessary to fully compensate for any damage or loss to the improvements which
are a part of such property on a replacement cost basis or (ii) the Principal
Balance of the Mortgage Loan, in each case in an amount not less than such
amount as is necessary to prevent the Mortgagor and/or the Mortgagee from
becoming a co-insurer. If the Mortgaged Property is in an area identified in the
Federal Register by the Flood Emergency Management Agency as having special
flood hazards and flood insurance has been made available, the Servicer will
cause to be maintained a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration with a generally
acceptable insurance carrier, in an amount representing coverage not less than
the least of (i) the Principal Balance of the Mortgage Loan, (ii) the maximum
insurable value of the improvements securing such Mortgage Loan or (iii) the
maximum amount of insurance which is available under the National Flood
Insurance Act of 1968, as amended. The Servicer shall also maintain on the REO
Property for the benefit of the Certificateholders, (x) fire and hazard
insurance with extended coverage in an amount which is at least equal to the
replacement cost of the improvements which are a part of such property and (y)
to the extent required and available under the Flood Disaster Protection Act of
1973, as amended, flood insurance in an amount as provided above. Any amounts
collected by the Servicer under any such policies other than amounts to be
deposited in the Escrow Account and applied to the restoration or repair of the
Mortgaged Property or REO Property, or released to the Mortgagor in accordance
with the Servicer's normal servicing procedures, shall be deposited in the
Collection Account, subject to withdrawal pursuant to Section 3.05. It is
understood and agreed that no earthquake or other additional insurance is
required to be maintained by the Servicer or the Mortgagor or maintained on
property acquired in respect of the Mortgage Loan, other than pursuant to such
Applicable Regulations as shall at any time be in force and as shall require
such additional insurance. All such policies shall be endorsed with standard
mortgagee clauses with loss payable to the Servicer and shall provide for at
least thirty days prior written notice of any cancellation, reduction in the
amount of or material change in coverage to the Servicer. The Servicer shall not
interfere with the Mortgagor's freedom of choice in selecting either his
insurance carrier or agent, provided, however, that the Servicer shall not
accept any such insurance policies from insurance companies unless such
companies currently reflect a general policy rating of B:VI or better in Best's
Key Rating Guide and are licensed to do business in the state wherein the
property subject to the policy is located.
Section 3.11 Maintenance of Mortgage Impairment Insurance Policy.
In the event that the Servicer shall obtain and maintain a blanket policy issued
by an insurer that has a general policy rating of B:VI or better in Best's Key
Rating Guide insuring against hazard losses on all of the Mortgage Loans, then,
to the extent such policy provides coverage in an amount equal to the amount
required pursuant to Section 3.10 and otherwise complies with all other
requirements of Section 3.10, it shall conclusively be deemed to have satisfied
its obligations as set forth in Section 3.10, it being understood and agreed
that such policy may contain a deductible clause, in which case the Servicer
shall, in the event that there shall not have been maintained on the related
Mortgaged Property or REO Property a policy complying with Section 3.10, and
there shall have been a loss which would have been covered by such policy,
deliver to the Securities Administrator for deposit in the Distribution Account
the amount not otherwise payable under the blanket policy because of such
deductible clause, which amount shall not be reimbursable to the Servicer from
the Trust Fund. In connection with its activities as servicer of the Mortgage
Loans, the Servicer agrees to prepare and present, on behalf of the Trustee,
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy. Upon request of the Securities Administrator, the Servicer
shall cause to be delivered to the Custodian, the Trustee and the Securities
Administrator a certified true copy of such policy and a statement from the
insurer thereunder that such policy shall in no event be terminated or
materially modified without thirty days prior written notice to the Trustee.
Section 3.12 Fidelity Bond, Errors and Omissions Insurance. (a)
The Servicer shall maintain, at all times and at its own expense, a Servicer
Errors and Omissions Policy in an amount and with an insurer acceptable to
Xxxxxx Xxx or Xxxxxxx Mac. The Servicer Errors and Omissions Policy shall insure
the Servicer, its successors and assigns, against any losses resulting from
negligence, errors or omissions on the part of officers, employees or other
persons acting on behalf of the Servicer in the performance of its duties as a
Servicer pursuant to this Agreement. The Servicer shall maintain in effect the
Servicer Errors and Omissions Policy at all times and the Servicer Errors and
Omissions Policy may not be canceled, permitted to lapse or otherwise terminated
without the acquisition of comparable coverage by the Servicer. The terms of the
Servicer Errors and Omissions Policy shall provide for a deductible amount that
is acceptable to Xxxxxx Mae or Xxxxxxx Mac with respect to its approved mortgage
loan servicers. The Servicer Errors and Omissions Policy shall be obtained by
the Servicer from an insurer which satisfies Xxxxxx Mae or Xxxxxxx Mac standards
in this regard.
(b) The Servicer must maintain, at all times, at its own expense,
a Fidelity Bond in an amount and with an insurer acceptable to Xxxxxx Mae or
Xxxxxxx Mac and having terms that are acceptable to Xxxxxx Mae or Xxxxxxx Mac.
The amount of Fidelity Bond coverage shall be an amount acceptable to Xxxxxx Mae
or Xxxxxxx Mac. The coverage of the Fidelity Bond must explicitly insure the
Servicer, its successors and assigns, against any losses resulting from
dishonest, fraudulent or criminal acts on the part of officers, employees or
other persons acting on behalf of the Servicer. The Servicer must maintain in
effect the Fidelity Bond at all times and the Fidelity Bond may not be canceled,
permitted to lapse or otherwise terminated without thirty Business Days' prior
written notice by registered mail to the Securities Administrator and the
Depositor. Further, the Fidelity Bond must provide that, or the insurer must
state in writing to the Securities Administrator and the Depositor that, the
Fidelity Bond shall not be cancelable without the giving of notice as provided
for in the prior sentence. The terms of the Fidelity Bond must provide for a
deductible amount that does not exceed Xxxxxx Mae or Xxxxxxx Mac requirements.
The Fidelity Bond must be obtained from a company which satisfies Xxxxxx Mae or
Xxxxxxx Mac standards in this regard.
Section 3.13 Title, Management and Disposition of REO Property.
(a) In the event that title to a Mortgaged Property is acquired in foreclosure
or by deed in lieu of foreclosure, the deed or certificate of sale shall be
taken in the name of the Trustee, on behalf of the Certificateholders, or in the
event the Trustee is not authorized or permitted to hold title to real property
in the state where the REO Property is located, or would be adversely affected
under the "doing business" or tax laws of such state by so holding title, the
deed or certificate of sale shall be taken in the name of such Person or Persons
as shall be consistent with an Opinion of Counsel obtained by the Servicer from
an attorney duly licensed to practice law in the state where the REO Property is
located. Any Person or Persons holding such title other than the Trustee shall
acknowledge in writing that such title is being held as nominee for the benefit
of the Trustee. Pursuant to the power of attorney granted in Section 3.01, the
Servicer is hereby authorized to acquire, transfer and dispose of any REO
Property taken in the name of the Trustee pursuant to this Section 3.13 without
further documentation of its authority as attorney in fact for the Trustee on
behalf of the Trust.
(b) In the event that the Trust Fund acquires any REO Property as
aforesaid or otherwise in connection with a default or imminent default on a
Mortgage Loan, the Servicer shall dispose of such REO Property before the end of
the third calendar year beginning after the year of its acquisition by the Trust
Fund for purposes of Section 860G(a)(8) of the Code or, at the expense of the
Trust Fund, request from the Internal Revenue Service, more than 60 days before
the day on which the above-mentioned grace period would otherwise expire, an
extension of the above-mentioned grace period, unless the Servicer obtains an
Opinion of Counsel, addressed and delivered to the Servicer and the Trustee, to
the effect that the holding by the Trust Fund of such REO Property subsequent to
such period will not: (i) result in the imposition of any tax on "prohibited
transactions" as defined in Section 860F of the Code; or (ii) cause any Trust
REMIC to fail to qualify as a REMIC at any time that any Certificates are
outstanding, in which case the Trust Fund may continue to hold such REO Property
(subject to any conditions contained in such Opinion of Counsel). The Servicer
shall be entitled to be reimbursed from the Collection Account for any costs
incurred in obtaining such Opinion of Counsel, as provided in Section 3.05.
Subject to compliance with applicable laws and regulations as
shall at any time be in force, and notwithstanding any other provisions of this
Agreement, no REO Property acquired by the Trust Fund shall be rented (or
allowed to continue to be rented) or otherwise used by or on behalf of the Trust
Fund in such a manner or pursuant to any terms that would: (i) cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code; or (ii) subject any Trust REMIC to the
imposition of any federal income taxes on the income earned from such REO
Property, including any taxes imposed by reason of Sections 860F or 860G(c) of
the Code, unless the Servicer has agreed to indemnify and hold harmless the
Trust Fund with respect to the imposition of any such taxes.
The Servicer shall manage, conserve, protect and operate each REO
Property for the Certificateholders and the Trust Fund solely for the purpose of
its prompt disposition and sale in a manner which does not cause such REO
Property to fail to qualify as "foreclosure property" within the meaning of
Section 860G(a)(8) of the Code or result in the receipt by the related Trust
REMIC of any "income from non-permitted assets" within the meaning of Section
860F(a)(2)(B) of the Code, or any "net income from foreclosure property" which
is subject to taxation under the REMIC Provisions. The Servicer shall cause each
REO Property to be inspected promptly upon the acquisition of title thereto and
possession thereof and shall cause each REO Property to be inspected at least
annually thereafter. The Servicer shall make or cause to be made a written or
electronic report of each such inspection. Such reports shall be retained in the
Mortgage File and copies thereof shall be forwarded by the Servicer to the
Trustee upon request. The Servicer shall attempt to sell the same (and may
temporarily rent the same) on such terms and conditions as the Servicer deems to
be in the best interest of the Certificateholders and the Trust Fund.
With respect to each REO Property, the Servicer shall segregate
and hold all funds collected and received in connection with the operation of
the REO Property separate and apart from its own funds or general assets and
shall deposit or cause to be deposited, on a daily basis, within three Business
Days of receipt, into the Collection Account, all revenues received with respect
to the related REO Property and shall withdraw therefrom funds necessary for the
proper operation, management and maintenance of the REO Property, including the
cost of maintaining any hazard insurance pursuant to Section 3.10 hereof and the
fees of any managing agent acting on behalf of the Servicer.
The Servicer shall furnish to the Securities Administrator and
the Trustee, on each Servicer Remittance Date, an operating statement for each
REO Property covering the operation of each REO Property for the previous month,
if applicable. Such operation statement shall be accompanied by such other
information as the Securities Administrator or the Trustee shall reasonably
request.
The Servicer shall use its best efforts to dispose of the REO
Property as promptly as is practically consistent with protecting the
Certificateholders' interests.
Each REO Disposition shall be carried out by the Servicer at such
price and upon such terms and conditions as the Servicer deems to be in the best
interest of the Certificateholders. If as of the date title to any REO Property
was acquired by the Servicer there were outstanding unreimbursed Servicing
Advances with respect to the REO Property, the Servicer, upon an REO Disposition
of such REO Property, shall be entitled to reimbursement for any related
unreimbursed Servicing Advances from proceeds received in connection with such
REO Disposition. The Servicer shall be entitled to an REO Disposition Fee upon
each REO Disposition, and may withhold and retain the REO Disposition Fee from
Liquidation Proceeds. The proceeds from the REO Disposition, net of any payments
to the Servicer as provided above, shall be deposited in the Collection Account
and shall be distributed to the Trust in the month following receipt thereof in
accordance with Section 4.01.
Any REO Disposition shall be for cash only (unless changes in the
REMIC Provisions made subsequent to the Startup Day allow a sale for other
consideration and an Opinion of Counsel is obtained by the Servicer to the
effect that such sale shall not cause any REMIC constituting part of the Trust
Fund to fail to qualify as a REMIC).
Section 3.14 Due-on-Sale Clauses; Assumption and Substitution
Agreements. When a Mortgaged Property has been or is about to be conveyed by the
Mortgagor, the Servicer shall, to the extent it has knowledge of such conveyance
or prospective conveyance, exercise its rights to accelerate the maturity of the
related Mortgage Loan under any "due-on-sale" clause contained in the related
Mortgage or Mortgage Note; provided, however, that the Servicer shall not
exercise any such right if the "due-on-sale" clause, in the reasonable belief of
the Servicer, is not enforceable under applicable law. In such event, the
Servicer shall make reasonable efforts to enter into an assumption and
modification agreement with the Person to whom such property has been or is
about to be conveyed, pursuant to which such Person becomes liable under the
Mortgage Note and, unless prohibited by applicable law or the Mortgage, the
Mortgagor remains liable thereon. If the foregoing is not permitted under
applicable law, the Servicer is authorized to enter into a substitution of
liability agreement with such Person, pursuant to which the original Mortgagor
is released from liability and such Person is substituted as Mortgagor and
becomes liable under the Note. The Mortgage Loan, as assumed, shall conform in
all respects to the requirements, representations and warranties of this
Agreement. The Servicer shall notify the Trustee that any such assumption or
substitution agreement has been completed by forwarding to the Trustee (or the
Custodian, as the case may be) the original copy of such assumption or
substitution agreement (indicating the Mortgage File to which it relates) which
copy shall be added by the Trustee (or the Custodian, as the case may be) to the
related Mortgage File and which shall, for all purposes, be considered a part of
such Mortgage File to the same extent as all other documents and instruments
constituting a part thereof. The Servicer shall be responsible for recording any
such assumption or substitution agreements. Except as otherwise provided in
Section 3.01, in connection with any such assumption or substitution agreement,
the Monthly Payment on the related Mortgage Loan shall not be changed but shall
remain as in effect immediately prior to the assumption or substitution, the
stated maturity or outstanding principal amount of such Mortgage Loan shall not
be changed nor shall any required monthly payments of principal or interest be
deferred or forgiven. Any fee collected by the Servicer for consenting to any
such conveyance or entering into an assumption or substitution agreement shall
be retained by or paid to the Servicer as additional servicing compensation.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, the Servicer shall not be deemed to be in default, breach or any
other violation of its obligations hereunder by reason of any assumption of a
Mortgage Loan by operation of law or any assumption which the Servicer may be
restricted by law from preventing, for any reason whatsoever.
Section 3.15 Duties of the Credit Risk Manager.
For and on behalf of the Trust, the Credit Risk Manager shall
provide reports and recommendations as to loss mitigation activities concerning
Mortgage Loans that are past due, are in default, as to which there has been
commencement of foreclosure, as to which there has been forbearance in exercise
of remedies, as to which any obligor is the subject of bankruptcy, receivership,
or an arrangement of creditors, or which have become REO Properties. Such
reports and recommendations will be based upon information provided pursuant to
the Credit Risk Management Agreement. The Credit Risk Manager shall look solely
to the Servicer for all information and data (including loss and delinquency
information and data) and loan-level information and data relating to the
servicing of the Mortgage Loans.
The Credit Risk Manager may be removed at any time by a vote of
Certificateholders holding Certificates evidencing at least 66 2/3% of the
aggregate Voting Interests of the Certificates. After any such termination, the
Credit Risk Manager shall have no further obligations hereunder, and shall no
longer be entitled to the Credit Risk Manager Fee.
Section 3.16 Optional Purchases of 60+ Day Delinquent Loans. (a)
The Depositor may, at its option, purchase any 60+ Day Delinquent Loan or any
Mortgage Loan or REO Property for which the Servicer has accepted a deed in lieu
of foreclosure during the following time periods: (i) beginning on the first day
of the second month following the month in which the Servicer has reported that
it has initiated foreclosure proceedings with respect to such 60+ Day Delinquent
Loan, with such repurchase option expiring on the last day of such second
following month; (ii) beginning on the first day of the second month following
the month in which the Servicer has reported that such defaulted Mortgage Loan
has become an REO Property, with such repurchase option expiring on the last day
of such second following month; and (iii) beginning on the day on which the
Servicer accepts a contractual commitment by a third party to purchase the
Mortgaged Property related to the 60+ Day Delinquent Loan or REO Property, with
such repurchase option expiring on the earlier of the last day of the month in
which such contractual commitment was accepted by the Servicer or the day
immediately prior to the day on which the closing occurs with respect to such
third party purchase of the Mortgaged Property related to the 60+ Day Delinquent
Loan or REO Property.
Prior to purchase pursuant to this Section 3.16, the Servicer
shall be required to continue to make monthly Advances pursuant to Section 4.07.
The Depositor shall not use any procedure in selecting Mortgage Loans to be
purchased which is materially adverse to the interests of the
Certificateholders. The Depositor shall purchase any such 60+ Day Delinquent
Loan or REO Property that it elects to purchase at a price equal to the Purchase
Price. The Purchase Price for the repurchased Mortgage Loan or REO Property
shall be deposited in the Collection Account, and the Custodian, on behalf of
the Trustee, upon receipt of written certification from the Depositor of such
deposit, shall release to, or at the direction of, the Depositor, the related
Mortgage File and shall execute and deliver such instruments of transfer or
assignment, in each case without recourse, as the Depositor shall furnish to it
and as shall be necessary to vest in the Depositor any Mortgage Loan or REO
Property released pursuant hereto and neither the Trustee nor the Custodian
shall have further responsibility with regard to such Mortgage File.
Section 3.17 Custodian to Cooperate; Release of Files. (a) Upon
the payment in full of any Mortgage Loan (including any liquidation of any
Mortgage Loan through foreclosure or otherwise, or the receipt by the Servicer
of a notification that payment in full will be escrowed in a manner customary
for such purposes), the Servicer shall confirm to the Trustee and the Securities
Administrator that all amounts required to be remitted to the Distribution
Account in connection with such Mortgage Loan have been so deposited, and the
Servicer shall deliver two copies of such Request for Release to the Custodian.
The Custodian shall, within five Business Days of its receipt of such a Request
for Release, release the related Owner Mortgage File (and Retained Mortgage
File, if applicable) to the Servicer, as requested by the Servicer. No expenses
incurred in connection with any instrument of satisfaction or deed of
reconveyance shall be chargeable to the Distribution Account.
From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including but not limited to, collection under
any insurance policies, or to effect a partial release of any Mortgaged Property
from the lien of the Mortgage, the Servicer shall deliver to the Custodian two
copies of a Request for Release. The Custodian shall, within five Business Days,
release the related Owner Mortgage File (and Retained Mortgage File, if
applicable) to the Servicer. Any such Request for Release shall obligate the
Servicer to return the Owner Mortgage File (and Retained Mortgage File, if
applicable) to the Custodian by the sixtieth day following the release thereof,
unless (i) the Mortgage Loan has been liquidated and the Liquidation Proceeds
relating to the Mortgage Loan have been deposited in the Distribution Account or
(ii) the Owner Mortgage File (or Retained Mortgage File, if applicable) or any
documents contained therein have been delivered to an attorney, or to a public
trustee or other public official as required by law, for purposes of initiating
or pursuing legal action or other proceedings for the foreclosure of the
Mortgaged Property either judicially or non-judicially. Upon receipt of two
copies of a Request for Release stating that such Mortgage Loan was liquidated
and that all amounts received or to be received in connection with such
liquidation which are required to be deposited into the Distribution Account
have been so deposited, or that such Mortgage Loan has become an REO Property,
the Custodian shall amend its records.
Upon the occurrence of the event specified in clause (ii) of the
preceding paragraph, the Trustee shall execute and deliver to the Servicer, as
directed by the Servicer, court pleadings, requests for trustee's sale or other
documents necessary to the foreclosure or trustee's sale in respect of a
Mortgaged Property or to any legal action brought to obtain judgment against any
Mortgagor on the Mortgage Note or Mortgage or to obtain a deficiency judgment,
or to enforce any other remedies or rights provided by the Mortgage Note or
Mortgage or otherwise available at law or in equity. Each such direction shall
include a request that such pleadings or documents be executed by the Trustee
and a statement as to the reason such documents or pleadings are required and a
certification that the execution and delivery thereof by the Trustee will not
invalidate or otherwise affect the lien of the Mortgage, except for the
termination of such a lien upon completion of the foreclosure proceeding or
trustee's sale.
(b) Subject to Section 3.01, the Servicer shall have the right to
accept applications of Mortgagors for consent to (i) partial releases of
Mortgages, (ii) alterations, and (iii) removal, demolition or division of
properties subject to Mortgages. No application for approval shall be considered
by the Servicer unless: (w) either (A) it has received an Opinion of Counsel,
addressed to the Trustee (which opinion shall not be an expense of the Trustee
or the Trust Fund) that such sale, disposition, substitution, acquisition or
contribution will not affect adversely the status of any Trust REMIC as a REMIC
or cause any Trust REMIC to be subject to a tax on "prohibited transactions" or
"contributions" pursuant to the REMIC Provisions or (B) other evidence
satisfactory to the Servicer; (x) the provisions of the related Mortgage Note
and Mortgage have been complied with; (y) the Loan-to-Value Ratio and
debt-to-income ratio after any release does not exceed the maximum Loan-to-Value
Ratio and debt-to-income ratio established in accordance with the underwriting
standards of the Mortgage Loans; and (z) the lien priority of the related
Mortgage is not affected. Upon receipt by the Trustee of a Servicing Officer's
certificate setting forth the action proposed to be taken in respect of a
particular Mortgage Loan and certifying that the criteria set forth in the
immediately preceding sentence have been satisfied, the Trustee shall execute
and deliver to the Servicer the consent or partial release so requested by, and
furnished to it by, the Servicer. A proposed form of consent or partial release,
as the case may be, shall accompany any Servicing Officer's certificate
delivered by the Servicer pursuant to this paragraph.
Section 3.18 Servicing Compensation. As compensation for its
activities hereunder, the Servicer shall be entitled to retain the amount of the
Servicing Fee with respect to each Mortgage Loan (including REO Properties). The
Servicer shall be entitled to retain additional servicing compensation in the
form of release fees, bad check charges, assumption fees, modification or
extension fees, late payment charges, prepayment penalties that are not
Prepayment Penalties, Servicer Prepayment Penalty Payment Amounts, Originator
Prepayment Penalty Payment Amounts or REO Disposition Fees, or any other
service-related fees, Insurance Proceeds and Liquidation Proceeds not required
to be deposited in the Collection Account and similar items, to the extent
collected from Mortgagors. In addition, the Servicer shall be entitled to the
investment income on funds on deposit in the Collection Account.
Section 3.19 Annual Statement as to Compliance. (a) The
Securities Administrator shall deliver in electronic format or otherwise make
available to the Depositor, and the Trustee and the Servicer shall deliver and
the Securities Administrator, the Trustee and the Servicer shall cause each
Additional Servicer engaged by it to deliver in electronic form, or otherwise
make available to the Securities Administrator (and the Securities Administrator
shall forward to the Trustee and each Rating Agency) on or before March 5 of
each year or if such day is not a Business Day, the next Business Day (with a 10
calendar day cure period, but in no event later than March 15), commencing in
March 2007, a copy of a certificate in the form required by Item 1123 of
Regulation AB, to the effect that (i) an authorized officer of the Securities
Administrator, the Servicer or the Additional Servicer, as the case may be, has
reviewed (or a review has been made under his or her supervision of) such
party's activities under this Agreement or such other applicable agreement in
the case of an Additional Servicer, during the prior calendar year or portion
thereof and (ii) to the best of such officer's knowledge, based on such review,
such party has fulfilled all of its obligations under this Agreement or such
other applicable agreement in the case of an Additional Servicer, in all
material respects throughout the prior calendar 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. If any of the certificates delivered pursuant to this Section 3.19
disclose that there has been a failure to fulfill any obligation in any material
respect then the Securities Administrator shall promptly notify the Depositor
and forward a copy of such certificate to the Depositor, and the Depositor shall
review such certificate and, if applicable, consult with the Servicer as to the
nature of any failure to fulfill any obligation under this Agreement or such
other applicable agreement in the case of an Additional Servicer, in any
material respect.
(b) Delivery of such reports, information and documents to the
Securities Administrator is for informational purposes only and the Trustee's,
Securities Administrator's and Depositor's receipt of such shall not constitute
constructive notice of any information contained therein or determinable, from
information contained therein, including the Servicer's compliance with any of
its covenants hereunder (as to which the Trustee, the Securities Administrator
and the Depositor are entitled to rely exclusively on Officer's Certificates).
Section 3.20 Assessment of Servicing Compliance; Registered
Public Accounting Firm Attestation Reports.(a)
(a) The Securities Administrator, at its own expense, shall
furnish to the Depositor and the Trustee, and the Servicer, the Trustee and the
Custodian, at their own expense, shall furnish, or otherwise make available, and
the Securities Administrator and each such party shall cause any Servicing
Function Participant engaged by any such party to furnish, to the Securities
Administrator, not later than March 5 of each year, or if such day is not a
Business Day, the next Business Day (with a 10 day cure period, but in no event
later than March 15), commencing in March 2007, a copy of a report, signed by an
authorized officer of the Securities Administrator, the Trustee, the Custodian,
the Servicing Function Participant or the Servicer, as applicable, on assessment
of compliance with, at a minimum, the Relevant Servicing Criteria that contains:
(i) a statement by such party of its responsibility for assessing
compliance with the Servicing Criteria applicable to it;
(ii) a statement that such party used the Servicing Criteria
applicable to it to assess compliance with the Servicing Criteria;
(iii) such party's assessment of compliance with the Servicing
Criteria applicable to it as of and for the preceding fiscal year,
including, if there had been any material instance of noncompliance with
the Servicing Criteria applicable to it, identifying each such failure
and the nature and status thereof; and
(iv) a statement that a registered public accounting firm has
issued an attestation report on such party's assessment of compliance
with the Servicing Criteria applicable to it as of and for the preceding
fiscal year.
No later than 30 days following the end of each fiscal year, the
Securities Administrator shall forward to the Depositor the name of each
Servicing Function Participant engaged by it and what Relevant Servicing
Criteria will be addressed in the report on assessment of compliance prepared by
such Servicing Function Participant. When the Securities Administrator submits
its assessments to the Depositor, it will also at such time include the
assessment (and attestation pursuant to Section 3.20(b)) of each Servicing
Function Participant engaged by it.
No later than 30 days following the end of each fiscal year, each
of the Servicer, the Trustee and the Custodian (so long as the Custodian is not
the Securities Administrator) shall 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 Servicer, the Trustee
and the Custodian (so long as the Custodian is not the Securities Administrator)
submit their assessments to the Securities Administrator, each such party will
also at such time include the assessment (and attestation pursuant to Section
3.20(b)) of each Servicing Function Participant engaged by it.
The Securities Administrator shall confirm that the assessments
address the Relevant Servicing Criteria for each party as set forth on Exhibit S
and shall notify the Depositor of any exceptions and deliver the assessment of
compliance containing such exceptions. Promptly after receipt of each such
report on assessment of compliance, the Depositor shall review each such report
and, if applicable, consult with the Securities Administrator, the Trustee, the
Custodian, the Servicer and any Servicing Function Participant as to the nature
of any material instance of noncompliance with the Relevant Servicing Criteria
by the Securities Administrator, the Trustee, the Custodian, the Servicer or any
Servicing Function Participant engaged by such parties.
(b) The Securities Administrator, at its own expense, shall cause
a registered public accounting firm which is a member of the Institute of
Certified Public Accountants to furnish to the Depositor, and each of the
Trustee, the Servicer and the Custodian at their own expense, shall cause, and
the Securities Administrator and each such party shall cause any Servicing
Function Participant engaged by any such party, at such party's expense, to
cause a registered public accounting firm which is a member of the Institute of
Certified Public Accountants to furnish to the Securities Administrator, not
later than March 5 of each year, or if such day is not a Business Day, the next
Business Day (with a 10 calendar day cure period, but in no event later than
March 15), commencing in March 2007, an electronic report 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 Public Company Accounting Oversight Board, it is expressing an
opinion as to whether such party's assessment of 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. If requested by the
Securities Administrator or the Depositor, such report shall contain or be
accompanied by a consent of such accounting firm to inclusion or incorporation
of such report in the Depositor's Registration Statement on Form S-3 relating to
the Certificates and the Trust's Form 10-K.
Promptly after receipt of such report from the Securities
Administrator or any Servicing Function Participant engaged by the Securities
Administrator, the Depositor shall review the report and, if applicable, consult
with the Securities Administrator if any such report (i) states that the party's
assessment of compliance was not fairly stated in a material respect or (ii) is
unable to state an overall opinion.
Promptly after receipt of such report from the Trustee, the
Custodian, the Servicer or any Servicing Function Participant engaged by such
parties, the Securities Administrator shall review the report and shall promptly
notify the Depositor if any such report (i) states that the party's assessment
of compliance was not fairly stated in a material respect or (ii) is unable to
state an overall opinion and the Depositor shall promptly review each such
report and the Depositor and the Securities Administrator shall consult with the
parties to which such report relates.
(c) The Securities Administrator shall make available any report
from the Securities Administrator, the Trustee, the Custodian, the Servicer, or
any Servicing Function Participant furnished pursuant to Section 3.19 and this
Section 3.20, as well as any documents incorporated by reference into the
Prospectus (to the extent such documents are either in its possession or have
been filed with the Commission), to any Certificateholder requesting such
information.
Section 3.21 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The Servicer shall provide to the Trustee, the
Securities Administrator, Certificateholders that are federally insured savings
and loan associations, the Office of Thrift Supervision, the FDIC and the
supervisory agents and examiners of each of the foregoing (which, in the case of
supervisory agents and examiners, may be required by applicable state and
federal regulations) access to the available documentation regarding the
Mortgage Loans, such access being afforded without charge but only upon
reasonable advance request and during normal business hours at the offices of
the Servicer designated by it.
Upon request, the Servicer shall furnish to the Securities
Administrator its most recent financial statements and such other information
relating to the Servicer's capacity to perform its obligations under this
Agreement as it possesses. The Securities Administrator shall deliver such
financial statements to the Depositor and the Trustee immediately upon receipt.
To the extent such information is not otherwise available to the public, the
Depositor, the Securities Administrator and the Trustee shall not disseminate
any information obtained pursuant to the preceding sentence without the
Servicer's written consent, except as required pursuant to this Agreement or to
the extent that it is appropriate to do so (i) in working with legal counsel,
auditors, taxing authorities or other governmental agencies or (ii) pursuant to
any law, rule, regulation, order, judgment, writ, injunction or decree of any
court or governmental authority having jurisdiction over the Depositor and the
Trustee or the Trust Fund, and in any case, each of the Depositor, the
Securities Administrator or the Trustee, as the case may be, shall use its best
efforts to assure the confidentiality of any such disseminated non-public
information.
Section 3.22 Obligations of the Servicer in Respect of
Compensating Interest. With respect to each Distribution Date, not later than
the close of business on the related Servicer Remittance Date, the Servicer
shall deliver to the Securities Administrator for deposit in the Distribution
Account an amount ("Compensating Interest") equal to the lesser of (A) the
aggregate of the Prepayment Interest Shortfalls on the Mortgage Loans for such
Distribution Date resulting from Principal Prepayments on the Mortgage Loans
during the related Prepayment Period and (B) its aggregate Servicing Fee
received in the related Collection Period. The Servicer shall apply Compensating
Interest to offset any Prepayment Interest Shortfalls attributable to Principal
Prepayments in full on the Mortgage Loans. The Servicer shall not have the right
to reimbursement for any amounts remitted to the Securities Administrator in
respect of Compensating Interest. Such amounts so remitted shall be included in
the Available Funds and distributed therewith on the next Distribution Date.
Section 3.23 Investment of Funds in the Collection Account and
the Distribution Account. (a) The Servicer may direct in writing any depository
institution maintaining the Collection Account and the Securities Administrator
may direct in writing any depository institution maintaining the Distribution
Account (for purposes of this Section 3.23, each an "Investment Account"), to
invest the funds in such Investment Account in one or more Permitted Investments
bearing interest or sold at a discount, and maturing, unless payable on demand,
(i) no later than the Business Day immediately preceding the date on which such
funds are required to be withdrawn from such account pursuant to this Agreement,
if a Person other than the Securities Administrator is the obligor thereon, and
(ii) no later than the date on which such funds are required to be withdrawn
from such account pursuant to this Agreement, if the Securities Administrator is
the obligor thereon. All such Permitted Investments shall be held to maturity,
unless payable on demand. Any investment of funds in an Investment Account shall
be made in the name of the Securities Administrator or the Servicer, as
applicable (in its capacity as such) or in the name of a nominee of the same.
The Servicer or the Securities Administrator, as applicable, shall be entitled
to sole possession over each such investment and the income thereon, and any
certificate or other instrument evidencing any such investment shall be
delivered directly to the Securities Administrator or its agent, together with
any document of transfer necessary to transfer title to such investment to the
Securities Administrator or its nominee. In the event amounts on deposit in an
Investment Account are at any time invested in a Permitted Investment payable on
demand, the Servicer or the Securities Administrator:
(x) consistent with any notice required to be given
thereunder, demand that payment thereon be made on
the last day such Permitted Investment may otherwise
mature hereunder in an amount equal to the lesser of
(1) all amounts then payable thereunder and (2) the
amount required to be withdrawn on such date; and
(y) demand payment of all amounts due thereunder
promptly upon determination by a Responsible Officer
of the Securities Administrator that such Permitted
Investment would not constitute a Permitted
Investment in respect of funds thereafter on deposit
in the Investment Account.
(b) All income and gain realized from the investment of funds in
the Collection Account shall be for the benefit of the Servicer. The Servicer
shall deposit in the Collection Account the amount of any loss incurred in
respect of any such Permitted Investment made with funds in such account
immediately upon realization of such loss. All income and gain realized from the
investment of funds in the Distribution Account shall be for the benefit of the
Securities Administrator. The Securities Administrator shall deposit in the
Distribution Account the amount of any loss incurred on Permitted Investments in
the Distribution Account.
(c) Except as otherwise expressly provided in this Agreement, if
any default occurs in the making of a payment due under any Permitted
Investment, or if a default occurs in any other performance required under any
Permitted Investment, the Securities Administrator may and, subject to Section
8.01 and Section 8.02(a)(v), upon the request of the Holders of Certificates
representing more than 50% of the Voting Rights allocated to any Class of
Certificates, shall take such action as may be appropriate to enforce such
payment or performance, including the institution and prosecution of appropriate
proceedings.
Section 3.24 Liability of Servicer; Indemnification. (a) Subject
to clause (b) below and Section 6.03, the Servicer (except the Securities
Administrator if it is required to succeed the Servicer hereunder) indemnifies
and holds the Trustee, the Securities Administrator and the Depositor (and their
respective officers, directors and Affiliates) and each Certificateholder
harmless against any and all claims, losses, penalties, fines, forfeitures,
reasonable legal fees and related costs, judgments, and any other costs, fees
and expenses that the Trustee, the Securities Administrator, the Depositor and
any Certificateholder may sustain in any way related to the failure of the
Servicer to perform its duties hereunder and service the Mortgage Loans in
compliance with the Servicing Standards, including, but not limited to the
Servicer's obligation to deliver any information, report, certification,
accountants' letter or other material required to comply with Regulation AB or
(b) any material breach by the Servicer of any of the representations and
warranties contained in Section 2.05. The Servicer shall immediately notify the
Trustee, the Securities Administrator, the Depositor and each Certificateholder
if a claim is made that may result in such claims, losses, penalties, fines,
forfeitures, legal fees or related costs, judgments, or any other costs, fees
and expenses, and the Servicer shall assume (with the consent of such party or
parties who are the subject of any such claim) the defense of any such claim and
pay all expenses in connection therewith, including reasonable counsel fees, and
promptly pay, discharge and satisfy any judgment or decree which may be entered
against the Servicer, the Trustee, the Securities Administrator, the Depositor
and/or Certificateholder in respect of such claim. The provisions of this
Section 3.24 shall survive the termination of this Agreement and the payment of
the outstanding Certificates.
(b) None of the Depositor, the Servicer, or any of the directors,
officers, employees or agents of the Depositor or the Servicer shall be under
any liability to the Trust Fund or the Certificateholders for any action taken,
or for refraining from the taking of any action, in good faith pursuant to this
Agreement, or for errors in judgment; provided, however, that this provision
shall not protect the Depositor or the Servicer or any such Person against any
breach of warranties or representations made herein, or against any specific
liability imposed on the Servicer for a breach of the Servicing Standard, or
against any liability which would otherwise be imposed by reason of its
respective willful misfeasance, bad faith, fraud or negligence in the
performance of its duties or by reasons of negligent disregard of its respective
obligations or duties hereunder.
The Depositor, the Servicer and any director, officer, employee
or agent of the Depositor or the Servicer, may rely in good faith on any
document of any kind which, prima facie, is properly executed and submitted by
any appropriate Person with respect to any matters arising hereunder. The
Depositor, the Servicer and any director, officer, employee or agent of the
Depositor or the Servicer shall be indemnified and held harmless by the Trust
Fund against any loss, liability or expense incurred in connection with any
legal action relating to this Agreement or the Certificates, other than any
loss, liability or expense incurred in connection with any legal action incurred
by reason of its respective misfeasance, bad faith, fraud or negligence, a
breach of a representation or warranty hereunder or (in the case of the
Servicer) a breach of the Servicing Standard in the performance of its
respective duties or by reason of negligent disregard of its respective
obligations or duties hereunder. Neither the Depositor nor the Servicer shall be
under any obligation to appear in, prosecute or defend any legal action unless
such action is related to its respective duties under this Agreement and in its
opinion does not expose it to any expense or liability; provided, however, that
each of the Depositor and the Servicer may in its discretion undertake any
action related to its obligations hereunder 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 Certificateholders hereunder. The
Servicer's right to indemnity or reimbursement pursuant to this Section shall
survive any resignation or termination of the Servicer pursuant to Section 6.04
or 7.01 with respect to any losses, expenses, costs or liabilities arising prior
to such resignation or termination (or arising from events that occurred prior
to such resignation or termination). In such event, unless the Depositor or the
Servicer acts without the consent of Holders of Certificates entitled to at
least 51% of the Voting Rights, the legal expenses and costs of such action and
any liability resulting therefrom (except any loss, liability or expense
incurred by reason of willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder) shall be expenses, costs and liabilities of
the Trust Fund, and the Depositor and the Servicer shall be entitled to be
reimbursed therefor from the Collection Account as and to the extent provided in
Section 3.05, any such right of reimbursement being prior to the rights of the
Certificateholders to receive any amount in the Collection Account.
Section 3.25 Reports of Foreclosure and Abandonment of Mortgaged
Properties. On or before April 30 of each year beginning in 2007, the Servicer
shall file the reports of foreclosure and abandonment of any Mortgaged Property
required by Section 6050J of the Code with the Internal Revenue Service and
provide an Officer's Certificate certifying its compliance with this Section
3.25 to the Trustee. The reports from the Servicer shall be in form and
substance sufficient to meet the reporting requirements imposed by such Section
6050J.
Section 3.26 Limitation of Liability of the Credit Risk Manager.
Neither the Credit Risk Manager, nor any of the directors,
officers, employees or agents of the Credit Risk Manager, shall be under any
liability to the Trustee, the Securities Administrator, the Certificateholders
or the Depositor for any action taken or for refraining from the taking of any
action in good faith pursuant to this Agreement, in reliance upon information
provided by the Servicer under the Credit Risk Management Agreement or for
errors in judgment; provided, however, that this provision shall not protect the
Credit Risk Manager or any such person against liability that would otherwise be
imposed by reason of willful malfeasance, bad faith or gross negligence in its
performance of its duties or by reason of reckless disregard for its obligations
and duties under this Agreement or the applicable Credit Risk Management
Agreement. The Credit Risk Manager and any director, officer, employee or agent
of the Credit Risk Manager may rely in good faith on any document of any kind
prima facie properly executed and submitted by any Person respecting any matters
arising hereunder, and may rely in good faith upon the accuracy of information
furnished by the Servicer pursuant to the applicable Credit Risk Management
Agreement in the performance of its duties thereunder and hereunder.
Section 3.27 No Personal Solicitation. From and after the Closing
Date, the Servicer agrees that it will not take any action or permit or cause
any action to be taken by any of its agents and Affiliates, or by any
independent contractors or independent mortgage brokerage companies on the
Servicer's behalf, to personally, by telephone, mail or electronic mail, solicit
the Mortgagor under any Mortgage Loan for the purpose of refinancing such
Mortgage Loan; provided, that the Servicer may solicit any Mortgagor for whom
the Servicer has received a request for verification of mortgage, a request for
demand for payoff, a mortgagor initiated written or verbal communication
indicating a desire to prepay the related Mortgage Loan, or the mortgagor
initiates a title search; provided, further, it is understood and agreed that
promotions undertaken by the Servicer or any of its Affiliates which (i) concern
optional insurance products or other additional products or (ii) are directed to
the general public at large, including, without limitation, mass mailings based
on commercially acquired mailing lists, newspaper, radio and television
advertisements shall not constitute solicitation under this Section, nor is the
Servicer prohibited from responding to unsolicited requests or inquiries made by
a Mortgagor or an agent of a Mortgagor. Furthermore, the Servicer shall be
permitted to include in its monthly statements to borrowers or otherwise,
statements regarding the availability of the Servicer's counseling services with
respect to refinancing mortgage loans.
Section 3.28 Exchange Act Reports.
(a) Within 15 days after each Distribution Date, the Securities
Administrator shall prepare, an authorized officer of the Servicer shall sign
(and return an electronic copy of such signed Form 10-D (with an original
executed hard copy to follow by overnight mail) to the Securities Administrator
no later than the 13th calendar day after the related Distribution Date provided
that the Securities Administrator provides such Form 10-D for signature to the
Servicer no later than the 11th calendar day after the related Distribution
Date), and the Securities Administrator shall file with the Commission, on
behalf of the Trust, 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 reported by the parties set forth on Exhibit T and directed and
approved by the Depositor, and the Securities Administrator will have no duty or
liability for any failure hereunder to determine or prepare any Additional Form
10-D Disclosure (other than with respect to itself) absent such reporting,
direction and approval. If a Form 10-D cannot be filed on time or if a
previously filed Form 10-D needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 3.28(d). 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.
For so long as the Trust is subject to the Exchange Act reporting
requirements, within five (5) calendar days after the related Distribution Date,
the parties identified on Exhibit T shall (i) provide to the Securities
Administrator and the Depositor, to the extent known by a Responsible Officer,
in XXXXX-compatible format, or in such other format as otherwise agreed upon by
the Securities Administrator and such party, the form and substance of any
Additional Form 10-D Disclosure, if applicable and (ii) include with such
Additional Form 10-D Disclosure, an Additional Disclosure Notification in the
form attached hereto as Exhibit W, and 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 Securities Administrator has
no duty under this Agreement to monitor or enforce the performance by the
parties listed on Exhibit T of their duties under this paragraph or proactively
solicit or procure from such parties any Additional Form 10-D Disclosure. After
preparing the Form 10-D, if the Form 10-D contains any Additional Form 10-D
Disclosure, the Securities Administrator shall forward electronically a draft
copy of the Form 10-D to the Depositor for review. Each party to this Agreement
acknowledges that the performance by the Securities Administrator of its duties
under this Section 3.28(a) relating to the timely preparation 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 3.28(a). The Securities
Administrator shall have no liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare and/or timely
file such Form 10-D, where such failure results from the Securities
Administrator's inability or failure to receive, on a timely basis, any
information from any other party hereto or the Custodian, needed to prepare,
arrange for execution or file such Form 10-D, not resulting from its own
negligence, bad faith or willful misconduct. The Depositor will be responsible
for any reasonable fees assessed and expenses incurred by the Securities
Administrator in connection with including any Additional Form 10-D Disclosure
on Form 10-D pursuant to this paragraph.
(b) Within 90 days after the end of each fiscal year of the Trust
or such earlier date as may be required by the Exchange Act (it being understood
that the fiscal year for the Trust ends on December 31st of each year),
commencing in March 2007 (the "Form 10-K Filing Deadline"), the Securities
Administrator shall prepare and the Securities Administrator shall file with the
Commission, on behalf of the Trust, 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 timeframes set forth in this Agreement or
the Custodial Agreement:
(i) an annual compliance statement for the Securities
Administrator, the Servicer and any Additional Servicer, as described
under Section 3.19;
(ii) (A) the annual reports on assessment of compliance with
Servicing Criteria for the Securities Administrator, the Trustee, the
Servicer, the Custodian, and each Servicing Function Participant, as
described under Section 3.20(a), and (B) if any party's report on
assessment of compliance with Servicing Criteria described under Section
3.20(a) identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any party's report on
assessment of compliance with servicing criteria described under Section
3.20(a) is not included as an exhibit to such Form 10-K, disclosure that
such report is not included and an explanation of why such report is not
included;
(iii) (A) the registered public accounting firm attestation
report for each of the Securities Administrator, the Trustee, the
Servicer, the Custodian, and each Servicing Function Participant, as
described under Section 3.20(b), and (B) if any registered public
accounting firm attestation report described under Section 3.20(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
of why such report is not included; and
(iv) the Xxxxxxxx-Xxxxx Certification.
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, pursuant to the paragraph immediately below, be reported by
the parties set forth on Exhibit U and directed and approved by the Depositor,
and the Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure (other
than with respect to itself) absent such reporting, direction and approval. If a
Form 10-K cannot be filed on time or if a previously filed Form 10-K needs to be
amended, the Securities Administrator will follow the procedures set forth in
Section 3.28(d). 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.
No later than March 5 (with a 10 calendar day cure period, but in
no event later than March 15) of each year that the Trust is subject to the
Exchange Act reporting requirements, commencing in March 2007, (i) the parties
identified on Exhibit U shall provide to the Securities Administrator and the
Depositor, to the extent known by a Responsible Officer, in XXXXX-compatible
format, or in such other format as otherwise agreed upon by the Securities
Administrator and such party, the form and substance of any Additional Form 10-K
Disclosure, if applicable, and (ii) the parties identified on Exhibit U shall
include with such Additional Form 10-K Disclosure, an Additional Disclosure
Notification in the form attached hereto as Exhibit W, and 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 Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit U of their duties under this
paragraph or proactively solicit or procure from such parties any Additional
Form 10-K Disclosure information. The Depositor will be responsible for any
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-K Disclosure
on Form 10-K pursuant to this paragraph.
After preparing the Form 10-K, no later than the close of
business on the 7th Business Day prior to the Form 10-K Filing Deadline, the
Securities Administrator shall forward electronically a draft copy of the Form
10-K to the Depositor and the Servicer for review. No later than the close of
business on the fourth Business Day prior to the Form 10-K Filing Deadline, a
senior officer of the Servicer in charge of the servicing function shall sign
the Form 10-K and return an electronic or fax copy of such signed Form 10-K,
together with a signed copy of the certification in the form attached hereto as
Exhibit O or in such other form as may be required by Rules 13a-14 and 15d-14
under the Exchange Act, as applicable, and any directives or interpretations
thereof by the Commission (the "Xxxxxxxx-Xxxxx Certification") and required to
be included with each Form 10-K (with an original executed hard copy of each to
follow by overnight mail) to the Securities Administrator.
Each party to this Agreement acknowledges that the performance by
the Securities Administrator of its duties under this Section 3.28(b) relating
to the timely preparation and filing of Form 10-K is contingent upon such
parties strictly observing all applicable timeframes in the performance of their
duties under Sections 3.19, 3.20 or this Section 3.28(b). The Securities
Administrator shall have no liability for any loss, expense, damage, claim
arising out of or with respect to any failure to properly prepare and/or timely
file such Form 10-K, where such failure results from the Securities
Administrator's inability or failure to obtain or receive, on a timely basis,
any information from any other party hereto or the Custodian needed to prepare,
arrange for execution or file such Form 10-K, not resulting from its own
negligence, bad faith or willful misconduct.
(c) Within four (4) Business Days (or, in the case of any
information disclosed pursuant to Item 7.01 of Form 8-K, within the time period
required by Regulation FD) after the occurrence of an event requiring disclosure
on Form 8-K (each such event, a "Reportable Event"), and if directed by the
Depositor, the Securities Administrator shall prepare, an authorized officer of
the Servicer shall sign (and return an electronic copy of such signed Form 8-K
(with an original executed hard copy to follow by overnight mail) to the
Securities Administrator by noon on the fourth Business Day after such
Reportable Event provided that the Securities Administrator provides such Form
8-K for signature to the Servicer no later than noon on the third Business Day
after such Reportable Event), and the Securities Administrator shall file with
the Commission, on behalf of the Trust, any Form 8-K, as required by the
Exchange Act, provided that the Depositor shall prepare and file the initial
Form 8-K in connection with the issuance of the Certificates. Any disclosure or
information related to a Reportable Event or that is otherwise required to be
included on Form 8-K ("Form 8-K Disclosure Information") shall, pursuant to the
paragraph immediately below, be reported by the parties set forth on Exhibit V
and directed and approved by the Depositor, and the Securities Administrator
will have no duty or liability for any failure hereunder to determine or prepare
any Form 8-K Disclosure Information (other than with respect to itself) absent
such reporting, direction and approval. If a Form 8-K cannot be filed on time or
if a previously filed Form 8-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 3.28(d). 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 prepared and filed by the Securities Administrator.
For so long as the Trust is subject to the Exchange Act reporting
requirements, no later than the end of business (New York City time) on the
second Business Day after the occurrence of a Reportable Event (i) the parties
identified on Exhibit V shall provide to the Securities Administrator and the
Depositor, to the extent known by a Responsible Officer, in XXXXX-compatible
form, or in such other form as otherwise agreed upon by the Securities
Administrator and such party, the form and substance of any Form 8-K Disclosure
Information, if applicable, and (ii) the parties identified on Exhibit V shall
include with such Additional Form 8-K Disclosure, an Additional Disclosure
Notification in the form attached hereto as Exhibit W and 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 on Form 8-K. The Securities
Administrator has no duty under this Agreement to monitor or enforce the
performance by the parties listed on Exhibit V of their duties under this
paragraph or proactively solicit or procure from such parties any Form 8-K
Disclosure Information. The Depositor will be responsible for any reasonable
fees and expenses assessed or incurred by the Securities Administrator in
connection with including any Form 8-K Disclosure Information on Form 8-K
pursuant to this paragraph.
After preparing the Form 8-K, the Securities Administrator shall
forward electronically a draft copy of the Form 8-K to the Depositor and the
Servicer for review. Each party to this Agreement acknowledges that the
performance by the Securities Administrator of its duties under this Section
3.28(c) relating to the timely preparation and filing of Form 8-K is contingent
upon such party strictly observing all applicable timeframes in the performance
of its duties under this Section 3.28(c). The Securities Administrator shall
have no liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare 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 or the Custodian needed to prepare, arrange for execution or file
such Form 8-K, not resulting from its own negligence, bad faith or willful
misconduct.
(d) In the event that the Securities Administrator is unable to
timely file with the Commission all or any required portion of any Form 8-K,
10-D or 10-K required to be filed by this Agreement because required disclosure
information was either not delivered to it or delivered to it after the delivery
deadlines set forth in this Agreement or for any other reason, the Securities
Administrator will promptly notify the Depositor and, in the case of Form 10-D
or 10-K, the Depositor, the Servicer and the Securities Administrator will
cooperate to prepare and file a Form 12b-25 pursuant to Rule 12b-25 of the
Exchange Act. Any Form 12b-25 relating to a Form 10-K shall be signed by a
senior officer of the Servicer and any Form 12b-25 relating to a Form 10-D shall
be signed by an authorized officer of the Servicer. Within five days following
the due date of any Form 10-D as to which it has filed a Form 12b-25, the
Securities Administrator shall prepare, the Servicer shall sign, and the
Securities Administrator shall file the related Form 10-D. Within 15 days
following the due date of any Form 10-K as to which it has filed a Form 12b-25,
the Securities Administrator shall prepare, cause the Servicer to sign, and file
the related Form 10-K. In the case of Form 8-K, the Securities Administrator
will, upon receipt of all required Form 8-K Disclosure Information and at the
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, the Securities Administrator will notify the Depositor and each party
whose cooperation is required in connection with the preparation of such
amendment and each of such parties shall cooperate to prepare any necessary
amendment to Form 8-K, Form 10-D or Form 10-K; provided however that such notice
shall not be required in connection with an amendment to Form 10-D due to a
revision made to any Distribution Date Statement. Any amendment to Form 10-D or
Form 8-K shall be signed by an authorized officer of the Servicer and any
amendment to the Form 10-K shall be signed by a senior officer of the Servicer
in charge of the servicing function. The parties to this Agreement acknowledge
that the performance by the Securities Administrator of its duties under this
Section 3.28(d) related to the timely preparation and filing of 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. The Securities Administrator shall
have no liability for any loss, expense, damage, claim arising out of or with
respect to any failure to properly prepare and/or timely file any such 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 or the Custodian
needed to prepare, arrange for execution or file such 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.
(e) Not later than 15 calendar days before the date on which the
Form 10-K is required to be filed in accordance with the Exchange Act and the
rules and regulations of the Commission (or, if such day is not a Business Day,
the immediately preceding Business Day), the Securities Administrator shall sign
and deliver to the Servicer a certification in the form attached hereto as
Exhibit P (the "Securities Administrator's Certification") for the benefit of
the Servicer and its officers, directors and Affiliates as to items 1 through 3
of the Xxxxxxxx-Xxxxx Certification; provided, however, that the Securities
Administrator shall not undertake an analysis of the accountant's report
attached as an exhibit to the Form 10-K. In addition, the Securities
Administrator shall indemnify and hold harmless the Servicer and each Person, if
any, who "controls" the Servicer within the meaning of the 1933 Act and its
officers, directors and Affiliates from and against any losses, damages,
penalties, fines, forfeitures, reasonable and necessary legal fees and related
costs, judgments and other costs and expenses arising out of or based upon a
breach of the Securities Administrator's obligations under this Section 3.28(e)
or the Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith or any inaccuracy in the Securities Administrator's
Certification. If the indemnification provided for in this Section 3.28(e) is
unavailable or insufficient to hold harmless such Persons, then the Securities
Administrator shall contribute to the amount paid or payable by such Persons as
a result of the losses, claims, damages or liabilities of such Persons in such
proportion as is appropriate to reflect the relative fault of the Depositor or
the Servicer on the one hand and the Securities Administrator on the other. The
Securities Administrator acknowledges that the Servicer is relying on the
Securities Administrator's performance of its obligations under this Section
3.28(e) in order to perform its obligations under Section 3.28(b) above.
(f) On or prior to January 30 of the first year in which the
Securities Administrator is able to do so under applicable law, the Securities
Administrator shall prepare, an authorized officer of the Servicer shall sign,
and the Securities Administrator shall file with the Commission, on behalf of
the Trust, a Form 15 relating to the automatic suspension of reporting in
respect of the Trust under the Exchange Act. At the beginning of any year after
the filing of a Form 15, if the number of Certificateholders of record exceeds
the number set forth in Section 15(d) of the Exchange Act or the regulations
promulgated pursuant thereto which would cause the Trust to again become subject
to the reporting requirements of the Exchange Act, the Securities Administrator
shall recommence preparing and filing reports on Form 10-D, 10-K and 8-K as
required pursuant to this Section.
(g) To the extent the Securities Administrator is obligated to
give any notice to the Depositor pursuant to this Section 3.28, such notice may,
notwithstanding the provisions of Section 11.05 in this Agreement, be delivered
via facsimile to 000-000-0000 or via electronic mail to
Xxxxxxxxxxxxxxxxx-xxxxxxxxx@xxxxxxxxxx.xxx (a)
ARTICLE IV
FLOW OF FUNDS
Section 4.01 Interest Distributions. On each Distribution Date,
the Paying Agent shall withdraw, from the Distribution Account, the Interest
Remittance Amount and apply it in the following order of priority (based upon
the Mortgage Loan information provided to it in the Remittance Report, upon
which the Securities Administrator may conclusively rely), and the calculations
required to be made by the Securities Administrator, to the extent available:
(i) concurrently, to the Class X-0, Xxxxx X-0, Class A-3 and
Class A-4 Certificates, pro rata (based on the Accrued Certificate
Interest for each such Class), the applicable Accrued Certificate
Interest thereon for such Distribution Date;
(ii) concurrently, to the Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates, pro rata (based on the Interest Carry Forward
Amount for each such Class), the applicable Interest Carry Forward Amount
thereon for such Distribution Date;
(iii) to the Class M-1 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(iv) to the Class M-1 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(v) to the Class M-2 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(vi) to the Class M-2 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(vii) to the Class M-3 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(viii) to the Class M-3 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(ix) to the Class M-4 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(x) to the Class M-4 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(xi) to the Class M-5 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xii) to the Class M-5 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(xiii) to the Class M-6 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xiv) to the Class M-6 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(xv) to the Class M-7 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xvi) to the Class M-7 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(xvii) to the Class M-8 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xviii) to the Class M-8 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(xix) to the Class M-9 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xx) to the Class M-9 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date;
(xxi) to the Class M-10 Certificates, the Accrued Certificate
Interest thereon for such Distribution Date;
(xxii) to the Class M-10 Certificates, the Interest Carry Forward
Amount thereon for such Distribution Date; and
(xxiii) to the Credit Risk Manager, the Credit Risk Manager Fee.
Section 4.02 Distributions of Principal and Monthly Excess
Cashflow Amounts. (a) On each Distribution Date, the Paying Agent shall make the
following distributions in the following order of priority (based upon the
Mortgage Loan information provided to it in the Remittance Report and the
calculations required to be made by the Securities Administrator), to the extent
of the Principal Distribution Amount:
(i) before the Stepdown Date or with respect to which a Trigger
Event is in effect, sequentially, as follows:
first, sequentially, to the Class A-1, Class A-2, Class A-3 and
Class A-4 Certificates;
second, sequentially, to the Class X-0, Xxxxx X-0, Class M-3,
Class M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates; and
third, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set forth in
Section 4.02(b).
(ii) With respect to each Distribution Date on or after the
Stepdown Date and as long as a Trigger Event is not in effect, sequentially, as
follows:
first, (a) with respect to any Distribution Date prior to the
Subordination Depletion Date, sequentially, to the Class A-1, Class A-2, Class
A-3 and Class A-4 Certificates, up to the Senior Principal Distribution Amount
and (b) with respect to any Distribution Date on or after the Subordination
Depletion Date, sequentially, to the Class A-1, Class A-2, Class A-3 and Class
A-4 Certificates, up to the Principal Distribution Amount;
second, to the Class M-1 Certificates, up to the Class M-1
Principal Distribution Amount;
third, to the Class M-2 Certificates, up to the Class M-2
Principal Distribution Amount;
fourth, to the Class M-3 Certificates, up to the Class M-3
Principal Distribution Amount;
fifth, to the Class M-4 Certificates, up to the Class M-4
Principal Distribution Amount;
sixth, to the Class M-5 Certificates, up to the Class M-5
Principal Distribution Amount;
seventh, to the Class M-6 Certificates, up to the Class M-6
Principal Distribution Amount;
eighth, to the Class M-7 Certificates, up to the Class M-7
Principal Distribution Amount;
ninth, to the Class M-8 Certificates, up to the Class M-8
Principal Distribution Amount;
tenth, to the Class M-9 Certificates, up to the Class M-9
Principal Distribution Amount;
eleventh, to the Class M-10 Certificates, up to the Class M-10
Principal Distribution Amount; and
twelfth, any remaining Principal Distribution Amount will be
distributed as part of the Monthly Excess Cashflow Amount as set forth in
Section 4.02(b).
(b) On each Distribution Date, any Monthly Excess Cashflow Amount
remaining after distributions made pursuant to Section 4.02(f) on such
Distribution Date shall be distributed, to the extent available, in the
following order of priority on such Distribution Date:
(i) to the Class A Certificates, pro rata, any remaining Accrued
Certificate Interest for such Classes for such Distribution Date;
(ii) to the Class A Certificates, pro rata, any remaining
Interest Carry Forward Amounts for such Classes for such Distribution
Date;
(iii) to the Class M-1 Certificates, any remaining unpaid Accrued
Certificate Interest thereon for such Distribution Date;
(iv) to the Class M-1 Certificates, any remaining Interest Carry
Forward Amount thereon for such Distribution Date;
(v) to the Class M-2 Certificates, any remaining unpaid Accrued
Certificate Interest thereon for such Distribution Date;
(vi) to the Class M-2 Certificates, any remaining Interest Carry
Forward Amount thereon for such Distribution Date;
(vii) to the Class M-3 Certificates, any remaining unpaid Accrued
Certificate Interest thereon for such Distribution Date;
(viii) to the Class M-3 Certificates, any remaining Interest
Carry Forward Amount thereon for such Distribution Date;
(ix) to the Class M-4 Certificates, any remaining unpaid Accrued
Certificate Interest thereon for such Distribution Date;
(x) to the Class M-4 Certificates, any remaining Interest Carry
Forward Amount thereon for such Distribution Date;
(xi) to the Class M-5 Certificates, any remaining unpaid Accrued
Certificate Interest thereon for such Distribution Date;
(xii) to the Class M-5 Certificates, any remaining Interest Carry
Forward Amount thereon for such Distribution Date;
(xiii) to the Class M-6 Certificates, any remaining unpaid
Accrued Certificate Interest thereon for such Distribution Date;
(xiv) to the Class M-6 Certificates, any remaining Interest Carry
Forward Amount thereon for such Distribution Date;
(xv) to the Class M-7 Certificates, any remaining unpaid Accrued
Certificate Interest thereon for such Distribution Date;
(xvi) to the Class M-7 Certificates, any remaining Interest Carry
Forward Amount thereon for such Distribution Date;
(xvii) to the Class M-8 Certificates, any remaining unpaid
Accrued Certificate Interest thereon for such Distribution Date;
(xviii) to the Class M-8 Certificates, any remaining Interest
Carry Forward Amount thereon for such Distribution Date;
(xix) to the Class M-9 Certificates, any remaining unpaid Accrued
Certificate Interest thereon for such Distribution Date;
(xx) to the Class M-9 Certificates, any remaining Interest Carry
Forward Amount thereon for such Distribution Date;
(xxi) to the Class M-10 Certificates, any remaining unpaid
Accrued Certificate Interest thereon for such Distribution Date;
(xxii) to the Class M-10 Certificates, any remaining Interest
Carry Forward Amount thereon for such Distribution Date;
(xxiii) to the Class M-1 Certificates, the Class M-1 Realized
Loss Amortization Amount for such Distribution Date;
(xxiv) to the Class M-2 Certificates, the Class M-2 Realized Loss
Amortization Amount for such Distribution Date;
(xxv) to the Class M-3 Certificates, the Class M-3 Realized Loss
Amortization Amount for such Distribution Date;
(xxvi) to the Class M-4 Certificates, the Class M-4 Realized Loss
Amortization Amount for such Distribution Date;
(xxvii) to the Class M-5 Certificates, the Class M-5 Realized
Loss Amortization Amount for such Distribution Date;
(xxviii) to the Class M-6 Certificates, the Class M-6 Realized
Loss Amortization Amount for such Distribution Date;
(xxix) to the Class M-7 Certificates, the Class M-7 Realized Loss
Amortization Amount for such Distribution Date;
(xxx) to the Class M-8 Certificates, the Class M-8 Realized Loss
Amortization Amount for such Distribution Date;
(xxxi) to the Class M-9 Certificates, the Class M-9 Realized Loss
Amortization Amount for such Distribution Date;
(xxxii) to the Class M-10 Certificates, the Class M-10 Realized
Loss Amortization Amount for such Distribution Date;
(xxxiii) to the Excess Reserve Fund Account, any Cap Carryover
Amounts (without regard to Net Swap Payments made by the Swap Provider to
the Supplemental Interest Trust) for such Distribution Date;
(xxxiv) to the Supplemental Interest Trust Account, any Swap
Termination Payments resulting from a Swap Provider Trigger Event for
such Distribution Date; and
(xxxv) to the Class CE Certificates, up to the Class CE
Distributable Amount for such Distribution Date.
On each Distribution Date, there shall be distributed (i) to the
Holder of the Class R-2 Certificate in respect of the Class PT1-R Interest, the
Class PT2-R Interest, the Class LT-R Interest and the Class UT-R Interest and
(ii) to the Holder of the Class R-1 Certificate in respect of the Class XX XXXXX
any remaining amount in the Distribution Account with respect to the related
Trust REMIC on such date after the application pursuant to Sections 4.01,
4.02(a) and 4.02(b)(i) through (xxxv).
Notwithstanding anything to the contrary contained in this
Agreement, if the Principal Balance of a Class of Certificates is reduced to
zero, such Class shall be entitled to any remaining Cap Carryover Amount and any
applicable unpaid Realized Loss Amortization Amount on future Distribution
Dates.
(c) On each Distribution Date, the Securities Administrator shall
withdraw any amounts then on deposit in the Distribution Account that represent
Prepayment Penalties collected by the Servicer in connection with the Principal
Prepayment in full of any of the Mortgage Loans, any Originator Prepayment
Penalty Payment Amounts or Servicer Prepayment Penalty Payment Amounts and shall
distribute such amounts to the Holders of the Class P Certificates. Such amounts
shall be treated as having been distributed to the Holders of the Class P
Certificates from the Grantor Trust.
(d) Any amounts distributed to the Certificates (other than the
Class CE, Class P and Residual Certificates) in respect of interest pursuant to
Section 4.02(b)(xxxiii) that constitute Cap Carryover Amounts shall be deemed
distributed (i) in the case of any Class of Class A and Class M Certificates, to
the extent the source of such funds is either a distribution from the
Supplemental Interest Trust Account or Excess Reserve Fund Account, as
applicable, from the Grantor Trust and (ii) otherwise, as first, a distribution
by Upper-Tier REMIC in respect of the Class CE Interest, and then by Class XX
XXXXX as a distribution to the Class CE Certificates and then, a distribution to
the applicable Certificates from the Grantor Trust, in either case, as payments
on notional principal contracts in the nature of cap contracts. Any remaining
amount with respect to the Class CE Certificates or any amounts remaining in the
Supplemental Interest Trust Account shall be treated as having been distributed
to the Holders of the Class CE Certificates from the Grantor Trust.
(e) On each Distribution Date, Unpaid Realized Loss Amounts on
the Class M Certificates will be reduced by the amount of any Subsequent
Recoveries received during the related Prepayment Period in the following order
of priority on such Distribution Date: Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class M-7, Class M-8, Class M-9 and Class M-10
Certificates.
(f) On each Distribution Date, prior to any distributions of the
Monthly Excess Cashflow Amount pursuant to Section 4.02(b), any Monthly Excess
Interest Amount shall be distributed, to the extent available, in the following
order of priority on such Distribution Date: (i) concurrently, based on each
Class' Interest Percentage of the Current Interest Shortfall for such
Distribution Date, to the Class A Certificates, pro rata, and (ii) sequentially,
up to each Class' Interest Percentage of the Current Interest Shortfall for such
Distribution Date, to the Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8 and Class M-9, Class M-10 Certificates.
Section 4.03 Allocation of Losses. Realized Losses shall be
allocated, through the priority of distributions in Section 4.02, first against
the Monthly Excess Interest Amount and then against the Overcollateralization
Amount until such amount has been reduced to zero. If, after giving effect to
the distribution of the Principal Distribution Amount on any Distribution Date
the aggregate Principal Balance of the Certificates (other than the Class CE,
Class P and Residual Certificates) exceeds the Pool Balance as of the end of the
related Collection Period, the resulting Applied Realized Loss Amount will be
allocated against the Class M-10, Class M-9, Class M-8, Class M-7, Class M-6,
Class M-5, Class M-4, Class M-3, Class M-2 and Class M-1 Certificates, in that
order and until the respective Principal Balances thereof are reduced to zero.
Section 4.04 Method of Distribution. The Paying Agent shall make
distributions in respect of a Distribution Date to each Certificateholder of
record on the related Record Date (other than as provided in Section 10.01
respecting the final distribution), in the case of Certificateholders of the
Certificates (i) by wire transfer in immediately available funds to the account
of the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date, such Person is the
registered owner of such Certificates and such Certificates evidence at least a
$100,000 initial Principal Balance or (ii) by check mailed by first class mail
to the address of the Person entitled thereto, as such name and address shall
appear on the Certificate Register, provided that the Certificate Registrar may
deduct a reasonable wire transfer fee from any payment made by wire transfer.
Distributions among Certificateholders shall be made in proportion to the
Percentage Interests evidenced by the Certificates held by such
Certificateholders.
Section 4.05 Distributions on Book-Entry Certificates. Each
distribution with respect to a Book-Entry Certificate shall be paid to the
Depository, which shall credit the amount of such distribution to the accounts
of its Depository Participants in accordance with its normal procedures. Each
Depository Participant shall be responsible for disbursing such distribution to
the Certificate Owners that it represents and to each indirect participating
brokerage firm (a "brokerage firm" or "indirect participating firm") for which
it acts as agent. Each brokerage firm shall be responsible for disbursing funds
to the Certificate Owners that it represents. All such credits and disbursements
with respect to a Book Entry Certificate are to be made by the Depository and
the Depository Participants in accordance with the provisions of the
Certificates. None of Securities Administrator, the Trustee, the Depositor or
the Servicer shall have any responsibility therefor except as otherwise provided
by applicable law.
Section 4.06 Statements. (a) On each Distribution Date, based on
the Mortgage Loan information contained in the Remittance Report, the Securities
Administrator shall prepare and make available on its website at
xxx.xxxxxxx.xxx, a statement (the "Distribution Date Statement") as to the
distributions made on such Distribution Date:
(i) the amount of the distribution made on such Distribution Date
to the Holders of each Class of Certificates allocable to principal,
separately identified and the amount of the distribution made on such
Distribution Date to the Holders of the Class P Certificates from
Prepayment Penalties, Originator Prepayment Penalty Payment Amounts and
Servicer Prepayment Penalty Payment Amounts;
(ii) the amount of the distribution made on such Distribution
Date to the Holders of each Class of Certificates allocable to interest
or Class CE Distributable Amount, separately identified;
(iii) the Overcollateralization Amount, the Overcollateralization
Release Amount, the Overcollateralization Deficiency and the Targeted
Overcollateralization Amount as of such Distribution Date and the Monthly
Excess Interest Amount and Monthly Excess Cashflow Amount for such
Distribution Date;
(iv) the aggregate amount of servicing compensation received by
the Servicer during the related Collection Period;
(v) the aggregate amount of Advances for the related Collection
Period, cumulative unreimbursed Advances and Servicing Advances and
cumulative Nonrecoverable Advances;
(vi) the Pool Balance, at the close of business at the end of the
related Collection Period;
(vii) the number, weighted average remaining term to maturity and
weighted average Mortgage Interest Rate of the Mortgage Loans as of the
related Due Date;
(viii) the number and aggregate principal balances of the
Mortgage Loans (A) delinquent (exclusive of Mortgage Loans in foreclosure
or bankruptcy), grouping such delinquent Mortgage Loans in 30 day
increments, up to 180 days delinquent (determined in accordance with the
Mortgage Bankers' Association delinquency methodology), (B) in
foreclosure, as of the close of business on the last day of the calendar
month preceding the Distribution Date and (C) in bankruptcy as of the
close of business on the last day of the calendar month preceding the
Distribution Date;
(ix) with respect to any Mortgage Loan that became an REO
Property during the preceding calendar month, the loan number of such
Mortgage Loan, the unpaid principal balance of the REO Property as of the
close of business on the last Business Day of such calendar month and the
principal balance of such Mortgage Loan as of the date it became an REO
Property;
(x) the book value of any REO Property as of the close of
business on the last Business Day of the calendar month preceding the
Distribution Date, and, cumulatively, the total number and cumulative
principal balance of all REO Properties as of the close of business of
the last day of the preceding Collection Period;
(xi) the aggregate amount of Principal Prepayments made during
the related Prepayment Period;
(xii) the aggregate amount of Realized Losses incurred during the
related Collection Period and the cumulative amount of Realized Losses;
(xiii) the Principal Balance of each Class of Certificates, after
giving effect to the distributions, and allocations of Realized Losses or
Applied Realized Loss Amounts, as applicable, made on such Distribution
Date, separately identifying any reduction thereof due to allocations of
Realized Losses or Applied Realized Loss Amounts;
(xiv) the Accrued Certificate Interest in respect of each Class
of Certificates for such Distribution Date and any related Cap Carryover
Amounts, and the respective portions thereof, if any, remaining unpaid
following the distributions made in respect of such Certificates on such
Distribution Date;
(xv) the aggregate amount of any Prepayment Interest Shortfalls
and of any Compensating Interest for such Distribution Date, to the
extent not covered by payments by the Servicer pursuant to Section 3.23;
(xvi) the Interest Percentage for each Class of Certificates, the
amount of any Current Interest Shortfall and the amount of the
distribution made to each Class of Certificates pursuant to Section
4.02(f) for such Distribution Date;
(xvii) the Cap Carryover Amounts distributed on such Distribution
Date, the amounts remaining after giving effect to distributions thereof
on such Distribution Date and the amount of all Cap Carryover Amounts
covered by withdrawals from the Excess Reserve Fund Account and the
Supplemental Interest Trust Account on such Distribution Date;
(xviii) any Overcollateralization Deficiency after giving effect
to the distribution of principal on such Distribution Date;
(xix) whether a Trigger Event has occurred and is continuing, and
the cumulative Realized Losses, as a percentage of the original Pool
Balance;
(xx) the Available Funds;
(xxi) the Pass-Through Rate for each Class of Certificates for
such Distribution Date;
(xxii) the information contained in the Liquidation Report for
such Distribution Date;
(xxiii) the aggregate Principal Balance of Mortgage Loans
purchased by the Servicer or the Depositor during the related Prepayment
Period and indicating the section of this Agreement requiring or allowing
the purchase of each such Mortgage Loan;
(xxiv) the aggregate Principal Balance of the Mortgage Loans
repurchased by the Depositor during the related Prepayment Period in
connection with Section 3.16;
(xxv) the amount of the Credit Risk Manager Fee paid;
(xxvi) the Mortgage Loan identifying number of each Mortgage Loan
with a Prepayment Penalty that was the subject of a Principal Prepayment
in full during the related Collection Period, the Prepayment Penalty
listed on each related Mortgage Note and the Prepayment Penalty
collected, and the Servicer Prepayment Penalty Payment Amount and the
Originator Prepayment Penalty Payment Amount paid with respect to each
such Mortgage Loan;
(xxvii) the pool factors for such Distribution Date;
(xxviii) the amount of any Net Swap Payments for such
Distribution Date;
(xxix) the amount of Subsequent Recoveries received during the
related Prepayment Period;
(xxx) any expenses or indemnification amounts paid by the Trust
Fund, the specific purpose of each payment and the parties to whom these
payments are made;
(xxxi) the applicable Determination Date, the Record Date and
Interest Accrual Period for calculating the distribution and the actual
Distribution Date for the distribution;
(xxxii) any material modifications, extensions or waivers to
Mortgage Loan terms, fees, penalties or payments since the previous
Distribution Date;
(xxxiii) any material breaches of representations and warranties
relating to the Mortgage Loans or material breaches of transaction
covenants or representations and warranties; and
(xxxiv) any other customary information as is required to enable
Certificateholders to prepare their tax returns.
Assistance in using the Securities Administrator's website can be
obtained by calling the Securities Administrator's customer service desk at
(000) 000-0000. The Securities Administrator shall provide such information to
parties that are unable to use the above distribution option by mailing to them
via first class mail a paper copy of the Distribution Date Statement, upon
request of any such party made by calling the customer service desk and
indicating such. The Securities Administrator shall have the right to change the
way such reports are distributed in order to make such distribution more
convenient and/or more accessible to the parties, and the Securities
Administrator shall provide timely and adequate notification to all parties
regarding any such change.
The Securities Administrator may fully rely upon and shall have
no liability with respect to information with respect to the Mortgage Loans
provided by the Servicer.
In the case of information furnished pursuant to subclauses (i),
(ii) and (xiii) above, the amounts shall be expressed in a separate section of
the report as a dollar amount for each Class for each $1,000 original dollar
amount as of the Closing Date.
(b) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall furnish to each Person who at
any time during the calendar year was a Certificateholder of a Regular
Certificate or a Class CE Certificate, if requested in writing by such Person,
such information as is reasonably necessary to provide to such Person a
statement containing the information set forth in subclauses (i), (ii), (xiv)
and (xvii) above, aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be prepared and furnished by the
Securities Administrator to Certificateholders pursuant to any requirements of
the Code as are in force from time to time.
(c) On each Distribution Date, the Securities Administrator shall
forward to the Residual Certificateholders a copy of the reports forwarded to
the holder of any Regular Certificate in respect of such Distribution Date with
such other information as the Securities Administrator deems necessary or
appropriate. Such obligation of the Securities Administrator shall be deemed to
have been satisfied to the extent that substantially comparable information
shall be prepared and furnished to Residual Certificateholders by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
force.
Section 4.07 Remittance Reports; Advances. (a) On the 15th
calendar day of each month, or the following Business Day if such 15th calendar
day is not a Business Day, the Servicer shall deliver to the Securities
Administrator by telecopy (or by such other means as the Servicer and the
Securities Administrator may agree from time to time) a Remittance Report with
respect to the related Distribution Date. On the same date, the Servicer shall
electronically forward to the Securities Administrator in such medium as may be
agreed between the Servicer and the Securities Administrator the information set
forth in such Remittance Report with respect to the related Distribution Date
and such information reasonably available to the Servicer necessary in order for
the Securities Administrator to perform the calculations necessary to make the
distributions and allocations contemplated by Section 4.01, 4.02 and 4.03 and to
prepare the Distribution Date Statement. The Securities Administrator shall not
be responsible to recompute, recalculate or verify any information provided to
it by the Servicer.
(b) The amount of Advances to be made by the Servicer for any
Distribution Date shall equal, subject to Section 4.07(d), the sum of (i) the
aggregate amount of Monthly Payments (net of the related Servicing Fee), due
during the related Collection Period in respect of the Mortgage Loans, which
Monthly Payments were delinquent on a contractual basis as of the close of
business on the related Determination Date and (ii) with respect to each REO
Property, which REO Property was acquired during or prior to the related
Collection Period and as to which REO Property an REO Disposition did not occur
during the related Collection Period, an amount equal to the excess, if any, of
the REO Imputed Interest on such REO Property for such Collection Period, over
the net income from such REO Property transferred to the Distribution Account
pursuant to Section 3.13 for distribution on such Distribution Date. For
purposes of the preceding sentence, the Monthly Payment on each Balloon Loan
with a delinquent Balloon Payment is equal to the assumed monthly payment that
would have been due on the related Due Date based on the original principal
amortization schedule for such Balloon Loan.
On the Servicer Remittance Date, the Servicer shall remit in
immediately available funds to the Securities Administrator for deposit in the
Distribution Account an amount equal to the aggregate amount of Advances, if
any, to be made in respect of the Mortgage Loans for the related Distribution
Date either (i) from its own funds or (ii) from the Collection Account, to the
extent of funds held therein for future distribution (in which case it will
cause to be made an appropriate entry in the records of the Collection Account
that amounts held for future distribution have been, as permitted by this
Section 4.07, used by the Servicer in discharge of any such Advance) or (iii) in
the form of any combination of (i) and (ii) aggregating the total amount of
Advances to be made by the Servicer with respect to the Mortgage Loans. Any
amounts held for future distribution and so used shall be appropriately
reflected in the Servicer's records and replaced by the Servicer by deposit in
the Collection Account on or before any future Servicer Remittance Date to the
extent that the Available Funds for the related Distribution Date (determined
without regard to Advances to be made on the Servicer Remittance Date) shall be
less than the sum of (a) the total amount that would be distributed to the
Classes of Certificateholders pursuant to Section 4.01 and 4.02 on such
Distribution Date and (b) any Net Swap Payments owed to the Swap Provider for
such Distribution Date, if such amounts held for future distributions had not
been so used to make Advances. The Securities Administrator will provide notice
to the Servicer by telecopy by 4:00 p.m. New York City time on any Servicer
Remittance Date in the event that (i) the Servicer fails to remit the Advances
required to be made by the Servicer for the related Distribution Date or (ii)
the amount remitted by the Servicer to the Securities Administrator on such date
is less than the Advances required to be made by the Servicer for the related
Distribution Date, as set forth in the related Remittance Report.
(c) The obligation of the Servicer to make such Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
(d) below, and, with respect to any Mortgage Loan, shall continue until such
Mortgage Loan is paid in full by the Mortgagor or disposed of by the Trust, or
until the recovery of all Liquidation Proceeds thereon.
(d) Notwithstanding anything herein to the contrary, no Advance
or Servicing Advance shall be required to be made hereunder by the Servicer if
such Advance would, if made, constitute a Nonrecoverable Advance. The
determination by the Servicer that it has made a Nonrecoverable Advance or that
any proposed Advance, if made, would constitute a Nonrecoverable Advance, shall
be evidenced by an Officer's Certificate of the Servicer delivered to the
Securities Administrator.
(e) In the event that the Servicer fails to remit any Advances as
required pursuant to this Section 4.07, the Securities Administrator shall
notify the Trustee by 4:00 p.m. on the Servicer Remittance Date identifying for
each Advance the related Mortgage Loan and the amount of the Advance. On or
before 11:00 a.m. New York City time on the Distribution Date immediately
following the Servicer Remittance Date, the Trustee shall remit in immediately
available funds to the Securities Administrator such Advances that the Servicer
was required but failed to make for the related Distribution Date; provided that
the Trustee may conclusively rely upon any determination by the Servicer that an
Advance if made would be a Nonrecoverable Advance; provided, further, that the
Trustee is not obligated to make any Advance that the Trustee, in its good faith
business judgment, determines would constitute a Nonrecoverable Advance, such
determination to be evidenced by an Officer's Certificate of the Trustee
delivered to the Securities Administrator. So long as the Trustee has not
terminated all of the rights and obligations of the Servicer pursuant to Section
7.01(b) as a result of a Servicer Event of Termination pursuant to
7.01(a)(i)(A), the Servicer shall pay to the Trustee an amount equal to the
Advance made by the Trustee plus interest at an annual rate equal to Prime Rate,
adjusted as of the date of each change, plus two percentage points, but in no
event greater than the maximum amount permitted by applicable law, on any
Advances made by the Trustee. Such interest shall be solely an obligation of the
Servicer and shall not be payable or reimbursable from any assets of the Trust
Fund.
Section 4.08 Tax Treatment of Cap Carryover Amounts, the
Supplemental Interest Trust and the Interest Rate Swap Agreement. The Trustee
shall treat the rights that each Class of Regular Certificates has to receive
payments of Cap Carryover Amounts as rights to receive payments under a limited
recourse interest rate cap contract written by the Class CE Certificateholders
in favor of each such Class. Accordingly, each Class of Certificates (excluding
the Class CE, Class P and the Residual Certificates) will be comprised of two
components - an Upper-Tier Regular Interest and an interest in an interest rate
cap contract, and the Class CE Certificate will be comprised of four components
- two Upper-Tier Regular Interests (the Class CE Interest and the Class IO
Interest), ownership of the Excess Reserve Fund Account, subject to an
obligation to pay Cap Carryover Amounts, and ownership of the Supplemental
Interest Trust and the Interest Rate Swap Agreement, subject to the obligation
to pay Cap Carryover Amounts. The Trustee shall allocate the issue price for a
Class of Regular Certificates among the respective components for purposes of
determining the issue price of the Upper-Tier Regular Interest component based
on information received from the Depositor. Unless otherwise advised by the
Depositor in writing, for federal income tax purposes, the Trustee is hereby
directed to assign a value of zero to the right of each Holder of a Regular
Certificate to receive the related Cap Carryover Amounts and, without
duplication, the related Cap Carryover Amount for purposes of allocating the
purchase price of an initial Regular Certificateholder between such rights and
the related Upper-Tier Regular Interest.
Holders of Regular Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class CE
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than any Swap Termination Payment
resulting from a Swap Provider Trigger Event) over (ii) the sum of amounts
payable on the Class CE Interest available for such payments and amounts payable
on the Class IO Interest (such excess, a "Class IO Shortfall"), first from
interest and then from principal distributable on the Regular Certificates. A
Class IO Shortfall payable from interest collections shall be allocated pro rata
among such Regular Certificates based on the amount of interest otherwise
payable to such Class of Regular Certificates, and a Class IO Shortfall payable
from principal collections shall be allocated in reverse sequential order
beginning with the most subordinate Class of Regular Certificates then
Outstanding.
Any payments of Class IO Shortfalls shall be treated solely for
tax purposes as having been received by the Holders of such Class of Regular
Certificates in respect of the Corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class CE Certificates
through the Supplemental Interest Trust.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. Each of the Class A-1, Class A-2,
Class X-0, Xxxxx X-0, Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class M-7, Class M-8, Class M-9, Class M-10, Class CE, Class P, Class
R-1 and Class R-2 Certificates shall be substantially in the forms annexed
hereto as exhibits, and shall, on original issue, be executed by the Securities
Administrator and authenticated and delivered by the Certificate Registrar to or
upon the receipt of a Written Order to Authenticate from the Depositor
concurrently with the sale and assignment to the Trustee of the Trust Fund. Each
Class of the Class A and Class M Certificates (other than the Class M-10
Certificates) shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of
$100,000 and integral multiples of $1 in excess thereof. Each of the Class M-10
Certificates shall be initially evidenced by one or more Certificates
representing a Percentage Interest with a minimum dollar denomination of
$250,000 and integral multiples of $1 in excess thereof. The Class CE and Class
P Certificates are issuable only in minimum Percentage Interests of 10% and
incremental Percentage Interests of 1% in excess thereof. The Class R-1 and
Class R-2 Certificates are issuable only as single certificates.
The Certificates shall be executed on behalf of the Trust by
manual or facsimile signature on behalf of the Securities Administrator by a
Responsible Officer. Certificates bearing the manual or facsimile signatures of
individuals who were, at the time when such signatures were affixed, authorized
to sign on behalf of the Securities Administrator shall bind the Trust,
notwithstanding that such individuals or any of them have ceased to be so
authorized prior to the authentication and delivery of such Certificates or did
not hold such offices at the date of such Certificate. No Certificate shall be
entitled to any benefit under this Agreement or be valid for any purpose, unless
such Certificate shall have been manually authenticated by the Certificate
Registrar substantially in the form provided for herein, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly authenticated and delivered hereunder. All
Certificates shall be dated the date of their authentication. Subject to Section
5.02(c), the Certificates (other than the Class CE, Class P, Class R-1 and Class
R-2 Certificates) shall be Book-Entry Certificates. The Class CE, Class P, Class
R-1 and Class R-2 Certificates shall not be Book-Entry Certificates but shall be
issued in fully registered certificate form.
Section 5.02 Registration of Transfer and Exchange of
Certificates. (a) The Certificate Registrar shall cause to be kept at the
Corporate Trust Office of the Securities Administrator a Certificate Register in
which, subject to such reasonable regulations as it may prescribe, the
Certificate Registrar shall provide for the registration of Certificates and of
transfers and exchanges of Certificates as herein provided. The Securities
Administrator shall initially serve as Certificate Registrar for the purpose of
registering Certificates and transfers and exchanges of Certificates as herein
provided. The Securities Administrator as Certificate Registrar shall be subject
to the same standards of care, limitations on liability and rights to indemnity
as the Securities Administrator, and the provisions of Sections 8.01, 8.02,
8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall apply to the Certificate Registrar
to the same extent as they apply to the Securities Administrator. Any
Certificate Registrar appointed in accordance with this Section 5.02(a) may at
any time resign by giving at least 30 days' advance written notice of
resignation to the Securities Administrator, the Trustee, the Servicer and the
Depositor, such resignation to become effective upon appointment of a successor
Certificate Registrar.
Upon surrender for registration of transfer of any Certificate at
any office or agency of the Certificate Registrar maintained for such purpose
pursuant to the foregoing paragraph and, in the case of the Residual
Certificates and the Class M-10, Class CE and Class P Certificates, upon
satisfaction of the conditions set forth below, the Securities Administrator on
behalf of the Trust shall execute and the Certificate Registrar shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Certificates of the same aggregate Percentage
Interest.
At the option of the Certificateholders, Certificates may be
exchanged for other Certificates in authorized denominations and the same
aggregate Percentage Interests, upon surrender of the Certificates to be
exchanged at any such office or agency. Whenever any Certificates are so
surrendered for exchange, the Securities Administrator shall execute on behalf
of the Trust and the Certificate Registrar shall authenticate and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall (if so required by the Securities Administrator or the
Certificate Registrar) be duly endorsed by, or be accompanied by a written
instrument of transfer satisfactory to the Securities Administrator and the
Certificate Registrar duly executed by, the Holder thereof or his attorney duly
authorized in writing.
(b) Upon original issuance, the Book-Entry Certificates shall be
issued in the form of one or more typewritten certificates, to be delivered to
the Depository by, or on behalf of, the Depositor; or to, and deposited with the
Certificate Custodian, on behalf of the Depository, if directed to do so
pursuant to instructions from the Depository. Except as provided in paragraph
(c) below, the Book-Entry Certificates shall at all times remain registered in
the name of the Depository or its nominee and at all times: (i) registration of
such Certificates may not be transferred by the Securities Administrator except
to another Depository; (ii) the Depository shall maintain book-entry records
with respect to the Certificate Owners and with respect to ownership and
transfers of such Certificates; (iii) ownership and transfers of registration of
such Certificates on the books of the Depository shall be governed by applicable
rules established by the Depository; (iv) the Depository may collect its usual
and customary fees, charges and expenses from its Depository Participants; (v)
the Securities Administrator shall for all purposes deal with the Depository as
representative of the Certificate Owners of the Certificates for purposes of
exercising the rights of Holders under this Agreement, and requests and
directions for and votes of such representative shall not be deemed to be
inconsistent if they are made with respect to different Certificate Owners; (vi)
the Securities Administrator may rely and shall be fully protected in relying
upon information furnished by the Depository with respect to its Depository
Participants and furnished by the Depository Participants with respect to
indirect participating firms and Persons shown on the books of such indirect
participating firms as direct or indirect Certificate Owners; and (vii) the
direct participants of the Depository shall have no rights under this Agreement
under or with respect to any of the Certificates held on their behalf by the
Depository, and the Depository may be treated by the Securities Administrator
and its agents, employees, officers and directors as the absolute owner of the
Certificates for all purposes whatsoever.
All transfers by Certificate Owners of Book-Entry Certificates
shall be made in accordance with the procedures established by the Depository
Participant or brokerage firm representing such Certificate Owners. Each
Depository Participant shall only transfer Book Entry Certificates of
Certificate Owners that it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures. The parties hereto
are hereby authorized to execute one or more letter of representations with the
Depository or take such other action as may be necessary or desirable to
register a Book-Entry Certificate to the Depository. In the event of any
conflict between the terms of any such letter of representation and this
Agreement, the terms of this Agreement shall control.
(c) If the Depository advises the Securities Administrator in
writing that the Depository is no longer willing or able to discharge properly
its responsibilities as Depository and the Securities Administrator or the
Depositor is unable to locate a qualified successor and upon surrender to the
Certificate Registrar of the Book-Entry Certificates by the Depository,
accompanied by registration instructions from the Depository for registration,
the Securities Administrator shall, at the Trust's expense, execute on behalf of
the Trust and the Certificate Registrar shall authenticate definitive, fully
registered certificates (the "Definitive Certificates"). None of the Depositor
or the Securities Administrator shall be liable for any delay in delivery of
such instructions and may conclusively rely on, and shall be protected in
relying on, such instructions. Upon the issuance of Definitive Certificates, the
Securities Administrator, the Certificate Registrar, the Servicer, the
Securities Administrator, any Paying Agent and the Depositor shall recognize the
Holders of the Definitive Certificates as Certificateholders hereunder.
(d) Except with respect to a transfer of the Private Certificates
between or among the Depositor, the Seller, their affiliates or both, no
transfer, sale, pledge or other disposition of any Private Certificate shall be
made unless such disposition is exempt from the registration requirements of the
1933 Act, and any applicable state securities laws or is made in accordance with
the 1933 Act and laws. In the event of any such transfer, the Certificate
Registrar shall require the transferor to execute a transferor certificate (in
substantially the form attached hereto as Exhibit L) and the transferee to
execute an investment letter in substantially in the form attached hereto as
Exhibit J acceptable to and in form and substance reasonably satisfactory to the
Depositor and the Certificate Registrar certifying to the Depositor and the
Certificate Registrar the facts surrounding such transfer, which investment
letter shall not be an expense of the Certificate Registrar or the Depositor.
The transferor of a Private Certificate desiring to effect such transfer shall,
and does hereby agree to, indemnify the Certificate Registrar, the Trustee, the
Securities Administrator and the Depositor against any liability that may result
if the transfer is not so exempt or is not made in accordance with such federal
and state laws. For purposes of this Section 5.02(d) the representations
required in any transferor certificate (in substantially the form attached
hereto as Exhibit L) and any investment letter (substantially in the form of
Exhibit J hereto) shall be deemed to have been made in connection with the
transfer of any Private Certificate that is a Book-Entry Certificate.
No transfer of an ERISA Restricted Certificate shall be made
unless the Certificate Registrar shall have received either (A) a representation
from the transferee of such Certificate substantially in the form of Exhibit I
to the effect that such transferee is not an employee benefit plan or
arrangement subject to Section 406 of ERISA, a plan subject to Section 4975 of
the Code or a plan subject to any Federal, state or local law ("Similar Law")
materially similar to the foregoing provisions of ERISA or the Code, nor a
Person acting on behalf of any such plan or arrangement nor using the assets of
any such plan or arrangement (collectively, a "Plan") to effect such transfer,
(B) in the case of a Class M-10 Certificate, the purchaser of which is an
insurance company, a representation that the purchaser is an insurance company
that is purchasing such Certificates with funds contained in an "insurance
company general account" (as such term is defined in Section V(e) of Prohibited
Transaction Class Exemption 95-60 ("PTCE 95-60")) and that the purchase and
holding of such Certificates are covered under Sections I and III of PTCE 95-60
or (C) in the case of a Class M-10 Certificate presented for registration in the
name of a Plan, an Opinion of Counsel satisfactory to the Certificate Registrar,
which Opinion of Counsel shall not be an expense of the Certificate Registrar,
the Trustee, the Securities Administrator, the Depositor, the Servicer or the
Trust Fund, addressed to the Certificate Registrar, to the effect that the
purchase or holding of such ERISA Restricted Certificate will not constitute or
result in a non-exempt prohibited transaction within the meaning of ERISA,
Section 4975 of the Code or any Similar Law and will not subject the Certificate
Registrar, the Trustee, the Securities Administrator, the Depositor or the
Servicer to any obligation in addition to those expressly undertaken in this
Agreement or to any liability. For purposes of the preceding sentence, with
respect to a Class M-10 Certificate, in the event the representation letter
referred to in either clause (A) or (B) in the preceding sentence is not
furnished, such representation shall be deemed to have been made to the
Certificate Registrar by the transferee's (including an initial acquirer's)
acceptance of the ERISA Restricted Certificates. Notwithstanding anything else
to the contrary herein, (a) any purported transfer of a Class M-10 Certificate,
to or on behalf of an employee benefit plan subject to ERISA, the Code or
Similar Law without the delivery to the Certificate Registrar of an Opinion of
Counsel satisfactory to the Securities Administrator as described above shall be
void and of no effect and (b) any purported transfer of a Class P Certificate,
Class CE Certificate or Residual Certificate to a transferee that does not make
the representation in clause (i) above shall be void and of no effect.
The Residual, Class CE and Class P Certificates may not be sold
to any employee benefit plan subject to Title I of ERISA, any plan subject to
Section 4975 of the Code, or any plan subject to any Similar Law or any Person
investing on behalf of or with plan assets of such Plan.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Certificate Registrar shall be under no liability to any
Person for any registration of transfer of any ERISA Restricted Certificate that
is in fact not permitted by this Section 5.02(d) or for making any payments due
on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Certificate Registrar in accordance with the
foregoing requirements.
As long as the Interest Rate Swap Agreement is in effect, each
beneficial owner of a Certificate (other than an ERISA Restricted Certificate),
or any interest therein, shall be deemed to have represented that either (i) it
is not a Plan or (ii) the acquisition and holding of the Certificate are
eligible for the exemptive relief available under at least one of the
Investor-Based Exemptions.
Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions and to
have irrevocably appointed the Depositor or its designee as its attorney-in-fact
to negotiate the terms of any mandatory sale under clause (v) below and to
execute all instruments of transfer and to do all other things necessary in
connection with any such sale, and the rights of each Person acquiring any
Ownership Interest in a Class R-1 or Class R-2 Certificate are expressly subject
to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Class R-1 or Class R-2 Certificate shall be a Permitted Transferee and
shall promptly notify the Certificate Registrar of any change or
impending change in its status as a Permitted Transferee.
(ii) No Person shall acquire an Ownership Interest in a Class R-1
or Class R-2 Certificate unless such Ownership Interest is a pro rata
undivided interest.
(iii) In connection with any proposed transfer of any Ownership
Interest in a Class R-1 or Class R-2 Certificate, the Certificate
Registrar shall as a condition to registration of the transfer, require
delivery to it, in form and substance satisfactory to it, of each of the
following:
A. an affidavit in the form of Exhibit K hereto from the proposed
transferee to the effect that, among other things, such
transferee is a Permitted Transferee and that it is not acquiring
its Ownership Interest in a Class R-1 or Class R-2 Certificate
that is the subject of the proposed transfer as a nominee,
trustee or agent for any Person who is not a Permitted
Transferee; and
B. a covenant of the proposed transferee to the effect that the
proposed transferee agrees to be bound by and to abide by the
transfer restrictions applicable to a Class R-1 or Class R-2
Certificate.
(iv) Any attempted or purported transfer of any Ownership
Interest in a Residual Certificate in violation of the provisions of this
Section shall be absolutely null and void and shall vest no rights in the
purported transferee. If any purported transferee shall, in violation of
the provisions of this Section, become the Holder of a Class R-1 or Class
R-2 Certificate, then the prior Holder of such Class R-1 or Class R-2
Certificate that is a Permitted Transferee shall, upon discovery that the
registration of transfer of such Class R-1 or Class R-2 Certificate was
not in fact permitted by this Section, be restored to all rights as
Holder thereof retroactive to the date of registration of transfer of
such Class R-1 or Class R-2 Certificate. The Certificate Registrar shall
be under no liability to any Person for any registration of transfer of a
Class R-1 or Class R-2 Certificate that is in fact not permitted by this
Section or for making any distributions due on such Class R-1 or Class
R-2 Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as
the Certificate Registrar received the documents specified in clause
(iii). The Securities Administrator shall be entitled to recover from any
Holder of a Class R-1 or Class R-2 Certificate that was in fact not a
Permitted Transferee at the time such distributions were made all
distributions made on such Class R-1 or Class R-2 Certificate. Any such
distributions so recovered by the Securities Administrator shall be
distributed and delivered by the Securities Administrator to the prior
Holder of such Class R-1 or Class R-2 Certificate that is a Permitted
Transferee.
(v) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Class R-1 or Class R-2 Certificate in violation
of the restrictions in this Section, then the Certificate Registrar shall
have the right but not the obligation, without notice to the Holder of a
Class R-1 or Class R-2 Certificate or any other Person having an
Ownership Interest therein, to notify the Depositor to arrange for the
sale of a Class R-1 or Class R-2 Certificate. The proceeds of such sale,
net of commissions (which may include commissions payable to the
Depositor or its affiliates in connection with such sale), expenses and
taxes due, if any, will be remitted by the Securities Administrator to
the previous Holder of a Class R-1 or Class R-2 Certificate that is a
Permitted Transferee, except that in the event that the Securities
Administrator determines that the Holder of a Class R-1 or Class R-2
Certificate may be liable for any amount due under this Section or any
other provisions of this Agreement, the Securities Administrator may
withhold a corresponding amount from such remittance as security for such
claim. The terms and conditions of any sale under this clause (v) shall
be determined in the sole discretion of the Securities Administrator and
it shall not be liable to any Person having an Ownership Interest in a
Class R-1 or Class R-2 Certificate as a result of its exercise of such
discretion.
(vi) If any Person other than a Permitted Transferee acquires any
Ownership Interest in a Class R-1 or Class R-2 Certificate in violation
of the restrictions in this Section, then the Securities Administrator
will provide to the Internal Revenue Service, and to the persons
specified in Sections 860E(e)(3) and (6) of the Code, information needed
to compute the tax imposed under Section 860E(e)(5) of the Code on
transfers of residual interests to disqualified organizations. The
Securities Administrator shall be entitled to reasonable compensation for
providing such information from the person to whom it is provided.
The foregoing provisions of this Section shall cease to apply to transfers
occurring on or after the date on which there shall have been delivered to the
Certificate Registrar, in form and substance satisfactory to the Certificate
Registrar, (i) written notification from each Rating Agency that the removal of
the restrictions on transfer set forth in this Section will not cause such
Rating Agency to downgrade its rating of the Certificates and (ii) an Opinion of
Counsel to the effect that such removal will not cause any Trust REMIC to fail
to qualify as a REMIC.
(e) No service charge shall be made for any registration of
transfer or exchange of Certificates of any Class, but the Certificate Registrar
may require payment of a sum sufficient to cover any tax or governmental charge
that may be imposed in connection with any transfer or exchange of Certificates.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled by the Certificate Registrar and disposed of
pursuant to its standard procedures.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates.
If (i) any mutilated Certificate is surrendered to the Certificate Registrar or
the Certificate Registrar receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (ii) there is delivered to the
Securities Administrator, the Trustee, the Depositor and the Certificate
Registrar such security or indemnity as may be required by them to save each of
them harmless, then, in the absence of notice to the Securities Administrator or
the Certificate Registrar that such Certificate has been acquired by a bona fide
purchaser, the Securities Administrator shall execute on behalf of the Trust,
and the Certificate Registrar shall authenticate and deliver, in exchange for or
in lieu of any such mutilated, destroyed, lost or stolen Certificate, a new
Certificate of like tenor and Percentage Interest. Upon the issuance of any new
Certificate under this Section, the Securities Administrator or the Certificate
Registrar may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Securities Administrator and
the Certificate Registrar) in connection therewith. Any duplicate Certificate
issued pursuant to this Section, shall constitute complete and indefeasible
evidence of ownership in the Trust, as if originally issued, whether or not the
lost, stolen or destroyed Certificate shall be found at any time.
Section 5.04 Persons Deemed Owners. The Servicer, the Depositor,
the Trustee, the Securities Administrator, the Certificate Registrar, any Paying
Agent and any agent of the Servicer, the Depositor, the Securities
Administrator, the Trustee, the Certificate Registrar or any Paying Agent may
treat the Person, including a Depository, in whose name any Certificate is
registered as the owner of such Certificate for the purpose of receiving
distributions pursuant to Section 4.01 and 4.02 and for all other purposes
whatsoever, and none of the Servicer, the Trust, the Trustee, the Securities
Administrator nor any agent of any of them shall be affected by notice to the
contrary.
Section 5.05 Appointment of Paying Agent. The Paying Agent shall
make distributions to Certificateholders from the Distribution Account pursuant
to Section 4.01 and 4.02 and shall report the amounts of such distributions to
the Securities Administrator. The duties of the Paying Agent may include the
obligation to distribute statements and provide information to
Certificateholders as required hereunder. The Paying Agent hereunder shall at
all times be an entity duly incorporated and validly existing under the laws of
the United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers and subject to supervision or examination by
federal or state authorities. The Paying Agent shall initially be the Securities
Administrator. The Securities Administrator may appoint a successor to act as
Paying Agent, which appointment shall be reasonably satisfactory to the
Depositor and the Rating Agencies. The Securities Administrator as Paying Agent
shall be subject to the same standards of care, limitations on liability and
rights to indemnity as the Securities Administrator, and the provisions of
Sections 8.01, 8.02, 8.03, 8.04, 8.05, 8.14, 8.15 and 8.16 shall apply to the
Paying Agent to the same extent as they apply to the Securities Administrator.
Any Paying Agent appointed in accordance with this Section 5.05 may at any time
resign by giving at least 30 days' advance written notice of resignation to the
Trustee, the Securities Administrator, the Servicer and the Depositor, such
resignation to become effective upon appointment of a successor Paying Agent. If
Xxxxx Fargo Bank is no longer acting as Securities Administrator, the successor
securities administrator shall pay, from its own funds, the compensation of any
Paying Agent other than Xxxxx Fargo Bank.
The Trustee shall cause any Paying Agent that is not the
Securities Administrator or HSBC Bank USA, National Association to execute and
deliver to the Trustee an instrument (a "Paying Agent Agreement") in which such
Paying Agent agrees with the Trustee that such Paying Agent shall (i) hold all
amounts remitted to it by the Securities Administrator for distribution to
Certificateholders in trust for the benefit of Certificateholders until such
amounts are distributed to Certificateholders or otherwise disposed of as herein
provided; (ii) give the Depositor notice of any default by the Securities
Administrator in remitting any required amount; (iii) at any time during the
continuance of any such default, upon the written request of the Depositor,
forthwith pay to the Depositor all amounts held in trust by such Paying Agent;
and (iv) provide to the Securities Administrator the assessment of compliance
and accountants report provided for in Section 3.20 with respect to the
Servicing Criteria set forth in Item 1122(d) of Regulation AB applicable to the
duties of the Paying Agent. ARTICLE VI
THE SERVICER AND THE DEPOSITOR
Section 6.01 Liability of the Servicer and the Depositor. The
Servicer shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Servicer herein. The
Depositor shall be liable in accordance herewith only to the extent of the
obligations specifically imposed upon and undertaken by the Depositor.
Section 6.02 Merger or Consolidation of, or Assumption of the
Obligations of, the Servicer or the Depositor. Any entity into which the
Servicer or the Depositor may be merged or consolidated, or any entity resulting
from any merger, conversion or consolidation to which the Servicer or the
Depositor shall be a party, or any organization succeeding to the business of
the Servicer or the Depositor through the transfer of substantially all of its
assets or all assets relating to such business, or otherwise, shall be the
successor of the Servicer or the Depositor, as the case may be, hereunder,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding;
provided, however, that (a) the successor servicer shall satisfy all the
requirements of Section 7.02 with respect to the qualifications of a successor
servicer and (b) the Servicer and such successor or surviving Person shall
notify the Depositor and the Trustee of any such merger, conversion or
consolidation at least two Business Days prior to the effective date thereof
(unless giving such prior notice would be prohibited by applicable law or by a
confidentiality agreement, in which case notice shall be given by 12 noon
eastern time one Business Day after such merger or consolidation).
Section 6.03 Limitation on Liability of the Servicer and Others.
Neither the Servicer nor any of the directors or officers or employees or agents
of the Servicer shall be under any liability to the Trust or the
Certificateholders for any action taken or for refraining from the taking of any
action by the Servicer in good faith pursuant to this Agreement, or for errors
in judgment; provided, however, that this provision shall not protect the
Servicer or any such Person against any liability which would otherwise be
imposed by reason of its willful misfeasance, bad faith or gross negligence in
the performance of duties of the Servicer or by reason of its reckless disregard
of its obligations and duties of the Servicer hereunder. The Servicer and any
director or officer or employee or agent of the 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. The Servicer and any director
or officer or employee or agent of the Servicer shall be indemnified by the
Trust and held harmless against any loss, liability or expense incurred in
connection with the performance of its duties and obligations and any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense related to any specific Mortgage Loan or Mortgage Loans
(except as any such loss, liability or expense shall be otherwise reimbursable
pursuant to this Agreement) and any loss, liability or expense incurred by
reason of its willful misfeasance, bad faith or gross negligence in the
performance of duties hereunder or by reason of its reckless disregard of
obligations and duties hereunder. The Servicer may undertake any such action
which it may deem necessary or desirable in respect of this Agreement, and the
rights and duties of the parties hereto and the interests of the
Certificateholders hereunder. In such event, the reasonable legal expenses and
costs of such action and any liability resulting therefrom shall be expenses,
costs and liabilities of the Trust and the Servicer shall be entitled to be
reimbursed therefor pursuant to Section 3.05. The Servicer's right to indemnity
or reimbursement pursuant to this Section shall survive any resignation or
termination of the Servicer pursuant to Section 6.04 or 7.01 with respect to any
losses, expenses, costs or liabilities arising prior to such resignation or
termination (or arising from events that occurred prior to such resignation or
termination). This paragraph shall apply to the Servicer solely in its capacity
as Servicer hereunder and in no other capacities.
Section 6.04 Servicer Not to Resign. Subject to the provisions of
Section 7.01 and Section 6.02, the Servicer shall not resign from the
obligations and duties hereby imposed on it except (i) upon determination that
the performance of its obligations or duties hereunder are no longer permissible
under applicable law or are in material conflict by reason of applicable law
with any other activities carried on by it or its subsidiaries or Affiliates,
the other activities of the Servicer so causing such a conflict being of a type
and nature carried on by the Servicer or its subsidiaries or Affiliates at the
date of this Agreement or (ii) upon satisfaction of the following conditions:
(a) the Servicer has proposed a successor servicer to the Trustee and the
Securities Administrator in writing and such proposed successor servicer is
reasonably acceptable to the Trustee and the Securities Administrator and the
proposed successor executes and delivers to the Trustee and the Securities
Administrator an agreement, in form and substance reasonably satisfactory to the
Trustee and the Securities Administrator, which contains an assumption by such
successor servicer of the due and punctual performance and observance of each
covenant and condition to be performed or observed by the Servicer under this
Agreement from and after the date of such agreement; and (b) each Rating Agency
shall have delivered a letter to the Trustee and the Securities Administrator
prior to the appointment of the successor servicer stating that the proposed
appointment of such successor servicer as Servicer hereunder will not result in
the reduction or withdrawal of the then current rating of the Regular
Certificates or the ratings that are in effect; provided, however, that no such
resignation by the Servicer shall become effective until such successor servicer
or, in the case of (i) above, the Trustee shall have assumed the Servicer's
responsibilities and obligations hereunder or the Trustee shall have designated
a successor servicer in accordance with Section 7.02. Any such resignation shall
not relieve the Servicer of responsibility for any of the obligations specified
in Sections 7.01 and 7.02 as obligations that survive the resignation or
termination of the Servicer. Any such determination permitting the resignation
of the Servicer shall be evidenced by an Opinion of Counsel to such effect
delivered to the Trustee and the Securities Administrator.
Section 6.05 Delegation of Duties.(a) (a) In the ordinary course
of business, the Servicer at any time may delegate any of its duties hereunder
to any Person, including any of its Affiliates, who agrees to conduct such
duties in accordance with standards comparable to those set forth in Section
3.01. Such delegation shall not relieve the Servicer of its liabilities and
responsibilities with respect to such duties and shall not constitute a
resignation within the meaning of Section 6.04. The Servicer shall provide the
Trustee and the Rating Agencies with 60 days written notice prior to the
delegation of any of its duties to any Person other than any of the Servicer's
Affiliates or their respective successors and assigns.
(b) Notwithstanding anything contained herein to the contrary, to
the extent the Servicer engages any affiliate or third party vendor, in
connection with the performance of any of its duties under this Agreement, the
Servicer shall immediately notify the Depositor in writing of such engagement;
provided however, that prior to engaging any affiliate or third party vendor in
connection with the performance of any of its duties under this Agreement, the
Servicer shall determine (i) if such affiliates or third party vendors would be
a Servicing Function Participant and (ii) if such affiliate or third party
vendor would be a "servicer" within the meaning of Item 1101 of Regulation AB
(an "Additional Servicer") and meets the criteria in Item 1108(a)(2)(i), (ii) or
(iii) of Regulation AB. If the Servicer has determined that such affiliates or
third party vendors are a Servicing Function Participant, the Servicer shall
cause such Servicing Function Participant to prepare and deliver to the
Securities Administrator a separate assessment and attestation report, as
contemplated by Section 3.20 of this Agreement. In addition, if the Servicer has
determined that any such affiliate or third party vendor would be an Additional
Servicer and meets the criteria in Item 1108(a)(2)(i), (ii) or (iii) of
Regulation AB, the Servicer shall cause such Additional Servicer to prepare and
deliver to the Securities Administrator a separate compliance statement as
contemplated by Section 3.19 of this Agreement. In addition, if the Servicer
determines any such affiliate or third party vendor would be a "servicer" within
the meaning of Item 1101 of Regulation AB, the Servicer shall not engage such
affiliate or third party vendor unless it provides the Securities Administrator
and the Depositor the information required by Section 1108(b) and 1108(c) of
Regulation AB prior to such engagement.
In the event of any assignment of rights or delegation of duties
of the Servicer, the Securities Administrator shall report such event on Form
8-K within four Business Days after the effective date thereof provided that the
Servicer provides notice of such occurrence to the Securities Administrator
within 2 days of such effective date.
ARTICLE VII
DEFAULT
Section 7.01 Servicer Events of Termination. (a) If any one of
the following events ("Servicer Events of Termination") shall occur and be
continuing:
(i) (A) The failure by the Servicer to make any Advance,
Servicing Advance or to pay Compensating Interest and such failure
described in this clause (A) continues unremedied until 1:00 p.m. New
York City time on the Business Day immediately following the Distribution
Date following such failure; or
(B) any other failure by the Servicer to deposit in the
Collection Account or Distribution Account any deposit required to be
made under the terms of this Agreement, which failure described in this
clause (B) continues unremedied for a period of three Business Days after
the first date on which written notice of such failure is given to the
Servicer;
(ii) any failure on the part of the Servicer to observe or
perform in any material respect any of its covenants or agreements under
Sections 3.19, 3.20 or 3.28 hereof, subject to any cure period set forth
in such sections;
(iii) The failure by the Servicer duly to observe or perform, in
any material respect, any other covenants, obligations or agreements
(other than any covenants or agreements of the Servicer under Sections
3.19, 3.20 or 3.28) of the Servicer as set forth in this Agreement, which
failure continues unremedied for a period of 60 days, after the date (A)
on which written notice of such failure, requiring the same to be
remedied, shall have been given to the Servicer by the Trustee, the
Securities Administrator or by any Holder of a Certificate (other than a
Residual Certificate) evidencing at least 25% of the Voting Interests or
(B) actual knowledge of such failure by a Servicing Officer of the
Servicer; or
(iv) The entry against the Servicer of a decree or order by a
court or agency or supervisory authority having jurisdiction in the
premises for the appointment of a trustee, conservator, receiver or
liquidator in any insolvency, conservatorship, receivership, readjustment
of debt, marshalling of assets and liabilities or similar proceedings, or
for the winding up or liquidation of its affairs, and the continuance of
any such decree or order unstayed and in effect for a period of 60 days;
or
(v) The Servicer shall voluntarily go into liquidation, consent
to the appointment of a conservator or receiver or liquidator or similar
person in any insolvency, readjustment of debt, marshalling of assets and
liabilities or similar proceedings of or relating to the Servicer or of
or relating to all or substantially all of its property; or a decree or
order of a court or agency or supervisory authority having jurisdiction
in the premises for the appointment of a conservator, receiver,
liquidator or similar person in any insolvency, readjustment of debt,
marshalling of assets and liabilities or similar proceedings, or for the
winding-up or liquidation of its affairs, shall have been entered against
the Servicer and such decree or order shall have remained in force
undischarged, unbonded or unstayed for a period of 60 days; or the
Servicer shall admit in writing its inability to pay its debts generally
as they become due, file a petition to take advantage of any applicable
insolvency or reorganization statute, make an assignment for the benefit
of its creditors or voluntarily suspend payment of its obligations; or
(vi) the Servicer and any Subservicer appointed by it becoming
ineligible to service for both Xxxxxx Xxx and Xxxxxxx Mac (unless
remedied within 90 days).
(b) Then, and in each and every such case, so long as a Servicer
Event of Termination shall not have been remedied within the applicable grace
period, (x) with respect solely to clause (i)(A) above, if such Advance is not
made by 1:00 p.m. New York City time on the Business Day immediately following
the Distribution Date, the Trustee may terminate all of the rights and
obligations of the Servicer under this Agreement and the Trustee shall assume
upon such termination (or, pursuant to Section 4.07(e), prior to such
termination in the case of the obligation to make Advances), the duties of a
successor servicer pursuant to Section 7.02 (including, but not limited to, the
duty to make Advances required pursuant to this Agreement) and (y) in the case
of (i)(B), (iii), (iv), (v) and (vi) above, the Trustee shall, at the direction
of the Holders of each Class of Regular Certificates and the Class CE
Certificates evidencing Voting Interests aggregating not less than 66 2/3%, by
notice then given in writing to the Servicer (and to the Trustee if given by
Holders of Certificates), terminate all of the rights and obligations of the
Servicer as servicer under this Agreement. Any such notice to the Servicer shall
also be given to the Securities Administrator, each Rating Agency, the Depositor
and the Swap Provider. On or after the receipt by the Servicer (and by the
Trustee if such notice is given by the Holders) of such written notice, all
authority and power of the Servicer under this Agreement, whether with respect
to the Certificates or the Mortgage Loans or otherwise, shall pass to and be
vested in the Trustee pursuant to and under this Section or successor servicer
appointed in connection with Section 7.02; and, without limitation, the Trustee
or successor servicer is hereby authorized and empowered to execute and deliver,
on behalf of the Servicer, as attorney-in-fact or otherwise, any and all
documents and other instruments, and to do or accomplish all other acts or
things necessary or appropriate to effect the purposes of such notice of
termination, whether to complete the transfer and endorsement of each Mortgage
Loan and Related Documents or otherwise. The Servicer agrees to cooperate with
the Trustee (or the applicable successor servicer) in effecting the termination
of the responsibilities and rights of the Servicer hereunder, including, without
limitation, the delivery to the Trustee (or the applicable successor servicer)
of all documents and records requested by it to enable it to assume the
Servicer's functions under this Agreement within twenty Business Days subsequent
to such notice, the transfer within two Business Days subsequent to such notice
to the Trustee (or the applicable successor servicer) for the administration by
it of all cash amounts that shall at the time be held by the Servicer and to be
deposited by it in the Collection Account, the Distribution Account or any
Escrow Account or that have been deposited by the Servicer in such accounts or
thereafter received by the Servicer with respect to the Mortgage Loans or any
REO Property received by the Servicer. All reasonable out-of-pocket costs and
expenses (including attorneys' fees) incurred in connection with transferring
the servicing to the successor servicer and amending this Agreement to reflect
such succession as Servicer pursuant to this Section shall be paid by the
predecessor servicer (or if the predecessor servicer is the Trustee, the initial
servicer) upon presentation of reasonable documentation of such costs and
expenses, and if such predecessor Servicer defaults in its obligation to pay
such costs, such costs shall be paid by the successor Servicer or the Trustee
(in which case the successor Servicer or the Trustee shall be entitled to
reimbursement therefor from funds in the Collection Account).
Notwithstanding any termination of the activities of a Servicer
hereunder, the Servicer shall be entitled to receive payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding Advances and
Servicing Advances properly made prior to the date of termination.
Section 7.02 Trustee to Act; Appointment of Successor. (a) Within
90 days of the time the Servicer (and the Trustee, if notice is sent by the
Holders) receives a notice of termination pursuant to Section 7.01 or 6.04, the
Trustee (or such other successor servicer as is approved in accordance with this
Agreement) shall be the successor in all respects to the Servicer in its
capacity as servicer under this Agreement and the transactions set forth or
provided for herein and shall be subject to all the responsibilities, duties and
liabilities relating thereto placed on the Servicer by the terms and provisions
hereof arising on and after its succession. As compensation therefor, the
Trustee (or such other successor servicer) shall be entitled to such
compensation as the Servicer would have been entitled to hereunder if no such
notice of termination had been given. Notwithstanding the above, (i) if the
Trustee is unwilling to act as successor servicer or (ii) if the Trustee is
legally unable so to act, the Trustee shall appoint or petition a court of
competent jurisdiction to appoint, any established housing and home finance
institution, bank or other mortgage loan or home equity loan servicer having a
net worth of not less than $50,000,000 as the successor to the Servicer
hereunder in the assumption of all or any part of the responsibilities, duties
or liabilities of the Servicer hereunder; provided, that the appointment of any
such successor servicer will not result in the qualification, reduction or
withdrawal of the ratings assigned to the Certificates or the ratings that are
in effect by the Rating Agencies as evidenced by a letter to such effect from
the Rating Agencies. Pending appointment of a successor to the Servicer
hereunder, unless the Trustee is prohibited by law from so acting, the Trustee
shall act in such capacity as hereinabove provided. In connection with such
appointment and assumption, the successor shall be entitled to receive
compensation out of payments on Mortgage Loans in an amount equal to the
compensation which the Servicer would otherwise have received pursuant to
Section 3.18 (or such other compensation as the Trustee and such successor shall
agree, not to exceed the Servicing Fee). The appointment of a successor servicer
shall not affect any liability of the predecessor servicer which may have arisen
under this Agreement prior to its termination as Servicer to pay any deductible
under an insurance policy pursuant to Section 3.11 or to indemnify the parties
indicated in Section 3.24 pursuant to the terms thereof, nor shall any successor
servicer be liable for any acts or omissions of the predecessor servicer or for
any breach by such servicer of any of its representations or warranties
contained herein or in any related document or agreement. The Trustee and such
successor shall take such action, consistent with this Agreement, as shall be
necessary to effectuate any such succession.
The predecessor Servicer and successor Servicer shall notify the
Securities Administrator, Depositor and Trustee of any such appointment at least
two Business Days prior to the effective date thereof and shall provide the
Securities Administrator, the Depositor and the Trustee with all information
required by the Depositor to comply with its reporting obligation under Item
6.02 of Form 8-K not later than the effective date of such appointment and the
Securities Administrator shall report such event on Form 8-K within four
business days of the occurrence of such event.
(b) Any successor, including the Trustee, to the Servicer as
servicer shall during the term of its service as servicer continue to service
and administer the Mortgage Loans for the benefit of Certificateholders, and
maintain in force a policy or policies of insurance covering errors and
omissions in the performance of its obligations as Servicer hereunder and a
Fidelity Bond in respect of its officers, employees and agents to the same
extent as the Servicer is so required pursuant to Section 3.12.
Section 7.03 Waiver of Defaults. The Holders of Certificates
entitled to at least 66 2/3% of the Voting Interests allocated to the Classes of
Certificates affected by a Servicer Event of Termination may, on behalf of all
Certificateholders, waive any events permitting removal of the Servicer as
servicer pursuant to this Article VII, provided, however, that such Holders may
not waive a default in making a required distribution on a Certificate without
the consent of the Holder of such Certificate. Upon any waiver of a past
default, such default shall cease to exist and any Servicer Event of Termination
arising therefrom shall be deemed to have been remedied for every purpose of
this Agreement. No such waiver shall extend to any subsequent or other default
or impair any right consequent thereto except to the extent expressly so waived.
Notice of any such waiver shall be given by the Trustee to the Securities
Administrator and the Rating Agencies.
Section 7.04 Notification to Certificateholders. (a) On any
termination or appointment of a successor to the Servicer pursuant to this
Article VII or Section 6.04, the Trustee shall give prompt written notice
thereof to the Securities Administrator and the Certificateholders at their
respective addresses appearing in the Certificate Register and each Rating
Agency.
(b) No later than 60 days after the occurrence of any event which
constitutes or which, with notice or a lapse of time or both, would constitute a
Servicer Event of Termination for five Business Days after a Responsible Officer
of the Trustee becomes aware of the occurrence of such an event, the Trustee
shall transmit by mail to the Securities Administrator and all
Certificateholders notice of such occurrence unless such default or Servicer
Event of Termination shall have been waived or cured. Such notice shall be given
to the Rating Agencies promptly after any such occurrence.
Section 7.05 Survival of Servicer Liabilities. Notwithstanding
anything herein to the contrary, upon termination of the Servicer hereunder, any
liabilities of the Servicer which accrued prior to such termination shall
survive such termination.
ARTICLE VIII
THE TRUSTEE AND THE SECURITIES ADMINISTRATOR
Section 8.01 Duties of Trustee and Securities Administrator. The
Trustee, prior to the occurrence of a Servicer Event of Termination of which a
Responsible Officer of the Trustee shall have actual knowledge and after the
curing of all Servicer Events of Termination which may have occurred, and the
Securities Administrator, each undertakes to perform such duties and only such
duties as are specifically set forth in this Agreement as duties of the Trustee
and the Securities Administrator, respectively. If a Servicer Event of
Termination has occurred (which has not been cured), of which a Responsible
Officer of the Trustee has knowledge, the Trustee shall exercise such of the
rights and powers vested in it by this Agreement, and use the same degree of
care and skill in their exercise, as a prudent person would exercise or use
under the circumstances in the conduct of such person's own affairs.
Upon receipt of all resolutions, certificates, statements,
opinions, reports, documents, orders or other instruments furnished to the
Trustee and the Securities Administrator which are specifically required to be
furnished pursuant to any provision of this Agreement, the Trustee and the
Securities Administrator shall examine them to determine whether they conform to
the requirements of this Agreement; provided, however, that neither the Trustee
or the Securities Administrator shall be responsible for the accuracy or content
of any resolution, certificate, statement, opinion, report, document, order or
other instrument furnished by the Servicer, the Seller or the Depositor
hereunder. If any such instrument is found not to conform in any material
respect to the requirements of this Agreement, the Trustee shall notify the
Certificateholders of such instrument in the event that the Trustee, after so
requesting, does not receive a satisfactorily corrected instrument.
Any good faith interpretation of the Securities Administrator of
any provisions of this Agreement relating to the distributions to be made on or
the allocation of any losses to the Certificates which the Securities
Administrator concludes are ambiguous or unclear shall be binding on
Certificateholders.
No provision of this Agreement shall be construed to relieve the
Trustee and the Securities Administrator from liability for its own negligent
action, its own negligent failure to act or its own misconduct; provided,
however, that:
(i) prior to the occurrence of a Servicer Event of Termination of
which a Responsible Officer of the Trustee or Securities Administrator,
as applicable, has actual knowledge, and after the curing of all such
Servicer Events of Termination which may have occurred, the duties and
obligations of the Trustee and the Securities Administrator shall be
determined solely by the express provisions of this Agreement, neither
the Trustee nor the Securities Administrator shall be liable except for
the performance of such duties and obligations as are specifically set
forth in this Agreement, no implied covenants or obligations shall be
read into this Agreement against the Trustee and the Securities
Administrator and, in the absence of bad faith on the part of the Trustee
or the Securities Administrator, the Trustee or the Securities
Administrator, as the case may be, may conclusively rely, as to the truth
of the statements and the correctness of the opinions expressed therein,
upon any certificates or opinions furnished to the Trustee or the
Securities Administrator and conforming to the requirements of this
Agreement;
(ii) neither the Trustee nor the Securities Administrator shall
be personally liable for an error of judgment made in good faith by a
Responsible Officer of the Trustee or the Securities Administrator,
unless it shall be proved that the Trustee or the Securities
Administrator, respectively, was negligent in ascertaining or
investigating the facts related thereto;
(iii) neither the Trustee nor the Securities Administrator shall
be personally liable with respect to any action taken, suffered or
omitted to be taken by it in good faith in accordance with the direction
of the Majority Certificateholders relating to the time, method and place
of conducting any proceeding for any remedy available to the Trustee or
the Securities Administrator or exercising or omitting to exercise any
trust or power conferred upon the Trustee or the Securities Administrator
under this Agreement; and
(iv) neither the Trustee nor the Securities Administrator shall
be charged with knowledge of any failure by the Servicer to comply with
the obligations of the Servicer referred to in clauses (i) and (ii) of
Section 7.01(a) or any Servicer Event of Termination unless a Responsible
Officer of the Trustee or the Securities Administrator obtains actual
knowledge of such failure or the Trustee or the Securities Administrator
receives written notice of such failure from the Servicer or the Majority
Certificateholders.
Neither the Trustee nor the Securities Administrator shall be
required to expend or risk its own funds or otherwise incur financial liability
in the performance of any of its duties hereunder, or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it, and none of the provisions contained in this
Agreement shall in any event require the Trustee or the Securities Administrator
to perform, or be responsible for the manner of performance of, any of the
obligations of the Servicer under this Agreement, except during such time, if
any, as the Trustee shall be the successor to, and be vested with the rights,
duties, powers and privileges of, the Servicer in accordance with the terms of
this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Securities Administrator. (a) Except as otherwise provided in Section 8.01:
(i) the Trustee and the Securities Administrator may request and
rely upon, and shall be protected in acting or refraining from acting
upon, any resolution, Officer's Certificate, certificate of auditors or
any other certificate, statement, instrument, opinion, report, notice,
request, consent, order, appraisal, bond or other paper or document
reasonably believed by it to be genuine and to have been signed or
presented by the proper party or parties;
(ii) the Trustee and the Securities Administrator may consult
with counsel and any advice or Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken or
suffered or omitted by it hereunder in good faith and in accordance with
such advice or Opinion of Counsel;
(iii) neither the Trustee nor the Securities Administrator shall
be under any obligation to exercise any of the rights or powers vested in
it by this Agreement, or to institute, conduct or defend any litigation
hereunder or in relation hereto, at the request, order or direction of
the Certificateholders pursuant to the provisions of this Agreement,
unless such Certificateholders shall have offered to the Trustee or the
Securities Administrator, as the case may be, reasonable security or
indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby; the right of the Trustee or the Securities
Administrator, as the case may be, to perform any discretionary act
enumerated in this Agreement shall not be construed as a duty, and
neither the Trustee nor the Securities Administrator shall be answerable
for other than its negligence or willful misconduct in the performance of
any such act;
(iv) neither the Trustee nor the Securities Administrator shall
be personally liable for any action taken, suffered or omitted by it in
good faith and believed by it to be authorized or within the discretion
or rights or powers conferred upon it by this Agreement;
(v) prior to the occurrence of a Servicer Event of Termination of
which a Responsible Officer of the Trustee or Securities Administrator,
as applicable, has actual knowledge, and after the curing of all Servicer
Events of Termination which may have occurred, neither the Trustee nor
the Securities Administrator shall be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent, order,
approval, bond or other paper or documents, unless requested in writing
to do so by the Majority Certificateholders; provided, however, that if
the payment within a reasonable time to the Trustee or the Securities
Administrator of the costs, expenses or liabilities likely to be incurred
by it in the making of such investigation is, in the opinion of the
Trustee or the Securities Administrator, not reasonably assured to the
Trustee or the Securities Administrator by the security afforded to it by
the terms of this Agreement, the Trustee and the Securities Administrator
may require indemnity satisfactory to the Trustee or the Securities
Administrator, as applicable, against such cost, expense or liability as
a condition to such proceeding. The reasonable expense of every such
examination shall be paid by the Servicer or, if paid by the Trustee or
the Securities Administrator, shall be reimbursed by the Servicer upon
demand from the Servicer's own funds. Nothing in this clause (v) shall
derogate from the obligation of the Servicer to observe any applicable
law prohibiting disclosure of information regarding the Mortgagors;
(vi) neither the Trustee nor the Securities Administrator shall
be accountable, have any liability or make any representation as to any
acts or omissions hereunder of the Servicer until such time as the
Trustee may be required to act as Servicer pursuant to Section 7.02;
(vii) each of the Trustee and the Securities Administrator may
execute any of the trusts or powers hereunder or perform any duties
hereunder either directly or by or through agents or attorneys or a
custodian and neither the Trustee nor the Securities Administrator shall
be responsible for any misconduct or negligence on the part of any such
agent, attorney or custodian appointed by it with due care; and
(viii) the right of the Trustee or the Securities Administrator
to perform any discretionary act enumerated in this Agreement shall not
be construed as a duty, and neither the Trustee nor the Securities
Administrator shall be answerable for other than its negligence or
willful misconduct in the performance of such act.
(ix) neither Trustee nor the Securities Administrator shall be
required to give any bond or surety in respect of the execution of the
Trust Fund created hereby or the powers granted hereunder.
Section 8.03 Trustee and Securities Administrator Not Liable for
Certificates or Mortgage Loans. The recitals contained herein and in the
Certificates shall be taken as the statements of the Depositor, and neither the
Trustee nor the Securities Administrator assumes any responsibility for the
correctness of the same. Neither the Trustee nor the Securities Administrator
makes any representations as to the validity or sufficiency of this Agreement or
of the Certificates (other than (i) the signature and authentication of the
Securities Administrator on the Certificates, in the case of the Securities
Administrator and (ii) the authentication of the Securities Administrator,
acting as Certificate Registrar, on the Certificates, in the case of the
Securities Administrator) or of any Mortgage Loan or Related Document. Neither
the Trustee nor the Securities Administrator shall be accountable for the use or
application by the Servicer, or for the use or application of any funds paid to
the Servicer in respect of the Mortgage Loans or deposited in or withdrawn from
the Collection Account by the Servicer. Neither the Trustee nor the Securities
Administrator shall at any time have any responsibility or liability for or with
respect to the legality, validity and enforceability of any Mortgage or any
Mortgage Loan, or the perfection and priority of any Mortgage or the maintenance
of any such perfection and priority, or for or with respect to the sufficiency
of the Trust or its ability to generate the payments to be distributed to
Certificateholders under this Agreement, including, without limitation: the
existence, condition and ownership of any Mortgaged Property; the existence and
enforceability of any hazard insurance thereon (other than the Trustee's
responsibility if the Trustee shall assume the duties of the Servicer pursuant
to Section 7.02); the validity of the assignment of any Mortgage Loan to the
Trustee or of any intervening assignment; the completeness of any Mortgage Loan;
the performance or enforcement of any Mortgage Loan (other than the Trustee's
responsibility if the Trustee shall assume the duties of the Servicer pursuant
to Section 7.02); the compliance by the Depositor or the Servicer with any
warranty or representation made under this Agreement or in any related document
or the accuracy of any such warranty or representation (except, in the case of
the Trustee, after receipt of notice of any non-compliance therewith or any
breach thereof); any investment of monies by or at the direction of the Servicer
or any loss resulting therefrom, it being understood that the Trustee shall
remain responsible for any Trust property that it may hold in its individual
capacity; the acts or omissions of any of the Servicer (other than the Trustee's
responsibility if the Trustee shall assume the duties of the Servicer pursuant
to Section 7.02), or any Mortgagor; any action of the Servicer (other than the
Trustee's responsibility if the Trustee shall assume the duties of the Servicer
pursuant to Section 7.02), taken in the name of the Trust; the failure of the
Servicer to act or perform any duties required of it as agent of the Trust
hereunder (other than the Trustee's responsibility if the Trustee shall assume
the duties of the Servicer pursuant to Section 7.02); or any action by the
Trustee or the Securities Administrator taken at the instruction of the Servicer
(other than the Trustee's responsibility if the Trustee shall assume the duties
of the Servicer pursuant to Section 7.02); provided, however, that the foregoing
shall not relieve the Trustee and the Securities Administrator of their
obligation to perform their respective duties under this Agreement. The Trustee
shall have no responsibility for filing any financing or continuation statement
in any public office at any time or to otherwise perfect or maintain the
perfection of any security interest or lien granted to it hereunder.
Section 8.04 Trustee and Securities Administrator May Own
Certificates. Each of the Trustee and the Securities Administrator in its
individual or any other capacity may become the owner or pledgee of Certificates
with the same rights as it would have if it were not Trustee or Securities
Administrator and may transact any banking and trust business or otherwise deal
with the Servicer, the Depositor or their Affiliates.
Section 8.05 Trustee and Securities Administrator Fees and
Expenses. The Securities Administrator shall be entitled to the investment
income on funds on deposit in the Distribution Account as set forth in Section
3.23. This shall constitute compensation to the Securities Administrator for its
activities hereunder. The fees and expenses of the Trustee shall be paid by the
Securities Administrator, without reimbursement from the Trust Fund, in
accordance with a side letter agreement between the Trustee and the Securities
Administrator. The Trust shall reimburse the Trustee and the Securities
Administrator for all reasonable expenses, disbursements and advances incurred
or made by the Trustee or the Securities Administrator in accordance with any of
the provisions of this Agreement (including the reasonable compensation and the
expenses and disbursements of its counsel and of all persons not regularly in
its employ), except any such expense, disbursement or advance as may arise from
its gross negligence or bad faith or which is the responsibility of the Trustee
or Securities Administrator hereunder or that does not constitute an
"unanticipated expense" of a REMIC within the meaning of Treasury Regulation
Section 1.860G(b)(3)(ii). In addition, the Trustee, the Securities Administrator
and their respective officers, directors, employees and agents shall be
indemnified by the Trust from, and held harmless against, any and all losses,
liabilities, damages, claims or expenses incurred in connection with any legal
action relating to this Agreement or the Certificates, other than any loss,
liability or expense (i) that constitutes a specific liability of the Trustee or
the Securities Administrator, as applicable, under this Agreement, (ii) incurred
by reason of willful misfeasance, bad faith or gross negligence of the Trustee
or Securities Administrator, as applicable, in the performance of its respective
duties hereunder or by reason of the Trustee's or the Securities
Administrator's, as the case may be, reckless disregard of its obligations and
duties hereunder or (iii) that does not constitute an "unanticipated expense" of
a REMIC within the meaning of Treasury Regulation Section 1.860G(b)(3)(ii). The
Trustee and its officers, directors, employees and agents shall be indemnified
by the Trust from, and held harmless against, any and all losses, liabilities,
damages, claims or expenses, including reasonable attorneys' fees, that may be
imposed on, incurred by or asserted against the Custodian in any way related to
or arising out of the Custodial Agreement or any action taken or not taken by
the Custodian and which the Trustee had paid to the Custodian pursuant to the
terms of the Custodial Agreement, other than any loss, liability or expense (i)
that constitutes a specific liability of the Custodian under the Custodial
Agreement or (ii) or incurred by reason of willful misfeasance, bad faith or
negligence of the Custodian in the performance of its duties under the Custodial
Agreement or by reason of the Custodian's reckless disregard of its obligations
under the Custodial Agreement. Subject to the provisions of this Article VIII,
the Trustee and its officers, directors, employees and agents shall be
indemnified by the Securities Administrator from, and held harmless against, any
and all losses, liabilities, damages, claims or expenses incurred by the Trustee
in connection with or arising out of the willful misfeasance, bad faith or
negligence of the Securities Administrator in the performance of its duties
under this Agreement. This Section shall survive termination of this Agreement
or the resignation or removal of any Trustee or Securities Administrator
hereunder and payment of the Certificates.
Section 8.06 Eligibility Requirements for Trustee and Securities
Administrator. Each of the Trustee and the Securities Administrator shall at all
times be (i) an entity duly organized and validly existing under the laws of the
United States of America or any state thereof, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 or a member of a bank holding system, the aggregate combined
capital surplus of which is at least $50,000,000, provided that its separate
capital and surplus shall at all times be at least the amount specified in
Section 310(a)(2) of the Trust Indenture Act of 1939, (ii) be subject to
supervision or examination by federal or state authority and (iii) have a
minimum long-term debt rating of BBB by S&P and Fitch and Baa3 by Xxxxx'x and a
long term debt rating of at least A1 or better by Xxxxx'x, and subject to
supervision or examination by federal or state authority. The Trustee shall not
be an affiliate of the Depositor or the Servicer. If such entity publishes
reports of condition at least annually, pursuant to law or to the requirements
of the aforesaid supervising or examining authority, then for the purposes of
this Section 8.06, the combined capital and surplus of such entity shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. The principal office of the Trustee and the
Securities Administrator (other than the initial Trustee or Securities
Administrator) shall be in a state with respect to which an Opinion of Counsel
has been delivered to such Trustee or Securities Administrator at the time such
Trustee or Securities Administrator is appointed Trustee or Securities
Administrator, at such entity's expense, to the effect that the Trust will not
be a taxable entity under the laws of such state. In case at any time the
Trustee or Securities Administrator shall cease to be eligible in accordance
with the provisions of this Section 8.06, the Trustee or Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 8.07. The Securities Administrator (i) may not be the
Originator, the Servicer, the Depositor or an affiliate of the Depositor unless
the Securities Administrator is in an institutional trust department, (ii) must
be authorized to exercise corporate trust powers under the laws of its
jurisdiction of organization, and (iii) must be rated at least A/F1 by Fitch
and A-1 by S&P and the equivalent rating by Xxxxx'x (or such other rating
acceptable to Fitch, S&P and Xxxxx'x pursuant to a ratings confirmation). If no
successor Securities Administrator shall have been appointed and shall have
accepted appointment within 60 days after the Securities Administrator ceases to
be the Securities Administrator pursuant to this Section 8.06, then the Trustee
shall perform the duties of the Securities Administrator pursuant to this
Agreement. The Trustee shall notify the Rating Agencies of any change of
Securities Administrator.
Section 8.07 Resignation or Removal of Trustee and Securities
Administrator. The Trustee or the Securities Administrator may at any time
resign and be discharged from the trusts hereby created by giving written notice
thereof to the Depositor, the Servicer and each Rating Agency. Upon receiving
such notice of resignation, the Depositor shall promptly appoint a successor
Trustee or Securities Administrator, by written instrument, in duplicate, one
copy of which instrument shall be delivered to the resigning Trustee or
Securities Administrator, as applicable, and one copy to the successor Trustee
or Securities Administrator, as the case may be. If no successor Trustee or
Securities Administrator shall have been so appointed and having accepted
appointment within 30 days after the giving of such notice of resignation, the
resigning Trustee or Securities Administrator may petition any court of
competent jurisdiction for the appointment of a successor Trustee or Securities
Administrator.
If at any time the Trustee or the Securities Administrator shall
cease to be eligible in accordance with the provisions of Section 8.06 and shall
fail to resign after written request therefor by the Depositor, or if at any
time the Trustee or the Securities Administrator shall be legally unable to act,
or shall be adjudged bankrupt or insolvent, or a receiver of the Trustee or the
Securities Administrator or of its property shall be appointed, or any public
officer shall take charge or control of the Trustee or the Securities
Administrator or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then the Depositor or Servicer may remove the
Trustee or the Securities Administrator, as the case may be. If the Depositor or
the Servicer removes the Trustee or the Securities Administrator under the
authority of the immediately preceding sentence, the Depositor shall promptly
appoint a successor Trustee or Securities Administrator by written instrument,
in duplicate, one copy of which instrument shall be delivered to the Trustee or
Securities Administrator so removed and one copy to the successor Trustee or
Securities Administrator.
In addition, if (a) the Trustee or Securities Administrator fails
to comply with its obligations to deliver any assessment of servicing compliance
or registered public accounting firm attestation reports required pursuant to
Section 3.20 or (b) any Servicing Function Participant engaged by the Trustee or
Securities Administrator fails to comply with its obligations to deliver any
assessment of servicing compliance or registered public accounting firm
attestation reports, the Servicer, may, after consultation with the Depositor,
remove the Trustee or Securities Administrator and appoint a successor trustee
or securities administrator by written instrument, in duplicate, one copy of
which instrument shall be delivered to the Trustee or Securities Administrator
so removed and one copy to the successor trustee or securities administrator.
The Majority Certificateholders may at any time remove the
Trustee or the Securities Administrator by written instrument or instruments
delivered to the Servicer, the Depositor, the Securities Administrator and the
Trustee; the Depositor shall thereupon use its best efforts to appoint a
successor Trustee or Securities Administrator, as the case may be in accordance
with this Section.
Any resignation or removal of the Trustee or the Securities
Administrator and appointment of a successor Trustee or Securities Administrator
pursuant to any of the provisions of this Section 8.07 shall not become
effective until acceptance of appointment by the successor Trustee or Securities
Administrator as provided in Section 8.08.
Section 8.08 Successor Trustee and Successor Securities
Administrator. Any successor Trustee or Securities Administrator appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the
Depositor, the Rating Agencies, the Servicer and to its predecessor Trustee or
Securities Administrator an instrument accepting such appointment hereunder, and
thereupon the resignation or removal of the predecessor Trustee or Securities
Administrator shall become effective, and such successor Trustee or Securities
Administrator, without any further act, deed or conveyance, shall become fully
vested with all the rights, powers, duties and obligations of its predecessor
hereunder, with like effect as if originally named as Trustee or Securities
Administrator. The Depositor, the Servicer and the predecessor Trustee or
Securities Administrator shall execute and deliver such instruments and do such
other things as may reasonably be required for fully and certainly vesting and
confirming in the successor Trustee or Securities Administrator all such rights,
powers, duties and obligations.
If the predecessor trustee or securities administrator has been
removed for cause or has resigned, all costs associated with the appointment of
a successor trustee or securities administrator shall be paid to the Person that
incurred them by the predecessor trustee or securities administrator. Without
limiting the predecessor trustee's or securities administrator's obligation, if
the predecessor trustee or securities administrator fails to pay such costs,
such costs shall be reimbursed by the Trust; provided however, that if the
predecessor trustee or securities administrator has been terminated without
cause pursuant to the fourth paragraph of Section 8.07, all reasonable expenses
incurred in complying with this Section 8.08 shall be reimbursed by the Trust to
the Person that incurred them.
No successor Trustee or Securities Administrator shall accept
appointment as provided in this Section 8.08 unless at the time of such
acceptance such successor Trustee or Securities Administrator shall be eligible
under the provisions of Section 8.06 and the appointment of such successor
Trustee or Securities Administrator shall not result in a downgrading of the
Regular Certificates by any Rating Agency, as evidenced by a letter from each
Rating Agency.
Upon acceptance of appointment by a successor Trustee or
Securities Administrator as provided in this Section 8.08, the successor Trustee
or Securities Administrator shall mail notice of the appointment of a successor
Trustee or Securities Administrator hereunder to the Swap Provider and all
Holders of Certificates at their addresses as shown in the Certificate Register
and to each Rating Agency.
Section 8.09 Merger or Consolidation of Trustee or Securities
Administrator. Any entity into which the Trustee or the Securities Administrator
may be merged or converted or with which it may be consolidated, or any entity
resulting from any merger, conversion or consolidation to which the Trustee or
the Securities Administrator shall be a party, or any entity succeeding to the
business of the Trustee or the Securities Administrator, shall be the successor
of the Trustee or Securities Administrator hereunder, provided such entity (i)
shall be eligible under the provisions of Section 8.06 and 8.08, without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, anything herein to the contrary notwithstanding and (ii) shall
notify the Depositor of any such merger, conversion or consolidation at least
two Business Days prior to the effective date thereof (unless such notice is
otherwise prohibited by law, in which case such notice shall be provided on the
effective date thereof) and shall provide the Depositor and the Securities
Administrator (if such entity is not replacing the Securities Administrator)
with all information required by the Depositor to comply with its reporting
obligations under Item 6.02 of Form 8-K not later than the effective date of
such merger, conversion or consolidation and the Securities Administrator shall
report such event on Form 8-K within four business days of the occurrence of
such event.
Section 8.10 Appointment of Co-Trustee or Separate Trustee.
Notwithstanding any other provisions of this Agreement, at any time, for the
purpose of meeting any legal requirements of any jurisdiction in which any part
of the Trust or any Mortgaged Property may at the time be located, the Depositor
and the Trustee acting jointly shall have the power and shall execute and
deliver all instruments to appoint one or more Persons approved by the Trustee
to act as co-trustee or co-trustees, jointly with the Trustee, or separate
trustee or separate trustees, of all or any part of the Trust, and to vest in
such Person or Persons, in such capacity and for the benefit of the
Certificateholders, such title to the Trust, or any part thereof, and, subject
to the other provisions of this Section 8.10, such powers, duties, obligations,
rights and trusts as the Servicer and the Trustee may consider necessary or
desirable. Any such co-trustee or separate trustee shall be subject to the
written approval of the Servicer. If the Servicer shall not have joined in such
appointment within 15 days after the receipt by it of a request so to do, or in
the case a Servicer Event of Termination shall have occurred and be continuing,
the Trustee alone shall have the power to make such appointment. No co-trustee
or separate trustee hereunder shall be required to meet the terms of eligibility
as a successor Trustee under Section 8.06, and no notice to Certificateholders
of the appointment of any co-trustee or separate trustee shall be required under
Section 8.08.
Every separate trustee and co-trustee shall, to the extent
permitted by law, be appointed and act subject to the following provisions and
conditions:
(i) all rights, powers, duties and obligations conferred or
imposed upon the Trustee shall be conferred or imposed upon and exercised
or performed by the Trustee and such separate trustee or co-trustee
jointly (it being understood that such separate trustee or co-trustee is
not authorized to act separately without the Trustee joining in such
act), except to the extent that under any law of any jurisdiction in
which any particular act or acts are to be performed, the Trustee shall
be incompetent or unqualified to perform such act or acts, in which event
such rights, powers, duties and obligations (including the holding of
title to the Trust or any portion thereof in any such jurisdiction) shall
be exercised and performed singly by such separate trustee or co-trustee,
but solely at the direction of the Trustee;
(ii) no trustee hereunder shall be held personally liable by
reason of any act or omission of any other trustee hereunder; and
(iii) the Securities Administrator and the Trustee, acting
jointly may at any time accept the resignation of or remove any separate
trustee or co-trustee.
Any notice, request or other writing given to the Trustee shall
be deemed to have been given to each of the then separate trustees and
co-trustees, as effectively as if given to each of them. Every instrument
appointing any separate trustee or co-trustee shall refer to this Agreement and
the conditions of this Article VIII. Each separate trustee and co-trustee, upon
its acceptance of the trusts conferred, shall be vested with the estates or
property specified in its instrument of appointment, either jointly with the
Trustee or separately, as may be provided therein, subject to all the provisions
of this Agreement, specifically including every provision of this Agreement
relating to the conduct of, affecting the liability of, or affording protection
to, the Trustee. Every such instrument shall be filed with the Trustee and a
copy thereof given to the Depositor, the Securities Administrator, the Rating
Agencies and the Servicer.
Any separate trustee or co-trustee may, at any time, constitute
the Trustee, its agent or attorney-in-fact, with full power and authority, to
the extent not prohibited by law, to do any lawful act under or in respect of
this Agreement on its behalf and in its name. If any separate trustee or
co-trustee shall die, become incapable of acting, resign or be removed, all of
its estates, properties, rights, remedies and trusts shall vest in and be
exercised by the Trustee, to the extent permitted by law, without the
appointment of a new or successor Trustee.
Section 8.11 Limitation of Liability. The Certificates are
executed by the Securities Administrator, not in its individual capacity but
solely as Securities Administrator of the Trust, in the exercise of the powers
and authority conferred and vested in it by this Agreement. Each of the
undertakings and agreements made on the part of the Securities Administrator in
the Certificates is made and intended not as a personal undertaking or agreement
by the Securities Administrator but is made and intended for the purpose of
binding only the Trust.
Section 8.12 Trustee or Securities Administrator May Enforce
Claims Without Possession of Certificates. (a) All rights of action and claims
under this Agreement or the Certificates may be prosecuted and enforced by the
Trustee or the Securities Administrator without the possession of any of the
Certificates or the production thereof in any proceeding relating thereto, and
such proceeding instituted by the Trustee or the Securities Administrator shall
be brought in its own name or in its capacity as Trustee or Securities
Administrator for the benefit of all Holders of such Certificates, subject to
the provisions of this Agreement. Any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses, disbursement
and advances of the Trustee or Securities Administrator, as the case may be, or
their agents and counsel, be for the ratable benefit of the Certificateholders
in respect of which such judgment has been recovered.
(b) The Trustee shall afford the Depositor, the Servicer, the
Securities Administrator and each Certificateholder upon reasonable notice
during normal business hours, access to all records maintained by the Trustee in
respect of its duties hereunder and access to officers of the Trustee
responsible for performing such duties. The Trustee shall cooperate fully with
the Servicer, the Depositor, the Securities Administrator and such
Certificateholder and shall make available to the Servicer, the Depositor, the
Securities Administrator and such Certificateholder for review and copying at
the expense of the party requesting such copies, such books, documents or
records as may be requested with respect to the Trustee's duties hereunder. The
Depositor, the Servicer, the Securities Administrator and the Certificateholders
shall not have any responsibility or liability for any action or failure to act
by the Trustee and are not obligated to supervise the performance of the Trustee
under this Agreement or otherwise.
(c) The Securities Administrator shall afford the Depositor, the
Trustee, the Servicer and each Certificateholder upon reasonable notice during
normal business hours, access to all records maintained by the Securities
Administrator in respect of its duties hereunder and access to officers of the
Securities Administrator responsible for performing such duties. The Securities
Administrator shall cooperate fully with the Servicer, the Trustee, the
Depositor and such Certificateholder and shall make available to the Servicer,
the Trustee, the Depositor and such Certificateholder for review and copying at
the expense of the party requesting such copies, such books, documents or
records as may be requested with respect to the Securities Administrator's
duties hereunder. The Depositor, the Trustee, the Servicer and the
Certificateholders shall not have any responsibility or liability for any action
or failure to act by the Securities Administrator and are not obligated to
supervise the performance of the Securities Administrator under this Agreement
or otherwise.
Section 8.13 Suits for Enforcement. In case a Servicer Event of
Termination or other default by the Servicer hereunder shall occur and be
continuing, the Trustee may proceed to protect and enforce its rights and the
rights of the Certificateholders under this Agreement by a suit, action or
proceeding in equity or at law or otherwise, whether for the specific
performance of any covenant or agreement contained in this Agreement or in aid
of the execution of any power granted in this Agreement or for the enforcement
of any other legal, equitable or other remedy, as the Trustee, being advised by
counsel, and subject to the foregoing, shall deem most effectual to protect and
enforce any of the rights of the Trustee and the Certificateholders.
Section 8.14 Waiver of Bond Requirement. The Trustee shall be
relieved of, and each Certificateholder hereby waives, any requirement of any
jurisdiction in which the Trust, or any part thereof, may be located that the
Trustee post a bond or other surety with any court, agency or body whatsoever.
Section 8.15 Waiver of Inventory, Accounting and Appraisal
Requirement. The Trustee shall be relieved of, and each Certificateholder hereby
waives, any requirement of any jurisdiction in which the Trust, or any part
thereof, may be located that the Trustee file any inventory, accounting or
appraisal of the Trust with any court, agency or body at any time or in any
manner whatsoever.
Section 8.16 Appointment of Custodian. Xxxxx Fargo Bank has been
appointed Custodian by the Trustee pursuant to the Custodial Agreement. If such
entity resigns or is terminated as Custodian pursuant to the Custodial
Agreement, the Trustee shall serve as Custodian or the Trustee may, with the
consent of the Depositor and the Servicer, appoint one or more Custodians to
hold all or a portion of the Mortgage Files as agent for the Trustee, by
entering into a custodial agreement in the form of the Custodial Agreement or
otherwise in a form acceptable to the Depositor and the Servicer. Subject to
this Article VIII, the Trustee agrees to comply with the terms of the Custodial
Agreement and any such custodial agreement and to enforce the terms and
provisions thereof against the Custodian for the benefit of the
Certificateholders. Each Custodian will be a depositary institution subject to
supervision by federal or state authority, shall have a combined capital and
surplus of at least $10,000,000 and shall be qualified to do business in the
jurisdiction in which it holds any Mortgage File and afforded the same
protections hereunder as the Trustee.
Section 8.17 Indemnification of the Securities Administrator and
Depositor by the Trustee
The Trustee shall indemnify and hold harmless the Securities
Administrator and the Depositor and any director, officer or agent thereof
against any loss, liability or expense, including reasonable attorney's fees,
arising out of, in connection with or incurred by reason of willful misfeasance,
bad faith or negligence in the performance of duties of the Trustee or by reason
of reckless disregard of its obligation to deliver any information, report,
certification, accountants' letter or other material required to comply with
Regulation AB. Any payment pursuant to this Section made by the Trustee to the
Securities Administrator or the Depositor shall be from such entity's own funds,
without reimbursement therefor. The provisions of this Section 8.17 shall
survive the termination of this Agreement.
Notwithstanding anything in this Agreement to the contrary, in no
event shall the Trustee be liable for any special, indirect or consequential
loss or damage of any kind whatsoever (including but not limited to lost
profits) resulting from the Trustee's nonperformance of its duties or
obligations to deliver any information, report, certification, accountants'
letter or other material required to comply with Regulation AB, even if the
Trustee has been advised of the likelihood of such loss or damage and regardless
of the form of action.
Section 8.18 Trustee Errors and Omissions Policy.
The Trustee shall maintain, at all times and at its own expense,
a Trustee Errors and Omissions Policy, which policy shall have such terms and
coverage amounts as are comparable to those of errors and omissions policies
maintained by trustees generally.
The Trustee Errors and Omissions Policy shall insure the Trustee,
its successors and assigns, against any losses resulting from negligence, errors
or omissions on the part of officers, employees or other persons acting on
behalf of the Trustee in the performance of its duties as Trustee pursuant to
this Agreement.
The Trustee shall maintain in effect the Trustee Errors and
Omissions Policy at all times and the Trustee Errors and Omissions Policy may
not be canceled, permitted to lapse or otherwise terminated without thirty
Business Days' prior written notice by registered mail to the Securities
Administrator and the Depositor.
Section 8.19 Securities Administrator Errors and Omissions
Policy.
The Securities Administrator shall maintain, at all times and at
its own expense, a Securities Administrator Errors and Omissions Policy, which
policy shall have such terms and coverage amounts as are comparable to those of
errors and omissions policies maintained by trustees of mortgage loans
generally.
The Securities Administrator Errors and Omissions Policy shall
insure the Securities Administrator, its successors and assigns, against any
losses resulting from negligence, errors or omissions on the part of officers,
employees or other persons acting on behalf of the Securities Administrator in
the performance of its duties as Securities Administrator pursuant to this
Agreement.
The Securities Administrator shall maintain in effect the
Securities Administrator Errors and Omissions Policy at all times and the
Securities Administrator Errors and Omissions Policy may not be canceled,
permitted to lapse or otherwise terminated without the acquisition of comparable
coverage by the Securities Administrator.
ARTICLE IX
REMIC AND GRANTOR TRUST ADMINISTRATION
Section 9.01 REMIC Administration. (a) The Preliminary Statement
sets forth the designations for federal income tax purposes of all interests
created hereby. For the avoidance of doubt, the Class P Certificates shall not
represent a regular or residual interest in any Trust REMIC. The Closing Date is
hereby designated as the "Startup Day" of each Trust REMIC within the meaning of
section 860G(a)(9) of the Code. The "latest possible maturity date" of the
regular interests in each Trust REMIC is the Distribution Date in July 2036,
which is the Distribution Date in the month following the month in which the
latest maturity date of any Mortgage Loan occurs. Amounts distributable to the
Class CE Certificates (prior to any reduction for any Cap Carryover Amounts or
Swap Termination Payment), exclusive of any amounts received from the Swap
Provider, shall be deemed paid from the Upper-Tier REMIC to the Class XX XXXXX
in respect of the Class UT-X Interest and the Class UT-IO Interest and then from
the Class XX XXXXX in respect of the Class CE Interest and the Class IO Interest
to the Holders of the Class CE Certificates prior to distribution of any Cap
Carryover Amounts to the Regular Certificates or Net Swap Payments or Swap
Termination Payments payable to the Swap Provider.
For federal income tax purposes, any amount distributed on the
Regular Certificates on any Distribution Date in excess of the amount
distributable on their Corresponding Class of Upper-Tier Regular Interest on
such Distribution Date shall be treated as having been paid from the Excess
Reserve Fund Account or the Supplemental Interest Trust, as applicable, and any
amount distributable on such Corresponding Class of Upper-Tier Regular Interest
on such Distribution Date in excess of the amount distributable on the
Corresponding Class of Regular Certificates on such Distribution Date shall be
treated as having been paid to the Supplemental Interest Trust.
(b) The Trustee shall make or cause to be made REMIC elections
for each of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier REMIC,
the Upper-Tier REMIC, and the Class XX XXXXX as set forth in the Preliminary
Statement on Forms 1066 as prepared by the Securities Administrator or other
appropriate federal tax or information return for the taxable year ending on the
last day of the calendar year in which the Certificates are issued. The
Securities Administrator shall prepare such Forms 1066 and any other appropriate
federal tax or information return and deliver them to the Trustee on a timely
basis for the Trustee's execution. The Trustee shall execute and the Securities
Administrator shall file such forms.
(c) The Securities Administrator shall pay any and all tax
related expenses (not including taxes) of each Trust REMIC, including but not
limited to any professional fees or expenses related to audits or any
administrative or judicial proceedings with respect to such Trust REMIC that
involve the Internal Revenue Service or state tax authorities, but only to the
extent that (i) such expenses are ordinary or routine expenses, including
expenses of a routine audit but not expenses of litigation (except as described
in (ii)); or (ii) such expenses or liabilities (including taxes and penalties)
are attributable to the negligence or willful misconduct of the Securities
Administrator in fulfilling its duties hereunder. The Securities Administrator
shall be entitled to reimbursement of expenses to the extent provided in clause
(i) above from the Trust.
(d) The Securities Administrator shall prepare or cause to be
prepared, and cause the Trustee to sign and the Securities Administrator shall
file or cause to be filed, each Trust REMIC's federal and state tax and
information returns as such Trust REMIC's direct representative. The expenses of
preparing and filing such returns shall be borne by the Securities
Administrator. The Securities Administrator will apply for an Employer
Identification Number from the Internal Revenue Service via a form SS-4 or any
other acceptable method for all Trust REMICs and other tax entities and will
also file a Form 8811 with respect to all such Trust REMICs with the Internal
Revenue Service.
(e) The Holder of the Class R-2 Certificates shall act as the
"tax matters person" for Pooling-Tier REMIC 1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC, and the Holder of the Class R-1
Certificates shall act as "tax matters person" for the Class XX XXXXX, in each
case, within the meaning of Treasury Regulations Section 1.860F-4(d), and the
Securities Administrator is hereby irrevocably designated as agent of such
Certificateholders for such purpose (or if the Securities Administrator is not
so permitted, such Holder shall be the "tax matters person" in accordance with
the REMIC Provisions). In such capacity, the Securities Administrator shall, as
and when necessary and appropriate, represent any Trust REMIC in any
administrative or judicial proceedings relating to an examination or audit by
any governmental taxing authority, request an administrative adjustment as to
any taxable year of any Trust REMIC, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of any Trust REMIC, and otherwise act on behalf of each Trust REMIC in
relation to any tax matter or controversy involving it.
To enable the Securities Administrator to perform its duties
under this Agreement, the Depositor shall provide to the Securities
Administrator all information or data that the Securities Administrator requests
in writing and determines to be relevant for tax purposes to the valuations and
offering prices of the Certificates, including the price, yield, prepayment
assumption, and projected cash flows of the Certificates and the Mortgage Loans.
Thereafter, the Depositor shall provide to the Securities Administrator promptly
upon written request therefor any additional information or data that the
Securities Administrator may, from time to time, reasonably request to enable
the Securities Administrator to perform its duties under this Agreement;
provided, however, that the Depositor shall not be required to provide any
information regarding the Mortgage Loans after the Closing Date or any
information that the Servicer is required to provide to the Securities
Administrator pursuant to this Agreement.
(f) The Trustee, the Securities Administrator, the Servicer, and
the Holders of Certificates shall take any action or cause any Trust REMIC to
take any action necessary to create or maintain the status of such REMIC as a
REMIC under the REMIC Provisions and shall assist each other as necessary to
create or maintain such status. None of the Trustee, the Servicer, the
Securities Administrator or the Holder of the Class R-1 or Class R-2 Certificate
shall take any action or cause any Trust REMIC to take any action or fail to
take (or fail to cause to be taken) any action that, under the REMIC Provisions,
if taken or not taken, as the case may be, could (i) endanger the status of such
Trust REMIC as a REMIC or (ii) result in the imposition of a tax upon such Trust
REMIC (including but not limited to the tax on prohibited transactions as
defined in Code Section 860F(a)(2) and the tax on prohibited contributions set
forth on Section 860G(d) of the Code) (either such event, an "Adverse REMIC
Event") unless the Securities Administrator, the Trustee and the Servicer have
received an Opinion of Counsel (at the expense of the party seeking to take such
action) to the effect that the contemplated action will not endanger such status
or result in the imposition of such a tax. In addition, prior to taking any
action with respect to any Trust REMIC or the assets therein, or causing such
Trust REMIC to take any action, which is not expressly permitted under the terms
of this Agreement, any Holder of the Class R-1 or Class R-2 Certificate will
consult with the Securities Administrator, the Trustee and the Servicer, or
their respective designees, in writing, with respect to whether such action
could cause an Adverse REMIC Event to occur with respect to any Trust REMIC, and
no such Person shall take any such action or cause such Trust REMIC to take any
such action as to which the Securities Administrator, the Trustee or the
Servicer has advised it in writing that an Adverse REMIC Event could occur.
(g) The Holder of the Class R-2 Certificate shall pay when due
any and all taxes imposed on Pooling-Tier REMIC 1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC by federal or state governmental
authorities, but only from amounts, if any, distributable thereon. The Holder of
the Class R-1 Certificate shall pay when due any and all taxes imposed on the
Class XX XXXXX by federal or state governmental authorities, but only from
amounts, if any, distributable thereon. To the extent that such REMIC taxes are
not paid by the Class R-1 or Class R-2 Certificateholder, as applicable, the
Securities Administrator shall pay any remaining REMIC taxes out of future
amounts otherwise distributable to the Holder of the Class R-1 or Class R-2
Certificate, as applicable, or, if no such amounts are available, out of other
amounts held in the Distribution Account, and shall reduce amounts otherwise
payable to Holders of the REMIC Regular Interests or the Certificates, as the
case may be.
(h) The Securities Administrator, shall, for federal income tax
purposes, maintain or cause to be maintained books and records with respect to
each Trust REMIC on a calendar year and on an accrual basis.
(i) No additional contributions of assets shall be made to any
Trust REMIC, except as expressly provided in this Agreement with respect to
Eligible Substitute Mortgage Loans.
(j) None of the Trustee, the Securities Administrator or the
Servicer shall enter into any arrangement by which any Trust REMIC will receive
a fee or other compensation for services.
(k) On or before April 15 of each calendar year, beginning in
2007, the Securities Administrator shall deliver to each Rating Agency an
Officer's Certificate stating the Securities Administrator's compliance with
those provisions of this Section 9.01 applicable to it.
(l) The Securities Administrator shall treat (i) the rights of
the Regular Certificates to receive Cap Carryover Amounts as a right in interest
rate cap contracts written by the Class CE Certificateholders in favor of the
Holders of the Regular Certificates and (ii) the rights of the Class CE
Certificates under the Interest Rate Swap Agreement in accordance with the terms
thereof and shall assign such rights for federal tax return and information
reporting a value of zero. The Securities Administrator shall account for such
as property held separate and apart from the regular interests it holds in each
of the Trust REMICs. The provisions of this paragraph are intended to satisfy
the requirements of Treasury Regulations Section 1.860G-2(i) for the treatment
of property rights coupled with regular interests to be separately respected and
shall be interpreted consistent with such regulation. On each Distribution Date,
to the extent the Regular Certificates receive interest in excess of the
Upper-Tier REMIC WAC Rate, such interest will be treated as distributed to the
Class CE Certificates, together with any amount deposited in the Supplemental
Interest Trust Account in respect of the Interest Rate Swap Agreement, and then
paid to the respective Classes of Regular Certificates pursuant to the related
interest rate cap agreement.
Section 9.02 Prohibited Transactions and Activities. (a) None of
the Depositor, the Servicer, the Securities Administrator or the Trustee shall
sell, dispose of, or substitute for any of the Mortgage Loans, except in a
disposition pursuant to (i) the foreclosure of a Mortgage Loan, (ii) the
bankruptcy of the Trust Fund, (iii) the termination of any Trust REMIC pursuant
to Article X of this Agreement, (iv) a substitution pursuant to Article II of
this Agreement, (v) a repurchase of Mortgage Loans pursuant to Article II of
this Agreement or (vi) an optional purchase by the Depositor pursuant to Section
3.16 of this Agreement, nor acquire any assets for any Trust REMIC, nor sell or
dispose of any investments in the Distribution Account for gain, nor accept any
contributions to any Trust REMIC after the Closing Date, unless it has received
an Opinion of Counsel (at the expense of the party causing such sale,
disposition, or substitution) that such disposition, acquisition, substitution,
or acceptance will not (a) affect adversely the status of such Trust REMIC as a
REMIC or of the interests therein other than the Class R-1 or Class R-2
Certificates, as applicable, and as the regular interests therein, (b) affect
the distribution of interest or principal on the Certificates, (c) result in the
encumbrance of the assets transferred or assigned to the Trust Fund (except
pursuant to the provisions of this Agreement) or (d) cause such Trust REMIC to
be subject to a tax on prohibited transactions or prohibited contributions
pursuant to the REMIC Provisions.
(b) No Eligible Investments will be sold or disposed of at a gain
prior to maturity unless the Securities Administrator has received an Opinion of
Counsel or other evidence satisfactory to it that such sale or disposition will
not cause any Trust REMIC to be subject to the tax on "prohibited transactions"
imposed by Code Section 860F(a)(1), otherwise subject the Trust Fund to tax, or
cause any Trust REMIC to fail to qualify as a REMIC while any Certificates are
outstanding.
Section 9.03 Indemnification with Respect to Certain Taxes and
Loss of REMIC Status. In the event that any Trust REMIC fails to qualify as a
REMIC, loses its status as a REMIC, or incurs federal, state or local taxes as a
result of a prohibited transaction or prohibited contribution under the REMIC
Provisions due to the negligent performance by the Servicer, the Trustee or the
Securities Administrator of its duties and obligations set forth herein, such
person shall indemnify the Trust Fund and the Holder of the Class R-1 or Class
R-2 Certificate, as applicable, against any and all losses, claims, damages,
liabilities or expenses ("Losses") resulting from such negligence; provided,
however, that no such person shall be liable for any such Losses attributable to
the action or inaction of the Trustee, the Depositor or the Holder of the Class
R-1 or Class R-2 Certificate, as applicable, nor for any such Losses resulting
from misinformation provided by the Holder of the Class R-1 or Class R-2
Certificate, as applicable, on which such person has relied. The foregoing shall
not be deemed to limit or restrict the rights and remedies of the Holder of the
Class R-1 or Class R-2 Certificate, as applicable, now or hereafter existing at
law or in equity. Notwithstanding the foregoing, however, in no event shall the
Servicer have any liability (1) for any action or omission that is taken in
accordance with and in compliance with the express terms of, or which is
expressly permitted by the terms of, this Agreement, (2) for any Losses other
than arising out of a negligent performance by the Servicer, the Trustee or the
Securities Administrator of its duties and obligations set forth herein, and (3)
for any special or consequential damages to Certificateholders (in addition to
payment of principal and interest on the Certificates).
Section 9.04 [Reserved].
Section 9.05 Grantor Trust Administration. The parties intend
that the portions of the Trust Fund consisting of the right of the Class P
Certificates to receive Prepayment Penalties, Originator Prepayment Penalty
Payment Amounts and Servicer Prepayment Penalty Payment Amounts, the right of
the Regular Certificates to receive Cap Carryover Amounts and the right of the
Class CE Certificates to receive Net Swap Payments from the Swap Provider
subject to the obligation of the Class CE Certificates to pay Cap Carryover
Amounts and any Net Swap Payments and Swap Termination Payments to the Swap
Provider, shall be treated as a "grantor trust" under the Code, and the
provisions hereof shall be interpreted consistently with this intention. In
furtherance of such intention, the Securities Administrator shall furnish or
cause to be furnished (i) the Holders of the Class P Certificates, (ii) to the
Holders of the Regular Certificates and (iii) to the Holders of the Class CE
Certificates and shall file or cause to be filed with the Internal Revenue
Service together with Form 1041 or such other form as may be applicable, their
allocable shares of income and expenses with respect to the property held by the
Grantor Trust, at the time or times and in the manner required by the Code.
ARTICLE X
TERMINATION
Section 10.01 Termination. (a) The respective obligations and
responsibilities of the Servicer, the Depositor, the Trustee, the Securities
Administrator and the Certificate Registrar created hereby (other than the
obligation of the Securities Administrator to make certain payments to
Certificateholders after the final Distribution Date and the obligation of the
Securities Administrator to send certain notices as hereinafter set forth) shall
terminate upon notice to the Trustee and the Securities Administrator upon the
earliest of (i) the Distribution Date on which the Principal Balance of each
Class of Certificates has been reduced to zero, (ii) the final payment or other
liquidation of the last Mortgage Loan in the Trust, and (iii) the optional
purchase by the Majority Class CE Certificateholder, or if there is no Majority
Class CE Certificateholder, the Depositor, of the Mortgage Loans as described
below. Notwithstanding the foregoing, in no event shall the trust created hereby
continue beyond the expiration of 21 years from the death of the last survivor
of the descendants of Xxxxxx X. Xxxxxxx, the late ambassador of the United
States to the Court of St. Xxxxx, living on the date hereof.
The Majority Class CE Certificateholder or Depositor may, at its
option, terminate the Trust Fund and retire the Certificates on the second
Distribution Date following the Distribution Date on which the Pool Balance is
reduced to less than 5% of the Pool Balance as of the Cut-off Date by purchasing
all of the outstanding Mortgage Loans (and REO Properties) in the Trust Fund at
a price equal to the sum of (i) the sum of the outstanding unpaid principal
balance of the Mortgage Loans and except to the extent previously advanced by
the Servicer, accrued and unpaid interest thereon at the weighted average of the
Mortgage Interest Rates through the end of the Collection Period preceding the
final Distribution Date plus unreimbursed Servicing Advances, Advances and any
unpaid Servicing Fees allocable to such Mortgage Loans, (ii) the fair market
value of the REO Properties as determined in good faith by the Servicer and
(iii) the amount of any Swap Termination Payment owed to the Swap Provider
pursuant to the Interest Rate Swap Agreement (the "Termination Price"). If the
Majority Class CE Certificateholder (or, if there is no Majority Class CE
Certificateholder, the Depositor or an affiliate of the Depositor) is subject to
regulation by the OCC, the FDIC, the Federal Reserve or the Office of Thrift
Supervision, the option may not be exercised unless the aggregate fair market
value of the Mortgage Loans and REO Properties is greater than or equal to the
Termination Price. Notwithstanding the foregoing, no party may exercise this
optional purchase right unless any Reimbursement Amount owed to the Trust
pursuant to Section 2.03 hereof has been paid.
Any such purchase shall be accomplished by delivery by the party
exercising the optional purchase right on the Determination Date before such
Distribution Date of the Termination Price to the Securities Administrator for
deposit into the Distribution Account as part of Available Funds.
(b) Notice of any termination, specifying the Distribution Date
(which shall be a date that would otherwise be a Distribution Date) upon which
the Certificateholders may surrender their Certificates to the Securities
Administrator for payment of the final distribution and cancellation, shall be
given promptly by the Securities Administrator upon the Securities Administrator
receiving notice of such date from the Majority Class CE Certificateholder or
Depositor, as applicable, by letter to the Certificateholders and the Securities
Administrator mailed not earlier than the 15th day of the month preceding the
month of such final distribution and not later than the 15th day of the month of
such final distribution specifying (1) the Distribution Date upon which final
distribution of the Certificates will be made upon presentation and surrender of
such Certificates at the Corporate Trust Office of the Securities Administrator
therein designated, (2) the amount of any such final distribution and (3) that
the Record Date otherwise applicable to such Distribution Date is not
applicable, distributions being made only upon presentation and surrender of the
Certificates at the Corporate Trust Office of the Securities Administrator
therein specified. Not less than five (5) Business Days prior to such
Determination Date relating to such Distribution Date, the Securities
Administrator shall notify the Depositor of the amount of any unpaid
Reimbursement Amount owed to the Trust.
(c) Upon presentation and surrender of the Certificates, the
Paying Agent shall cause to be distributed to the Holders of the Certificates on
the Distribution Date for such final distribution, in proportion to the
Percentage Interests of their respective Class and to the extent that funds are
available for such purpose, an amount equal to the amount required to be
distributed to such Holders in accordance with the provisions of Sections 4.01
and 4.02 for such Distribution Date.
(d) In the event that all Certificateholders shall not surrender
their Certificates for final payment and cancellation on or before such final
Distribution Date, the Securities Administrator shall promptly following such
date cause all funds in the Distribution Account not distributed in final
distribution to Certificateholders to be withdrawn therefrom and credited to the
remaining Certificateholders by depositing such funds in a separate escrow
account for the benefit of such Certificateholders, and the Servicer shall give
a second written notice to the remaining Certificateholders, to surrender their
Certificates for cancellation and receive the final distribution with respect
thereto. If within nine months after the second notice all the Certificates
shall not have been surrendered for cancellation, the Holder of the Class R-2
Certificates shall be entitled to all unclaimed funds and other assets which
remain subject hereto (except with respect to the Class CE and Class P
Certificates) and the Securities Administrator upon transfer of such funds shall
be discharged of any responsibility for such funds, and all other
Certificateholders shall look to the Holder of the Class R-2 Certificates for
payment.
Section 10.02 Additional Termination Requirements. (a) In the
event that the Majority Class CE Certificateholder or the Depositor exercises
its purchase option as provided in Section 10.01, the Trust shall be terminated
in accordance with the following additional requirements, unless the Securities
Administrator shall have been furnished with an Opinion of Counsel to the effect
that the failure of the Trust to comply with the requirements of this Section
will not (i) result in the imposition of taxes on "prohibited transactions" of
the Trust as defined in Section 860F of the Code or (ii) cause any Trust REMIC
to fail to qualify as a REMIC at any time that any Certificates (other than the
Class P Certificates) are outstanding:
(i) The Securities Administrator shall designate a date within 90
days prior to the final Distribution Date as the date of adoption of
plans of complete liquidation of each of Pooling-Tier REMIC-1,
Pooling-Tier REMIC-2, the Lower-Tier REMIC, the Upper-Tier REMIC and the
Class XX XXXXX and shall specify such date in the final federal income
tax return of each such Trust REMIC;
(ii) After the date of adoption of such plans of complete
liquidation and at or prior to the final Distribution Date, the
Securities Administrator shall sell all of the assets of the Trust to the
Majority Class CE Certificateholder or Depositor, as applicable, for
cash; and
(iii) At the time of the making of the final payment on the
Certificates, the Securities Administrator shall distribute or credit, or
cause to be distributed or credited in the order of priority set forth in
Section 4.02 and then (A) to the Class R-2 Certificateholder, all cash on
hand in respect of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC and the Upper-Tier REMIC and (B) to the Class R-1
Certificateholder, all cash on hand in respect of the Class XX XXXXX
after such payment in clause (A) (other than cash retained to meet
claims) and the Trust shall terminate at such time.
(b) By their acceptance of Certificates, the Holders thereof
hereby agree to appoint the Securities Administrator as their attorney in fact
to: (i) designate such date of adoption of plans of complete liquidation and
(ii) to take such other action in connection therewith as may be reasonably
required to carry out such plans of complete liquidation all in accordance with
the terms hereof.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment. This Agreement may be amended from time
to time by the Depositor, the Servicer, the Securities Administrator and the
Trustee without the consent of the Certificateholders (i) to cure any ambiguity
or mistake, (ii) to correct, modify or supplement any provision herein which may
be inconsistent with any other provision herein or the Prospectus or the Private
Placement Memorandum, (iii) to make any other provisions with respect to matters
or questions arising under this Agreement, which are not materially inconsistent
with the provisions of this Agreement, (iv) to conform the obligations of the
parties under this Agreement, or to add obligations of the parties to this
Agreement, if necessary, to comply with the requirements of Regulation AB or (v)
to comply with any requirements imposed by the Code; provided, however, that any
such action listed in clause (iii) above shall not adversely affect in any
material respect the interests of any Certificateholder, as evidenced by (a)
delivery to the Depositor, the Servicer, the Securities Administrator and the
Trustee of written notification from each Rating Agency that provides, at the
request of the Depositor, a rating confirmation for each outstanding Class of
Certificates (other than the Class CE, Class P and Residual Certificates) to the
effect that such amendment will not cause such Rating Agency to lower or
withdrawal of the then current rating of such outstanding Classes of
Certificates with respect to which it is a Rating Agency, or (b) an Opinion of
Counsel delivered to the Servicer, the Securities Administrator and the Trustee.
In addition, this Agreement may be amended from time to time by
the Depositor, the Servicer, the Securities Administrator and the Trustee, with
the consent of the Majority Certificateholders for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Agreement or of modifying in any manner the rights of the Holders of
Certificates; provided, however, that no such amendment or waiver shall (x)
reduce in any manner the amount of, or delay the timing of, payments on the
Certificates which are required to be made on any Certificate without the
consent of the Holder of such Certificate, (y) adversely affect in any material
respect the interests of the Holders of any Class of Certificates in a manner
other than as described in clause (x) above, without the consent of the Holders
of Certificates of such Class aggregating at least 66 2/3% of the Voting
Interests evidenced by such Class, or (z) reduce the percentage of Voting
Interests required by clause (y) above without the consent of the Holders of all
Certificates of such Class then outstanding. Upon approval of an amendment, a
copy of such amendment shall be sent to the Rating Agencies. Prior to the
execution of any amendment to this Agreement, the Trustee and the Securities
Administrator will not consent to any amendment of the applicable Agreement
unless it shall first have received an Opinion of Counsel stating that the
execution of such amendment is authorized or permitted by this Agreement. Each
of the Securities Administrator and Trustee may, but shall not be obligated to,
enter into any such amendment which affects the Trustee's or Securities
Administrator's own rights, duties or immunities under this Agreement.
Notwithstanding any provision of this Agreement to the contrary,
neither the Securities Administrator, nor the Trustee shall consent to any
amendment to this Agreement unless it shall have first received an Opinion of
Counsel, delivered by (and at the expense of) the Person seeking such Amendment,
to the effect that such amendment will not result in the imposition of a tax on
any Trust REMIC pursuant to the REMIC Provisions or cause any Trust REMIC to
fail to qualify as a REMIC or the Grantor Trust to fail to qualify as a grantor
trust at any time that any Certificates are outstanding and that the amendment
is being made in accordance with the terms hereof.
Promptly after the execution of any such amendment the Securities
Administrator shall furnish, at the expense of the Person that requested the
amendment if such Person is the Servicer, or otherwise at the expense of the
Trust (but in no event at the expense of the Trustee), a copy of such amendment
and the Opinion of Counsel referred to in the immediately preceding paragraph to
the Servicer and each Rating Agency.
It shall not be necessary for the consent of Certificateholders
under this Section 11.01 to approve the particular form of any proposed
amendment; instead it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Securities Administrator may prescribe.
Notwithstanding any of the other provisions of this Section
11.01, so long as the Interest Rate Swap Agreement is in effect, none of the
Depositor, the Servicer, the Securities Administrator or the Trustee shall enter
into any amendment to, or otherwise modify the operation of, the following
without the prior written consent of the Swap Provider: (i) the definitions of
Available Funds, Interest Remittance Amount, Principal Remittance Amount, Swap
Provider Trigger Event, Supplemental Interest Trust Account and Termination
Price, (ii) Sections 11.01 and 11.10, (iii) Sections 4.01 and 4.02 and (iv)
Sections 3.04(b)(iii) and 3.04(h).
Section 11.02 Recordation of Agreement; Counterparts. To the
extent permitted by applicable law, this Agreement is subject to recordation in
all appropriate public offices for real property records in all the counties or
other comparable jurisdictions in which any or all of the properties subject to
the Mortgages are situated, and in any other appropriate public recording office
or elsewhere, such recordation to be effected by the Servicer at the expense of
the Trust, but only upon direction of Certificateholders, accompanied by an
Opinion of Counsel to the effect that such recordation materially and
beneficially affects the interests of the Certificateholders.
For the purpose of facilitating the recordation of this Agreement
as herein provided and for other purposes, this Agreement may be executed
simultaneously in any number of counterparts, each of which counterparts shall
be deemed to be an original, and such counterparts shall together constitute but
one and the same instrument.
Section 11.03 Limitation on Rights of Certificateholders. The
death or incapacity of any Certificateholder shall not (i) operate to terminate
this Agreement or the Trust, (ii) entitle such Certificateholder's legal
representatives or heirs to claim an accounting or to take any action or
proceeding in any court for a partition or winding up of the Trust, or (iii)
otherwise affect the rights, obligations and liabilities of the parties hereto
or any of them.
Except as expressly provided for herein, no Certificateholder
shall have any right to vote or in any manner otherwise control the operation
and management of the Trust, or the obligations of the parties hereto, nor shall
anything herein set forth or contained in the terms of the Certificates be
construed so as to constitute the Certificateholders from time to time as
partners or members of an association; nor shall any Certificateholder be under
any liability to any third person by reason of any action taken by the parties
to this Agreement pursuant to any provision hereof.
No Certificateholder shall have any right by virtue of any
provision of this Agreement to institute any suit, action or proceeding in
equity or at law upon or under or with respect to this Agreement, unless such
Holder previously shall have given to the Trustee a written notice of default
and of the continuance thereof, as herein provided, and unless also the Holders
of Certificates entitled to at least 25% of the Voting Interests shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for 60 days after
its receipt of such notice, request and offer of indemnity, shall have neglected
or refused to institute any such action, suit or proceeding. It is understood
and intended, and expressly covenanted by each Certificateholder with every
other Certificateholder and the Trustee, that no one or more Holders of
Certificates shall have any right in any manner whatever by virtue of any
provision of this Agreement to affect, disturb or prejudice the rights of the
Holders of any other of such Certificates, or to obtain or seek to obtain
priority over or preference to any other such Holder, which priority or
preference is not otherwise provided for herein, or to enforce any right under
this Agreement, except in the manner herein provided and for the equal, ratable
and common benefit of all Certificateholders. For the protection and enforcement
of the provisions of this Section 11.03 each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.04 Governing Law; Jurisdiction. This Agreement shall
be construed in accordance with the laws of the State of New York, and the
obligations, rights and remedies of the parties hereunder shall be determined in
accordance with such laws. With respect to any claim arising out of this
Agreement, each party irrevocably submits to the exclusive jurisdiction of the
courts of the State of New York and the United States District Court located in
the Borough of Manhattan in The City of New York, and each party irrevocably
waives any objection which it may have at any time to the laying of venue of any
suit, action or proceeding arising out of or relating hereto brought in any such
courts, irrevocably waives any claim that any such suit, action or proceeding
brought in any such court has been brought in any inconvenient forum and further
irrevocably waives the right to object, with respect to such claim, suit, action
or proceeding brought in any such court, that such court does not have
jurisdiction over such party, provided that service of process has been made by
any lawful means.
Section 11.05 Notices. All directions, demands and notices
hereunder shall be in writing and shall be deemed to have been duly given if
personally delivered at or mailed by first class mail, postage prepaid, or by
express delivery service, or, in the case of the Securities Administrator, sent
by facsimile, to (a) in the case of the Trustee, HSBC Bank USA, National
Association, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: WFHET
2006-2, or such other address as may hereafter be furnished to the Depositor,
the Securities Administrator and the Servicer in writing by the Trustee, (b) in
the case of the Depositor, Xxxxx Fargo Asset Securities Corporation, 0000 Xxx
Xxxxxxxxxx Xxx, Xxxxxxxxx, Xxxxxxxx 00000, Attention: Vice President, Structured
Finance, or such other address as may be furnished to the Servicer, the
Securities Administrator and the Trustee in writing by the Depositor, (c) in the
case of the Servicer, Xxxxx Fargo Bank, N.A., 000 Xxxxxxxxx 0xx Xxxxxx, Xxx
Xxxxxx, Xxxx 00000, Attention: Senior Vice President, Servicing, and Xxxxx Fargo
Bank, N.A., 1 Home Campus, Xxx Xxxxxx, Xxxx 00000 0001, Attention: Xxxx X.
Xxxxx, MAC X2401 042, or such other address as may be hereafter furnished to the
Depositor, the Trustee and the Securities Administrator by the Servicer in
writing and (d) in the case of the Securities Administrator, Xxxxx Fargo Bank,
N.A., 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 00000, Attention: Client
Manager-WFHET, Series 2006-2, or such other address as may be hereafter
furnished to the Depositor, the Trustee and the Servicer by the Securities
Administrator in writing or by facsimile at (000) 000-0000. Any notice required
or permitted to be mailed to a Certificateholder shall be given by first class
mail, postage prepaid, at the address of such Holder as shown in the Certificate
Register. Notice of any Servicer Event of Termination shall be given by telecopy
and by certified mail. Any notice so mailed within the time prescribed in this
Agreement shall be conclusively presumed to have duly been given when mailed,
whether or not the Certificateholder receives such notice. A copy of any notice
required to be telecopied hereunder shall also be mailed to the appropriate
party in the manner set forth above.
Section 11.06 Severability of Provisions. If any one or more of
the covenants, agreements, provisions or terms of this Agreement shall for any
reason whatsoever be held invalid, then such covenants, agreements, provisions
or terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 11.07 Article and Section References.
All article and section references used in this Agreement, unless
otherwise provided, are to articles and sections in this Agreement.
Section 11.08 Notice to the Rating Agencies. (a) Each of the
Trustee and the Securities Administrator shall be obligated to use its
reasonable efforts promptly to provide notice to the Rating Agencies with
respect to each of the following of which a Responsible Officer of the Trustee
or the Securities Administrator, as the case may be, has actual knowledge:
(i) any material change or amendment to this Agreement;
(ii) the occurrence of any Servicer Event of Termination that has
not been cured or waived;
(iii) assignment by the Servicer of its rights and delegation of
its duties pursuant to Section 6.02 or 6.05;
(iv) the resignation or termination of the Servicer, the
Securities Administrator or the Trustee;
(v) the appointment of any successor to the Servicer pursuant to
Sections 6.04 or 7.01; and
(vi) if the Trustee is acting as successor servicer pursuant to
Section 7.02 hereof, any event that would result in the inability of the
Trustee to make Advances.
(b) The Securities Administrator shall be obligated to use its reasonable
efforts promptly to provide notice to the Rating Agencies with respect to each
of the following of which a Responsible Officer of the Securities Administrator
has actual knowledge:
(i) the final payment to Holders of the Certificates of any
Class;
(ii) any change in the location of any Account; and
(iii) the resignation of the Custodian or the appointment of a
successor Custodian pursuant to the Custodial Agreement.
(c) In addition, the Securities Administrator shall promptly furnish to
each Rating Agency copies of the following:
(A) each annual statement as to compliance described in
Section 3.19 hereof;
(B) each annual independent public accountants' servicing
report described in Section 3.20 hereof; and
(C) each notice delivered pursuant to Section 7.01(a)
hereof which relates to the fact that the Servicer has not made
an Advance.
Any such notice pursuant to this Section 11.08 shall be in
writing and shall be deemed to have been duly given if personally delivered or
mailed by first class mail, postage prepaid, or by express delivery service to:
Fitch Ratings, Xxx Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Managing Director, Residential Mortgage-Backed Securities; Xxxxx'x Investors
Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Managing
Director, Residential Mortgage-Backed Securities; and Standard & Poor's, a
division of The XxXxxx-Xxxx Companies, Inc., 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Mortgage Surveillance Group.
Section 11.09 Further Assurances. Notwithstanding any other
provision of this Agreement, neither the Regular Certificateholders, the Holders
of the Class CE Certificates, the Securities Administrator nor the Trustee shall
have any obligation to consent to any amendment or modification of this
Agreement unless they have been provided reasonable security or indemnity
against their out-of-pocket expenses (including reasonable attorneys' fees) to
be incurred in connection therewith.
Section 11.10 Benefits of Agreement. Nothing in this Agreement or
in the Certificates, expressed or implied, shall give to any Person, other than
the Certificateholders and the parties hereto and their successors hereunder,
any benefit or any legal or equitable right, remedy or claim under this
Agreement, except that the Custodian is an express third party beneficiary of
this Agreement for purposes of Section 8.05.
The Swap Provider shall be deemed a third-party beneficiary of
this Agreement to the same extent as if it were a party hereto, and shall have
the right to enforce the provisions of this Agreement directly against the
parties to this Agreement.
Section 11.11 Acts of Certificateholders. (a) Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Agreement to be given or taken by the Certificateholders may be
embodied in and evidenced by one or more instruments of substantially similar
tenor signed by such Certificateholders in person or by agent duly appointed in
writing; and such action shall become effective when such instrument or
instruments are delivered to the Trustee, the Securities Administrator and the
Servicer. Such instrument or instruments (and the action embodied therein and
evidenced thereby) are herein sometimes referred to as the "act" of the
Certificateholders signing such instrument or instruments. Proof of execution of
any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Agreement and conclusive in favor of the
Securities Administrator, the Trustee and the Trust, if made in the manner
provided in this Section 11.11.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by the affidavit of a witness of such
execution or by the certificate of a notary public or other officer authorized
by law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Whenever
such execution is by a signer acting in a capacity other than his or her
individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or other action by any Certificateholder shall bind every future
Holder of such Certificate and the Holder of every Certificate issued upon the
registration of transfer thereof or in exchange therefor or in lieu thereof, in
respect of anything done, omitted or suffered to be done by the Trustee, the
Securities Administrator or the Trust in reliance thereon, whether or not
notation of such action is made upon such Certificate.
Section 11.12 Recharacterization.
The parties to this Agreement intend the conveyance by the
Depositor to the Trustee of all of its right, title and interest in and to the
Trust Fund pursuant to this Agreement to constitute a purchase and sale and not
a loan. Notwithstanding the foregoing, to the extent that such conveyance is
held not to constitute a sale under applicable law, it is intended that this
Agreement shall constitute a security agreement under applicable law and that
the Depositor shall be deemed to have granted to the Trustee a first priority
security interest in all of the Depositor's right, title and interest in and to
the Trust Fund. The Securities Administrator shall take all actions, including,
without limitation, filing any Uniform Commercial Code continuation statements,
as shall be necessary to perfect or maintain the perfection of such security
interest.
Section 11.13 Regulation AB Compliance; Intent of Parties;
Reasonableness.
The parties hereto acknowledge that interpretations of the
requirements of Regulation AB may change over time, whether due to interpretive
guidance provided by the Commission or its staff, consensus among participants
in the asset-backed securities markets, advice of counsel, or otherwise, and
agree to comply with requests made by the Depositor or the Securities
Administrator in good faith for delivery of information under these provisions
on the basis of evolving interpretations of Regulation AB. In connection with
the Trust, the parties hereto shall cooperate fully with the Securities
Administrator and the Depositor to deliver to the Securities Administrator
and/or the Depositor, any and all statements, reports, certifications, records
and any other information available to such party and reasonably necessary in
the good faith determination of the Depositor or the Securities Administrator to
permit the Depositor or the Securities Administrator to comply with the
provisions of Regulation AB, together with such disclosures reasonably believed
by the Depositor or the Securities Administrator to be necessary in order to
effect such compliance.
IN WITNESS WHEREOF, the Depositor, the Servicer, the Securities
Administrator and the Trustee have caused their names to be signed hereto by
their respective officers thereunto duly authorized, all as of the day and year
first above written.
XXXXX FARGO ASSET SECURITIES
CORPORATION, as Depositor
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXXXX FARGO BANK, N.A., as
Servicer
By: /s/ Xxxxxxx X. Xxxxx
--------------------
Name: Xxxxxxx X. Xxxxx
Title: Vice President
XXXXX FARGO BANK, N.A., as
Securities Administrator
By: /s/ Xxxxxxxx X. Xxxxxxxxxx
--------------------------
Name: Xxxxxxxx X. Xxxxxxxxxx
Title: Assistant Vice President
HSBC BANK USA, NATIONAL ASSOCIATION, as
Trustee
By: /s/ Xxxxxxxx Xxxxxxx
--------------------
Name: Xxxxxxxx Xxxxxxx
Title: Vice President
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXXXXX )
On the 29th day of June, 2006 before me, a notary public in and
for said State, personally appeared Xxxxxxx X. Xxxxx, known to me to be a Vice
President of Xxxxx Fargo Asset Securities Corporation, a Delaware corporation,
that executed the within instrument, and also known to me to be the person who
executed it on behalf of said corporation, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXXXXXXX )
On the 29th day of June, 2006 before me, a notary public in
and for said State, personally appeared Xxxxxxx X. Xxxxx, known to me to be a
Vice President of Xxxxx Fargo Bank, N.A., a national banking association, that
executed the within instrument, and also known to me to be the person who
executed it on behalf of said association, and acknowledged to me that such
corporation executed the within instrument.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my
official seal the day and year in this certificate first above written.
Notary Public
STATE OF MARYLAND )
) ss.:
COUNTY OF XXXX ARUNDEL )
On the 29th day of June, 2006, before me, a notary public in and
for said State, personally appeared Xxxxxxxx Xxxxxxxxxx, known to me to be an
Assistant Vice President of Xxxxx Fargo Bank, National Association, one of the
national banking associations that executed the within instrument, and also
known to me to be the person who executed it on behalf of said national banking
association, and acknowledged to me that such national banking association
executed the within instrument.
Notary Public
STATE OF NEW YORK )
ss.:
COUNTY OF NEW YORK )
On this 29th day of June, 2006, before me, a notary public in and
for the State of New York, personally appeared Xxxxxxxx Xxxxxxx, known to me
who, being by me duly sworn, did depose and say that he resides at Huntington,
New York; that he is a Vice President of HSBC Bank USA, National Association, a
national banking association, one of the parties that executed the foregoing
instrument; and that s/he signed his name thereto by order of the Board of
Directors of said corporation.
-------------------------
Notary Public
[NOTARIAL SEAL]
EXHIBIT A-1
[FORM OF THE CLASS A-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS A-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class A-1 Original Principal Balance of the
Class A-1 Certificates as of the
Pass-Through Rate: Floating Closing Date: $369,249,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AA 9
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class A-1 Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-1
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Xxxxx Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class A-1 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class A-1 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class A-1 Certificates for each
Distribution Date will be the lesser of (i) the Class A-1 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class A-1 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
A-1 Certificates.
The Class A-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Securities Administrator and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to the Voting Interests
identified in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
-----------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as Certificate
Registrar
By:
------------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-2
[FORM OF THE CLASS A-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS A-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class A-2 Original Principal Balance of the
Class A-2 Certificates as of the
Pass-Through Rate: Floating Closing Date: $89,966,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
No. Association
CUSIP: 9497EA AB 7 Closing Date: June 29, 2006
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class A-2 Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-2
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Xxxxx Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class A-2 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class A-2 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class A-2 Certificates for each
Distribution Date will be the lesser of (i) the Class A-2 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class A-2 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
A-2 Certificates.
The Class A-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Securities Administrator and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to the Voting Interests
identified in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-3
[FORM OF THE CLASS A-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS A-3
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class A-3 Original Principal Balance of the
Class A-3 Certificates as of the
Pass-Through Rate: Floating Closing Date: $134,092,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AC 5
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class A-3 Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-3
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Xxxxx Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class A-3 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class A-3 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class A-3 Certificates for each
Distribution Date will be the lesser of (i) the Class A-3 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class A-3 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
A-3 Certificates.
The Class A-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Securities Administrator and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to the Voting Interests
identified in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT A-4
[FORM OF THE CLASS A-4 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS A-4
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class A-4 Original Principal Balance of the
Class A-4 Certificates as of the
Pass-Through Rate: Floating Closing Date: $66,317,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AD 3
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _______________ is the registered owner of a
Percentage Interest (obtained by dividing the Initial Principal Balance of this
Certificate by the Original Principal Balance of the Class A-4 Certificates) in
that certain beneficial ownership interest evidenced by all the Class A-4
Certificates in the Trust Fund created pursuant to a Pooling and Servicing
Agreement, dated as specified above (the "Agreement"), among Xxxxx Fargo Asset
Securities Corporation (hereinafter called the "Depositor," which term includes
any successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class A-4 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class A-4 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class A-4 Certificates for each
Distribution Date will be the lesser of (i) the Class A-4 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class A-4 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
A-4 Certificates.
The Class A-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Securities Administrator and the Trustee and the
rights of the Certificateholders under the Agreement at any time by the
Depositor, the Servicer, the Securities Administrator and the Trustee with the
consent of the Holders of Certificates entitled to the Voting Interests
identified in the Agreement. Any such consent by the Holder of this Certificate
shall be conclusive and binding on such Holder and upon all future Holders of
this Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-1
[FORM OF CLASS M-1 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR
CERTIFICATES AS DESCRIBED IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-1 Original Principal Balance of the
Class M-1 Certificates as of the
Pass-Through Rate: Floating Closing Date: $30,001,000.009
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AE 1
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-1
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-1 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-1 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-1 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-1 Certificates for each
Distribution Date will be the lesser of (i) the Class M-1 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-1 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-1 Certificates.
The Class M-1 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-2
[FORM OF CLASS M-2 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR AND
CLASS M-1 CERTIFICATES AS DESCRIBED IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-2 Original Principal Balance of the
Class M-2 Certificates as of the
Pass-Through Rate: Floating Closing Date: $25,542,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AF 8
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-2
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-2 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-2 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-2 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-2 Certificates for each
Distribution Date will be the lesser of (i) the Class M-2 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-2 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-2 Certificates.
The Class M-2 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior Certificates and Class M-1 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-3
[FORM OF CLASS M-3 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1 AND CLASS M-2 CERTIFICATES AS DESCRIBED IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-3
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-3 Original Principal Balance of the
Class M-3 Certificates as of the
Pass-Through Rate: Floating Closing Date: $14,595,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AG 6
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-3
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-3 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-3 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-3 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-3 Certificates for each
Distribution Date will be the lesser of (i) the Class M-3 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-3 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-3 Certificates.
The Class M-3 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class M-1 and Class M-2 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain
limitations therein set forth, the transfer of this Certificate is registrable
in the Certificate Register upon surrender of this Certificate for registration
of transfer at the offices or agencies as provided in the Agreement, duly
endorsed by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-4
[FORM OF CLASS M-4 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1, CLASS M-2 AND CLASS M-3 CERTIFICATES AS DESCRIBED IN THE
AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-4
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-4 Original Principal Balance of the
Class M-4 Certificates as of the
Pass-Through Rate: Floating Closing Date: $12,974,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AH 4
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-4
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-4 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-4 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-4 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-4 Certificates for each
Distribution Date will be the lesser of (i) the Class M-4 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-4 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-4 Certificates.
The Class M-4 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class M-1, Class M-2 and Class M-3 Certificates as described in the
Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-5
[FORM OF CLASS M-5 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1, CLASS M-2, CLASS M-3 AND CLASS M-4 CERTIFICATES AS DESCRIBED
IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-5
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-5 Original Principal Balance of the
Class M-5 Certificates as of the
Pass-Through Rate: Floating Closing Date: $12,974,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AJ 0
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-5
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-5 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-5 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-5 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-5 Certificates for each
Distribution Date will be the lesser of (i) the Class M-5 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-5 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-5 Certificates.
The Class M-5 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class X-0, Xxxxx X-0, Class M-3 and Class M-4 Certificates as described
in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-6
[FORM OF CLASS M-6 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4 AND CLASS M-5 CERTIFICATES
AS DESCRIBED IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-6
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-6 Original Principal Balance of the
Class M-6 Certificates as of the
Pass-Through Rate: Floating Closing Date: $11,757,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AK 7
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-6
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-6 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-6 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-6 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-6 Certificates for each
Distribution Date will be the lesser of (i) the Class M-6 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-6 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-6 Certificates.
The Class M-6 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class X-0, Xxxxx X-0, Class M-3, Class M-4 and Class M-5 Certificates as
described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-7
[FORM OF CLASS M-7 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5 AND CLASS M-6
CERTIFICATES AS DESCRIBED IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-7
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-7 Original Principal Balance of the
Class M-7 Certificates as of the
Pass-Through Rate: Floating Closing Date: $11,352,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AL 5
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-7
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-7 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-7 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-7 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-7 Certificates for each
Distribution Date will be the lesser of (i) the Class M-7 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-7 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-7 Certificates.
The Class M-7 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5 and Class M-6
Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-8
[FORM OF CLASS M-8 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, CLASS M-6 AND
CLASS M-7 CERTIFICATES AS DESCRIBED IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-8
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-8 Original Principal Balance of the
Class M-8 Certificates as of the
Pass-Through Rate: Floating Closing Date: $8,919,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AM 3
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-8
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-8 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-8 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-8 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-8 Certificates for each
Distribution Date will be the lesser of (i) the Class M-8 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-8 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-8 Certificates.
The Class M-8 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6 and
Class M-7 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-9
[FORM OF CLASS M-9 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, CLASS M-6, CLASS
M-7 AND CLASS M-8 CERTIFICATES AS DESCRIBED IN THE AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-9
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-9 Original Principal Balance of the
Class M-9 Certificates as of the
Pass-Through Rate: Floating Closing Date: $4,460,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AN 1
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-9
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-9 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-9 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-9 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-9 Certificates for each
Distribution Date will be the lesser of (i) the Class M-9 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-9 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-9 Certificates.
The Class M-9 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7 and Class M-8 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT B-10
[FORM OF CLASS M-10 CERTIFICATE]
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE
TRUSTEE OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR
PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED
REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH
OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR
TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE
& CO., HAS AN INTEREST HEREIN.
THIS CERTIFICATE IS SUBORDINATED IN RIGHT OF PAYMENT TO THE SENIOR,
CLASS M-1, CLASS M-2, CLASS M-3, CLASS M-4, CLASS M-5, CLASS M-6, CLASS
M-7, CLASS M-8 AND CLASS M-9 CERTIFICATES AS DESCRIBED IN THE
AGREEMENT.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS
BENEFICIAL OWNERSHIP OF A "REGULAR INTEREST" IN A "REAL ESTATE MORTGAGE
INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN
SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE") AND CERTAIN OTHER PROPERTY.
THIS CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY
IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
THE INITIAL PURCHASER IN THIS CERTIFICATE, AND EACH SUBSEQUENT
PURCHASER OF THIS CERTIFICATE, BY PURCHASING THIS CERTIFICATE OR AN
INTEREST HEREIN, IS DEEMED TO HAVE AGREED TO COMPLY WITH CERTAIN
TRANSFER REQUIREMENTS SET FORTH IN THE AGREEMENT.
UNDER CURRENT LAW THE PURCHASE AND HOLDING OF THIS CERTIFICATE BY OR ON
BEHALF OF ANY EMPLOYEE BENEFIT PLAN OR ARRANGEMENT, INCLUDING AN
INDIVIDUAL RETIREMENT ACCOUNT, SUBJECT TO THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"), THE CODE OR ANY
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") WHICH IS SIMILAR TO ERISA
OR THE CODE (COLLECTIVELY, A "PLAN"), MAY RESULT IN "PROHIBITED
TRANSACTIONS" WITHIN THE MEANING OF ERISA, THE CODE OR SIMILAR LAW.
TRANSFER OF THIS CERTIFICATE WILL NOT BE MADE UNLESS THE TRANSFEREE
DELIVERS TO THE CERTIFICATE REGISTRAR AND DEPOSITOR EITHER (I) A
REPRESENTATION LETTER, IN FORM AND SUBSTANCE SATISFACTORY TO THE
CERTIFICATE REGISTRAR AND THE DEPOSITOR, STATING THAT (A) IT IS NOT,
AND IS NOT ACTING ON BEHALF OF, ANY SUCH PLAN OR USING THE ASSETS OF
ANY SUCH PLAN TO EFFECT SUCH PURCHASE OR (B) IF IT IS AN INSURANCE
COMPANY, THAT THE SOURCE OF FUNDS USED TO PURCHASE THIS CERTIFICATE IS
AN "INSURANCE COMPANY GENERAL ACCOUNT" (AS SUCH TERM IS DEFINED IN
SECTION V(E) OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60 ("PTE
95-60"), 60 FED. REG. 35925 (JULY 12, 1995)), THERE IS NO PLAN WITH
RESPECT TO WHICH THE AMOUNT OF SUCH GENERAL ACCOUNT'S RESERVES AND
LIABILITIES FOR THE CONTRACT(S) HELD BY OR ON BEHALF OF SUCH PLAN AND
ALL OTHER PLANS MAINTAINED BY THE SAME EMPLOYER (OR AFFILIATE THEREOF
AS DEFINED IN SECTION V(A)(1) OF PTE 95-60) OR BY THE SAME EMPLOYEE
ORGANIZATION EXCEEDS 10% OF THE TOTAL OF ALL RESERVES AND LIABILITIES
OF SUCH GENERAL ACCOUNT (AS SUCH AMOUNTS ARE DETERMINED UNDER SECTION
I(A) OF PTE 95-60) AT THE DATE OF ACQUISITION AND ALL PLANS THAT HAVE
AN INTEREST IN SUCH GENERAL ACCOUNT ARE PLANS TO WHICH PTE 95-60
APPLIES, OR (II) AN OPINION OF COUNSEL, IN FORM AND SUBSTANCE
SATISFACTORY TO THE CERTIFICATE REGISTRAR AND THE DEPOSITOR, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF THIS CERTIFICATE BY OR ON BEHALF
OF SUCH PLAN WILL NOT CONSTITUTE OR RESULT IN A NON-EXEMPT PROHIBITED
TRANSACTION WITHIN THE MEANING OF ERISA, SECTION 4975 OF THE CODE OR
SIMILAR LAW AND WILL NOT SUBJECT THE DEPOSITOR, THE SERVICER, THE
SECURITIES ADMINISTRATOR, THE TRUSTEE OR THE CERTIFICATE REGISTRAR TO
ANY OBLIGATION IN ADDITION TO THOSE UNDERTAKEN IN THE AGREEMENT. EACH
PERSON WHO ACQUIRES THIS CERTIFICATE OR ANY INTEREST THEREIN SHALL BE
DEEMED TO HAVE MADE THE REPRESENTATIONS REQUIRED BY THE REPRESENTATION
LETTER REFERRED TO IN THE PRECEDING SENTENCE, UNLESS SUCH PERSON SHALL
HAVE PROVIDED SUCH REPRESENTATION LETTER OR THE OPINION OF COUNSEL
REFERRED TO IN THE PRECEDING SENTENCE TO THE CERTIFICATE REGISTRAR AND
DEPOSITOR. THE AGREEMENT PROVIDES THAT ANY ATTEMPTED OR PURPORTED
TRANSFER IN VIOLATION OF THESE TRANSFER RESTRICTIONS WILL BE NULL AND
VOID AND WILL VEST NO RIGHTS IN ANY PURPORTED TRANSFEREE.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS M-10
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class M-10 Original Principal Balance of the
Class M-10 Certificates as of the
Pass-Through Rate: Floating Closing Date: $8,108,000.00
Date of Pooling and Servicing Agreement: Initial Principal Balance: $
June 29, 2006
Servicer: Xxxxx Fargo Bank, N.A.
First Distribution Date: July 25, 2006
Trustee: HSBC Bank USA, National
Association
No.
Closing Date: June 29, 2006
CUSIP: 9497EA AP 6
DISTRIBUTIONS IN REDUCTION OF THE PRINCIPAL BALANCE OF THIS CERTIFICATE
MAY BE MADE MONTHLY AS SET FORTH HEREIN. ACCORDINGLY, THE OUTSTANDING
PRINCIPAL BALANCE HEREOF AT ANY TIME MAY BE LESS THAN THE AMOUNT SHOWN
ABOVE.
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _________________ is the registered owner of
a Percentage Interest (obtained by dividing the Initial Principal Balance of
this Certificate by the Original Principal Balance of the Class M-10
Certificates) in that certain beneficial ownership interest evidenced by all the
Class M-10 Certificates in the Trust Fund created pursuant to a Pooling and
Servicing Agreement, dated as specified above (the "Agreement"), among Xxxxx
Fargo Asset Securities Corporation (hereinafter called the "Depositor," which
term includes any successor entity under the Agreement), the Servicer, the
Securities Administrator and the Trustee, a summary of certain of the pertinent
provisions of which is set forth hereafter. To the extent not defined herein,
the capitalized terms used herein have the meanings assigned in the Agreement.
This Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class M-10 Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class M-10 Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
The Pass-Through Rate for the Class M-10 Certificates for each
Distribution Date will be the lesser of (i) the Class M-10 Formula Rate and (ii)
the Pool Cap. Interest will accrue on the Class M-10 Certificates during each
Interest Accrual Period at the Pass-Through Rate.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing a Percentage Interest in the Class
M-10 Certificates.
The Class M-10 Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
This certificate is subordinated in right of payment to the
Senior, Class X-0, Xxxxx X-0, Class M-3, Class M-4, Class M-5, Class M-6, Class
M-7, Class M-8 and Class M-9 Certificates as described in the Agreement.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. If a transfer of this Certificate is to be made
without registration under the 1933 Act, then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) certain certificate(s) required pursuant to Section 5.02
of the Agreement (as to which, so long as this Certificate is a Book-Entry
Certificate, the representations and agreements made therein will be deemed to
have been made by the prospective transferor and/or the prospective transferee,
as applicable). None of the Depositor, the Certificate Registrar, the Securities
Administrator or the Trustee is obligated to register or qualify the Class of
Certificates specified on the face hereof under the 1933 Act or any other
securities law or to take any action not otherwise required under the Agreement
to permit the transfer of such Certificates without registration or
qualification. Any transferor desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate
Registrar, the Securities Administrator and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-1
[FORM OF CLASS CE CERTIFICATES]
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS A
DIRECT OR INDIRECT BENEFICIAL INTEREST IN A "REGULAR INTEREST" IN A
"REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS THOSE TERMS ARE DEFINED,
RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE INTERNAL REVENUE CODE OF
1986, AS AMENDED (THE "CODE") AND CERTAIN OTHER PROPERTY.
THIS CLASS CE CERTIFICATE IS SUBORDINATE TO THE SENIOR CERTIFICATES AND
THE CLASS M CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN
AND IN THE AGREEMENT.
THIS CLASS CE CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE AGREEMENT.
THIS CLASS CE CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION
OF THIS CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE
MADE ONLY IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR
ANY MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL
LAW WILL BE REGISTERED.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS CE
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class CE Servicer: Xxxxx Fargo Bank, N.A.
ate of Pooling and Servicing Agreement: Trustee: HSBC Bank USA, National
June 29, 2006 Association
First Distribution Date: July 25, 2006 Closing Date: June 29, 2006
Percentage Interest: 100%
No.
CUSIP: 9497EA AQ 4
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that __________________________________ is the
registered owner of the Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class CE Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Xxxxx Fargo Asset Securities
Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in an amount equal to the product of the Percentage Interest evidenced
by this Certificate and the amount required to be distributed to the Holders of
Class CE Certificates on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class CE Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest specified on
the face hereof.
The Class CE Certificates are limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein
provided, the amendment thereof and the modification of the rights and
obligations of the Depositor, the Servicer, the Trustee and the rights of the
Certificateholders under the Agreement at any time by the Depositor, the
Servicer, the Securities Administrator and the Trustee with the consent of the
Holders of Certificates entitled to the Voting Interests identified in the
Agreement. Any such consent by the Holder of this Certificate shall be
conclusive and binding on such Holder and upon all future Holders of this
Certificate and of any Certificate issued upon the transfer hereof or in
exchange herefor or in lieu hereof whether or not notation of such consent is
made upon this Certificate. The Agreement also permits the amendment thereof, in
certain limited circumstances, without the consent of the Holders of any of the
Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. If a transfer of this Certificate is to be made
without registration under the 1933 Act, then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) certain certificate(s) required pursuant to Section 5.02
of the Agreement. None of the Depositor, the Certificate Registrar, the
Securities Administrator or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any transferor desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate
Registrar, the Securities Administrator and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Securities Administrator may
require payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in connection with any transfer or exchange of
Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assume no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Date of Authentication:
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-2
[FORM OF CLASS P CERTIFICATE]
THIS CLASS P CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE SECURITIES
LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS
CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE MADE ONLY
IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
THIS CLASS P CERTIFICATE IS ONLY ENTITLED TO PREPAYMENT PENALTIES ON
THE MORTGAGE LOANS, ORIGINATOR PREPAYMENT PENALTY PAYMENT AMOUNTS AND
SERVICER PREPAYMENT PENALTY PAYMENT AMOUNTS, ALL AS MORE SPECIFICALLY
DESCRIBED IN THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR
ANY MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL
LAW WILL BE REGISTERED.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS P
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class P Servicer: Xxxxx Fargo Bank, N.A.
Date of Pooling and Servicing Agreement: Trustee: HSBC Bank USA, National
June 29, 2006 Association
First Distribution Date: July 25, 2006 Closing Date: June 29, 2006
No. Percentage Interest: 100%
CUSIP: 9497EA AR 2
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that __________________________________ is the
registered owner of the Percentage Interest set forth above in that certain
beneficial ownership interest evidenced by all the Class P Certificates in the
Trust Fund created pursuant to a Pooling and Servicing Agreement, dated as
specified above (the "Agreement"), among Xxxxx Fargo Asset Securities
Corporation (hereinafter called the "Depositor," which term includes any
successor entity under the Agreement), the Servicer, the Securities
Administrator and the Trustee, a summary of certain of the pertinent provisions
of which is set forth hereafter. To the extent not defined herein, the
capitalized terms used herein have the meanings assigned in the Agreement. This
Certificate is issued under and is subject to the terms, provisions and
conditions of the Agreement, to which Agreement the Holder of this Certificate
by virtue of the acceptance hereof assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from Prepayment Penalties,
Servicer Prepayment Penalty Payment Amounts and Originator Prepayment Penalty
Payment Amounts in the Distribution Account in an amount equal to the product of
the Percentage Interest evidenced by this Certificate and the amount required to
be distributed to the Holders of Class P Certificates on such Distribution Date
pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class P Certificates, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest specified on
the face hereof.
The Class P Certificates are limited in right of payment to
Prepayment Penalties received on the Mortgage Loans, Originator Prepayment
Penalty Payment Amounts and Servicer Prepayment Penalty Payment Amounts, all as
more specifically set forth in the Agreement. As provided in the Agreement,
withdrawals from the Collection Account and the Distribution Account may be made
from time to time for purposes other than distributions to Certificateholders,
such purposes including reimbursement of advances made, or certain expenses
incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies as provided in the Agreement, duly endorsed
by, or accompanied by an assignment in the form below or other written
instrument of transfer in form satisfactory to the Trustee, the Securities
Administrator and the Certificate Registrar duly executed by, the Holder hereof
or such Holder's attorney duly authorized in writing, and thereupon one or more
new Certificates of the same Class in authorized denominations evidencing the
same aggregate Percentage Interest will be issued to the designated transferee
or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. If a transfer of this Certificate is to be made
without registration under the 1933 Act, then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) certain certificate(s) required pursuant to Section 5.02
of the Agreement. None of the Depositor, the Certificate Registrar, the
Securities Administrator or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any transferor desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate
Registrar, the Securities Administrator and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar or any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Date of Authentication:
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-3
[FORM OF CLASS R-1 CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN A "REAL ESTATE MORTGAGE INVESTMENT CONDUIT," AS
THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G AND 860D OF THE
INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R-1 CERTIFICATE IS SUBORDINATE TO THE SENIOR, CLASS M AND
CLASS CE CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND
IN THE AGREEMENT.
THIS CLASS R-1 CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE AGREEMENT.
THIS CLASS R-1 CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION
OF THIS CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE
MADE ONLY IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR
ANY MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL
LAW WILL BE REGISTERED.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-1 CERTIFICATE
MAY BE MADE ONLY IF (1) THE PROPOSED TRANSFEREE PROVIDES AN AFFIDAVIT
TO THE CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), (D) AN
AGENT OF A DISQUALIFIED ORGANIZATION OR (E) ANY PERSON THAT CAUSES
INCOME FROM THIS CERTIFICATE TO BE ATTRIBUTABLE TO A FOREIGN PERMANENT
ESTABLISHMENT OR FIXED BASE, WITHIN THE MEANING OF AN APPLICABLE INCOME
TAX TREATY, OF THAT PERSON OR ANY OTHER U.S. PERSON AND (2) NO PURPOSE
OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND
(3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R-1 CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
THE CLASS R-1 CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE
DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CLASS R-1 CERTIFICATE.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS R-1
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class R-1 Servicer: Xxxxx Fargo Bank, N.A.
Date of Pooling and Servicing Agreement: Trustee: HSBC Bank USA, National
June 29, 2006 Association
First Distribution Date: July 25, 2006 Closing Date: June 29, 2006
No. Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _______________________ is the registered
owner of the Percentage Interest set forth above in that certain beneficial
ownership interest evidenced by the Class R-1 Certificate in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Xxxxx Fargo Asset Securities Corporation (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Securities Administrator and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in the amount required to be distributed to the Holder of Class R-1
Certificate on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class R-1 Certificate, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest specified on
the face hereof.
The Class R-1 Certificate is limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Securities
Administrator, the Securities Administrator and the Certificate Registrar duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. If a transfer of this Certificate is to be made
without registration under the 1933 Act, then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) certain certificate(s) required pursuant to Section 5.02
of the Agreement. None of the Depositor, the Certificate Registrar, the
Securities Administrator or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any transferor desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate
Registrar, the Securities Administrator and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
The Holder of this Certificate, by its acceptance hereof, shall
be deemed for all purposes to have consented to the provisions of Section 5.02
of the Agreement and to any amendment of the Agreement deemed necessary by
counsel of the Depositor to ensure that the transfer of this Certificate to any
Person other than a Permitted Transferee or any other Person will not cause the
Trust to cease to qualify as five separate REMICs or cause the imposition of a
tax upon the Trust.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Date of Authentication:
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT C-4
[FORM OF CLASS R-2 CERTIFICATE]
THIS CERTIFICATE MAY NOT BE TRANSFERRED TO A NON-UNITED STATES PERSON.
FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS THE
"RESIDUAL INTEREST" IN EACH OF FOUR "REAL ESTATE MORTGAGE INVESTMENT
CONDUITS," AS THOSE TERMS ARE DEFINED, RESPECTIVELY, IN SECTIONS 860G
AND 860D OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED (THE "CODE").
THIS CLASS R-2 CERTIFICATE IS SUBORDINATE TO THE SENIOR, CLASS M AND
CLASS CE CERTIFICATES OF THIS SERIES TO THE EXTENT DESCRIBED HEREIN AND
IN THE AGREEMENT.
THIS CLASS R-2 CERTIFICATE WILL NOT BE ENTITLED TO PAYMENTS UNTIL SUCH
TIME AS DESCRIBED IN THE AGREEMENT.
THIS CLASS R-2 CERTIFICATE HAS NOT BEEN REGISTERED OR QUALIFIED UNDER
THE SECURITIES ACT OF 1933, AS AMENDED (THE "1933 ACT"), OR THE
SECURITIES LAWS OF ANY STATE. ANY RESALE, TRANSFER OR OTHER DISPOSITION
OF THIS CERTIFICATE WITHOUT SUCH REGISTRATION OR QUALIFICATION MAY BE
MADE ONLY IN A TRANSACTION THAT DOES NOT REQUIRE SUCH REGISTRATION OR
QUALIFICATION AND IN ACCORDANCE WITH THE PROVISIONS OF SECTION 5.02 OF
THE AGREEMENT.
NO TRANSFER OF THIS CERTIFICATE TO AN EMPLOYEE BENEFIT PLAN OR OTHER
RETIREMENT ARRANGEMENT SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT
INCOME SECURITY ACT OF 1974, AS AMENDED, SECTION 4975 OF THE CODE OR
ANY MATERIALLY SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL
LAW WILL BE REGISTERED.
ANY RESALE, TRANSFER OR OTHER DISPOSITION OF THIS CLASS R-2 CERTIFICATE
MAY BE MADE ONLY IF (1) THE PROPOSED TRANSFEREE PROVIDES AN AFFIDAVIT
TO THE CERTIFICATE REGISTRAR THAT SUCH TRANSFEREE IS NOT (A) THE UNITED
STATES, ANY STATE OR POLITICAL SUBDIVISION THEREOF, ANY FOREIGN
GOVERNMENT, ANY INTERNATIONAL ORGANIZATION, OR ANY AGENCY OR
INSTRUMENTALITY OF ANY OF THE FOREGOING, (B) ANY ORGANIZATION (OTHER
THAN A COOPERATIVE DESCRIBED IN SECTION 521 OF THE CODE) WHICH IS
EXEMPT FROM THE TAX IMPOSED BY CHAPTER 1 OF THE CODE UNLESS SUCH
ORGANIZATION IS SUBJECT TO THE TAX IMPOSED BY SECTION 511 OF THE CODE,
(C) ANY ORGANIZATION DESCRIBED IN SECTION 1381(a)(2)(C) OF THE CODE
(ANY SUCH PERSON DESCRIBED IN THE FOREGOING CLAUSES (A), (B) OR (C)
BEING HEREINAFTER REFERRED TO AS A "DISQUALIFIED ORGANIZATION"), (D) AN
AGENT OF A DISQUALIFIED ORGANIZATION OR (E) ANY PERSON THAT CAUSES
INCOME FROM THIS CERTIFICATE TO BE ATTRIBUTABLE TO A FOREIGN PERMANENT
ESTABLISHMENT OR FIXED BASE, WITHIN THE MEANING OF AN APPLICABLE INCOME
TAX TREATY, OF THAT PERSON OR ANY OTHER U.S. PERSON AND (2) NO PURPOSE
OF SUCH TRANSFER IS TO IMPEDE THE ASSESSMENT OR COLLECTION OF TAX, AND
(3) SUCH TRANSFEREE SATISFIES CERTAIN ADDITIONAL CONDITIONS RELATING TO
THE FINANCIAL CONDITION OF THE PROPOSED TRANSFEREE. NOTWITHSTANDING THE
REGISTRATION IN THE CERTIFICATE REGISTER OR ANY TRANSFER, SALE OR OTHER
DISPOSITION OF THIS CLASS R-2 CERTIFICATE TO A DISQUALIFIED
ORGANIZATION OR AN AGENT OF A DISQUALIFIED ORGANIZATION, SUCH
REGISTRATION SHALL BE DEEMED TO BE OF NO LEGAL FORCE OR EFFECT
WHATSOEVER AND SUCH PERSON SHALL NOT BE DEEMED TO BE A
CERTIFICATEHOLDER FOR ANY PURPOSE HEREUNDER, INCLUDING, BUT NOT LIMITED
TO, THE RECEIPT OF DISTRIBUTIONS ON THIS CERTIFICATE. EACH HOLDER OF
THE CLASS R-2 CERTIFICATE BY ACCEPTANCE OF THIS CERTIFICATE SHALL BE
DEEMED TO HAVE CONSENTED TO THE PROVISIONS OF THIS PARAGRAPH AND THE
PROVISIONS OF SECTION 5.02 OF THE AGREEMENT. ANY PERSON THAT IS A
DISQUALIFIED ORGANIZATION IS PROHIBITED FROM ACQUIRING BENEFICIAL
OWNERSHIP OF THIS CLASS R-2 CERTIFICATE.
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET-BACKED CERTIFICATES
SERIES 2006-2, CLASS R-2
evidencing a beneficial ownership interest in a Trust Fund consisting primarily
of a pool of fixed-rate and adjustable-rate one- to four-family first lien
mortgage loans formed and sold by
XXXXX FARGO ASSET SECURITIES CORPORATION
Series 2006-2, Class R-2 Servicer: Xxxxx Fargo Bank, N.A.
Date of Pooling and Servicing Agreement: Trustee: HSBC Bank USA, National
June 29, 2006 Association
First Distribution Date: July 25, 2006 Closing Date: June 29, 2006
No. Percentage Interest: 100%
THIS CERTIFICATE DOES NOT REPRESENT AN OBLIGATION OF OR INTEREST IN
XXXXX FARGO ASSET SECURITIES CORPORATION, THE SERVICER, THE TRUSTEE,
THE SECURITIES ADMINISTRATOR OR ANY OF THEIR AFFILIATES. THIS
CERTIFICATE IS NOT GUARANTEED BY ANY AGENCY OR INSTRUMENTALITY OF THE
UNITED STATES OR ANY OTHER ENTITY.
This certifies that _______________________ is the registered
owner of the Percentage Interest set forth above in that certain beneficial
ownership interest evidenced by the Class R-2 Certificate in the Trust Fund
created pursuant to a Pooling and Servicing Agreement, dated as specified above
(the "Agreement"), among Xxxxx Fargo Asset Securities Corporation (hereinafter
called the "Depositor," which term includes any successor entity under the
Agreement), the Servicer, the Securities Administrator and the Trustee, a
summary of certain of the pertinent provisions of which is set forth hereafter.
To the extent not defined herein, the capitalized terms used herein have the
meanings assigned in the Agreement. This Certificate is issued under and is
subject to the terms, provisions and conditions of the Agreement, to which
Agreement the Holder of this Certificate by virtue of the acceptance hereof
assents and by which such Holder is bound.
Pursuant to the terms of the Agreement, distributions will be
made on the 25th day of each month or, if such 25th day is not a Business Day,
the Business Day immediately following (a "Distribution Date"), commencing on
the first Distribution Date specified above, to the Person in whose name this
Certificate is registered on the Record Date, from funds in the Distribution
Account in the amount required to be distributed to the Holder of Class R-2
Certificate on such Distribution Date pursuant to the Agreement.
All distributions to the Holder of this Certificate under the
Agreement will be made or caused to be made by or on behalf of the Securities
Administrator by wire transfer in immediately available funds to the account of
the Person entitled thereto if such Person shall have so notified the
Certificate Registrar in writing at least seven Business Days prior to the
Record Date immediately prior to such Distribution Date and is the registered
owner of Class R-2 Certificate, or by check mailed by first class mail to the
address of the Person entitled thereto, as such name and address shall appear on
the Certificate Register, provided that the Certificate Registrar may deduct a
reasonable wire transfer fee from any payment made by wire transfer.
Notwithstanding the above, the final distribution on this Certificate will be
made after due notice by the Securities Administrator of the pendency of such
distribution and only upon presentation and surrender of this Certificate at the
office or agency appointed by the Securities Administrator for that purpose as
provided in the Agreement.
This Certificate is one of a duly authorized issue of
Certificates designated as Xxxxx Fargo Asset Securities Corporation, Home Equity
Asset Backed Certificates of the Series specified on the face hereof (herein
called the "Certificates") and representing the Percentage Interest specified on
the face hereof.
The Class R-2 Certificate is limited in right of payment to
certain collections and recoveries respecting the Mortgage Loans, all as more
specifically set forth herein and in the Agreement. As provided in the
Agreement, withdrawals from the Collection Account and the Distribution Account
may be made from time to time for purposes other than distributions to
Certificateholders, such purposes including reimbursement of advances made, or
certain expenses incurred, with respect to the Mortgage Loans.
The Agreement permits, with certain exceptions therein provided,
the amendment thereof and the modification of the rights and obligations of the
Depositor, the Servicer, the Trustee and the rights of the Certificateholders
under the Agreement at any time by the Depositor, the Servicer, the Securities
Administrator and the Trustee with the consent of the Holders of Certificates
entitled to the Voting Interests identified in the Agreement. Any such consent
by the Holder of this Certificate shall be conclusive and binding on such Holder
and upon all future Holders of this Certificate and of any Certificate issued
upon the transfer hereof or in exchange herefor or in lieu hereof whether or not
notation of such consent is made upon this Certificate. The Agreement also
permits the amendment thereof, in certain limited circumstances, without the
consent of the Holders of any of the Certificates.
As provided in the Agreement and subject to certain limitations
therein set forth, the transfer of this Certificate is registrable in the
Certificate Register upon surrender of this Certificate for registration of
transfer at the offices or agencies appointed by the Trustee as provided in the
Agreement, duly endorsed by, or accompanied by an assignment in the form below
or other written instrument of transfer in form satisfactory to the Securities
Administrator, the Securities Administrator and the Certificate Registrar duly
executed by, the Holder hereof or such Holder's attorney duly authorized in
writing, and thereupon one or more new Certificates of the same Class in
authorized denominations evidencing the same aggregate Percentage Interest will
be issued to the designated transferee or transferees.
The Certificates are issuable in fully registered form only
without coupons in Percentage Interests representing denominations as specified
in the Agreement. As provided in the Agreement and subject to certain
limitations therein set forth, Certificates are exchangeable for new
Certificates of the same Class in authorized denominations evidencing the same
aggregate Percentage Interest, as requested by the Holder surrendering the same.
No transfer of this Certificate shall be made unless that
transfer is made pursuant to an effective registration statement under the 1933
Act and effective registration or qualification under applicable state
securities laws, or is made in a transaction that does not require such
registration or qualification. If a transfer of this Certificate is to be made
without registration under the 1933 Act, then the Certificate Registrar shall
refuse to register such transfer unless it receives (and upon receipt, may
conclusively rely upon) certain certificate(s) required pursuant to Section 5.02
of the Agreement. None of the Depositor, the Certificate Registrar, the
Securities Administrator or the Trustee is obligated to register or qualify the
Class of Certificates specified on the face hereof under the 1933 Act or any
other securities law or to take any action not otherwise required under the
Agreement to permit the transfer of such Certificates without registration or
qualification. Any transferor desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Certificate
Registrar, the Securities Administrator and the Servicer against any liability
that may result if the transfer is not so exempt or is not made in accordance
with such federal and state laws.
The Holder of this Certificate, by its acceptance hereof, shall
be deemed for all purposes to have consented to the provisions of Section 5.02
of the Agreement and to any amendment of the Agreement deemed necessary by
counsel of the Depositor to ensure that the transfer of this Certificate to any
Person other than a Permitted Transferee or any other Person will not cause the
Trust to cease to qualify as five separate REMICs or cause the imposition of a
tax upon the Trust.
No service charge will be made for any such registration of
transfer or exchange of Certificates, but the Certificate Registrar may require
payment of a sum sufficient to cover any tax or other governmental charge that
may be imposed in connection with any transfer or exchange of Certificates.
The Depositor, the Servicer, the Trustee, the Securities
Administrator and the Certificate Registrar and any agent of the Depositor, the
Servicer, the Trustee, the Securities Administrator or the Certificate Registrar
may treat the Person in whose name this Certificate is registered as the owner
hereof for all purposes, and none of the Depositor, the Servicer, the Trustee,
the Securities Administrator, the Certificate Registrar nor any such agent shall
be affected by notice to the contrary.
The obligations created by the Agreement and the Trust Fund
created thereby shall terminate upon payment to the Certificateholders of all
amounts held on behalf of the Trustee and required to be paid to them pursuant
to the Agreement following the earlier of (i) the final payment or other
liquidation (or any advance with respect thereto) of the last Mortgage Loan
remaining in the Trust Fund, and (ii) the purchase by the party designated in
the Agreement at a price determined as provided in the Agreement from the Trust
Fund of all Mortgage Loans and all property acquired in respect of such Mortgage
Loans. The Agreement permits, but does not require, the party designated in the
Agreement, subject to certain conditions set forth in Article X of the
Agreement, to purchase from the Trust Fund all Mortgage Loans and all property
acquired in respect of any Mortgage Loan at the Termination Price on the
Optional Termination Date. The exercise of such right will effect early
retirement of the Certificates.
The recitals contained herein shall be taken as statements of the
Depositor and the Securities Administrator assumes no responsibility for their
correctness.
Unless the certificate of authentication hereon has been executed
by the Certificate Registrar, by manual signature, this Certificate shall not be
entitled to any benefit under the Agreement or be valid for any purpose.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
Xxxxx Fargo Bank, N.A., as Securities
Administrator
By:
--------------------------------
Authorized Officer
CERTIFICATE OF AUTHENTICATION
-----------------------------
This is one of the Certificates referred to in the within-
mentioned Agreement.
Xxxxx Fargo Bank, N.A., as
Certificate Registrar
By:
----------------------------------
Authorized Signatory
Date of Authentication:
ABBREVIATIONS
The following abbreviations, when used in the inscription on the
face of this instrument, shall be construed as though they were written out in
full according to applicable laws or regulations:
TEN COM - as tenants in common UNIF GIFT MIN ACT - Custodian
---------
TEN ENT - as tenants by the entireties (Cust) (Minor)
under Uniform
JT TEN - as joint tenants with right Gifts to Minors
of survivorship and not as Act
tenants in common _______________
(State)
Additional abbreviations may also be used though not in the above
list.
ASSIGNMENT
----------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________________
________________________________________________________________________________
(Please print or typewrite name, address including postal zip code, and Taxpayer
Identification Number of assignee) _____________________________________________
a Percentage Interest equal to ____% evidenced by the within asset-backed
Certificate and hereby authorize(s) the registration of transfer of such
interest to assignee on the Certificate Register of the Trust Fund.
I (we) further direct the Certificate Registrar to issue a new
Certificate of a like Percentage Interest and Class to the above named assignee
and deliver such Certificate to the following address:
________________________________________________________________________________
Dated:
---------------------------------------
Signature by or on behalf of assignor
---------------------------------------
Signature Guaranteed
DISTRIBUTION INSTRUCTIONS
The assignee should include the following for purposes of
distribution:
Distributions shall be made, by wire transfer or otherwise, in
immediately available funds to _________________________________________________
________________________________________________________________________________
for the account of _______________________________, account number ____________.
or, if mailed by check, to ____________________________________________________,
Applicable statements should be mailed to_______________________________________
This information is provided by _______________________________________________,
the assignee named above, or ________________________________________, as its
agent.
EXHIBIT D
Addresses for Requesting Mortgage Loan Schedule
In the case of the Depositor:
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Attention: Vice President - Structured Finance
In the case of the Securities Administrator:
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000-0000
Attention: Client Manager - WFHET 2006-2
EXHIBIT E
FORM OF REQUEST FOR RELEASE
Xxxxx Fargo Bank, N.A.
0000 00xx Xxxxxx Xxxxxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000
Attention: WFHET Series 2006-2
Re: Pooling and Servicing Agreement dated as of June 29, 2006
among Xxxxx Fargo Asset Securities Corporation, as
depositor, Xxxxx Fargo Bank, N.A., as servicer, Xxxxx Fargo
Bank, National Association, as securities administrator and
HSBC Bank USA, National Association, as trustee
-----------------------------------------------------------
All capitalized terms used herein shall have the means ascribed
to them in the Pooling and Servicing Agreement (the "Agreement") referenced
above.
In connection with the administration of the Mortgage Loans held
by you as Custodian pursuant to the Agreement, we request the release, and
hereby acknowledge receipt, of the Custodian's Mortgage File for the Mortgage
Loan described below, for the reason indicated.
Mortgage Loan Number:
--------------------
Mortgagor Name, Address & Zip Code:
----------------------------------
Reason for Requesting Documents (check one):
-------------------------------------------
_____ 1. Mortgage Paid in Full
_____ 2. Foreclosure
_____ 3. Substitution
_____ 4. Other Liquidation (Repurchases, etc.)
_____ 5. Nonliquidation Reason: _________________________
By:______________________________
(authorized signer)
Issuer:__________________________
Address:_________________________
_________________________________
Date:____________________________
Custodian
---------
[_______________________________]
Please acknowledge the execution of the above request by
your signature and date below:
_____________________________ ______________
Signature Date
Documents returned to Custodian:
______________________________ ______________
Custodian Date
EXHIBIT F-1
FORM OF CUSTODIAN'S INITIAL CERTIFICATION
Date
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager- WFHET Series 2006-2
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: WFHET 2006-2
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of June 29, 2006 among Xxxxx Fargo
Asset Securities Corporation, as depositor, Xxxxx Fargo
Bank, N.A., as servicer, Xxxxx Fargo Bank, National
Association, as securities administrator and HSBC Bank USA,
National Association, as trustee, with respect to Xxxxx
Fargo Asset Securities Corporation, Home Equity Asset
Backed Certificates, Series 2006-2
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Custodian, hereby certifies that it has received
original Mortgage Note (as described in Section 2.01(a)(i)) relating to each
Mortgage Loan listed in the Mortgage Loan Schedule as defined in the Pooling and
Servicing Agreement, subject to any exceptions noted on Schedule I hereto.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement in connection with this initial
certification. The Custodian makes no representations as to: (i) the validity,
legality, sufficiency, enforceability, recordability or genuineness of any of
the documents contained in each Mortgage File or any of the Mortgage Loans
identified in the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein and not otherwise
defined herein shall have the respective meanings assigned to them in the
Pooling and Servicing Agreement. This Certificate is subject in all respects to
the terms of Section 2.02 of the Pooling and Servicing Agreement and the Pooling
and Servicing Agreement sections cross-referenced therein.
XXXXX FARGO BANK, N.A.
as Custodian
By:
______________________________________
Name:
Title:
EXHIBIT F-2
FORM OF CUSTODIAN'S FINAL CERTIFICATION
[Date]
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxx Xxxx
Xxxxxxxx, Xxxxxxxx 00000
Attention: Client Manager- WFHET Series 2006-2
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Xxxxx Fargo Bank, N.A.
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
HSBC Bank USA, National Association
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: WFHET 2006-2
Re: Pooling and Servicing Agreement (the "Pooling and Servicing
Agreement"), dated as of June 29, 2006 among Xxxxx Fargo
Asset Securities Corporation, as depositor, Xxxxx Fargo
Bank, N.A., as servicer, Xxxxx Fargo Bank, National
Association, as securities administrator and HSBC Bank USA,
National Association, as trustee, with respect to Xxxxx
Fargo Asset Securities Corporation, Home Equity Asset
Backed Certificates, Series 2006-2
-----------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the Pooling and Servicing
Agreement, the undersigned, as Trustee, hereby certifies that as to each
Mortgage Loan listed in the Mortgage Loan Schedule as defined in the Pooling and
Servicing Agreement (other than any Mortgage Loan paid in full or listed on
Schedule I hereto), it has received the applicable documents listed in Section
2.01(a) of the Pooling and Servicing Agreement.
The undersigned hereby certifies that as to each Mortgage Loan
identified on the Mortgage Loan Schedules, other than any Mortgage Loan listed
on Schedule I hereto, it has reviewed the applicable documents listed in Section
2.01 of the Pooling and Servicing Agreement and has determined that each such
document appears to have been executed and appear regular on their face, and
that such documents relate to the Mortgage Loans identified in the Mortgage Loan
Schedule based on a comparison of the Mortgage Loan identifying number,
Mortgagor name and street address.
The Custodian has made no independent examination of any
documents contained in each Mortgage File beyond the review specifically
required in the Pooling and Servicing Agreement in connection with this final
certification. The Custodian makes no representations as to: (i) the validity,
legality, sufficiency, enforceability, recordability or genuineness of any of
the documents contained in each Mortgage File or any of the Mortgage Loans
identified in the Mortgage Loan Schedule or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Capitalized words and phrases used herein shall have the
respective meanings assigned to them in the Pooling and Servicing Agreement.
This Certificate is qualified in all respects by the terms of said Pooling and
Servicing Agreement.
XXXXX FARGO BANK, N.A.,
as Custodian
By:
______________________________________
Name:
Title:
EXHIBIT G
FORM OF MORTGAGE LOAN PURCHASE AGREEMENT
[Included as Exhibit 10.1 to the Current Report on Form 8-K pursuant to
which this Pooling and Servicing Agreement is filed]
EXHIBIT H
FORM OF LOST NOTE AFFIDAVIT
Personally appeared before me the undersigned authority to
administer oaths, ______________________ who first being duly sworn deposes and
says: Deponent is ______________________ of ______________________________,
successor by merger to _________________________________________ ("Seller") and
who has personal knowledge of the facts set out in this affidavit.
On ___________________, _________________________ did execute and
deliver a promissory note in the principal amount of $__________.
That said note has been misplaced or lost through causes unknown
and is presently lost and unavailable after diligent search has been made.
Seller's records show that an amount of principal and interest on said note is
still presently outstanding, due, and unpaid, and Seller is still owner and
holder in due course of said lost note.
Seller executes this Affidavit for the purpose of inducing
[_______________________________], as trustee on behalf of Xxxxx Fargo Asset
Securities Corporation, Home Equity Asset Backed Certificates, Series 2006-2, to
accept the transfer of the above described loan from Seller.
Seller agrees to indemnify and hold harmless
[____________________________] and Xxxxx Fargo Asset Securities Corporation for
any losses incurred by such parties resulting from the above described
promissory note has been lost or misplaced.
By:___________________________
______________________________
STATE OF )
) SS:
COUNTY OF )
On this ____ day of _______ 20__, before me, a Notary Public, in
and for said County and State, appeared ________________________, who
acknowledged the extension of the foregoing and who, having been duly sworn,
states that any representations therein contained are true.
Witness my hand and Notarial Seal this ____ day of _______ 20__.
__________________________________
__________________________________
__________________________________
My commission expires____________.
EXHIBIT I
FORM OF ERISA REPRESENTATION LETTER
Xxxxx Fargo Bank, X.X.
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Client Manager - WFHET, Series 2006-2
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Xxxxx Fargo Asset Securities Corporation,
Home Equity Asset Backed Certificates, Series 2006-2
----------------------------------------------------
Ladies and Gentlemen:
1. [The undersigned is the ______________________ of (the
"Transferee") a [corporation duly organized] and existing under the laws of
__________, on behalf of which he makes this affidavit.] [The undersigned,
___________________, is the transferee (the "Transferee").]
2. The Transferee hereby acknowledges that under the terms of the
Pooling and Servicing Agreement (the "Agreement") among Xxxxx Fargo Asset
Securities Corporation, as depositor (the "Depositor"), Xxxxx Fargo Bank, N.A.,
as servicer, Xxxxx Fargo Bank, National Association, as securities
administrator, and HSBC Bank USA, National Association, as trustee (the
"Trustee"), no transfer of the ERISA-Restricted Certificates shall be permitted
to be made to any person unless the Depositor and the Certificate Registrar (as
defined in the Agreement) have received a certificate from such transferee in
the form hereof.
3. The Transferee either (x) (i) is not an employee benefit plan
subject to Section 406 or Section 407 of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA"), or Section 4975 of the Internal Revenue Code
of 1986, as amended (the "Code") or any materially similar provisions of
applicable federal, state or local law ("Similar Law"), the Trustee of any such
plan or other than (except in the case of the Class CE, Class P, Class R-1 or
Class R-2 Certificates) an insurance company that represents (or is deemed to
represent) that (i) the source of funds used to purchase the Certificates is an
"insurance company general account" (as such term is defined in Section V(e) of
PTE 95-60, 60 Fed. Reg. 35925 (July 12, 1995)), (ii) that there is no Plan with
respect to which the amount of such general account's reserves and liabilities
for the contract(s) held by or on behalf of such Plan and all other Plans
maintained by the same employer (or affiliate thereof as defined in Section
V(a)(1) of PTE 95-60) or by the same employee organization exceeds 10% of the
total of all reserves and liabilities of such general account (as such amounts
are determined under Section I(a) of PTE 95-60) at the date of acquisition and
(iii) all Plans that have an interest in such general account are Plans to which
PTE 95-60 applies, or (y) (except in the case of the Class CE, Class P, Class
R-1 or Class R-2 Certificates) shall deliver to the Certificate Registrar and
the Depositor an opinion of counsel (a "Benefit Plan Opinion") satisfactory to
the Certificate Registrar, and upon which the Certificate Registrar and the
Depositor shall be entitled to rely, to the effect that the purchase or holding
of such Certificate by the Transferee will not constitute or otherwise result in
a non-exempt prohibited transaction within the meaning of ERISA or Section 4975
of the Code (or similar provisions of Similar Law) and will not subject the
Trustee, the Securities Administrator or the Depositor to any obligation in
addition to those undertaken by such entities in the Pooling and Servicing
Agreement, which opinion of counsel shall not be an expense of the Trustee, the
Securities Administrator, the Depositor or the Certificate Registrar.
Capitalized terms used but not defined herein shall have the
meanings ascribed to such terms in the Agreement.
IN WITNESS WHEREOF, the Transferee has executed this certificate.
_________________________________________
[Transferee]
By:______________________________________
Name:
Title:
EXHIBIT J
FORM OF RULE 144A INVESTMENT LETTER
[DATE]
Xxxxx Fargo Bank, X.X.
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Client Manager - WFHET, Series 2006-2
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Xxxxx Fargo Asset Securities Corporation,
Home Equity Asset Backed Certificates, Series 2006-2
----------------------------------------------------
Ladies and Gentlemen:
In connection with our acquisition of the Xxxxx Fargo Asset
Securities Corporation, Home Equity Asset Backed Certificates, Series 2006-2
(the "Certificates"), we certify that (a) we understand that the Certificates
are not being registered under the Securities Act of 1933, as amended (the
"Act"), or any state securities laws and are being transferred to us in a
transaction that is exempt from the registration requirements of the Act and any
such laws, (b) we have had the opportunity to ask questions of and receive
answers from the Depositor concerning the purchase of the Certificates and all
matters relating thereto or any additional information deemed necessary to our
decision to purchase the Certificates, (c) we have not, nor has anyone acting on
our behalf offered, transferred, pledged, sold or otherwise disposed of the
Certificates, any interest in the Certificates or any other similar security to,
or solicited any offer to buy or accept a transfer, pledge or other disposition
of the Certificates, any interest in the Certificates or any other similar
security from, or otherwise approached or negotiated with respect to the
Certificates, any interest in the Certificates or any other similar security
with, any person in any manner, or made any general solicitation by means of
general advertising or in any other manner, or taken any other action, that
would constitute a distribution of the Certificates under the Securities Act or
that would render the disposition of the Certificates a violation of Section 5
of the Securities Act or require registration pursuant thereto, nor will act,
nor has authorized or will authorize any person to act, in such manner with
respect to the Certificates, (d) we are a "qualified institutional buyer" as
that term is defined in Rule 144A under the Securities Act and have completed
either of the forms of certification to that effect attached hereto as Annex 1
or Annex 2. We are aware that the sale to us is being made in reliance on Rule
144A. We are acquiring the Certificates for our own account or for resale
pursuant to Rule 144A and further, understand that such Certificates may be
resold, pledged or transferred only (i) to a person reasonably believed to be a
qualified institutional buyer that purchases for its own account or for the
account of a qualified institutional buyer to whom notice is given that the
resale, pledge or transfer is being made in reliance on Rule 144A, or (ii)
pursuant to another exemption from registration under the Securities Act.
Very truly yours,
[NAME OF TRANSFEREE]
By:______________________________________
Authorized Officer
ANNEX 1 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
--------------------------------------------------------
[For Transferees Other Than Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
i. As indicated below, the undersigned is the President, Chief
Financial Officer, Senior Vice President or other executive officer of the
Buyer.
ii. In connection with purchases by the Buyer, the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because (i) the Buyer owned
and/or invested on a discretionary basis $_______(1) in securities (except for
the excluded securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance with Rule 144A
and (ii) the Buyer satisfies the criteria in the category marked below.
___ Corporation, etc. The Buyer is a corporation (other than a
bank, savings and loan association or similar institution),
Massachusetts or similar business trust, partnership, or
charitable organization described in Section 501(c)(3) of the
Internal Revenue Code of 1986, as amended.
___ Bank. The Buyer (a) is a national bank or banking institution
organized under the laws of any State, territory or the District
of Columbia, the business of which is substantially confined to
banking and is supervised by the State or territorial banking
commission or similar official or is a foreign bank or equivalent
institution, and (b) has an audited net worth of at least
$25,000,000 as demonstrated in its latest annual financial
statements, a copy of which is attached hereto.
___ Savings and Loan. The Buyer (a) is a savings and loan
association, building and loan association, cooperative bank,
homestead association or similar institution, which is supervised
and examined by a State or Federal authority having supervision
over any such institutions or is a foreign savings and loan
association or equivalent institution and (b) has an audited net
worth of at least $25,000,000 as demonstrated in its latest
annual financial statements, a copy of which is attached hereto.
___ Broker-dealer. The Buyer is a dealer registered pursuant to
Section 15 of the Securities Exchange Act of 1934.
___ Insurance Company. The Buyer is an insurance company whose
primary and predominant business activity is the writing of
insurance or the reinsuring of risks underwritten by insurance
companies and which is subject to supervision by the insurance
commissioner or a similar official or agency of a State,
territory or the District of Columbia.
___ State or Local Plan. The Buyer is a plan established and
maintained by a State, its political subdivisions, or any agency
or instrumentality of the State or its political subdivisions,
for the benefit of its employees.
___ ERISA Plan. The Buyer is an employee benefit plan within the
meaning of Title I of the Employee Retirement Income Security Act
of 1974.
___ Investment Advisor. The Buyer is an investment advisor
registered under the Investment Advisors Act of 1940.
___ Small Business Investment Company. Buyer is a small business
investment company licensed by the U.S. Small Business
Administration under Section 301(c) or (d) of the Small Business
Investment Act of 1958.
___ Business Development Company. Buyer is a business development
company as defined in Section 202(a)(22) of the Investment
Advisors Act of 1940.
iii. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer, (ii) securities that
are part of an unsold allotment to or subscription by the Buyer, if the Buyer is
a dealer, (iii) securities issued or guaranteed by the U.S. or any
instrumentality thereof, (iv) bank deposit notes and certificates of deposit,
(v) loan participations, (vi) repurchase agreements, (vii) securities owned but
subject to a repurchase agreement and (viii) currency, interest rate and
commodity swaps.
iv. For purposes of determining the aggregate amount of
securities owned and/or invested on a discretionary basis by the Buyer, the
Buyer used the cost of such securities to the Buyer and did not include any of
the securities referred to in the preceding paragraph, except (i) where the
Buyer reports its securities holdings in its financial statements on the basis
of their market value, and (ii) no current information with respect to the cost
of those securities has been published. If clause (ii) in the preceding sentence
applies, the securities may be valued at market. Further, in determining such
aggregate amount, the Buyer may have included securities owned by subsidiaries
of the Buyer, but only if such subsidiaries are consolidated with the Buyer in
its financial statements prepared in accordance with generally accepted
accounting principles and if the investments of such subsidiaries are managed
under the Buyer's direction. However, such securities were not included if the
Buyer is a majority-owned, consolidated subsidiary of another enterprise and the
Buyer is not itself a reporting company under the Securities Exchange Act of
1934, as amended.
v. The Buyer acknowledges that it is familiar with Rule 144A and
understands that the seller to it and other parties related to the Certificates
are relying and will continue to rely on the statements made herein because one
or more sales to the Buyer may be in reliance on Rule 144A.
vi. Until the date of purchase of the Rule 144A Securities, the
Buyer will notify each of the parties to which this certification is made of any
changes in the information and conclusions herein. Until such notice is given,
the Buyer's purchase of the Certificates will constitute a reaffirmation of this
certification as of the date of such purchase. In addition, if the Buyer is a
bank or savings and loan is provided above, the Buyer agrees that it will
furnish to such parties updated annual financial statements promptly after they
become available.
----------------------
(1) Buyer must own and/or invest on a discretionary basis at least $__________
in securities unless Buyer is a dealer, and, in that case, Buyer must own and/or
invest on a discretionary basis at least $__________ in securities.
________________________________________
Print Name of Buyer
By:____________________________________
Name:
Title:
Date:__________________________________
ANNEX 2 TO EXHIBIT J
QUALIFIED INSTITUTIONAL BUYER STATUS UNDER SEC RULE 144A
[For Transferees That are Registered Investment Companies]
The undersigned (the "Buyer") hereby certifies as follows to the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates with respect to the Certificates described therein:
1. As indicated below, the undersigned is the President, Chief
Financial Officer or Senior Vice President of the Buyer or, if the Buyer is a
"qualified institutional buyer" as that term is defined in Rule 144A under the
Securities Act of 1933, as amended ("Rule 144A") because Buyer is part of a
Family of Investment Companies (as defined below), is such an officer of the
Adviser.
2. In connection with purchases by Buyer, the Buyer is a
"qualified institutional buyer" as defined in SEC Rule 144A because (i) the
Buyer is an investment company registered under the Investment Company Act of
1940, as amended and (ii) as marked below, the Buyer alone, or the Buyer's
Family of Investment Companies, owned at least $100,000,000 in securities (other
than the excluded securities referred to below) as of the end of the Buyer's
most recent fiscal year. For purposes of determining the amount of securities
owned by the Buyer or the Buyer's Family of Investment Companies, the cost of
such securities was used, except (i) where the Buyer or the Buyer's Family of
Investment Companies reports its securities holdings in its financial statements
on the basis of their market value, and (ii) no current information with respect
to the cost of those securities has been published. If clause (ii) in the
preceding sentence applies, the securities may be valued at market.
___ The Buyer owned $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
___ The Buyer is part of a Family of Investment Companies which
owned in the aggregate $ in securities (other than the excluded
securities referred to below) as of the end of the Buyer's most
recent fiscal year (such amount being calculated in accordance
with Rule 144A).
3. The term "Family of Investment Companies" as used herein means
two or more registered investment companies (or series thereof) that have the
same investment adviser or investment advisers that are affiliated (by virtue of
being majority owned subsidiaries of the same parent or because one investment
adviser is a majority owned subsidiary of the other).
4. The term "securities" as used herein does not include (i)
securities of issuers that are affiliated with the Buyer or are part of the
Buyer's Family of Investment Companies, (ii) securities issued or guaranteed by
the U.S. or any instrumentality thereof, (iii) bank deposit notes and
certificates of deposit, (iv) loan participations, (v) repurchase agreements,
(vi) securities owned but subject to a repurchase agreement and (vii) currency,
interest rate and commodity swaps.
5. The Buyer is familiar with Rule 144A and understands that the
parties listed in the Rule 144A Transferee Certificate to which this
certification relates are relying and will continue to rely on the statements
made herein because one or more sales to the Buyer will be in reliance on Rule
144A. In addition, the Buyer will only purchase for the Buyer's own account.
6. Until the date of purchase of the Certificates, the
undersigned will notify the parties listed in the Rule 144A Transferee
Certificate to which this certification relates of any changes in the
information and conclusions herein. Until such notice is given, the Buyer's
purchase of the Certificates will constitute a reaffirmation of this
certification by the undersigned as of the date of such purchase.
________________________________________
Print Name of Buyer or Adviser
By:_____________________________________
Name:
Title:
IF AN ADVISER:
________________________________________
Print Name of Buyer
Date:____________________________________
EXHIBIT K
FORM OF RESIDUAL CERTIFICATE TRANSFER AFFIDAVIT
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET BACKED CERTIFICATES, SERIES 2006-2
STATE OF )
) ss.:
COUNTY OF )
The undersigned, being first duly sworn, deposes and says as
follows:
1. The undersigned is [an officer of] , the proposed Transferee
of an Ownership Interest in the Class [R-1][R-2] Certificates (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement, (the
"Agreement"), relating to the above-referenced Certificates, among Xxxxx Fargo
Asset Securities Corporation, as depositor, Xxxxx Fargo Bank, N.A., as servicer,
Xxxxx Fargo Bank, National Association, as securities administrator, and
[_______________________________], as trustee (the "Trustee"). Capitalized terms
used, but not defined herein shall have the meanings ascribed to such terms in
the Agreement. The Transferee has authorized the undersigned to make this
affidavit on behalf of the Transferee.
2. The Transferee is, as of the date hereof, and will be, as of
the date of the Transfer, a Permitted Transferee. The Transferee is acquiring
its Ownership Interest in the Certificates either (i) for its own account or
(ii) as nominee, trustee or agent for another Person and has attached hereto an
affidavit from such Person in substantially the same form as this affidavit. The
Transferee has no knowledge that any such affidavit is false.
3. The Transferee has been advised of, and understands that (i) a
tax will be imposed on Transfers of the Certificate to Persons that are
Disqualified Organization; (ii) such tax will be imposed on the transferor, or,
if such Transfer is through an agent (which includes a broker, nominee or
middleman) for a Person that is a Disqualified Organization, on the agent; and
(iii) the Person otherwise liable for the tax shall be relieved of liability for
the tax if the subsequent Transferee furnished to such Person an affidavit that
such subsequent Transferee is not a Disqualified Organization and, at the time
of Transfer, such Person does not have actual knowledge that the affidavit is
false.
4. The Transferee has been advised of, and understands that a tax
will be imposed on a "pass-through entity" holding the Certificate if at any
time during the taxable year of the pass-through entity a Person that is a
Disqualified Organization is the record holder of an interest in such entity.
The Transferee understands that such tax will not be imposed for any period with
respect to which the record holder furnishes to the pass-through entity an
affidavit that such record holder is not a Disqualified Organization and the
pass-through entity does not have actual knowledge that such affidavit is false.
(For this purpose, a "pass-through entity" includes a regulated investment
company, a real estate investment trust or common trust fund, a partnership,
trust or estate, and certain cooperatives and, except as may be provided in
Treasury Regulations, persons holding interests in pass-through entities as a
nominee for another Person.)
5. The Transferee has reviewed the provisions of Section 5.02 of
the Agreement and understands the legal consequences of the acquisition of an
Ownership Interest in the Certificate including, without limitation, the
restrictions on subsequent Transfers and the provisions regarding voiding the
Transfer and mandatory sales. The Transferee expressly agrees to be bound by and
to abide by the provisions of Section 5.02 of the Agreement and the restrictions
noted on the face of the Certificate. The Transferee understands and agrees that
any breach of any of the representations included herein shall render the
Transfer to the Transferee contemplated hereby null and void.
6. The Transferee agrees to require a Transfer Affidavit from any
Person to whom the Transferee attempts to Transfer its Ownership Interest in the
Certificate, and in connection with any Transfer by a Person for whom the
Transferee is acting as nominee, trustee or agent, and the Transferee will not
Transfer its Ownership Interest or cause any Ownership Interest to be
Transferred to any Person that the Transferee knows is not a Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate to
the effect that such Transferee has no actual knowledge that the Person to which
the Transfer is to be made is not a Permitted Transferee.
7. The Transferee does not have the intention to impede the
assessment or collection of any tax legally required to be paid with respect to
the Certificate.
8. The Transferee's taxpayer identification number is .
9. The Transferee is a U.S. Person as defined in Code Section
7701(a)(30).
10. The Transferee is aware that the Certificate may be a
"noneconomic residual interest" within the meaning of Treasury regulations
promulgated pursuant to the Code and that the transferor of a noneconomic
residual interest will remain liable for any taxes due with respect to the
income on such residual interest, unless no significant purpose of the transfer
was to impede the assessment or collection of tax.
11. That the Transferee will not cause income from the Class
[R-1][R-2] Certificate to be attributable to a foreign permanent establishment
or fixed base, within the meaning of an applicable income tax treaty, of the
Transferee or any other U.S. Person.
12. That, if the Transferee is purchasing the Class [R-1][R-2]
Certificate in a transfer intended to meet the safe harbor provisions of
Treasury Regulations Sections 1.860E-1(c), the Transferee has executed and
attached Attachment A hereto.
13. The Transferee is not an employee benefit plan that is
subject to ERISA or a plan that is subject to Section 4975 of the Code or a plan
or arrangement subject to any materially similar provisions of applicable
federal, state or local law, nor are we acting on behalf of such a plan.
IN WITNESS WHEREOF, the Transferee has caused this instrument to
be executed on its behalf, pursuant to authority of its Board of Directors, by
its duly authorized officer, duly attested, this day of , 20 .
[NAME OF TRANSFEREE]
By:_____________________________________
Name:
Title:
[Corporate Seal]
ATTEST:
[Assistant] Secretary
Personally appeared before me the above-named , known or proved
to me to be the same person who executed the foregoing instrument and to be the
of the Transferee, and acknowledged that he executed the same as his free act
and deed and the free act and deed of the Transferee.
Subscribed and sworn before me this ____ day of ________, 20 __.
_____________________________
NOTARY PUBLIC
My Commission expires
the ____ day of _________, 20__.
ATTACHMENT A
to
AFFIDAVIT PURSUANT TO SECTION 860E(e)(4) OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
Check the appropriate box:
[ ] The consideration paid to the Transferee to acquire the Class [R-1][R-2]
Certificate equals or exceeds the excess of (a) the present value of the
anticipated tax liabilities over (b) the present value of the anticipated
savings associated with holding such Certificate, in each case calculated in
accordance with U.S. Treasury Regulations Sections 1.860E-1(c)(7) and (8),
computing present values using a discount rate equal to the short-term Federal
rate prescribed by Section 1274(d) of the Code and the compounding period used
by the Transferee.
OR
[ ] The transfer of the Class [R-1][R-2] Certificate complies with U.S.
Treasury Regulations Sections 1.860E-1(c)(5) and (6) and, accordingly:
(i) the Transferee is an "eligible corporation," as defined in
U.S. Treasury Regulations Section 1.860E-1(c)(6)(i), as to which income
from Class [R-1][R-2] Certificate will only be taxed in the United
States;
(ii) at the time of the transfer, and at the close of the
Transferee's two fiscal years preceding the year of the transfer, the
Transferee had gross assets for financial reporting purposes (excluding
any obligation of a person related to the Transferee within the meaning
of U.S. Treasury Regulations Section 1.860E-1(c)(6)(ii)) in excess of
$100 million and net assets in excess of $10 million;
(iii) the Transferee will transfer the Class [R-1][R-2]
Certificate only to another "eligible corporation," as defined in U.S.
Treasury Regulations Section 1.860E-1(c)(6)(i), in a transaction that
satisfies the requirements of Sections 1.860E-1(c)(4)(i), (ii) and (iii)
and Section 1.860E-1(c)(5) of the U.S. Treasury Regulations;
(iv) the Transferee has determined the consideration paid to it
to acquire the Class [R-1][R-2] Certificate based on reasonable market
assumptions (including, but not limited to, borrowing and investment
rates, prepayment and loss assumptions, expense and reinvestment
assumptions, tax rates and other factors specific to the Transferee)
that it has determined in good faith; and
(v) in the event of any transfer of the Class [R-1][R-2]
Certificate by the Transferee, the Transferee will require its
transferee to complete a representation in the form of this Attachment A
as a condition of the transferee's purchase of the Class [R-1][R-2]
Certificate.
EXHIBIT L
FORM OF TRANSFEROR CERTIFICATE FOR THE CLASS M-10, CLASS CE AND
CLASS P CERTIFICATES
[DATE]
Xxxxx Fargo Bank, X.X.
Xxxxx Fargo Center
Xxxxx Xxxxxx xxx Xxxxxxxxx Xxxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attention: Client Manager - WFHET, Series 2006-2
Xxxxx Fargo Asset Securities Corporation
0000 Xxx Xxxxxxxxxx Xxx
Xxxxxxxxx, Xxxxxxxx 00000
Re: Xxxxx Fargo Asset Securities Corporation,
Home Equity Asset Backed Certificates, Series 2006-2
----------------------------------------------------
Ladies and Gentlemen:
In connection with our disposition of the Xxxxx Fargo Asset
Securities Corporation, Home Equity Asset Backed Certificates, Series 2006-2,
Class [_] (the "Certificates"), we certify that (a) we understand that the
Certificates have not been registered under the Securities Act of 1933, as
amended (the "Act"), and are being disposed by us to a "qualified institutional
buyer" as defined under the Act and (b) we have not offered or sold any
Certificates to, or solicited offers to buy any Certificates from, any person,
or otherwise approached or negotiated with any person with respect thereto, in a
manner that would be deemed, or taken any other action which would result in, a
violation of Section 5 of the Act.
Very truly yours,
[_____________________]
By: _____________________________
EXHIBIT M
[Reserved]
EXHIBIT N
Form of Interest Rate Swap Agreement
[Included as Exhibit 10.2 to the Current Report on Form 8-K pursuant to
which this Pooling and Servicing Agreement is filed]
Q-1
EXHIBIT O
Form of Xxxxxxxx-Xxxxx Certification
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET BACKED CERTIFICATES, SERIES 2006-2
I, [__________________] certify that:
1. I have reviewed this report on Form 10-K and all reports on Form 10-D
required to be filed in respect of the period covered by this report on
Form 10-K of the Xxxxx Fargo Home Equity Asset-Backed Securities 2006-2
Trust (the "Exchange Act Periodic Reports");
2. Based on my knowledge, the Exchange Act Periodic Reports, taken as a
whole, do not contain any untrue statement of a material fact or omit to
state a material fact necessary to make the statements made, in light of
the circumstances under which such statements were made, not misleading
with respect to the period covered by this report;
3. Based on my knowledge, all of the distribution, servicing and other
information required to be provided under Form 10-D for the period
covered by this report is included in the Exchange Act Periodic Reports;
4. I am responsible for reviewing the activities performed by the Servicer
and based upon my knowledge and the compliance review conducted in
preparing the servicer compliance statement required in this report under
Item 1123 of Regulation AB, and except as disclosed in the Exchange Act
Periodic Reports, the Servicer has fulfilled its obligations under the
pooling and servicing agreement, dated [ ], 20 , among Xxxxx Fargo Asset
Securities Corporation, as depositor, Xxxxx Fargo Bank N.A., as
securities administrator, Xxxxx Fargo Bank, N.A., as servicer, and HSBC
Bank USA, National Association, as trustee; and
5. All of the reports on assessment of compliance with the servicing
criteria for asset-backed securities and their related attestation
reports on assessment of compliance with servicing criteria for
asset-backed securities required to be included in this report in
accordance with Item 1122 of Regulation AB and Exchange Act Rules 13a-18
and 15d-18 have been included as an exhibit to this report, except as
otherwise disclosed in this report. Any material instances of
noncompliance described in such reports have been disclosed in this
report on Form 10-K.
By:___________________________________
Name:
Title:
EXHIBIT P
Form of Certification to be Provided by the Securities Administrator
to the Servicer
XXXXX FARGO ASSET SECURITIES CORPORATION,
HOME EQUITY ASSET BACKED CERTIFICATES, SERIES 2006-2
I, [identify the certifying individual], certify to Xxxxx Fargo
Bank, N.A. and its officers, directors and affiliates, and with the knowledge
and intent that they will rely upon this certification, that:
1. I have reviewed the annual report on Form 10-K for the fiscal year [___]
(the "Annual Report"), and all reports on Form 10-D required to be filed
in respect of period covered by the Annual Report (collectively with the
Annual Report, the "Reports"), of the Trust;
2. To my knowledge, the Reports, taken as a whole, do not contain any untrue
statement of a material fact or omit to state a material fact necessary
to make the statements made, in light of the circumstances under which
such statements were made, not misleading with respect to the period
covered by the Annual Report;
3. To my knowledge, the distribution information required to be provided by
the Securities Administrator under the pooling and servicing agreement
(the "Pooling and Servicing Agreement"), dated [ ], 20 , among Xxxxx
Fargo Asset Securities Corporation, as depositor, Xxxxx Fargo Bank N.A.,
as securities administrator, Xxxxx Fargo Bank, N.A., as servicer, and
HSBC Bank USA, National Association, as trustee, for inclusion in the
Reports is included in the Reports;
4. I am responsible for reviewing the activities performed by the Securities
Administrator under the Pooling and Servicing Agreement, and based on my
knowledge and the compliance review conducted in preparing the compliance
statement of the Securities Administrator required in the Annual Report
under Item 1123 of Regulation AB, and except as disclosed in the Reports,
the Securities Administrator has fulfilled its obligations under the
Pooling and Servicing Agreement in all material respects; and
5. The report on assessment of compliance with servicing criteria for
asset-backed securities of the Securities Administrator and its related
attestation report on assessment of compliance with servicing criteria
required to be included in the Annual Report in accordance with Item 1122
of Regulation AB and Exchange Act Rules 13a-18 and 15d-18 has been
included as an exhibit to the Annual Report. Any material instances of
non-compliance are described in such report and have been disclosed in
the Annual Report.
By:___________________________________
Name:
Title:
EXHIBIT Q
List of Recordation States
Maryland
Florida
EXHIBIT R
FORM OF CUSTODIAL AGREEMENT
THIS CUSTODIAL AGREEMENT (as amended and supplemented from time
to time, the "Agreement"), dated as of June 29, 2006, by and among HSBC BANK
USA, NATIONAL ASSOCIATION, not individually, but solely as Trustee (including
its successors under the Pooling and Servicing Agreement defined below, the
"Trustee"), XXXXX FARGO ASSET SECURITIES CORPORATION (together with any
successor in interest, the "Depositor"), XXXXX FARGO BANK, N.A. (together with
any successor in interest or successor under the Pooling and Servicing Agreement
referred to below, the "Servicer") and XXXXX FARGO BANK, N.A. (together with any
successor in interest or any successor appointed hereunder, the "Custodian").
W I T N E S S E T H T H A T
- - - - - - - - - - - - - -
WHEREAS, the Depositor, the Servicer, and the Trustee, have
entered into a Pooling and Servicing Agreement dated as of June 29, 2006
relating to the issuance of Home Equity Asset-Backed Certificates, Series 2006-2
(as amended and supplemented from time to time, the "Pooling and Servicing
Agreement"); and
WHEREAS, the Custodian has agreed to act as agent for the Trustee
for the purposes of receiving and holding certain documents and other
instruments delivered by the Depositor under the Pooling and Servicing
Agreement, all upon the terms and conditions and subject to the limitations
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements hereinafter set forth, the Trustee, the Depositor, the
Servicer and the Custodian hereby agree as follows:
ARTICLE I
DEFINITIONS
Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned in the Pooling and Servicing Agreement, unless
otherwise required by the context herein.
ARTICLE II
CUSTODY OF MORTGAGE DOCUMENTS
Section 2.1. Custodian to Act as Agent; Acceptance of Custodial
Files. Subject to Section 2.3 hereof, the Custodian, as the duly appointed agent
of the Trustee for these purposes, declares that it holds and will hold the
documents delivered to it pursuant to Section 2.01 of the Pooling and Servicing
Agreement and any other documents constituting part of the Owner Mortgage Loan
File or Retained Mortgage Loan File received on or subsequent to the date hereof
(the "Custodial Files") as agent for the Trustee, in trust, for the use and
benefit of all present and future Certificateholders. The Depositor shall give
written notice to the Custodian within 10 business days of the occurrence of a
Document Transfer Event.
Section 2.2. Recordation of Assignments. Unless an assignment of
a Mortgage is not required to be recorded in accordance with Section 2.01 of the
Pooling and Servicing Agreement, if any Custodial File includes one or more
assignments to the Trustee of Mortgage Notes that have not been recorded, each
such assignment shall be delivered by the Custodian to the Depositor for the
purpose of recording it in the appropriate public office for real property
records, and the Depositor, at no expense to the Custodian, shall promptly cause
to be recorded in the appropriate public office for real property records each
such assignment and, upon receipt thereof from such public office, shall return
each such assignment to the Custodian.
Section 2.3. Review of Custodial Files. The Custodian agrees, for
the benefit of Certificateholders, to review, in accordance with the provisions
of Section 2.02 of the Pooling and Servicing Agreement, each Custodial File and
to provide the initial and final certifications in the forms of Exhibits F-1 and
F-2 to the Pooling and Servicing Agreement in accordance with the provisions
thereof. If in performing the review required by this Section 2.3 the Custodian
finds any document or documents constituting a part of a Custodial File to be
missing or defective, the Custodian shall follow the procedures specified in the
Pooling and Servicing Agreement.
Section 2.4. Notification of Breaches of Representations and
Warranties. Upon discovery by the Custodian of a breach of any representation or
warranty made by the Depositor or the Servicer as set forth in the Pooling and
Servicing Agreement, the Custodian shall follow the procedures specified in the
Pooling and Servicing Agreement.
Section 2.5. Custodian to Cooperate; Release of Custodial Files.
Upon the payment in full of any Mortgage Loan, or the receipt by the Servicer of
a notification that payment in full will be escrowed in a manner customary for
such purposes, the Servicer shall immediately deliver to the Custodian two
copies of a Request for Release or such request in an electronic format
acceptable to the Custodian and shall request delivery to it of the Custodial
File. The Custodian agrees, within five business days of receipt of such Request
for Release, to release the related Custodial File to the Servicer.
From time to time as is appropriate for the servicing or
foreclosure of any Mortgage Loan, the Servicer shall deliver to the Custodian
two copies of a Request for Release of a Servicing Officer requesting that
possession of the Custodial File be released to the Servicer and certifying as
to the reason for such release. Upon receipt of the foregoing, the Custodian
shall deliver the Custodial File to the Servicer. The Servicer shall cause each
Custodial File therein so released to be returned to the Custodian when the need
therefor by the Servicer no longer exists, unless (i) the Mortgage Loan has been
liquidated and the Liquidation Proceeds relating to the Mortgage Loan have been
deposited in the Certificate Account to the extent required by the Pooling and
Servicing Agreement or (ii) the Custodial File or such document has been
delivered to an attorney, or to a public trustee or other public official as
required by law, for purposes of initiating or pursuing legal action or other
proceedings for the foreclosure of the Mortgaged Property either judicially or
non-judicially. In the event of the liquidation of a Mortgage Loan, the Servicer
shall deliver two copies of a Request for Release with respect thereto to the
Custodian upon deposit of the related Liquidation Proceeds in the Certificate
Account to the extent required by the Pooling and Servicing Agreement.
The Custodian shall maintain records (i) identifying all requests
made by Servicers (other than requests relating to Custodial Files already
released by the Custodian) for the release by the Custodian of Custodial Files
with respect to the Mortgage Loans and (ii) all Custodial Files released by the
Custodian.
Section 2.6. Assumption Agreements. In the event that any
assumption agreement or substitution of liability agreement is entered into with
respect to any Mortgage Loan subject to this Agreement in accordance with the
terms and provisions of the Pooling and Servicing Agreement, the Servicer shall
notify the Custodian that such assumption or substitution agreement has been
completed by forwarding to the Custodian the original of such assumption or
substitution agreement, which copy shall be added to the related Custodial File
and, for all purposes, shall be considered a part of such Custodial File to the
same extent as all other documents and instruments constituting parts thereof.
ARTICLE III
CONCERNING THE CUSTODIAN
Section 3.1. Custodian a Bailee and Agent of the Trustee. With
respect to each Mortgage Note, Mortgage and other documents constituting each
Custodial File which are delivered to the Custodian, the Custodian is
exclusively the bailee and agent of the Trustee, holds such documents for the
benefit of Certificateholders and undertakes to perform such duties and only
such duties as are specifically set forth in this Agreement and in the Pooling
and Servicing Agreement. All provisions of the Pooling and Servicing Agreement
setting forth duti