EXHIBIT 4
XXXXXX XXXXXXX CAPITAL I INC.,
Depositor,
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
Servicer, Securities Administrator and Custodian,
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
Servicer,
HOMEQ SERVICING CORPORATION,
Servicer,
WMC MORTGAGE CORP.,
Responsible Party,
DECISION ONE MORTGAGE COMPANY, LLC,
Responsible Party,
DEUTSCHE BANK NATIONAL TRUST COMPANY,
Trustee
and
LASALLE BANK NATIONAL ASSOCIATION,
Custodian
--------------------------------------
POOLING AND SERVICING AGREEMENT
Dated as of April 1, 2006
--------------------------------------
XXXXXX XXXXXXX CAPITAL I INC. TRUST 2006-HE2
MORTGAGE PASS-THROUGH CERTIFICATES,
SERIES 2006-HE2
TABLE OF CONTENTS
ARTICLE I
DEFINITIONS
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans.................................
Section 2.02 Acceptance by the Trustee of the Mortgage Loans..............
Section 2.03 Representations and Warranties; Remedies for Breaches of
Representations and Warranties with Respect to the Mortgage
Loans........................................................
Section 2.04 Execution and Delivery of Certificates.......................
Section 2.05 REMIC Matters................................................
Section 2.06 Representations and Warranties of the Depositor..............
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans..........................
Section 3.02 Subservicing Agreements between a Servicer and Subservicers..
Section 3.03 Successor Subservicers.......................................
Section 3.04 Liability of the Servicers...................................
Section 3.05 No Contractual Relationship between Subservicers and the
Trustee......................................................
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee......................................................
Section 3.07 Collection of Certain Mortgage Loan Payments.................
Section 3.08 Subservicing Accounts........................................
Section 3.09 Collection of Taxes, Assessments and Similar Items; Escrow
Accounts.....................................................
Section 3.10 Collection Accounts..........................................
Section 3.11 Withdrawals from the Collection Accounts.....................
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account.........................................
Section 3.13 Maintenance of Hazard Insurance and Errors and Omissions
and Fidelity Coverage........................................
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption Agreements....
Section 3.15 Realization upon Defaulted Mortgage Loans....................
Section 3.16 Release of Mortgage Files....................................
Section 3.17 Title, Conservation and Disposition of REO Property..........
Section 3.18 Notification of Adjustments..................................
Section 3.19 Access to Certain Documentation and Information Regarding
the Mortgage Loans...........................................
Section 3.20 Documents, Records and Funds in Possession of the Servicers
to Be Held for the Trustee...................................
Section 3.21 Servicing Compensation.......................................
Section 3.22 Annual Statement as to Compliance............................
Section 3.23 Annual Reports on Assessment of Compliance with Servicing
Criteria; Annual Independent Public Accountants'
Attestation Report...........................................
Section 3.24 Trustee to Act as Servicer...................................
Section 3.25 Compensating Interest........................................
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act.....................
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances.....................................................
Section 4.02 Priorities of Distribution...................................
Section 4.03 Monthly Statements to Certificateholders.....................
Section 4.04 Certain Matters Relating to the Determination of LIBOR.......
Section 4.05 Allocation of Applied Realized Loss Amounts..................
Section 4.06 Swap Account.................................................
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates.............................................
Section 5.02 Certificate Register; 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 Access to List of Certificateholders' Names and Addresses....
Section 5.06 Maintenance of Office or Agency..............................
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the Servicers....
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.......
Section 6.03 Limitation on Liability of the Depositor, the Servicers and
Others.......................................................
Section 6.04 Limitation on Resignation of a Servicer......................
Section 6.05 Additional Indemnification by the Servicers; Third-Party
Claims.......................................................
ARTICLE VII
DEFAULT
Section 7.01 Events of Default............................................
Section 7.02 Trustee to Act; Appointment of Successor.....................
Section 7.03 Notification to Certificateholders...........................
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee........................................
Section 8.02 Certain Matters Affecting the Trustee and the Custodians.....
Section 8.03 Trustee Not Liable for Certificates or Mortgage Loans........
Section 8.04 Trustee May Own Certificates.................................
Section 8.05 Trustee's Fees and Expenses..................................
Section 8.06 Eligibility Requirements for the Trustee.....................
Section 8.07 Resignation and Removal of the Trustee.......................
Section 8.08 Successor Trustee............................................
Section 8.09 Merger or Consolidation of the Trustee.......................
Section 8.10 Appointment of Co-Trustee or Separate Trustee................
Section 8.11 Tax Matters..................................................
Section 8.12 Periodic Filings.............................................
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax
Classification of the Excess Reserve Fund Account, Swap
Account and the Interest Rate Swap Agreement.................
Section 8.14 Custodial Responsibilities...................................
ARTICLE IX
CONCERNING THE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Securities Administrator...........................
Section 9.02 Certain Matters Affecting the Securities Administrator.......
Section 9.03 Securities Administrator Not Liable for Certificates or
Mortgage Loans...............................................
Section 9.04 Securities Administrator May Own Certificates................
Section 9.05 Securities Administrator's Fees and Expenses.................
Section 9.06 Eligibility Requirements for Securities Administrator........
Section 9.07 Resignation and Removal of Securities Administrator..........
Section 9.08 Successor Securities Administrator...........................
Section 9.09 Merger or Consolidation of Securities Administrator..........
Section 9.10 Assignment or Delegation of Duties by the Securities
Administrator................................................
ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Purchase of the Mortgage
Loans........................................................
Section 10.02 Final Distribution on the Certificates.......................
Section 10.03 Additional Termination Requirements..........................
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment....................................................
Section 11.02 Recordation of Agreement; Counterparts.......................
Section 11.03 Governing Law................................................
Section 11.04 Intention of Parties.........................................
Section 11.05 Notices......................................................
Section 11.06 Severability of Provisions...................................
Section 11.07 Assignment; Sales; Advance Facilities........................
Section 11.08 Limitation on Rights of Certificateholders...................
Section 11.09 Inspection and Audit Rights..................................
Section 11.10 Certificates Nonassessable and Fully Paid....................
Section 11.11 Rule of Construction.........................................
Section 11.12 Waiver of Jury Trial.........................................
Section 11.13 Opinions of Internal Counsel of WMC..........................
Section 11.14 Rights of the Swap Provider..................................
Section 11.15 Regulation AB Compliance; Intent of the Parties;
Reasonableness...............................................
SCHEDULES
Schedule I Mortgage Loan Schedule
Schedule II Representations and Warranties of Xxxxx Fargo, as Servicer
Schedule III Representations and Warranties of JPMorgan, as Servicer
Schedule IV Representations and Warranties of HomEq, as Servicer
Schedule V Representations and Warranties of Xxxxxx Xxxxxxx Capital I
Inc. as to the Mortgage Loans
Schedule VI Representations and Warranties of WMC as to the WMC Mortgage
Loans
Schedule VII Representations and Warranties of WMC as to WMC
Schedule VIII Representations and Warranties of Decision One, as to the
Decision One Mortgage Loans
Schedule IX Representations and Warranties of Xxxxx Fargo, as Custodian
Schedule X Representations and Warranties of LaSalle, as Custodian
EXHIBITS
--------
Exhibit A Form of Class A, Class M and Class B Certificate
Exhibit B Form of Class P Certificate
Exhibit C Form of Class R Certificate
Exhibit D Form of Class X Certificate
Exhibit E Form of Initial Certification of Custodians
Exhibit F Form of Document Certification and Exception Report of
Custodians
Exhibit G Form of Residual Transfer Affidavit
Exhibit H Form of Transferor Certificate
Exhibit I Form of Rule 144A Letter
Exhibit J Form of Request for Release
Exhibit K Form of Contents for Each Mortgage File
Exhibit L Form of Certification to be provided with Form 10-K
Exhibit M Form of Certification to be provided by the Securities
Administrator and the Trustee to Depositor
Exhibit N Form of Certification to be provided by the Applicable
Servicer to Depositor
Exhibit O WMC Purchase Agreement
Exhibit P Decision One Purchase Agreement
Exhibit Q Form of Servicer Power of Attorney
Exhibit R Servicing Criteria
Exhibit S Additional Form 10-D Disclosure
Exhibit T Additional Form 10-K Disclosure
Exhibit U Form 8-K Disclosure Information
Exhibit V Interest Rate Swap Agreement
Exhibit W JPMorgan Subservicing Agreement
Exhibit X Form of Servicer Reports
THIS POOLING AND SERVICING AGREEMENT, dated as of April 1,
2006, among XXXXXX XXXXXXX CAPITAL I INC., a Delaware corporation, as depositor
(the "Depositor"), XXXXX FARGO BANK, NATIONAL ASSOCIATION, a national banking
association ("Xxxxx Fargo"), as securities administrator (in such capacity, the
"Securities Administrator") and as a servicer and a custodian, JPMORGAN CHASE
BANK, NATIONAL ASSOCIATION, a national banking association, as a servicer
("JPMorgan"), HOMEQ SERVICING CORPORATION, a New Jersey corporation, as a
servicer ("HomEq" and, together with Xxxxx Fargo in its capacity as servicer and
JPMorgan, the "Servicers"), WMC MORTGAGE CORP., a California corporation, as a
responsible party ("WMC"), DECISION ONE MORTGAGE COMPANY, LLC, as a responsible
party ("Decision One"), DEUTSCHE BANK NATIONAL TRUST COMPANY, a national banking
association, as trustee (the "Trustee") and LASALLE BANK NATIONAL ASSOCIATION,
as a custodian ("LaSalle" and, together with Xxxxx Fargo in its capacity as
custodian, the "Custodians").
W I T N E S S E T H:
In consideration of the mutual agreements herein contained,
the parties hereto agree as follows:
PRELIMINARY STATEMENT
The Securities Administrator, on behalf of the Trustee, shall
elect that four segregated asset pools within the Trust Fund (exclusive of (i)
the Prepayment Premiums, (ii) the Swap Assets, (iii) the Excess Reserve Fund
Account, and (iv) the right of the Offered Certificates to receive Upper-Tier
CarryForward Amounts including, but without duplication, Basis Risk CarryForward
Amounts and the obligation to pay Class IO Shortfalls) be treated for federal
income tax purposes as comprising four REMICs (each, a "Trust REMIC" or, in the
alternative, Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the Lower-Tier REMIC
and the Upper-Tier REMIC, respectively). The Class X Interest, Class IO Interest
and each Class of Offered Certificates (other than the right of each Class of
Offered Certificates to receive Upper-Tier CarryForward Amounts including, but
without duplication, Basis Risk CarryForward Amounts and the obligation to pay
Class IO Shortfalls) represents ownership of a regular interest in a REMIC for
purposes of the REMIC Provisions. The Class R Certificates represent ownership
of the sole class of residual interest in each Trust REMIC for purposes of the
REMIC Provisions. The Startup Day for each Trust REMIC described herein is the
Closing Date. The latest possible maturity date for each regular interest is the
latest date referenced in Section 2.05. 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 Premiums, (ii) the Swap Assets,
(iii) the Excess Reserve Fund Account, and (iv) the right of the Offered
Certificates to receive Upper-Tier CarryForward Amounts including, but without
duplication, Basis Risk CarryForward Amounts and the obligation to pay Class IO
Shortfalls).
For federal income tax purposes, each Class of Offered
Certificates represents a beneficial ownership of a regular interest in the
Upper-Tier REMIC, the right to receive Upper-Tier CarryForward Amounts
(including, but without duplication, Basis Risk CarryForward Amounts), and the
obligation to pay Class IO Shortfalls; the Class X Certificates represent
beneficial ownership of the Class X Interest, the Class IO Interest, the
Interest Rate Swap Agreement, the Swap Account, the Excess Reserve Fund Account
and the right to receive Class IO Shortfalls, subject to the obligation to pay
Upper-Tier CarryForward Amounts (including, but without duplication, Basis Risk
CarryForward Amounts); and the Class P Certificates represent beneficial
ownership of the Prepayment Premiums, which portions of the Trust Fund shall be
treated as a grantor trust.
Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 shall issue the following interests in
Pooling-Tier REMIC-1, and each such interest, other than the Class PT1-R
Interest is hereby designated as a regular interest in the Pooling-Tier REMIC-1.
Pooling-Tier REMIC-1 Interests with an "I" in their designation shall relate to
Loan Group I and Pooling Tier REMIC-1 Interests with a "II" in their designation
shall relate to Loan Group II. Pooling-Tier REMIC-1 shall also issue the Class
PT1-R Interest, which is hereby designated as the sole class of residual
interest in Pooling-Tier REMIC-1. The Class PT1-R Interest shall be represented
by the Class R Certificates, shall not have a principal balance and shall have
no interest rate.
Pooling-Tier REMIC-1 Initial Pooling-Tier REMIC-1
Pooling-Tier REMIC-1 Interest Interest Rate Principal Amount
------------------------------- -------------------- ----------------------------
Class PT1-I-1 (1) $ 21,923,060.51
Class PT1-I-2A (2) $ 18,231,751.88
Class PT1-I-2B (3) $ 18,231,751.88
Class PT1-I-3A (2) $ 9,887,132.83
Class PT1-I-3B (3) $ 9,887,132.83
Class PT1-I-4A (2) $ 9,509,304.53
Class PT1-I-4B (3) $ 9,509,304.53
Class PT1-I-5A (2) $ 9,151,924.20
Class PT1-I-5B (3) $ 9,151,924.20
Class PT1-I-6A (2) $ 8,825,694.08
Class PT1-I-6B (3) $ 8,825,694.08
Class PT1-I-7A (2) $ 8,514,431.73
Class PT1-I-7B (3) $ 8,514,431.73
Class PT1-I-8A (2) $ 8,217,071.19
Class PT1-I-8B (3) $ 8,217,071.19
Class PT1-I-9A (2) $ 7,932,590.08
Class PT1-I-9B (3) $ 7,932,590.08
Class PT1-I-10A (2) $ 7,659,994.40
Class PT1-I-10B (3) $ 7,659,994.40
Class PT1-I-11A (2) $ 7,398,361.27
Class PT1-I-11B (3) $ 7,398,361.27
Class PT1-I-12A (2) $ 7,146,337.06
Class PT1-I-12B (3) $ 7,146,337.06
Class PT1-I-13A (2) $ 6,898,858.70
Class PT1-I-13B (3) $ 6,898,858.70
Class PT1-I-14A (2) $ 6,633,819.24
Class PT1-I-14B (3) $ 6,633,819.24
Class PT1-I-15A (2) $ 6,345,967.13
Class PT1-I-15B (3) $ 6,345,967.13
Class PT1-I-16A (2) $ 6,070,663.81
Class PT1-I-16B (3) $ 6,070,663.81
Class PT1-I-17A (2) $ 5,807,359.92
Class PT1-I-17B (3) $ 5,807,359.92
Class PT1-I-18A (2) $ 5,555,530.44
Class PT1-I-18B (3) $ 5,555,530.44
Class PT1-I-19A (2) $ 6,235,599.52
Class PT1-I-19B (3) $ 6,235,599.52
Class PT1-I-20A (2) $ 10,040,675.50
Class PT1-I-20B (3) $ 10,040,675.50
Class PT1-I-21A (2) $ 42,420,379.95
Class PT1-I-21B (3) $ 42,420,379.95
Class PT1-I-22A (2) $ 43,204,615.47
Class PT1-I-22B (3) $ 43,204,615.47
Class PT1-I-23A (2) $ 768,011.88
Class PT1-I-23B (3) $ 768,011.88
Class PT1-I-24A (2) $ 740,433.97
Class PT1-I-24B (3) $ 740,433.97
Class PT1-I-25A (2) $ 713,848.40
Class PT1-I-25B (3) $ 713,848.40
Class PT1-I-26A (2) $ 688,221.81
Class PT1-I-26B (3) $ 688,221.81
Class PT1-I-27A (2) $ 663,524.86
Class PT1-I-27B (3) $ 663,524.86
Class PT1-I-28A (2) $ 639,787.25
Class PT1-I-28B (3) $ 639,787.25
Class PT1-I-29A (2) $ 616,874.73
Class PT1-I-29B (3) $ 616,874.73
Class PT1-I-30A (2) $ 594,726.08
Class PT1-I-30B (3) $ 594,726.08
Class PT1-I-31A (2) $ 656,575.22
Class PT1-I-31B (3) $ 656,575.22
Class PT1-I-32A (2) $ 633,022.04
Class PT1-I-32B (3) $ 633,022.04
Class PT1-I-33A (2) $ 2,245,127.40
Class PT1-I-33B (3) $ 2,245,127.40
Class PT1-I-34A (2) $ 701,127.82
Class PT1-I-34B (3) $ 701,127.82
Class PT1-I-35A (2) $ 402,567.07
Class PT1-I-35B (3) $ 402,567.07
Class PT1-I-36A (2) $ 388,953.75
Class PT1-I-36B (3) $ 388,953.75
Class PT1-I-37A (2) $ 375,792.64
Class PT1-I-37B (3) $ 375,792.64
Class PT1-I-38A (2) $ 363,069.29
Class PT1-I-38B (3) $ 363,069.29
Class PT1-I-39A (2) $ 350,769.18
Class PT1-I-39B (3) $ 350,769.18
Class PT1-I-40A (2) $ 338,882.33
Class PT1-I-40B (3) $ 338,882.33
Class PT1-I-41A (2) $ 327,387.60
Class PT1-I-41B (3) $ 327,387.60
Class PT1-I-42A (2) $ 316,276.08
Class PT1-I-42B (3) $ 316,276.08
Class PT1-I-43A (2) $ 305,535.34
Class PT1-I-43B (3) $ 305,535.34
Class PT1-I-44A (2) $ 295,153.38
Class PT1-I-44B (3) $ 295,153.38
Class PT1-I-45A (2) $ 285,118.35
Class PT1-I-45B (3) $ 285,118.35
Class PT1-I-46A (2) $ 275,419.77
Class PT1-I-46B (3) $ 275,419.77
Class PT1-I-47A (2) $ 266,044.90
Class PT1-I-47B (3) $ 266,044.90
Class PT1-I-48A (2) $ 256,984.00
Class PT1-I-48B (3) $ 256,984.00
Class PT1-I-49A (2) $ 248,226.78
Class PT1-I-49B (3) $ 248,226.78
Class PT1-I-50A (2) $ 239,763.26
Class PT1-I-50B (3) $ 239,763.26
Class PT1-I-51A (2) $ 231,583.78
Class PT1-I-51B (3) $ 231,583.78
Class PT1-I-52A (2) $ 223,679.01
Class PT1-I-52B (3) $ 223,679.01
Class PT1-I-53A (2) $ 216,039.90
Class PT1-I-53B (3) $ 216,039.90
Class PT1-I-54A (2) $ 208,657.65
Class PT1-I-54B (3) $ 208,657.65
Class PT1-I-55A (2) $ 5,811,478.80
Class PT1-I-55B (3) $ 5,811,478.80
Class PT1-II-1 (4) $ 68,750,924.69
Class PT1-II-2A (5) $ 57,174,945.97
Class PT1-II-2B (6) $ 57,174,945.97
Class PT1-II-3A (5) $ 31,006,141.87
Class PT1-II-3B (6) $ 31,006,141.87
Class PT1-II-4A (5) $ 29,821,268.77
Class PT1-II-4B (6) $ 29,821,268.77
Class PT1-II-5A (5) $ 28,700,520.65
Class PT1-II-5B (6) $ 28,700,520.65
Class PT1-II-6A (5) $ 27,677,459.92
Class PT1-II-6B (6) $ 27,677,459.92
Class PT1-II-7A (5) $ 26,701,338.27
Class PT1-II-7B (6) $ 26,701,338.27
Class PT1-II-8A (5) $ 25,768,812.81
Class PT1-II-8B (6) $ 25,768,812.81
Class PT1-II-9A (5) $ 24,876,677.37
Class PT1-II-9B (6) $ 24,876,677.37
Class PT1-II-10A (5) $ 24,021,814.75
Class PT1-II-10B (6) $ 24,021,814.75
Class PT1-II-11A (5) $ 23,201,330.78
Class PT1-II-11B (6) $ 23,201,330.78
Class PT1-II-12A (5) $ 22,410,980.49
Class PT1-II-12B (6) $ 22,410,980.49
Class PT1-II-13A (5) $ 21,634,886.00
Class PT1-II-13B (6) $ 21,634,886.00
Class PT1-II-14A (5) $ 20,803,719.76
Class PT1-II-14B (6) $ 20,803,719.76
Class PT1-II-15A (5) $ 19,901,012.82
Class PT1-II-15B (6) $ 19,901,012.82
Class PT1-II-16A (5) $ 19,037,658.99
Class PT1-II-16B (6) $ 19,037,658.99
Class PT1-II-17A (5) $ 18,211,935.53
Class PT1-II-17B (6) $ 18,211,935.53
Class PT1-II-18A (5) $ 17,422,195.91
Class PT1-II-18B (6) $ 17,422,195.91
Class PT1-II-19A (5) $ 19,554,898.93
Class PT1-II-19B (6) $ 19,554,898.93
Class PT1-II-20A (5) $ 31,487,653.15
Class PT1-II-20B (6) $ 31,487,653.15
Class PT1-II-21A (5) $ 133,030,711.90
Class PT1-II-21B (6) $ 133,030,711.90
Class PT1-II-22A (5) $ 135,490,081.88
Class PT1-II-22B (6) $ 135,490,081.88
Class PT1-II-23A (5) $ 2,408,492.52
Class PT1-II-23B (6) $ 2,408,492.52
Class PT1-II-24A (5) $ 2,322,007.93
Class PT1-II-24B (6) $ 2,322,007.93
Class PT1-II-25A (5) $ 2,238,635.30
Class PT1-II-25B (6) $ 2,238,635.30
Class PT1-II-26A (5) $ 2,158,270.09
Class PT1-II-26B (6) $ 2,158,270.09
Class PT1-II-27A (5) $ 2,080,820.24
Class PT1-II-27B (6) $ 2,080,820.24
Class PT1-II-28A (5) $ 2,006,378.85
Class PT1-II-28B (6) $ 2,006,378.85
Class PT1-II-29A (5) $ 1,934,524.97
Class PT1-II-29B (6) $ 1,934,524.97
Class PT1-II-30A (5) $ 1,865,066.62
Class PT1-II-30B (6) $ 1,865,066.62
Class PT1-II-31A (5) $ 2,059,026.08
Class PT1-II-31B (6) $ 2,059,026.08
Class PT1-II-32A (5) $ 1,985,163.11
Class PT1-II-32B (6) $ 1,985,163.11
Class PT1-II-33A (5) $ 7,040,740.70
Class PT1-II-33B (6) $ 7,040,740.70
Class PT1-II-34A (5) $ 2,198,743.48
Class PT1-II-34B (6) $ 2,198,743.48
Class PT1-II-35A (5) $ 1,262,454.13
Class PT1-II-35B (6) $ 1,262,454.13
Class PT1-II-36A (5) $ 1,219,762.65
Class PT1-II-36B (6) $ 1,219,762.65
Class PT1-II-37A (5) $ 1,178,489.26
Class PT1-II-37B (6) $ 1,178,489.26
Class PT1-II-38A (5) $ 1,138,588.71
Class PT1-II-38B (6) $ 1,138,588.71
Class PT1-II-39A (5) $ 1,100,015.47
Class PT1-II-39B (6) $ 1,100,015.47
Class PT1-II-40A (5) $ 1,062,738.17
Class PT1-II-40B (6) $ 1,062,738.17
Class PT1-II-41A (5) $ 1,026,690.60
Class PT1-II-41B (6) $ 1,026,690.60
Class PT1-II-42A (5) $ 991,844.77
Class PT1-II-42B (6) $ 991,844.77
Class PT1-II-43A (5) $ 958,161.71
Class PT1-II-43B (6) $ 958,161.71
Class PT1-II-44A (5) $ 925,603.77
Class PT1-II-44B (6) $ 925,603.77
Class PT1-II-45A (5) $ 894,133.85
Class PT1-II-45B (6) $ 894,133.85
Class PT1-II-46A (5) $ 863,718.98
Class PT1-II-46B (6) $ 863,718.98
Class PT1-II-47A (5) $ 834,319.30
Class PT1-II-47B (6) $ 834,319.30
Class PT1-II-48A (5) $ 805,904.25
Class PT1-II-48B (6) $ 805,904.25
Class PT1-II-49A (5) $ 778,441.52
Class PT1-II-49B (6) $ 778,441.52
Class PT1-II-50A (5) $ 751,899.84
Class PT1-II-50B (6) $ 751,899.84
Class PT1-II-51A (5) $ 726,248.92
Class PT1-II-51B (6) $ 726,248.92
Class PT1-II-52A (5) $ 701,459.49
Class PT1-II-52B (6) $ 701,459.49
Class PT1-II-53A (5) $ 677,503.15
Class PT1-II-53B (6) $ 677,503.15
Class PT1-II-54A (5) $ 654,352.35
Class PT1-II-54B (6) $ 654,352.35
Class PT1-II-55A (5) $ 18,224,852.35
Class PT1-II-55B (6) $ 18,224,852.35
Class PT1-R (7) (7)
----------------------
(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 (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I 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 (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group I WAC Rate, subject to a
maximum rate of 10.30%.
(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 (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group I WAC Rate over (B) 10.30%.
(4) 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 (its "Pooling-Tier REMIC-1 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(5) 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 (its "Pooling-Tier REMIC-1 Interest Rate") equal to the product of (i)
2 and (ii) the Pooling-Tier REMIC-1 Loan Group II WAC Rate, subject to a
maximum rate of 10.30%.
(6) 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 (its "Pooling-Tier REMIC-1 Interest Rate") equal to the excess, if
any, of (A) the product of (i) 2 and (ii) the Pooling-Tier REMIC-1 Loan
Group II WAC Rate over (B) 10.30%.
(7) The Class PT1-R Interest shall not have a principal balance and shall not
bear interest.
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
Servicing Fees and Custodian Fees, shall be allocated in the same manner as
Realized Losses.
On each Distribution Date, the interest distributable in
respect of the Mortgage Loans from the related Loan Group 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 Group I Mortgage Loans
shall be allocated to the outstanding Pooling-Tier REMIC-1 Regular Interest
relating to the Group I Mortgage Loans with the lowest numerical denomination
until the Pooling-Tier REMIC-1 Principal Amount of such interest is reduced to
zero, provided that, with respect to Pooling-Tier REMIC-1 Regular Interests
relating to Loan Group I 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, until the Pooling-Tier
REMIC-1 Principal Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent
Recoveries and payments of principal in respect of the Group II Mortgage Loans
shall be allocated to the outstanding Pooling-Tier REMIC-1 Regular Interest
relating to the Group II Mortgage Loans with the lowest numerical denomination
until the Pooling-Tier REMIC-1 Principal Amount of such interest is reduced to
zero, provided that, with respect to Pooling-Tier REMIC-1 Regular Interests
relating to Loan Group II 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, until the Pooling-Tier
REMIC-1 Principal Amount of such interests is reduced to zero.
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.
Pooling-Tier REMIC-2 Interests with an "I" in their designation shall relate to
the Group I Mortgage Loans and Pooling Tier REMIC-2 Interests with a "II" in
their designation shall relate to the Group II Mortgage Loans. 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 Certificates.
Corresponding
Pooling-Tier Pooling-Tier Corresponding Pooling-Tier Corresponding
Pooling-Tier REMIC-2 REMIC-2 REMIC-2 Initial Pooling-Tier REMIC-2 REMIC-1 Regular Scheduled Crossover
Interest Interest Rate Principal Amount IO Interest Interest Distribution Date
--------------------- ------------- ---------------- --------------------- --------------- -----------------
Class PT2-I-1 (1) $ 21,923,060.51 N/A N/A N/A
Class PT2-I-2A (2) $ 18,231,751.88 Class PT2-I-IO-2 N/A N/A
Class PT2-I-2B (3) $ 18,231,751.88 N/A N/A N/A
Class PT2-I-3A (2) $ 9,887,132.83 Class PT2-I-IO-3 N/A N/A
Class PT2-I-3B (3) $ 9,887,132.83 N/A N/A N/A
Class PT2-I-4A (2) $ 9,509,304.53 Class PT2-I-IO-4 N/A N/A
Class PT2-I-4B (3) $ 9,509,304.53 N/A N/A N/A
Class PT2-I-5A (2) $ 9,151,924.20 Class PT2-I-IO-5 N/A N/A
Class PT2-I-5B (3) $ 9,151,924.20 N/A N/A N/A
Class PT2-I-6A (2) $ 8,825,694.08 Class PT2-I-IO-6 N/A N/A
Class PT2-I-6B (3) $ 8,825,694.08 N/A N/A N/A
Class PT2-I-7A (2) $ 8,514,431.73 Class PT2-I-IO-7 N/A N/A
Class PT2-I-7B (3) $ 8,514,431.73 N/A N/A N/A
Class PT2-I-8A (2) $ 8,217,071.19 Class PT2-I-IO-8 N/A N/A
Class PT2-I-8B (3) $ 8,217,071.19 N/A N/A N/A
Class PT2-I-9A (2) $ 7,932,590.08 Class PT2-I-IO-9 N/A N/A
Class PT2-I-9B (3) $ 7,932,590.08 N/A N/A N/A
Class PT2-I-10A (2) $ 7,659,994.40 Class PT2-I-IO-10 N/A N/A
Class PT2-I-10B (3) $ 7,659,994.40 N/A N/A N/A
Class PT2-I-11A (2) $ 7,398,361.27 Class PT2-I-IO-11 N/A N/A
Class PT2-I-11B (3) $ 7,398,361.27 N/A N/A N/A
Class PT2-I-12A (2) $ 7,146,337.06 Class PT2-I-IO-12 N/A N/A
Class PT2-I-12B (3) $ 7,146,337.06 N/A N/A N/A
Class PT2-I-13A (2) $ 6,898,858.70 Class PT2-I-IO-13 N/A N/A
Class PT2-I-13B (3) $ 6,898,858.70 N/A N/A N/A
Class PT2-I-14A (2) $ 6,633,819.24 Class PT2-I-IO-14 N/A N/A
Class PT2-I-14B (3) $ 6,633,819.24 N/A N/A N/A
Class PT2-I-15A (2) $ 6,345,967.13 Class PT2-I-IO-15 N/A N/A
Class PT2-I-15B (3) $ 6,345,967.13 N/A N/A N/A
Class PT2-I-16A (2) $ 6,070,663.81 Class PT2-I-IO-16 N/A N/A
Class PT2-I-16B (3) $ 6,070,663.81 N/A N/A N/A
Class PT2-I-17A (2) $ 5,807,359.92 Class PT2-I-IO-17 N/A N/A
Class PT2-I-17B (3) $ 5,807,359.92 N/A N/A N/A
Class PT2-I-18A (2) $ 5,555,530.44 Class PT2-I-IO-18 N/A N/A
Class PT2-I-18B (3) $ 5,555,530.44 N/A N/A N/A
Class PT2-I-19A (2) $ 6,235,599.52 Class PT2-I-IO-19 N/A N/A
Class PT2-I-19B (3) $ 6,235,599.52 N/A N/A N/A
Class PT2-I-20A (2) $ 10,040,675.50 Class PT2-I-IO-20 N/A N/A
Class PT2-I-20B (3) $ 10,040,675.50 N/A N/A N/A
Class PT2-I-21A (2) $ 42,420,379.95 Class PT2-I-IO-21 N/A N/A
Class PT2-I-21B (3) $ 42,420,379.95 N/A N/A N/A
Class PT2-I-22A (2) $ 43,204,615.47 Class PT2-I-IO-22 N/A N/A
Class PT2-I-22B (3) $ 43,204,615.47 N/A N/A N/A
Class PT2-I-23A (2) $ 768,011.88 Class PT2-I-IO-23 N/A N/A
Class PT2-I-23B (3) $ 768,011.88 N/A N/A N/A
Class PT2-I-24A (2) $ 740,433.97 Class PT2-I-IO-24 N/A N/A
Class PT2-I-24B (3) $ 740,433.97 N/A N/A N/A
Class PT2-I-25A (2) $ 713,848.40 Class PT2-I-IO-25 N/A N/A
Class PT2-I-25B (3) $ 713,848.40 N/A N/A N/A
Class PT2-I-26A (2) $ 688,221.81 Class PT2-I-IO-26 N/A N/A
Class PT2-I-26B (3) $ 688,221.81 N/A N/A N/A
Class PT2-I-27A (2) $ 663,524.86 Class PT2-I-IO-27 N/A N/A
Class PT2-I-27B (3) $ 663,524.86 N/A N/A N/A
Class PT2-I-28A (2) $ 639,787.25 Class PT2-I-IO-28 N/A N/A
Class PT2-I-28B (3) $ 639,787.25 N/A N/A N/A
Class PT2-I-29A (2) $ 616,874.73 Class PT2-I-IO-29 N/A N/A
Class PT2-I-29B (3) $ 616,874.73 N/A N/A N/A
Class PT2-I-30A (2) $ 594,726.08 Class PT2-I-IO-30 N/A N/A
Class PT2-I-30B (3) $ 594,726.08 N/A N/A N/A
Class PT2-I-31A (2) $ 656,575.22 Class PT2-I-IO-31 N/A N/A
Class PT2-I-31B (3) $ 656,575.22 N/A N/A N/A
Class PT2-I-32A (2) $ 633,022.04 Class PT2-I-IO-32 N/A N/A
Class PT2-I-32B (3) $ 633,022.04 N/A N/A N/A
Class PT2-I-33A (2) $ 2,245,127.40 Class PT2-I-IO-33 N/A N/A
Class PT2-I-33B (3) $ 2,245,127.40 N/A N/A N/A
Class PT2-I-34A (2) $ 701,127.82 Class PT2-I-IO-34 N/A N/A
Class PT2-I-34B (3) $ 701,127.82 N/A N/A N/A
Class PT2-I-35A (2) $ 402,567.07 Class PT2-I-IO-35 N/A N/A
Class PT2-I-35B (3) $ 402,567.07 N/A N/A N/A
Class PT2-I-36A (2) $ 388,953.75 Class PT2-I-IO-36 N/A N/A
Class PT2-I-36B (3) $ 388,953.75 N/A N/A N/A
Class PT2-I-37A (2) $ 375,792.64 Class PT2-I-IO-37 N/A N/A
Class PT2-I-37B (3) $ 375,792.64 N/A N/A N/A
Class PT2-I-38A (2) $ 363,069.29 Class PT2-I-IO-38 N/A N/A
Class PT2-I-38B (3) $ 363,069.29 N/A N/A N/A
Class PT2-I-39A (2) $ 350,769.18 Class PT2-I-IO-39 N/A N/A
Class PT2-I-39B (3) $ 350,769.18 N/A N/A N/A
Class PT2-I-40A (2) $ 338,882.33 Class PT2-I-IO-40 N/A N/A
Class PT2-I-40B (3) $ 338,882.33 N/A N/A N/A
Class PT2-I-41A (2) $ 327,387.60 Class PT2-I-IO-41 N/A N/A
Class PT2-I-41B (3) $ 327,387.60 N/A N/A N/A
Class PT2-I-42A (2) $ 316,276.08 Class PT2-I-IO-42 N/A N/A
Class PT2-I-42B (3) $ 316,276.08 N/A N/A N/A
Class PT2-I-43A (2) $ 305,535.34 Class PT2-I-IO-43 N/A N/A
Class PT2-I-43B (3) $ 305,535.34 N/A N/A N/A
Class PT2-I-44A (2) $ 295,153.38 Class PT2-I-IO-44 N/A N/A
Class PT2-I-44B (3) $ 295,153.38 N/A N/A N/A
Class PT2-I-45A (2) $ 285,118.35 Class PT2-I-IO-45 N/A N/A
Class PT2-I-45B (3) $ 285,118.35 N/A N/A N/A
Class PT2-I-46A (2) $ 275,419.77 Class PT2-I-IO-46 N/A N/A
Class PT2-I-46B (3) $ 275,419.77 N/A N/A N/A
Class PT2-I-47A (2) $ 266,044.90 Class PT2-I-IO-47 N/A N/A
Class PT2-I-47B (3) $ 266,044.90 N/A N/A N/A
Class PT2-I-48A (2) $ 256,984.00 Class PT2-I-IO-48 N/A N/A
Class PT2-I-48B (3) $ 256,984.00 N/A N/A N/A
Class PT2-I-49A (2) $ 248,226.78 Class PT2-I-IO-49 N/A N/A
Class PT2-I-49B (3) $ 248,226.78 N/A N/A N/A
Class PT2-I-50A (2) $ 239,763.26 Class PT2-I-IO-50 N/A N/A
Class PT2-I-50B (3) $ 239,763.26 N/A N/A N/A
Class PT2-I-51A (2) $ 231,583.78 Class PT2-I-IO-51 N/A N/A
Class PT2-I-51B (3) $ 231,583.78 N/A N/A N/A
Class PT2-I-52A (2) $ 223,679.01 Class PT2-I-IO-52 N/A N/A
Class PT2-I-52B (3) $ 223,679.01 N/A N/A N/A
Class PT2-I-53A (2) $ 216,039.90 Class PT2-I-IO-53 N/A N/A
Class PT2-I-53B (3) $ 216,039.90 N/A N/A N/A
Class PT2-I-54A (2) $ 208,657.65 Class PT2-I-IO-54 N/A N/A
Class PT2-I-54B (3) $ 208,657.65 N/A N/A N/A
Class PT2-I-55A (2) $ 5,811,478.80 Class PT2-I-IO-55 N/A N/A
Class PT2-I-55B (3) $ 5,811,478.80 N/A N/A N/A
Class PT2-I-IO-2 (4) (4) N/A Class PT1-I-2A May 2006
Class PT2-I-IO-3 (4) (4) N/A Class PT1-I-3A June 2006
Class PT2-I-IO-4 (4) (4) N/A Class PT1-I-4A July 2006
Class PT2-I-IO-5 (4) (4) N/A Class PT1-I-5A August 2006
Class PT2-I-IO-6 (4) (4) N/A Class PT1-I-6A September 2006
Class PT2-I-IO-7 (4) (4) N/A Class PT1-I-7A October 2006
Class PT2-I-IO-8 (4) (4) N/A Class PT1-I-8A November 2006
Class PT2-I-IO-9 (4) (4) N/A Class PT1-I-9A December 2006
Class PT2-I-IO-10 (4) (4) N/A Class PT1-I-10A January 2007
Class PT2-I-IO-11 (4) (4) N/A Class PT1-I-11A February 2007
Class PT2-I-IO-12 (4) (4) N/A Class PT1-I-12A March 2007
Class PT2-I-IO-13 (4) (4) N/A Class PT1-I-13A April 2007
Class PT2-I-IO-14 (4) (4) N/A Class PT1-I-14A May 2007
Class PT2-I-IO-15 (4) (4) N/A Class PT1-I-15A June 2007
Class PT2-I-IO-16 (4) (4) N/A Class PT1-I-16A July 2007
Class PT2-I-IO-17 (4) (4) N/A Class PT1-I-17A August 2007
Class PT2-I-IO-18 (4) (4) N/A Class PT1-I-18A September 2007
Class PT2-I-IO-19 (4) (4) N/A Class PT1-I-19A October 2007
Class PT2-I-IO-20 (4) (4) N/A Class PT1-I-20A November 2007
Class PT2-I-IO-21 (4) (4) N/A Class PT1-I-21A December 2007
Class PT2-I-IO-22 (4) (4) N/A Class PT1-I-22A January 2008
Class PT2-I-IO-23 (4) (4) N/A Class PT1-I-23A February 2008
Class PT2-I-IO-24 (4) (4) N/A Class PT1-I-24A March 2008
Class PT2-I-IO-25 (4) (4) N/A Class PT1-I-25A April 2008
Class PT2-I-IO-26 (4) (4) N/A Class PT1-I-26A May 2008
Class PT2-I-IO-27 (4) (4) N/A Class PT1-I-27A June 2008
Class PT2-I-IO-28 (4) (4) N/A Class PT1-I-28A July 2008
Class PT2-I-IO-29 (4) (4) N/A Class PT1-I-29A August 2008
Class PT2-I-IO-30 (4) (4) N/A Class PT1-I-30A September 2008
Class PT2-I-IO-31 (4) (4) N/A Class PT1-I-31A October 2008
Class PT2-I-IO-32 (4) (4) N/A Class PT1-I-32A November 2008
Class PT2-I-IO-33 (4) (4) N/A Class PT1-I-33A December 2008
Class PT2-I-IO-34 (4) (4) N/A Class PT1-I-34A January 2009
Class PT2-I-IO-35 (4) (4) N/A Class PT1-I-35A February 2009
Class PT2-I-IO-36 (4) (4) N/A Class PT1-I-36A March 2009
Class PT2-I-IO-37 (4) (4) N/A Class PT1-I-37A April 2009
Class PT2-I-IO-38 (4) (4) N/A Class PT1-I-38A May 2009
Class PT2-I-IO-39 (4) (4) N/A Class PT1-I-39A June 2009
Class PT2-I-IO-40 (4) (4) N/A Class PT1-I-40A July 2009
Class PT2-I-IO-41 (4) (4) N/A Class PT1-I-41A August 2009
Class PT2-I-IO-42 (4) (4) N/A Class PT1-I-42A September 2009
Class PT2-I-IO-43 (4) (4) N/A Class PT1-I-43A October 2009
Class PT2-I-IO-44 (4) (4) N/A Class PT1-I-44A November 2009
Class PT2-I-IO-45 (4) (4) N/A Class PT1-I-45A December 2009
Class PT2-I-IO-46 (4) (4) N/A Class PT1-I-46A January 2010
Class PT2-I-IO-47 (4) (4) N/A Class PT1-I-47A February 2010
Class PT2-I-IO-48 (4) (4) N/A Class PT1-I-48A March 2010
Class PT2-I-IO-49 (4) (4) N/A Class PT1-I-49A April 2010
Class PT2-I-IO-50 (4) (4) N/A Class PT1-I-50A May 2010
Class PT2-I-IO-51 (4) (4) N/A Class PT1-I-51A June 2010
Class PT2-I-IO-52 (4) (4) N/A Class PT1-I-52A July 2010
Class PT2-I-IO-53 (4) (4) N/A Class PT1-I-53A August 2010
Class PT2-I-IO-54 (4) (4) N/A Class PT1-I-54A September 2010
Class PT2-I-IO-55 (4) (4) N/A Class PT1-I-55A October 2010
Class PT2-II-1 (5) $ 68,750,924.69 N/A N/A N/A
Class PT2-II-2A (6) $ 57,174,945.97 Class PT2-II-IO-2 N/A N/A
Class PT2-II-2B (7) $ 57,174,945.97 N/A N/A N/A
Class PT2-II-3A (6) $ 31,006,141.87 Class PT2-II-IO-3 N/A N/A
Class PT2-II-3B (7) $ 31,006,141.87 N/A N/A N/A
Class PT2-II-4A (6) $ 29,821,268.77 Class PT2-II-IO-4 N/A N/A
Class PT2-II-4B (7) $ 29,821,268.77 N/A N/A N/A
Class PT2-II-5A (6) $ 28,700,520.65 Class PT2-II-IO-5 N/A N/A
Class PT2-II-5B (7) $ 28,700,520.65 N/A N/A N/A
Class PT2-II-6A (6) $ 27,677,459.92 Class PT2-II-IO-6 N/A N/A
Class PT2-II-6B (7) $ 27,677,459.92 N/A N/A N/A
Class PT2-II-7A (6) $ 26,701,338.27 Class PT2-II-IO-7 N/A N/A
Class PT2-II-7B (7) $ 26,701,338.27 N/A N/A N/A
Class PT2-II-8A (6) $ 25,768,812.81 Class PT2-II-IO-8 N/A N/A
Class PT2-II-8B (7) $ 25,768,812.81 N/A N/A N/A
Class PT2-II-9A (6) $ 24,876,677.37 Class PT2-II-IO-9 N/A N/A
Class PT2-II-9B (7) $ 24,876,677.37 N/A N/A N/A
Class PT2-II-10A (6) $ 24,021,814.75 Class PT2-II-IO-10 N/A N/A
Class PT2-II-10B (7) $ 24,021,814.75 N/A N/A N/A
Class PT2-II-11A (6) $ 23,201,330.78 Class PT2-II-IO-11 N/A N/A
Class PT2-II-11B (7) $ 23,201,330.78 N/A N/A N/A
Class PT2-II-12A (6) $ 22,410,980.49 Class PT2-II-IO-12 N/A N/A
Class PT2-II-12B (7) $ 22,410,980.49 N/A N/A N/A
Class PT2-II-13A (6) $ 21,634,886.00 Class PT2-II-IO-13 N/A N/A
Class PT2-II-13B (7) $ 21,634,886.00 N/A N/A N/A
Class PT2-II-14A (6) $ 20,803,719.76 Class PT2-II-IO-14 N/A N/A
Class PT2-II-14B (7) $ 20,803,719.76 N/A N/A N/A
Class PT2-II-15A (6) $ 19,901,012.82 Class PT2-II-IO-15 N/A N/A
Class PT2-II-15B (7) $ 19,901,012.82 N/A N/A N/A
Class PT2-II-16A (6) $ 19,037,658.99 Class PT2-II-IO-16 N/A N/A
Class PT2-II-16B (7) $ 19,037,658.99 N/A N/A N/A
Class PT2-II-17A (6) $ 18,211,935.53 Class PT2-II-IO-17 N/A N/A
Class PT2-II-17B (7) $ 18,211,935.53 N/A N/A N/A
Class PT2-II-18A (6) $ 17,422,195.91 Class PT2-II-IO-18 N/A N/A
Class PT2-II-18B (7) $ 17,422,195.91 N/A N/A N/A
Class PT2-II-19A (6) $ 19,554,898.93 Class PT2-II-IO-19 N/A N/A
Class PT2-II-19B (7) $ 19,554,898.93 N/A N/A N/A
Class PT2-II-20A (6) $ 31,487,653.15 Class PT2-II-IO-20 N/A N/A
Class PT2-II-20B (7) $ 31,487,653.15 N/A N/A N/A
Class PT2-II-21A (6) $ 133,030,711.90 Class PT2-II-IO-21 N/A N/A
Class PT2-II-21B (7) $ 133,030,711.90 N/A N/A N/A
Class PT2-II-22A (6) $ 135,490,081.88 Class PT2-II-IO-22 N/A N/A
Class PT2-II-22B (7) $ 135,490,081.88 N/A N/A N/A
Class PT2-II-23A (6) $ 2,408,492.52 Class PT2-II-IO-23 N/A N/A
Class PT2-II-23B (7) $ 2,408,492.52 N/A N/A N/A
Class PT2-II-24A (6) $ 2,322,007.93 Class PT2-II-IO-24 N/A N/A
Class PT2-II-24B (7) $ 2,322,007.93 N/A N/A N/A
Class PT2-II-25A (6) $ 2,238,635.30 Class PT2-II-IO-25 N/A N/A
Class PT2-II-25B (7) $ 2,238,635.30 N/A N/A N/A
Class PT2-II-26A (6) $ 2,158,270.09 Class PT2-II-IO-26 N/A N/A
Class PT2-II-26B (7) $ 2,158,270.09 N/A N/A N/A
Class PT2-II-27A (6) $ 2,080,820.24 Class PT2-II-IO-27 N/A N/A
Class PT2-II-27B (7) $ 2,080,820.24 N/A N/A N/A
Class PT2-II-28A (6) $ 2,006,378.85 Class PT2-II-IO-28 N/A N/A
Class PT2-II-28B (7) $ 2,006,378.85 N/A N/A N/A
Class PT2-II-29A (6) $ 1,934,524.97 Class PT2-II-IO-29 N/A N/A
Class PT2-II-29B (7) $ 1,934,524.97 N/A N/A N/A
Class PT2-II-30A (6) $ 1,865,066.62 Class PT2-II-IO-30 N/A N/A
Class PT2-II-30B (7) $ 1,865,066.62 N/A N/A N/A
Class PT2-II-31A (6) $ 2,059,026.08 Class PT2-II-IO-31 N/A N/A
Class PT2-II-31B (7) $ 2,059,026.08 N/A N/A N/A
Class PT2-II-32A (6) $ 1,985,163.11 Class PT2-II-IO-32 N/A N/A
Class PT2-II-32B (7) $ 1,985,163.11 N/A N/A N/A
Class PT2-II-33A (6) $ 7,040,740.70 Class PT2-II-IO-33 N/A N/A
Class PT2-II-33B (7) $ 7,040,740.70 N/A N/A N/A
Class PT2-II-34A (6) $ 2,198,743.48 Class PT2-II-IO-34 N/A N/A
Class PT2-II-34B (7) $ 2,198,743.48 N/A N/A N/A
Class PT2-II-35A (6) $ 1,262,454.13 Class PT2-II-IO-35 N/A N/A
Class PT2-II-35B (7) $ 1,262,454.13 N/A N/A N/A
Class PT2-II-36A (6) $ 1,219,762.65 Class PT2-II-IO-36 N/A N/A
Class PT2-II-36B (7) $ 1,219,762.65 N/A N/A N/A
Class PT2-II-37A (6) $ 1,178,489.26 Class PT2-II-IO-37 N/A N/A
Class PT2-II-37B (7) $ 1,178,489.26 N/A N/A N/A
Class PT2-II-38A (6) $ 1,138,588.71 Class PT2-II-IO-38 N/A N/A
Class PT2-II-38B (7) $ 1,138,588.71 N/A N/A N/A
Class PT2-II-39A (6) $ 1,100,015.47 Class PT2-II-IO-39 N/A N/A
Class PT2-II-39B (7) $ 1,100,015.47 N/A N/A N/A
Class PT2-II-40A (6) $ 1,062,738.17 Class PT2-II-IO-40 N/A N/A
Class PT2-II-40B (7) $ 1,062,738.17 N/A N/A N/A
Class PT2-II-41A (6) $ 1,026,690.60 Class PT2-II-IO-41 N/A N/A
Class PT2-II-41B (7) $ 1,026,690.60 N/A N/A N/A
Class PT2-II-42A (6) $ 991,844.77 Class PT2-II-IO-42 N/A N/A
Class PT2-II-42B (7) $ 991,844.77 N/A N/A N/A
Class PT2-II-43A (6) $ 958,161.71 Class PT2-II-IO-43 N/A N/A
Class PT2-II-43B (7) $ 958,161.71 N/A N/A N/A
Class PT2-II-44A (6) $ 925,603.77 Class PT2-II-IO-44 N/A N/A
Class PT2-II-44B (7) $ 925,603.77 N/A N/A N/A
Class PT2-II-45A (6) $ 894,133.85 Class PT2-II-IO-45 N/A N/A
Class PT2-II-45B (7) $ 894,133.85 N/A N/A N/A
Class PT2-II-46A (6) $ 863,718.98 Class PT2-II-IO-46 N/A N/A
Class PT2-II-46B (7) $ 863,718.98 N/A N/A N/A
Class PT2-II-47A (6) $ 834,319.30 Class PT2-II-IO-47 N/A N/A
Class PT2-II-47B (7) $ 834,319.30 N/A N/A N/A
Class PT2-II-48A (6) $ 805,904.25 Class PT2-II-IO-48 N/A N/A
Class PT2-II-48B (7) $ 805,904.25 N/A N/A N/A
Class PT2-II-49A (6) $ 778,441.52 Class PT2-II-IO-49 N/A N/A
Class PT2-II-49B (7) $ 778,441.52 N/A N/A N/A
Class PT2-II-50A (6) $ 751,899.84 Class PT2-II-IO-50 N/A N/A
Class PT2-II-50B (7) $ 751,899.84 N/A N/A N/A
Class PT2-II-51A (6) $ 726,248.92 Class PT2-II-IO-51 N/A N/A
Class PT2-II-51B (7) $ 726,248.92 N/A N/A N/A
Class PT2-II-52A (6) $ 701,459.49 Class PT2-II-IO-52 N/A N/A
Class PT2-II-52B (7) $ 701,459.49 N/A N/A N/A
Class PT2-II-53A (6) $ 677,503.15 Class PT2-II-IO-53 N/A N/A
Class PT2-II-53B (7) $ 677,503.15 N/A N/A N/A
Class PT2-II-54A (6) $ 654,352.35 Class PT2-II-IO-54 N/A N/A
Class PT2-II-54B (7) $ 654,352.35 N/A N/A N/A
Class PT2-II-55A (6) $ 18,224,852.35 Class PT2-II-IO-55 N/A N/A
Class PT2-II-55B (7) $ 18,224,852.35 N/A N/A N/A
Class PT2-II-IO-2 (4) (4) N/A Class PT1-II-2A May 2006
Class PT2-II-IO-3 (4) (4) N/A Class PT1-II-3A June 2006
Class PT2-II-IO-4 (4) (4) N/A Class PT1-II-4A July 2006
Class PT2-II-IO-5 (4) (4) N/A Class PT1-II-5A August 2006
Class PT2-II-IO-6 (4) (4) N/A Class PT1-II-6A September 2006
Class PT2-II-IO-7 (4) (4) N/A Class PT1-II-7A October 2006
Class PT2-II-IO-8 (4) (4) N/A Class PT1-II-8A November 2006
Class PT2-II-IO-9 (4) (4) N/A Class PT1-II-9A December 2006
Class PT2-II-IO-10 (4) (4) N/A Class PT1-II-10A January 2007
Class PT2-II-IO-11 (4) (4) N/A Class PT1-II-11A February 2007
Class PT2-II-IO-12 (4) (4) N/A Class PT1-II-12A March 2007
Class PT2-II-IO-13 (4) (4) N/A Class PT1-II-13A April 2007
Class PT2-II-IO-14 (4) (4) N/A Class PT1-II-14A May 2007
Class PT2-II-IO-15 (4) (4) N/A Class PT1-II-15A June 2007
Class PT2-II-IO-16 (4) (4) N/A Class PT1-II-16A July 2007
Class PT2-II-IO-17 (4) (4) N/A Class PT1-II-17A August 2007
Class PT2-II-IO-18 (4) (4) N/A Class PT1-II-18A September 2007
Class PT2-II-IO-19 (4) (4) N/A Class PT1-II-19A October 2007
Class PT2-II-IO-20 (4) (4) N/A Class PT1-II-20A November 2007
Class PT2-II-IO-21 (4) (4) N/A Class PT1-II-21A December 2007
Class PT2-II-IO-22 (4) (4) N/A Class PT1-II-22A January 2008
Class PT2-II-IO-23 (4) (4) N/A Class PT1-II-23A February 2008
Class PT2-II-IO-24 (4) (4) N/A Class PT1-II-24A March 2008
Class PT2-II-IO-25 (4) (4) N/A Class PT1-II-25A April 2008
Class PT2-II-IO-26 (4) (4) N/A Class PT1-II-26A May 2008
Class PT2-II-IO-27 (4) (4) N/A Class PT1-II-27A June 2008
Class PT2-II-IO-28 (4) (4) N/A Class PT1-II-28A July 2008
Class PT2-II-IO-29 (4) (4) N/A Class PT1-II-29A August 2008
Class PT2-II-IO-30 (4) (4) N/A Class PT1-II-30A September 2008
Class PT2-II-IO-31 (4) (4) N/A Class PT1-II-31A October 2008
Class PT2-II-IO-32 (4) (4) N/A Class PT1-II-32A November 2008
Class PT2-II-IO-33 (4) (4) N/A Class PT1-II-33A December 2008
Class PT2-II-IO-34 (4) (4) N/A Class PT1-II-34A January 2009
Class PT2-II-IO-35 (4) (4) N/A Class PT1-II-35A February 2009
Class PT2-II-IO-36 (4) (4) N/A Class PT1-II-36A March 2009
Class PT2-II-IO-37 (4) (4) N/A Class PT1-II-37A April 2009
Class PT2-II-IO-38 (4) (4) N/A Class PT1-II-38A May 2009
Class PT2-II-IO-39 (4) (4) N/A Class PT1-II-39A June 2009
Class PT2-II-IO-40 (4) (4) N/A Class PT1-II-40A July 2009
Class PT2-II-IO-41 (4) (4) N/A Class PT1-II-41A August 2009
Class PT2-II-IO-42 (4) (4) N/A Class PT1-II-42A September 2009
Class PT2-II-IO-43 (4) (4) N/A Class PT1-II-43A October 2009
Class PT2-II-IO-44 (4) (4) N/A Class PT1-II-44A November 2009
Class PT2-II-IO-45 (4) (4) N/A Class PT1-II-45A December 2009
Class PT2-II-IO-46 (4) (4) N/A Class PT1-II-46A January 2010
Class PT2-II-IO-47 (4) (4) N/A Class PT1-II-47A February 2010
Class PT2-II-IO-48 (4) (4) N/A Class PT1-II-48A March 2010
Class PT2-II-IO-49 (4) (4) N/A Class PT1-II-49A April 2010
Class PT2-II-IO-50 (4) (4) N/A Class PT1-II-50A May 2010
Class PT2-II-IO-51 (4) (4) N/A Class PT1-II-51A June 2010
Class PT2-II-IO-52 (4) (4) N/A Class PT1-II-52A July 2010
Class PT2-II-IO-53 (4) (4) N/A Class PT1-II-53A August 2010
Class PT2-II-IO-54 (4) (4) N/A Class PT1-II-54A September 2010
Class PT2-II-IO-55 (4) (4) N/A Class PT1-II-55A October 2010
Class PT2-R (8) (8) N/A N/A N/A
----------------------------
(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 (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group I 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 (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and 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 relating to Loan Group I and 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 (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group I and having a "B" in
their class designation.
(4) Each Pooling-Tier REMIC-2 IO is an interest-only interest and does not have
a principal balance but has a notional balance ("Pooling-Tier REMIC-2 IO
Notional Balance") equal to the Pooling-Tier REMIC-2 Principal Amount of
the Corresponding Pooling-Tier REMIC-1 Regular Interest. From the Closing
Date through and including the Corresponding Actual 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 Actual Crossover
Distribution Date, the Pooling-Tier REMIC-2 IO Interest shall not accrue
interest.
(5) 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 (its "Pooling-Tier REMIC-2 Interest Rate") equal to the Pooling-Tier
REMIC-1 Loan Group II WAC Rate.
(6) 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 (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to the Group II Mortgage Loans and
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
relating to Loan Group II and having an "A" in their class designation.
(7) 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 (its "Pooling-Tier REMIC-2 Interest Rate") equal to the weighted
average of the Pooling-Tier REMIC-1 Interest Rates on the Pooling-Tier
REMIC-1 Regular Interests relating to Loan Group II and having a "B" in
their class designation.
(8) The Class PT2-R Interest shall not have a principal balance and shall not
bear interest.
On each Distribution Date, the interest distributable in
respect of the Mortgage Loans from the related Loan Group 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 Group I Mortgage Loans
shall be allocated to the then outstanding Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests) relating to the
Group I Mortgage Loans with the lowest numerical denomination until the
Pooling-Tier REMIC-2 Principal Amount of such interest is reduced to zero,
provided that, for Pooling-Tier REMIC-2 Regular Interests relating to the Group
I Mortgage Loans 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, until the Pooling-Tier
REMIC-2 Principal Amount of such interests is reduced to zero.
On each Distribution Date, Realized Losses, Subsequent
Recoveries and payments of principal in respect of the Group II Mortgage Loans
shall be allocated to the then outstanding Pooling-Tier REMIC-2 Regular
Interests (other than the Pooling-Tier REMIC-2 IO Interests) relating to Loan
Group II with the lowest numerical denomination until the Pooling-Tier REMIC-2
Principal Amount of such interest is reduced to zero, provided that, for
Pooling-Tier REMIC-2 Regular Interests relating to the Group II Mortgage Loans
with the same numerical denomination, such Realized Losses and payments of
principal shall be allocated pro rata between such Pooling-Tier REMIC-2 Regular
Interests, until the Pooling-Tier REMIC-2 Principal Amount of such interests is
reduced to zero.
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 Certificates.
Corresponding
Lower-Tier Lower-Tier Interest Initial Lower-Tier Upper-Tier REMIC
REMIC Interest Rate Principal Amount Regular Interest
-------------- ------------------- ---------------- ----------------
Class LT-A-1 (1) 1/2 initial Class Certificate Balance of A-1
Corresponding Upper-Tier Regular Interest
Class LT-A-2a (1) 1/2 initial Class Certificate Balance of A-2a
Corresponding Upper-Tier Regular Interest
Class LT-A-2b (1) 1/2 initial Class Certificate Balance of A-2b
Corresponding Upper-Tier Regular Interest
Class LT-A-2c (1) 1/2 initial Class Certificate Balance of A-2c
Corresponding Upper-Tier Regular Interest
Class LT-A-2d (1) 1/2 initial Class Certificate Balance of A-2d
Corresponding Upper-Tier Regular Interest
Class LT-M-1 (1) 1/2 initial Class Certificate Balance of M-1
Corresponding Upper-Tier Regular Interest
Class LT-M-2 (1) 1/2 initial Class Certificate Balance of M-2
Corresponding Upper-Tier Regular Interest
Class LT-M-3 (1) 1/2 initial Class Certificate Balance of M-3
Corresponding Upper-Tier Regular Interest
Class LT-M-4 (1) 1/2 initial Class Certificate Balance of M-4
Corresponding Upper-Tier Regular Interest
Class LT-M-5 (1) 1/2 initial Class Certificate Balance of M-5
Corresponding Upper-Tier Regular Interest
Class LT-M-6 (1) 1/2 initial Class Certificate Balance of M-6
Corresponding Upper-Tier Regular Interest
Class LT-B-1 (1) 1/2 initial Class Certificate Balance of B-1
Corresponding Upper-Tier Regular Interest
Class LT-B-2 (1) 1/2 initial Class Certificate Balance of B-2
Corresponding Upper-Tier Regular Interest
Class LT-B-3 (1) 1/2 initial Class Certificate Balance of B-3
Corresponding Upper-Tier Regular Interest
Class LT-Accrual (1) 1/2 Pool Stated Principal Balance plus 1/2 N/A
Subordinated Amount, less the aggregate
initial Lower-Tier Principal Amount of
Class LT-Group I and Class LT Group II
Class LT-Group I (2) 0.001% aggregate Stated Principal Balance N/A
of Group I Mortgage Loans(4)
Class LT-Group II (3) 0.001% aggregate Stated Principal Balance N/A
of Group II Mortgage Loans(4)
Class LT-IO (5) (5) N/A
Class LT-R (6) (6) 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) The interest rate with respect to any Distribution Date for the Class
LT-Group I Interest is a per annum variable rate (expressed as a percentage
rounded to eight decimal places) 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) relating to
the Group I Mortgage Loans.
(3) The interest rate with respect to any Distribution Date for the Class
LT-Group II Interest is a per annum variable rate (expressed as a
percentage rounded to eight decimal places) 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)
relating to the Group II Mortgage Loans.
(4) For all Distribution Dates, the Lower-Tier Principal Amount of these
Lower-Tier Regular Interests shall be rounded to eight decimal places.
(5) 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.
(6) The Class LT-R Interest is the sole class of residual interest in the
Lower-Tier REMIC and it does not have a principal amount or an interest
rate.
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-2a, Class
LT-A-2b, Class LT-A-2c, Class LT-A-2d, 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-B-1, Class LT-B-2 and Class
LT-B-3 Interests are hereby designated the LT-Accretion Directed Classes (the
"LT-Accretion Directed Classes").
On each Distribution Date, 50% of the increase in the
Subordinated 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 Subordinated Amount that is
attributable to a reduction in the Class Certificate 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 Subordinated 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 Subordinated 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, the Class LT-Group I Interest and Class LT-Group II
Interest (and further allocated among these Lower-Tier Regular Interests in the
manner described below) 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 X Interest that result in the reduction in the Subordinated 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 Class Certificate Balance
of their Corresponding Class, and (ii) the Class LT-Accrual Interest, the Class
LT-Group I Interest and the Class LT-Group II Interest (and further allocated
among these Lower-Tier Regular Interests in the manner described below) is equal
to 50% of the aggregate Stated Principal Balance of the Mortgage Loans plus 50%
of the Subordinated Amount. Any increase in the Class Certificate Balance of a
Class of Offered 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, the
Class LT-Group I Interest and the Class LT-Group II Interest (such increase
shall be further allocated among such Lower-Tier Regular Interests in the manner
described below). As among the Class LT-Accrual Interest, the Class LT-Group I
Interest and the Class LT-Group II Interest, all payments of scheduled principal
and prepayments of principal generated by the Mortgage Loans, all Subsequent
Recoveries and all Realized Losses, allocable to such Lower-Tier Regular
Interests and all increases in the Lower-Tier Principal Amount of such
Lower-Tier Regular Interests as a result of Subsequent Recoveries shall be
allocated (i) to the Class LT-Group I Interest and the Class LT-Group II
Interest, each from the related Loan Group so that their respective Lower-Tier
Principal Amounts (computed to at least eight decimal places) are equal to
0.001% of the aggregate Stated Principal Balance of the Mortgage Loans in the
related Loan Group and (ii) the remainder to 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 Certificates.
Upper-Tier Initial Principal Corresponding Class of
Upper-Tier REMIC Interest Interest Rate Upper-Tier Amount Certificates
------------------------- ------------- ----------------- ------------
Class A-1 (1) $ 435,720,000 Class A-1
Class A-2a (2) $ 690,310,000 Class A-2a
Class A-2b (2) $ 196,890,000 Class A-2b
Class A-2c (2) $ 295,470,000 Class A-2c
Class A-2d (2) $ 183,755,000 Class A-2d
Class M-1 (3) $ 78,206,000 Class M-1
Class M-2 (3) $ 71,406,000 Class M-2
Class M-3 (3) $ 43,070,000 Class M-3
Class M-4 (3) $ 37,403,000 Class M-4
Class M-5 (3) $ 36,270,000 Class M-5
Class M-6 (3) $ 32,869,000 Class M-6
Class B-1 (3) $ 32,869,000 Class B-1
Class B-2 (3) $ 29,469,000 Class B-2
Class B-3 (3) $ 23,802,000 Class B-3
Class IO (4) (4) N/A
Class X (5) (5) Class X
Class UT-R (6) (6) Class R
-----------------
(1) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group I Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group I Interest (the "Upper-Tier REMIC Loan Group I Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(2) For any Distribution Date (and the related Interest Accrual Period) this
interest shall bear interest at the least of (i) the Pass-Through Rate
(determined without regard to the Loan Group II Cap or WAC Cap) for the
Corresponding Class of Certificates, (ii) the Lower-Tier Interest Rate for
the Class LT-Group II Interest (the "Upper-Tier REMIC Loan Group II Rate")
and (ii) the Upper-Tier REMIC WAC Rate.
(3) 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 WAC Cap) for the Corresponding Class of
Certificates and (ii) the Upper-Tier REMIC WAC Rate.
(4) 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 all interest distributable on the Class LT-IO Interest. This
interest shall be beneficially owned by the holders of the Class X
Certificates and shall be held as an asset of the Swap Account.
(5) The Class X Interest has an initial principal balance of $79,340,639 but
will not accrue interest on such balance but will accrue interest on a
notional principal balance. As of any Distribution Date, the Class X
Interest shall have a notional principal balance 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 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 each of the Class LT-Accrual Interest, Class LT-Group I Interest and
Class LT-Group II 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 principal balance of the Class X Interest shall be deferred in an
amount equal to any increase in the Subordinated Amount on such
Distribution Date. Such deferred interest shall not itself bear interest.
(6) The Class UT-R Interest does not have an interest rate or a principal
balance.
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 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 Class Certificate Balance of the Corresponding Class of
Certificates as of such Distribution Date.
The Certificates
Class Designation Class Pass-Through Rate Class Certificate Balance
----------------- ----------------------- -------------------------
Class A-1(9) (1) $ 435,720,000
Class A-2a(9) (2) $ 690,310,000
Class A-2b(9) (3) $ 196,890,000
Class A-2c(9) (4) $ 295,470,000
Class A-2d(9) (5) $ 183,755,000
Class M-1(9) (6) $ 78,206,000
Class M-2(9) (6) $ 71,406,000
Class M-3(9) (6) $ 43,070,000
Class M-4(9) (6) $ 37,403,000
Class M-5(9) (6) $ 36,270,000
Class M-6(9) (6) $ 32,869,000
Class B-1(9) (6) $ 32,869,000
Class B-2(9) (6) $ 29,469,000
Class B-3(9) (6) $ 23,802,000
Class X (7) $ 0(7)
Class R (8) $ 0(8)
----------------------------
(1) The Class A-1 Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group I Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group I Cap and (iii) the WAC Cap.
(2) The Class A-2a Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(3) The Class A-2b Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(4) The Class A-2c Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(5) The Class A-2d Interest will bear interest during each Interest Accrual
Period at a per annum rate equal to (a) on or prior to the Optional
Termination Date, the least of (i) LIBOR plus the applicable Pass-Through
Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap or (b) after the
Optional Termination Date, the least of (i) LIBOR plus the applicable
Pass-Through Margin, (ii) the Loan Group II Cap and (iii) the WAC Cap.
(6) The Class M-1, Class M-2, Class M-3, Class M-4, Class M-5, Class M-6, Class
B-1, Class B-2 and Class B-3 Interests will bear interest during each
Interest Accrual Period at a per annum rate equal to (a) on or prior to the
Optional Termination Date, the lesser of (i) LIBOR plus the applicable
Pass-Through Margin, and (ii) the WAC Cap or (b) after the Optional
Termination Date, the lesser of (i) LIBOR plus the applicable Pass-Through
Margin, and (ii) the WAC Cap.
(7) The Class X Certificates will represent beneficial ownership of the Class X
Interest, the Class IO Interest, the Interest Rate Swap Agreement, the
right to Class IO Shortfalls and amounts in the Excess Reserve Fund Account
and the Swap Account, subject to the obligation to make payments from the
Excess Reserve Fund Account in respect of Basis Risk CarryForward Amounts
and amounts in the Swap Account subject to the obligation to make Net Swap
Payments, Swap Termination Payments and Basis Risk CarryForward Amounts
and, without duplication, Upper Tier Carryforward Amounts. For federal
income tax purposes, the Securities Administrator will treat a Class X
Certificateholder's obligation to make payments from the Excess Reserve
Fund Account or the Swap Account as payments made pursuant to an interest
rate cap contract written by the Class X Certificateholders in favor of
each Class of Offered Certificates. Such rights of the Class X
Certificateholders and Offered 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.
(8) The Class UT-R Interest does not have an interest rate or a principal
balance.
(9) Each of these Certificates will represent not only the ownership of the
Corresponding Class of Upper-Tier Regular Interest but also the right to
receive payments from the Excess Reserve Fund Account and the Swap Account
in respect of any Basis Risk CarryForward Amounts and, without duplication,
Upper Tier CarryForward Amounts. Each of these Certificates will also be
subject to the obligation to pay Class IO Shortfalls as described in
Section 8.13. For federal income tax purposes, any amount distributed on
the Offered Certificates on any such 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 Swap Account, 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 Offered Certificates on such Distribution Date shall
be treated as having been paid to the Swap Account, all pursuant to, and as
further provided in, Section 8.13. For federal income tax purposes, the
Securities Administrator will treat a Certificateholder's right to receive
payments from the Excess Reserve Fund Account or the Swap Account as
payments made pursuant to an interest rate cap contract written by the
Class X Certificateholders.
The minimum denomination for each Class of Certificates, other
than the Class P, Class R and the Class X Certificates, will be $25,000 with
integral multiples of $1 in excess thereof. The minimum denomination for the
Class P and the Class X Certificates will each be a 1% Percentage Interest in
such Class. The Class R Certificate will represent a 100% Percentage Interest in
such Class.
It is expected that each Class of Certificates will receive
its final distribution of principal and interest on or prior to the Final
Scheduled Distribution Date.
Set forth below are designations of Classes of Certificates to
the categories used herein:
Book-Entry Certificates........................... All Classes of Certificates other than the Physical
Certificates.
Class A Certificates.............................. Class A-1, Class A-2a, Class A-2b, Class A-2c and Class A-2d
Certificates.
Delay Certificates................................ None.
ERISA-Restricted Certificates..................... Class R, Class P and Class X Certificates; any certificate
with a rating below the
lowest applicable
permitted rating under the
Underwriters' Exemption.
Non-Delay Certificates............................ Class A, Class X and Subordinated Certificates.
Offered Certificates.............................. All Classes of Certificates other than the Private
Certificates.
Physical Certificates............................. Class P, Class X and Class R Certificates.
Private Certificates.............................. Class P, Class X and Class R Certificates.
Rating Agencies................................... Fitch, Xxxxx'x and Standard & Poor's.
Regular Certificates.............................. All Classes of Certificates other than the Class P and Class R
Certificates.
Residual Certificates............................. Class R Certificates.
Subordinated Certificates......................... Class M-1, Class M-2, Class M-3, Class M-4, Class M-5,
Class M-6, Class B-1, Class B-2 and Class B-3 Certificates.
ARTICLE I
DEFINITIONS
Whenever used in this Agreement, the following words and phrases,
unless the context otherwise requires, shall have the following meanings:
Accepted Servicing Practices: With respect to any Mortgage Loan,
those mortgage servicing practices set forth in Section 3.01(a) of this
Agreement.
Account: Any of the Collection Accounts, the Distribution Account,
any Escrow Account, the Excess
Reserve Fund Account or the Swap Account. Each Account shall be an
Eligible Account.
Accrued Certificate Interest Distribution Amount: With respect to
any Distribution Date for each Class of Offered Certificates, the amount of
interest accrued during the related Interest Accrual Period at the applicable
Pass-Through Rate on the related Class Certificate Balance immediately prior to
such Distribution Date, as reduced by such Class's share of Net Prepayment
Interest Shortfalls and Relief Act Interest Shortfalls for such Distribution
Date allocated to such Class pursuant to Section 4.02.
Adjustable Rate Mortgage Loan: An adjustable rate Mortgage Loan.
Adjusted Net Mortgage Rate: As to each Mortgage Loan and at any
time, the per annum rate equal to the Mortgage Rate less the Expense Fee Rate.
Adjustment Date: As to any Adjustable Rate Mortgage Loan, the first
Due Date on which the related Mortgage Rate adjusts as set forth in the related
Mortgage Note and each Due Date thereafter on which the Mortgage Rate adjusts as
set forth in the related Mortgage Note.
Advance: Any P&I Advance or Servicing Advance.
Advance Facility: A financing or other facility as described in
Section 11.07.
Advancing Person: The Person to whom any Servicer's rights under
this Agreement to be reimbursed for any P&I Advances or Servicing Advances have
been assigned pursuant to Section 11.07.
Affiliate: With respect to any Person, any other Person controlling,
controlled by or under common control with such first Person. For the purposes
of this definition, "control" means the power to direct the management and
policies of such Person, directly or indirectly, whether through the ownership
of voting securities, by contract or otherwise; and the terms "controlling" and
"controlled" have meanings correlative to the foregoing.
Agreement: This Pooling and Servicing Agreement and all amendments
or supplements hereto.
Amount Held for Future Distribution: As to the Certificates on any
Distribution Date, the aggregate amount held in each Collection Account at the
close of business on the related Determination Date on account of (i) Principal
Prepayments, Insurance Proceeds, Condemnation Proceeds and Liquidation Proceeds
on the Mortgage Loans received after the end of the related Prepayment Period
and (ii) all Scheduled Payments on the Mortgage Loans due after the end of the
related Due Period.
Analytics Company: Intex Solutions, Inc., or any other bond
analytics service provider identified to the Securities Administrator by the
Depositor.
Applied Realized Loss Amount: With respect to any Distribution Date,
the amount, if any, by which the aggregate Class Certificate Balance of the
Offered Certificates after distributions of principal on such Distribution Date
exceeds the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date.
Appraised Value: The value set forth in an appraisal made in
connection with the origination of the related Mortgage Loan as the value of the
Mortgaged Property.
Assignment of Mortgage: An assignment of the Mortgage, notice of
transfer or equivalent instrument in recordable form (other than the assignee's
name and recording information not yet returned from the recording office),
reflecting the sale of the Mortgage to the Trustee.
Available Funds: With respect to any Distribution Date and the
Mortgage Loans to the extent received by the Securities Administrator (x) the
sum of (i) all scheduled installments of interest (net of the related Expense
Fees) and principal due on the Due Date on such Mortgage Loans in the related
Due Period and received by the Servicers on or prior to the related
Determination Date, together with any P&I Advances in respect thereof; (ii) all
Condemnation Proceeds, Insurance Proceeds and Liquidation Proceeds received by
the Servicers during the related Prepayment Period (in each case, net of
unreimbursed expenses incurred in connection with a liquidation or foreclosure
and unreimbursed Advances, if any); (iii) all partial or full prepayments on the
Mortgage Loans received by the Servicers during the related Prepayment Period
together with all Compensating Interest, if applicable, thereon (excluding any
Prepayment Charges); (iv) all Substitution Adjustment Amounts with respect to
the substitutions of Mortgage Loans that occur with respect to such Distribution
Date; (v) amounts received with respect to such Distribution Date as the
Repurchase Price in respect of a Mortgage Loan repurchased by the Depositor or
the Responsible Party, as applicable, with respect to such Distribution Date;
(vi) the proceeds received with respect to the termination of the Trust Fund
pursuant to clause (a) of Section 10.01; and (vii) the Closing Date Deposit
Amount; reduced by (y) amounts in reimbursement for Advances previously made
with respect to the Mortgage Loans and other amounts as to which the Servicers,
the Depositor, the Securities Administrator, the Custodians or the Trustee are
entitled to be paid or reimbursed pursuant to this Agreement.
Balloon Loan: Any Mortgage Loan that requires only payments of
interest until the stated maturity date of the Mortgage Loan or Scheduled
Payments of principal which (not including the payment due on its stated
maturity date) are based on an amortization schedule that would be insufficient
to fully amortize the principal thereof by the stated maturity date of the
Mortgage Loan.
Basic Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the Principal Remittance Amount for such
Distribution Date over (ii) the Excess Subordinated Amount, if any, for such
Distribution Date.
Basis Risk CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Pass Through Rate for any Class of Offered Certificates is
based upon a Loan Group Cap or the WAC Cap, the excess of (i) the Accrued
Certificate Interest Distribution Amount such Class of Certificates would
otherwise be entitled to receive on such Distribution Date had such Pass-Through
Rate not been subject to any Loan Group Cap or WAC Cap (that is, had such rate
been calculated as the sum of LIBOR and the applicable Pass-Through Margin on
such Class of Certificates for such Distribution Date and the resulting amount
being reduced by allocated Net Prepayment Interest Shortfalls and Relief Act
Interest Shortfalls) over (ii) the Accrued Certificate Interest Distribution
Amount received on such Distribution Date such Class of Certificates at, with
respect to each Class of Group I Class A Certificates, the lesser of the Loan
Group I Cap or the WAC Cap, with respect to each Class of Group II Class A
Certificates, the lesser of the Loan Group II Cap or the WAC Cap, and with
respect to each other Class of Offered Certificates, the WAC Cap, as applicable,
for such Distribution Date and (B) the Basis Risk CarryForward Amount for such
Class of Certificates for all previous Distribution Dates not previously paid,
together with interest thereon at a rate equal to the sum of LIBOR and the
applicable Pass-Through Margin for such Class of Certificates for such
Distribution Date.
Basis Risk Payment: For any Distribution Date, an amount equal to
the lesser of (i) the aggregate of the Basis Risk CarryForward Amounts for such
Distribution Date and (ii) the Class X Distributable Amount (prior to any
reduction for amounts paid from the Excess Reserve Fund Account to pay any Basis
Risk CarryForward Amount or any Swap Termination Payment).
Best's: Best's Key Rating Guide, as the same shall be amended from
time to time.
Book-Entry Certificates: As specified in the Preliminary Statement.
Business Day: Any day other than (i) Saturday or Sunday, or (ii) a
day on which banking and savings and loan institutions, in (a) the States of
Arizona, New York, California, Texas, Maryland, Minnesota, New Jersey or
Delaware, (b) a State in which any Servicer's servicing operations are located,
or (c) the State in which the Securities Administrator's operations are located,
are authorized or obligated by law or executive order to be closed.
Certificate: Any one of the Certificates executed by the Securities
Administrator in substantially the forms attached hereto as exhibits.
Certificate Balance: With respect to any Class of Certificates,
other than the Class X, Class P or Class R Certificates, at any date, the
maximum dollar amount of principal to which the Holder thereof is then entitled
hereunder, such amount being equal to the Denomination thereof minus all
distributions of principal previously made with respect thereto and in the case
of any Certificates, reduced by any Applied Realized Loss Amounts allocated to
such Class of Certificates pursuant to Section 4.05; provided, however, that
immediately following the Distribution Date on which a Subsequent Recovery is
distributed, the Class Certificate Balances of any Class or Classes of
Certificates that have been previously reduced by Applied Realized Loss Amounts
will be increased, in order of seniority, by the amount of the Subsequent
Recovery distributed on such Distribution Date (up to the amount of the Unpaid
Realized Loss Amount for such Class or Classes for such Distribution Date). The
Class X, Class P and Class R Certificates have no Certificate Balance.
Certificate Owner: With respect to a Book-Entry Certificate, the
Person who is the beneficial owner of such Book-Entry Certificate.
Certificate Register: The register maintained pursuant to Section
5.02.
Certificateholder or Holder: The person in whose name a Certificate
is registered in the Certificate Register, except that, solely for the purpose
of giving any consent pursuant to this Agreement, any Certificate registered in
the name of the Depositor or any Affiliate of the Depositor shall be deemed not
to be Outstanding and the Percentage Interest evidenced thereby shall not be
taken into account in determining whether the requisite amount of Percentage
Interests necessary to effect such consent has been obtained; provided, however,
that if any such Person (including the Depositor) owns 100% of the Percentage
Interests evidenced by a Class of Certificates, such Certificates shall be
deemed to be Outstanding for purposes of any provision hereof that requires the
consent of the Holders of Certificates of a particular Class as a condition to
the taking of any action hereunder. The Securities Administrator is entitled to
rely conclusively on a certification of the Depositor or any Affiliate of the
Depositor in determining which Certificates are registered in the name of an
Affiliate of the Depositor.
Class: All Certificates bearing the same class designation as set
forth in the Preliminary Statement.
Class A Certificate Group: The Group I Class A Certificates or the
Group II Class A Certificates, as applicable.
Class A Certificates: As specified in the Preliminary Statement.
Class A Principal Allocation Percentage: With respect to any
Distribution Date, the percentage equivalent of a fraction, determined as
follows: (A) with respect to the Group I Class A Certificates, a fraction, the
numerator of which is (x) the portion of the Principal Remittance Amount for
such Distribution Date that is attributable to the principal received or
advanced on the Group I Mortgage Loans and the denominator of which is (y) the
Principal Remittance Amount for such Distribution Date and (B) with respect to
the Group II Class A Certificates, a fraction, the numerator of which is (x) the
portion of the Principal Remittance Amount for such Distribution Date that is
attributable to the principal received or advanced on the Group II Mortgage
Loans and the denominator of which is (y) the Principal Remittance Amount for
such Distribution Date.
Class A Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the aggregate Class Certificate Balances of
the Class A Certificates immediately prior to such Distribution Date over (ii)
the lesser of (A) 59.00% of the aggregate Stated Principal Balance of the
Mortgage Loans for such Distribution Date and (B) the excess, if any, of the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date over $11,334,248.
Class A-1 Certificates: All Certificates bearing the class
designation of "Class A-1".
Class A-2a Certificates: All Certificates bearing the class
designation of "Class A-2a".
Class A-2b Certificates: All Certificates bearing the class
designation of "Class A-2b".
Class A-2c Certificates: All Certificates bearing the class
designation of "Class A-2c".
Class A-2d Certificates: All Certificates bearing the class
designation of "Class A-2d".
Class B Certificates: The Class B-1, Class B-2 and Class B-3
Certificates.
Class B-1 Certificates: All Certificates bearing the class
designation of "Class B-1".
Class B-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date) and (H) the Class
Certificate Balance of the Class B-1 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 88.30% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $11,334,248.
Class B-2 Certificates: All Certificates bearing the class
designation of "Class B-2".
Class B-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), and (I) the Class Certificate Balance of the Class B-2
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 90.90% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$11,334,248.
Class B-3 Certificates: All Certificates bearing the class
designation of "Class B-3".
Class B-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date), (G) the Class Certificate Balance of the Class M-6
Certificates (after taking into account the distribution of the Class M-6
Principal Distribution Amount for such Distribution Date), (H) the Class
Certificate Balance of the Class B-1 Certificates (after taking into account the
distribution of the Class B-1 Principal Distribution Amount for such
Distribution Date), (I) the Class Certificate Balance of the Class B-2
Certificates (after taking into account the distribution of the Class B-2
Principal Distribution Amount for such Distribution Date) and (J) the Class
Certificate Balance of the Class B-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 93.00% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $11,334,248.
Class Certificate Balance: With respect to any Class and as to any
date of determination, the aggregate of the Certificate Balances of all
Certificates of such Class as of such date.
Class IO Interest: As specified in the Preliminary Statement.
Class IO Shortfalls: As defined in Section 8.13. For the avoidance
of doubt, the Class IO Shortfall for any Distribution Date shall equal the
amount payable to the Class X Certificates in respect of amounts due to the Swap
Provider on such Distribution Date (other than Defaulted Swap Termination
Payments) in excess of the amount payable on the Class X Interest (prior to any
reduction for Basis Risk Payments or Swap Termination Payments) on such
Distribution Date, all as further provided in Section 8.13.
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 Certificates: The Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5 and Class M-6 Certificates.
Class M-1 Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balances of the Class M and Class B Certificates (other than the
Class M-1 Certificates) and (ii) the Subordinated Amount, in each case after
taking into account the distributions of the related Principal Distribution
Amount and any principal payments on those Classes of Certificates from the Swap
Account on that Distribution Date, by (y) the aggregate Stated Principal Balance
of the Mortgage Loans for that Distribution Date.
Class M-1 Certificates: All Certificates bearing the class
designation of "Class M-1".
Class M-1 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), and (B) the Class Certificate Balance of the Class M-1 Certificates
immediately prior to such Distribution Date over (ii) the lesser of (A) 65.90%
of the aggregate Stated Principal Balance of the Mortgage Loans for such
Distribution Date and (B) the excess, if any, of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date over $11,334,248.
Class M-2 Certificates: All Certificates bearing the class
designation of "Class M-2".
Class M-2 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date) and (C) the Class Certificate Balance of the
Class M-2 Certificates immediately prior to such Distribution Date over (ii) the
lesser of (A) 72.20% of the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date and (B) the excess, if any, of the aggregate
Stated Principal Balance of the Mortgage Loans for such Distribution Date over
$11,334,248.
Class M-3 Certificates: All Certificates bearing the class
designation of "Class M-3".
Class M-3 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date) and (D) the Class
Certificate Balance of the Class M-3 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 76.00% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $11,334,248.
Class M-4 Certificates: All Certificates bearing the class
designation of "Class M-4".
Class M-4 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), and (E) the Class Certificate Balance of the Class M-4
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 79.30% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$11,334,248.
Class M-5 Certificates: All Certificates bearing the class
designation of "Class M-5".
Class M-5 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date) and (F) the Class
Certificate Balance of the Class M-5 Certificates immediately prior to such
Distribution Date over (ii) the lesser of (A) 82.50% of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date and (B) the
excess, if any, of the aggregate Stated Principal Balance of the Mortgage Loans
for such Distribution Date over $11,334,248.
Class M-6 Certificates: All Certificates bearing the class
designation of "Class M-6".
Class M-6 Principal Distribution Amount: With respect to any
Distribution Date, the excess of (i) the sum of (A) the aggregate Class
Certificate Balances of the Class A Certificates (after taking into account the
distribution of the Class A Principal Distribution Amount for such Distribution
Date), (B) the Class Certificate Balance of the Class M-1 Certificates (after
taking into account the distribution of the Class M-1 Principal Distribution
Amount for such Distribution Date), (C) the Class Certificate Balance of the
Class M-2 Certificates (after taking into account the distribution of the Class
M-2 Principal Distribution Amount for such Distribution Date), (D) the Class
Certificate Balance of the Class M-3 Certificates (after taking into account the
distribution of the Class M-3 Principal Distribution Amount for such
Distribution Date), (E) the Class Certificate Balance of the Class M-4
Certificates (after taking into account the distribution of the Class M-4
Principal Distribution Amount for such Distribution Date), (F) the Class
Certificate Balance of the Class M-5 Certificates (after taking into account the
distribution of the Class M-5 Principal Distribution Amount for such
Distribution Date) and (G) the Class Certificate Balance of the Class M-6
Certificates immediately prior to such Distribution Date over (ii) the lesser of
(A) 85.40% of the aggregate Stated Principal Balance of the Mortgage Loans for
such Distribution Date and (B) the excess, if any, of the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date over
$11,334,248.
Class P Certificates: All Certificates bearing the class designation
of "Class P".
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 R Certificates: All Certificates bearing the class designation
of "Class R".
Class UT-R Interest: The residual interest in the Upper-Tier REMIC
as described in the Preliminary Statement and the related footnote thereto.
Class X Certificates: All Certificates bearing the class designation
of "Class X".
Class X Distributable Amount: On any Distribution Date, the sum of
(i) as a distribution in respect of interest, the amount of interest that has
accrued on the Class X Interest and not applied as an Extra Principal
Distribution Amount on such Distribution Date, plus any such accrued interest
remaining undistributed from prior Distribution Dates, plus, without
duplication, (ii) as a distribution in respect of principal, any portion of the
principal balance of the Class X Interest which is distributable as a
Subordination Reduction Amount, minus (iii) any amounts paid from the Excess
Reserve Fund Account to pay any Basis Risk CarryForward Amount or any Swap
Termination Payment.
Class X Interest: The Upper-Tier Regular Interest represented by the
Class X Certificates as specified and described in the Preliminary Statement and
the related footnote thereto.
Closing Date: April 28, 2006.
Closing Date Deposit Amount: $49,916.74 (all of which is allocable
to principal) deposited by the Depositor into the Distribution Account on the
Closing Date. $13.18 of the Closing Date Deposit Amount shall be attributable to
the Group I Mortgage Loans and $49,903.56 of the Closing Date Deposit Amount
shall be attributable to the Group II Mortgage Loans.
Code: The Internal Revenue Code of 1986, including any successor or
amendatory provisions.
Collection Account: As defined in Section 3.10(a).
Combined Loan to Value Ratio or CLTV: As of any date and as to any
Second Lien Mortgage Loan, the ratio, expressed as a percentage, of the (a) sum
of (i) the outstanding principal balance of the Second Lien Mortgage Loan and
(ii) the outstanding principal balance as of such date of any mortgage loan or
mortgage loans that are senior or equal in priority to the Second Lien Mortgage
Loan and which are secured by the same Mortgaged Property to (b) the Appraised
Value as determined pursuant to the Underwriting Guidelines of the related
Mortgaged Property as of the origination of the Second Lien Mortgage Loan.
Commission: The United States Securities and Exchange Commission.
Compensating Interest: For any Distribution Date and each Servicer,
the lesser of (a) the amount by which the Prepayment Interest Shortfall
resulting from Principal Prepayments in Full exceeds all Prepayment Interest
Excesses for such Distribution Date on the Mortgage Loans serviced by the
applicable Servicer and (b) the amount of the aggregate Servicing Fee paid to or
retained by the applicable Servicer for such Distribution Date.
Condemnation Proceeds: All awards or settlements in respect of a
Mortgaged Property, whether permanent or temporary, partial or entire, by
exercise of the power of eminent domain or condemnation.
Convertible Mortgage Loan: Any individual Adjustable Rate Mortgage
Loan which contains a provision whereby the Mortgagor is permitted to convert
the Adjustable Rate Mortgage Loan to a Fixed Rate Mortgage Loan in accordance
with the terms of the related Mortgage Note.
Corporate Trust Office: With respect to the Securities
Administrator, the principal office of the Securities Administrator (other than
Xxxxx Fargo in its capacity as Custodian) at 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx,
Xxxxxxxx 00000-0000, Attention: Client Manager MSMC 2006-HE2 (or, for the
purposes of the registration of transfers or exchanges of Certificates, as set
forth in Section 5.06), or such other address as the Securities Administrator
may designate from time to time by notice to the Certificateholders. The
designated office of the Trustee in the State of California at which at any
particular time its corporate trust business with respect to this Agreement is
administered, which office at the date of the execution of this Agreement is
located at 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attn: Trust
Administration-MS06H2, facsimile no. (000) 000-0000, and which is the address to
which notices to and correspondence with the Trustee should be directed.
Corresponding Actual Crossover Distribution Date: For each
Pooling-Tier REMIC-2 IO Interest, the related Corresponding Scheduled Crossover
Distribution Date, unless on such date two times the aggregate Pooling-Tier
REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO Interest then
outstanding is less than the scheduled swap notional amount (taking into account
the use of the multiplier) of the Interest Rate Swap Agreement applicable for
such Distribution Date, in which case the Corresponding Actual Crossover
Distribution Date for such Pooling-Tier REMIC-2 IO Interest shall be the first
Distribution Date thereafter on which two times the aggregate of the
Pooling-Tier REMIC-2 IO Notional Balance of each other Pooling-Tier REMIC-2 IO
Interest then outstanding is greater than or equal to the scheduled swap
notional amount (taking into account the use of the multiplier) of the Interest
Rate Swap Agreement.
Corresponding Class: The class of interests in the Lower-Tier REMIC
or Upper-Tier REMIC that corresponds to the class of interests in the other such
REMIC or to a Class of Certificates in the manner set out below:
Corresponding Corresponding Upper-Tier Corresponding
Lower-Tier Class Designation Regular Interest Class of Certificates
---------------------------- ---------------- ---------------------
Class LT-A-1 Class A-1 Class A-1
Class LT-A-2a Class A-2a Class A-2a
Class LT-A-2b Class A-2b Class A-2b
Class LT-A-2c Class A-2c Class A-2c
Class LT-A-2d Class A-2d Class A-2d
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-B-1 Class B-1 Class B-1
Class LT-B-2 Class B-2 Class B-2
Class LT-B-3 Class B-3 Class B-3
N/A Class X Class X
Corresponding Pooling-Tier REMIC-1 Regular Interest: As described in
the Preliminary Statement.
Corresponding Pooling-Tier REMIC-2 IO Interest: As described in the
Preliminary Statement.
Corresponding Scheduled Crossover Distribution Date: The
Distribution Date in the month and year specified in the Preliminary Statement
corresponding to a Pooling-Tier REMIC-2 IO Interest.
Cumulative Loss Percentage: With respect to any Distribution Date,
the percentage equivalent of a fraction, the numerator of which is the aggregate
amount of Realized Losses incurred from the Cut-off Date through the last day of
the related Prepayment Period and the denominator of which is the Cut-off Date
Pool Principal Balance of the Mortgage Loans.
Cumulative Loss Trigger Event: With respect to any Distribution
Date, a Cumulative Loss Trigger Event exists if the quotient (expressed as a
percentage) of (x) the aggregate amount of Realized Losses incurred since the
Cut-off Date through the last day of the related Prepayment Period divided by
(y) the Cut-off Date Pool Principal Balance exceeds the applicable cumulative
loss percentages set forth below with respect to such Distribution Date:
Distribution Date Occurring In Cumulative Loss Percentage
------------------------------ --------------------------
May 2008 through April 2009 1.400% for the first month, plus an additional 1/12th of 1.700%
for each month thereafter (e.g., 2.250% in November 2008)
May 2009 through April 2010 3.100% for the first month, plus an additional 1/12th of 1.700%
for each month thereafter (e.g., 3.950% in November 2009)
May 2010 through April 2011 4.800% for the first month, plus an additional 1/12th of 1.400%
for each month thereafter (e.g., 5.500% in November 2010)
May 2011 through April 2012 6.200% for the first month, plus an additional 1/12th of 0.700%
for each month thereafter (e.g., 6.550% in November 2011)
May 2012 and thereafter 6.900%
Custodial File: With respect to each Mortgage Loan, the file
retained by the applicable Custodian consisting of items (a) - (h) as listed on
Exhibit K hereto.
Custodian: With respect to the WMC Mortgage Loans, Xxxxx Fargo, and
with respect to the Decision One Mortgage Loans, LaSalle.
Custodian Fee: With respect to each Distribution Date, the aggregate
amount of fees and expenses that each Custodian is entitled to receive, pursuant
to the fee schedule related to the WMC Mortgage Loans or the Decision One
Mortgage Loans, as applicable, to which the Depositor and the applicable
Custodian have previously agreed, for custodial services rendered with respect
to the WMC Mortgage Loans or the Decision One Mortgage Loans, as applicable,
during the related Due Period. Each Custodian shall inform the Securities
Administrator of its Custodian Fee on or prior to the related Determination Date
pursuant to Section 3.07(i). The Custodian Fee shall be first received by the
Securities Administrator and the Securities Administrator shall then pay the
Custodians the Custodian Fee to which they are entitled.
Custodian Fee Rate: As to any Distribution Date, the applicable
Custodian Fee for such Distribution Date, converted to a per annum rate on (i)
the aggregate Stated Principal Balance of the Mortgage Loans as of the first day
of the related Interest Accrual Period and (ii) with respect to the
Determination Date in May 2006 only, the portion of the Closing Date Deposit
Amount allocable to principal (calculated on an actual/360 basis), but in no
event shall the Custodian Fee Rate be less than 0.0035%.
Custodian's Weighted Average Percentage: As defined in Section
8.14(e).
Cut-off Date: April 1, 2006.
Cut-off Date Pool Principal Balance: The aggregate Stated Principal
Balances of all Mortgage Loans as of the Cut-off Date plus the portion of the
Closing Date Deposit Amount allocable to principal.
Cut-off Date Principal Balance: As to any Mortgage Loan, the Stated
Principal Balance thereof as of the close of business on the Cut-off Date (after
giving effect to payments of principal due on that date, whether or not
received).
Data Tape Information: The information provided by the Responsible
Parties as of the Cut-off Date to the Depositor or the Sponsor setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgagor's
name; (2) as to each Mortgage Loan, the Scheduled Principal Balance as of the
Cut-off Date; (3) the Mortgage Rate Cap; (4) the Index; (5) a code indicating
whether the Mortgaged Property is owner occupied; (6) the type of Mortgaged
Property; (7) the first date on which the Scheduled Payment was due on the
Mortgage Loan and, if such date is not consistent with the Due Date currently in
effect, such Due Date; (8) the "paid through date" based on payments received
from the related Mortgagor; (9) the original principal amount of the Mortgage
Loan; (10) with respect to Adjustable Rate Mortgage Loans, the Maximum Mortgage
Rate; (11) the type of Mortgage Loan (i.e., Fixed Rate or Adjustable Rate
Mortgage Loan, First Lien Mortgage Loan or Second Lien Mortgage Loan); (12) a
code indicating the purpose of the loan (i.e., purchase, rate and term
refinance, equity take out refinance); (13) a code indicating the documentation
style (i.e., full, asset verification, income verification and no
documentation); (14) the credit risk score (FICO score); (15) the loan credit
grade classification (as described in the underwriting guidelines); (16) with
respect to each Adjustable Rate Mortgage Loan, the Minimum Mortgage Rate; (17)
the Mortgage Rate at origination; (18) with respect to each Adjustable Rate
Mortgage Loan, the first Adjustment Date immediately following the Cut-off Date;
(19) the value of the Mortgaged Property; (20) a code indicating the type of
Prepayment Charges applicable to such Mortgage Loan (including any prepayment
penalty term), if any; (21) with respect to each Adjustable Rate Mortgage Loan,
the Periodic Mortgage Rate Cap; (22) the applicable Responsible Party with
respect to such Mortgage Loan; (23) with respect to each First Lien Mortgage
Loan, the LTV at origination, and with respect to each Second Lien Mortgage
Loan, the CLTV at origination; and (24) if such Mortgage Loan is covered by a
primary mortgage insurance policy or a lender-paid primary mortgage insurance
policy, the primary mortgage insurance rate. With respect to the Mortgage Loans
in the aggregate, the Data Tape Information shall set forth the following
information, as of the Cut-off Date: (1) the number of Mortgage Loans; (2) the
current aggregate outstanding principal balance of the Mortgage Loans; (3) the
weighted average Mortgage Rate of the Mortgage Loans; and (4) the weighted
average maturity of the Mortgage Loans.
Debt Service Reduction: With respect to any Mortgage Loan, a
reduction by a court of competent jurisdiction in a proceeding under the United
States Bankruptcy Code in the Scheduled Payment for such Mortgage Loan which
became final and non-appealable, except such a reduction resulting from a
Deficient Valuation or any reduction that results in a permanent forgiveness of
principal.
Decision One: Decision One Mortgage Company, LLC, a California
limited liability company, and its successors in interest.
Decision One Mortgage Loans: The Mortgage Loans purchased by the
Sponsor pursuant to the Decision One Purchase Agreement for which Decision One
is identified as Responsible Party on the Mortgage Loan Schedule.
Decision One Purchase Agreement: The Third Amended and Restated
Mortgage Loan Purchase and Warranties Agreement, dated as of February 1, 2006,
by and between Decision One and the Sponsor, a copy of which is attached hereto
as Exhibit P.
Defaulted Swap Termination Payment: Any Swap Termination Payment
required to be paid by the Trust to the Swap Provider pursuant to the Interest
Rate Swap Agreement as a result of an Event of Default (as defined in the
Interest Rate Swap Agreement) with respect to which the Swap Provider is the
defaulting party or a Termination Event (as defined in the Interest Rate Swap
Agreement) (other than Illegality or a Tax Event that is not a Tax Event Upon
Merger (each as defined in the Interest Rate Swap Agreement )) with respect to
which the Swap Provider is the sole Affected Party (as defined in the Interest
Rate Swap Agreement).
Deficient Valuation: With respect to any Mortgage Loan, a valuation
of the related Mortgaged Property by a court of competent jurisdiction in an
amount less than the then outstanding principal balance of the Mortgage Loan,
which valuation results from a proceeding initiated under the United States
Bankruptcy Code.
Definitive Certificates: Any Certificate evidenced by a Physical
Certificate and any Certificate issued in lieu of a Book-Entry Certificate
pursuant to Section 5.02(e).
Delay Certificates: As specified in the Preliminary Statement.
Deleted Mortgage Loan: As defined in Section 2.03.
Delinquency Trigger Event: With respect to any Distribution Date, a
Delinquency Trigger Event exists if the quotient (expressed as a percentage) of
(x) the rolling three month average of the aggregate Stated Principal Balance of
60+ Day Delinquent Mortgage Loans (including Mortgage Loans in foreclosure and
Mortgage Loans related to REO Property) and (y) (1) until the aggregate Class
Certificate Balance of the Class A Certificates have been reduced to zero, the
aggregate Stated Principal Balance of the Mortgage Loans for such Distribution
Date equals or exceeds 38.15% of the prior period's Senior Enhancement
Percentage and (2) after the aggregate Class Certificate Balance of the Class A
Certificates have been reduced to zero, the aggregate Stated Principal Balance
of the Mortgage Loans for such Distribution Date equals or exceeds 46.90% of the
prior period's Class M Enhancement Percentage.
Denomination: With respect to each Certificate, the amount set forth
on the face thereof as the "Initial Certificate Balance of this Certificate" or
the Percentage Interest appearing on the face thereof.
Depositor: Xxxxxx Xxxxxxx Capital I Inc., a Delaware corporation,
and its successors in interest.
Depository: The initial Depository shall be The Depository Trust
Company, the nominee of which is CEDE & Co., as 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 Institution: Any depository institution or trust company,
including the Securities Administrator, that (a) is incorporated under the laws
of the United States of America or any State thereof, (b) is subject to
supervision and examination by federal or state banking authorities and (c) has
outstanding unsecured commercial paper or other short-term unsecured debt
obligations that are rated "P-1" by Xxxxx'x, "F1+" by Fitch and "A-1" by
Standard & Poor's (to the extent they are Rating Agencies hereunder).
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 each Distribution Date, the 18th
day (or if such day is not a Business Day, the immediately preceding Business
Day) in the calendar month in which such Distribution Date occurs.
Distribution Account: The separate Eligible Account created and
maintained by the Securities Administrator pursuant to Section 3.07(d) in the
name of the Securities Administrator for the benefit of the Certificateholders
and designated "Xxxxx Fargo Bank, National Association in trust for registered
Holders of Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2 Mortgage Pass-Through
Certificates, Series 2006-HE2." Funds in the Distribution Account shall be held
in trust for the Certificateholders for the uses and purposes set forth in this
Agreement.
Distribution Account Deposit Date: As to any Distribution Date,
12:00 noon New York City time on the second Business Day immediately preceding
such Distribution Date.
Distribution Date: The 25th day of each calendar month, or if such
day is not a Business Day, the next succeeding Business Day, commencing in May
2006.
Document Certification and Exception Report: The report attached to
Exhibit F hereto.
Due Date: The day of the month on which the Scheduled Payment is due
on a Mortgage Loan, exclusive of any days of grace.
Due Period: With respect to any Distribution Date, the period
commencing on the second day of the calendar month preceding the month in which
such Distribution Date occurs and ending on the first day of the calendar month
in which such Distribution Date occurs.
Eligible Account: Either (i) an account maintained with a federal or
state-chartered depository institution or trust company that complies with the
definition of Eligible Institution, (ii) an account maintained with the
corporate trust department of a federal depository institution or
state-chartered depository institution subject to regulations regarding
fiduciary funds on deposit similar to Title 12 of the U.S. Code of Federal
Regulation Section 9.10(b), which, in either case, has corporate trust powers
and is acting in its fiduciary capacity or (iii) any other account acceptable to
each Rating Agency. Eligible Accounts may bear interest, and may include, if
otherwise qualified under this definition, accounts maintained with the
Securities Administrator. Each Eligible Account shall be a separate account.
Eligible Institution: A federal or state-chartered depository
institution or trust company the commercial paper, short-term debt obligations,
or other short-term deposits of which are rated "A-1+" by Standard & Poor's if
the amounts on deposit are to be held in the account for no more than 365 days
(or at least "A-2" by Standard & Poor's if the amounts on deposit are to be held
in the account for no more than 30 days), or the long-term unsecured debt
obligations of which are rated at least "AA-" by Standard & Poor's if the
amounts on deposit are to be held in the account for no more than 365 days, and
the commercial paper, short-term debt obligations or other short-term deposits
of which are rated at least "P-1" by Moody's and "F1+" by Fitch (or a comparable
rating if another Rating Agency is specified by the Depositor by written notice
to the Servicers and the Securities Administrator) (in each case, to the extent
they are designated as Rating Agencies in the Preliminary Statement).
ERISA: The Employee Retirement Income Security Act of 1974, as
amended.
XXXXX-Xxxxxxxxxx Underwriting: A best efforts or firm commitment
underwriting or private placement that meets the requirements of Prohibited
Transaction Exemption ("PTE") 2002-41, 67 Fed. Reg. 54487 (2002) --- (or any
successor thereto), or any substantially similar administrative exemption
granted by the U.S. Department of Labor.
ERISA-Restricted Certificate: As specified in the Preliminary
Statement.
Escrow Account: The Eligible Account or Accounts established and
maintained pursuant to Section 3.09(b).
Escrow Payments: As defined in Section 3.09(b).
Event of Default: As defined in Section 7.01.
Excess Reserve Fund Account: The separate Eligible Account created
and maintained by the Securities Administrator pursuant to Sections 3.07(b) and
3.07(c) in the name of the Securities Administrator for the benefit of the
Regular Certificateholders and designated "Xxxxx Fargo Bank, National
Association in trust for registered Holders of Xxxxxx Xxxxxxx Capital I Inc.
Trust 2006-HE2, Mortgage Pass-Through Certificates, Series 2006-HE2." Funds in
the Excess Reserve Fund Account shall be held in trust for the Regular
Certificateholders for the uses and purposes set forth in this Agreement.
Amounts on deposit in the Excess Reserve Fund Account shall not be invested.
Excess Subordinated Amount: With respect to any Distribution Date,
the excess, if any, of (a) the Subordinated Amount on such Distribution Date
over (b) the Specified Subordinated Amount for such Distribution Date.
Exchange Act: The Securities Exchange Act of 1934, as amended.
Expense Fee Rate: As to each Mortgage Loan, a per-annum rate equal
to the sum of the Servicing Fee Rate, the Custodian Fee Rate and any lender-paid
primary mortgage insurance fee rate, if applicable.
Expense Fees: As to each Mortgage Loan, the sum of the Servicing
Fee, the Custodian Fee and any lender-paid primary mortgage insurance fee, if
applicable.
Extra Principal Distribution Amount: As of any Distribution Date,
the lesser of (x) the related Total Monthly Excess Spread for such Distribution
Date and (y) the related Subordination Deficiency for such Distribution Date.
Xxxxxx Xxx: The Federal National Mortgage Association, or any
successor thereto.
Xxxxxx Xxx Guides: The Xxxxxx Xxx Xxxxxxx' Guide and the Xxxxxx Xxx
Servicers' Guide and all amendments or additions thereto.
FDIC: The Federal Deposit Insurance Corporation, or any successor
thereto.
Final Recovery Determination: With respect to any defaulted Mortgage
Loan or any REO Property (other than any Mortgage Loan or REO Property purchased
by the applicable Responsible Party or the Depositor, as applicable, as
contemplated by this Agreement), a determination made by the applicable Servicer
that all Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds and
other payments or recoveries which the applicable Servicer, in its reasonable
good faith judgment, expects to be finally recoverable in respect thereof have
been so recovered. Each Servicer shall maintain records, prepared by a Servicing
Officer, of each Final Recovery Determination made thereby.
Final Scheduled Distribution Date: The Final Scheduled Distribution
Date for each Class of Certificates is the Distribution Date in March 2036.
First Lien Mortgage Loan: A Mortgage Loan secured by a first lien
Mortgage on the related Mortgaged Property.
Fitch: Fitch, Inc., and its successors in interest. If Fitch is
designated as a Rating Agency in the Preliminary Statement, for purposes of
Section 11.05(b) the address for notices to Fitch shall be Fitch, Inc., Xxx
Xxxxx Xxxxxx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: MBS Monitoring - Xxxxxx
Xxxxxxx Capital I Inc. Trust 2006-HE2, or such other address as Fitch may
hereafter furnish to the Depositor, the Securities Administrator, the Trustee
and the Servicers.
Fixed Rate Mortgage Loan: A fixed rate Mortgage Loan.
Freddie Mac: The Federal Home Loan Mortgage Corporation, a corporate
instrumentality of the United States created and existing under Title III of the
Emergency Home Finance Act of 1970, as amended, or any successor thereto.
Gross Margin: With respect to each Adjustable Rate Mortgage Loan,
the fixed percentage amount set forth in the related Mortgage Note to be added
to the applicable Index to determine the Mortgage Rate.
Group I Class A Certificates: The Class A-1 Certificates.
Group I Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group I Mortgage Loans.
Group II Class A Certificates: The Class A-2a Certificates, the
Class A-2b Certificates, the Class A-2c Certificates and the Class A-2d
Certificates, collectively.
Group II Mortgage Loans: The Mortgage Loans identified on the
Mortgage Loan Schedule as Group II Mortgage Loans.
HomEq: HomEq Servicing Corporation, a New Jersey corporation, and
its successors in interest.
Index: As to each Adjustable Rate Mortgage Loan, the index from time
to time in effect for the adjustment of the Mortgage Rate set forth as such on
the related Mortgage Note.
Insurance Policy: With respect to any Mortgage Loan included in the
Trust Fund, any insurance policy, including all riders and endorsements thereto
in effect, including any replacement policy or policies for any Insurance
Policies.
Insurance Proceeds: With respect to each Mortgage Loan, proceeds of
insurance policies insuring the Mortgage Loan or the related Mortgaged Property.
Interest Accrual Period: With respect to each Class of Non-Delay
Certificates and the Corresponding Class of Lower-Tier Regular Interests and any
Distribution Date, the period commencing on the Distribution Date occurring in
the month preceding the month in which the current Distribution Date occurs and
ending on the day immediately preceding the current Distribution Date (or, in
the case of the first Distribution Date, the period from and including the
Closing Date to but excluding such first Distribution Date). For purposes of
computing interest accruals on each Class of Non-Delay Certificates, each
Interest Accrual Period has the actual number of days in such month and each
year is assumed to have 360 days.
Interest Rate Adjustment Date: With respect to each Adjustable Rate
Mortgage Loan, the date, specified in the related Mortgage Note and the Mortgage
Loan Schedule, on which the Mortgage Rate is adjusted.
Interest Rate Swap Agreement: The interest rate swap agreement,
dated as of the Closing Date, between Xxxxxx Xxxxxxx Capital Services Inc. and
the Securities Administrator (a copy of which is attached hereto as Exhibit V).
Interest Remittance Amount: With respect to any Distribution Date
and the Mortgage Loans in a Loan Group, that portion of Available Funds
attributable to interest relating to the Mortgage Loans in that Loan Group.
Investment Account: As defined in Section 3.12(a).
Investor: With respect to each MERS Designated Mortgage Loan, the
Person named on the MERS(R) System as the investor pursuant to the MERS
Procedures Manual.
Investor-Based Exemption: Any of Prohibited Transaction Class
Exemption ("PTCE") 84-14 (for transactions by independent "qualified
professional asset managers"), PTCE 90-1 (for transactions by insurance company
pooled separate accounts), PTCE 91-38 (for transactions by bank collective
investment funds), 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.
JPMorgan: JPMorgan Chase Bank, National Association, a national
banking association, and its successors in interest.
LaSalle: LaSalle Bank National Association, a national banking
association, and its successors in interest.
Late Collections: With respect to any Mortgage Loan and any Due
Period, all amounts received after the Determination Date immediately following
such Due Period, whether as late payments of Scheduled 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 for such Due Period and not previously recovered.
LIBOR: With respect to any Interest Accrual Period for the Offered
Certificates, the rate determined by the Securities Administrator on the related
LIBOR Determination Date on the basis of the offered rate for one-month U.S.
dollar deposits as such rate appears on Telerate Page 3750 as of 11:00 a.m.
(London time) on such date; provided that if such rate does not appear on
Telerate Page 3750, the rate for such date will be determined on the basis of
the rates at which one-month U.S. dollar deposits are offered by the Reference
Banks at approximately 11:00 a.m. (London time) on such date to prime banks in
the London interbank market. In such event, the Securities Administrator shall
request the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations (rounded upwards if
necessary to the nearest whole multiple of 1/16%). If fewer than two quotations
are provided as requested, the rate for that date will be the arithmetic mean of
the rates quoted by major banks in New York City, selected by the Securities
Administrator (after consultation with the Depositor), at approximately 11:00
a.m. (New York City time) on such date for one-month U.S. dollar loans to
leading European banks.
LIBOR Determination Date: With respect to any Interest Accrual
Period for the Offered Certificates, the second London Business Day preceding
the commencement of such Interest Accrual Period.
Liquidated Mortgage Loan: With respect to any Distribution Date, a
defaulted Mortgage Loan (including any REO Property) which either (a) was
liquidated in the calendar month preceding the month of such Distribution Date
and as to which the applicable Servicer has certified to the Securities
Administrator that it has received all amounts it expects to receive in
connection with the liquidation of such Mortgage Loan including the final
disposition of an REO Property, or (b) is a Second Lien Mortgage Loan (1) that
is delinquent 180 days or longer, (2) for which the related first lien mortgage
loan is not a Mortgage Loan, and (3) as to which the applicable Servicer has
certified to the Securities Administrator that it does not believe there is a
reasonable likelihood that any further net proceeds will be received or
recovered with respect to such Second Lien Mortgage Loan.
Liquidation Proceeds: Cash received in connection with the
liquidation of a Liquidated Mortgage Loan, whether through a trustee's sale,
foreclosure sale or otherwise, including any Subsequent Recoveries.
Loan Group: The Group I Mortgage Loans or the Group II Mortgage
Loans, as applicable.
Loan Group Cap: The Loan Group I Cap or the Loan Group II Cap, as
applicable.
Loan Group I Cap: With respect to the Group I Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period.
Loan Group II Cap: With respect to the Group II Mortgage Loans as of
any Distribution Date, the weighted average of the Adjusted Net Mortgage Rates
then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans minus the Swap Payment Rate, adjusted in each case to accrue on
the basis of a 360-day year and the actual number of days in the related
Interest Accrual Period.
Loan-to-Value Ratio or LTV: With respect to any First Lien Mortgage
Loan, the ratio (expressed as a percentage) of the original outstanding
principal amount of the First Lien Mortgage Loan as of the Cut-off Date (unless
otherwise indicated), to the lesser of (a) the Appraised Value of the Mortgaged
Property at origination, and (b) if the First Lien Mortgage Loan was made to
finance the acquisition of the related Mortgaged Property, the purchase price of
the Mortgaged Property.
London Business Day: Any day on which dealings in deposits of United
States dollars are transacted in the London interbank market.
Lower-Tier Interest Rate: As described in the Preliminary Statement.
Lower-Tier Principal Amount: As described in the Preliminary
Statement.
Lower-Tier Regular Interest: Each of the Class LT-A-1, Class
LT-A-2a, Class LT-A-2b, Class LT-A-2c, Class LT-A-2d, 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-B-1,
Class LT-B-2, Class LT-B-3, Class LT-IO, Class LT-Group I, Class LT-Group II and
Class LT-Accrual Interests as described in the Preliminary Statement.
Lower-Tier REMIC: As described in the Preliminary Statement.
Maximum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the maximum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be increased during the
lifetime of such Adjustable Rate Mortgage Loan.
MERS: Mortgage Electronic Registration System, Inc.
MERS Designated Mortgage Loan: Mortgage Loans for which (a) the
Responsible Parties have designated or will designate MERS as, and have taken or
will take such action as is necessary to cause MERS to be, the mortgagee of
record, as nominee for the Responsible Parties, in accordance with MERS
Procedure Manual and (b) the Responsible Parties have designated or will
designate the Trustee as the Investor on the MERS(R) System.
MERS Procedures Manual: The MERS Procedures Manual, as it may be
amended, supplemented or otherwise modified from time to time.
MERS(R) System: MERS mortgage electronic registry system, as more
particularly described in the MERS Procedures Manual.
Minimum Mortgage Rate: With respect to each Adjustable Rate Mortgage
Loan, a rate that (i) is set forth on the Data Tape Information and in the
related Mortgage Note and (ii) is the minimum interest rate to which the
Mortgage Rate on such Adjustable Rate Mortgage Loan may be decreased during the
lifetime of such Adjustable Rate Mortgage Loan.
Monthly Statement: The statement delivered to the Certificateholders
pursuant to Section 4.03.
Moody's: Xxxxx'x Investors Service, Inc., and its successors in
interest. If Xxxxx'x is designated as a Rating Agency in the Preliminary
Statement, for purposes of Section 11.05(b), the address for notices to Moody's
shall be Xxxxx'x Investors Service, Inc., 00 Xxxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx
00000, Attention: Residential Mortgage Pass-Through Group, or such other address
as Moody's may hereafter furnish to the Depositor, the Securities Administrator,
the Trustee and the Servicers.
Mortgage: The mortgage, deed of trust or other instrument identified
on the Mortgage Loan Schedule as securing a Mortgage Note.
Mortgage File: The items pertaining to a particular Mortgage Loan
contained in either the Servicing File or Custodial File.
Mortgage Loan: An individual Mortgage Loan which is the subject of
this Agreement, each Mortgage Loan originally sold and subject to this Agreement
being identified on the Mortgage Loan Schedule, which Mortgage Loan includes,
without limitation, the Mortgage File, the Scheduled Payments, Principal
Prepayments, Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds,
REO Disposition proceeds, Prepayment Charges, and all other rights, benefits,
proceeds and obligations arising from or in connection with such Mortgage Loan,
excluding replaced or repurchased Mortgage Loans.
Mortgage Loan Schedule: A schedule of Mortgage Loans delivered to
the Custodians and referred to on Schedule I, such schedule setting forth the
following information with respect to each Mortgage Loan: (1) the Mortgage Loan
number; (2) the city, state and zip code of the Mortgaged Property; (3) the
number and type of residential units constituting the Mortgaged Property; (4)
the current Mortgage Rate; (5) the current net Mortgage Rate; (6) the current
Scheduled Payment; (7) with respect to each Adjustable Rate Mortgage Loan, the
Gross Margin; (8) the original term to maturity; (9) the scheduled maturity
date; (10) the principal balance of the Mortgage Loan as of the Cut-off Date
after deduction of payments of principal due on or before the Cut-off Date
whether or not collected; (11) with respect to each Adjustable Rate Mortgage
Loan, the next Interest Rate Adjustment Date; (12) with respect to each
Adjustable Rate Mortgage Loan, the lifetime Mortgage Interest Rate Cap; (13)
whether the Mortgage Loan is convertible or not; (14) the Servicing Fee; (15)
whether such Mortgage Loan is a Group I Mortgage Loan or a Group II Mortgage
Loan; (16) the identity of the Responsible Party and the date such Mortgage Loan
was sold by the applicable Responsible Party to the Sponsor, (17) whether such
Mortgage Loan provides for a Prepayment Charge as well as the term and amount of
such Prepayment Charge, if any; (18) with respect to each First Lien Mortgage
Loan, the LTV at origination, and with respect to each Second Lien Mortgage
Loan, the CLTV at origination; (19) the applicable Servicer's name; and (20) the
date on which servicing of the Mortgage Loan was transferred to the applicable
Servicer.
Mortgage Note: The note or other evidence of the indebtedness of a
Mortgagor under a Mortgage Loan.
Mortgage Rate: The annual rate of interest borne on a Mortgage Note,
which shall be adjusted from time to time in the case of an Adjustable Rate
Mortgage Loan.
Mortgage Rate Caps: With respect to an Adjustable Rate Mortgage
Loan, the Periodic Mortgage Rate Cap, the Maximum Mortgage Rate, and the Minimum
Mortgage Rate for such Mortgage Loan.
Mortgaged Property: With respect to each Mortgage Loan, the real
property (or leasehold estate, if applicable) identified on the Mortgage Loan
Schedule as securing repayment of the debt evidenced by the related Mortgage
Note.
Mortgagor: The obligor(s) on a Mortgage Note.
Net Monthly Excess Cash Flow: For any Distribution Date the amount
remaining for distribution pursuant to subsection 4.02(a)(iii) (before giving
effect to distributions pursuant to such subsection).
Net Prepayment Interest Shortfall: For any Distribution Date, the
amount by which the sum of the Prepayment Interest Shortfalls for such
Distribution Date exceeds the sum of (i) all Prepayment Interest Excesses for
such Distribution Date and (ii) Compensating Interest payments made with respect
to such Distribution Date.
Net Swap Payment: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) payable by the Trust to the Swap
Provider on the related Fixed Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
Net Swap Receipt: With respect to any Distribution Date, any net
payment (other than a Swap Termination Payment) made by the Swap Provider to the
Trust on the related Floating Rate Payer Payment Date (as defined in the
Interest Rate Swap Agreement).
NIM Issuer: The entity established as the issuer of the NIM
Securities.
NIM Securities: Any debt securities secured or otherwise backed by
some or all of the Class X and Class P Certificates that are rated by one or
more Rating Agencies.
NIM Trustee: The trustee for the NIM Securities.
Non-Delay Certificates: As specified in the Preliminary Statement.
Non-Permitted Transferee: A Person other than a Permitted
Transferee.
Nonrecoverable P&I Advance: Any P&I Advance previously made or
proposed to be made in respect of a Mortgage Loan or REO Property that, in the
good faith business judgment of the applicable Servicer, will not or, in the
case of a proposed P&I Advance, would not be ultimately recoverable from related
late payments, Insurance Proceeds, Condemnation Proceeds, or Liquidation
Proceeds on such Mortgage Loan or REO Property as provided herein.
Nonrecoverable Servicing Advance: Any Servicing Advances previously
made or proposed to be made in respect of a Mortgage Loan or REO Property,
which, in accordance with Accepted Servicing Practices, will not or, in the case
of a proposed Servicing Advance, would not be ultimately recoverable from
related Insurance Proceeds, Condemnation Proceeds, Liquidation Proceeds or
otherwise.
Notice of Final Distribution: The notice to be provided pursuant to
Section 10.02 to the effect that final distribution on any of the Certificates
shall be made only upon presentation and surrender thereof.
Offered Certificates: As specified in the Preliminary Statement.
Officer's Certificate: A certificate signed by an officer of any
Servicer or Subservicer with responsibility for the servicing of the Mortgage
Loans required to be serviced by such Servicer or Subservicer and listed on a
list delivered to the Securities Administrator pursuant to this Agreement.
Opinion of Counsel: A written opinion of counsel, who may be
in-house counsel for a Servicer or a Subservicer, reasonably acceptable to the
Trustee and/or the Securities Administrator, as applicable (and/or such other
Persons as may be set forth herein), provided that any Opinion of Counsel
relating to (a) qualification of any Trust REMIC or (b) compliance with the
REMIC Provisions, must be (unless otherwise stated in such Opinion of Counsel)
an opinion of counsel who (i) is in fact independent of such Servicer of the
Mortgage Loans, (ii) does not have any material direct or indirect financial
interest in such Servicer of the Mortgage Loans or in an Affiliate of either and
(iii) is not connected with such Servicer of the Mortgage Loans as an officer,
employee, director or person performing similar functions.
Optional Termination Date: The Distribution Date on which the
aggregate Stated Principal Balance of the Mortgage Loans, as of the last day of
the related Due Period, is equal to 10% or less of the Cut-off Date Pool
Principal Balance.
OTS: Office of Thrift Supervision, and any successor thereto.
Outstanding: With respect to the Certificates as of any date of
determination, all Certificates theretofore executed and authenticated under
this Agreement except:
(i) Certificates theretofore canceled by the Securities
Administrator or delivered to the Securities Administrator for
cancellation; and
(ii) Certificates in exchange for which or in lieu of which other
Certificates have been executed and delivered by the Securities
Administrator pursuant to this Agreement.
Outstanding Mortgage Loan: As of any Due Date, a Mortgage Loan with
a Stated Principal Balance greater than zero which was not the subject of a
Principal Prepayment in Full prior to such Due Date and which did not become a
Liquidated Mortgage Loan prior to such Due Date.
Ownership Interest: As to any Residual Certificate, any ownership
interest in such Certificate including any interest in such Certificate as the
Holder thereof and any other interest therein, whether direct or indirect, legal
or beneficial.
P&I Advance: As to any Mortgage Loan or REO Property, any advance
made by the applicable Servicer in respect of any Remittance Date representing
the aggregate of all payments of principal and interest, net of the Servicing
Fee, that were due during the related Due Period on the Mortgage Loans and that
were delinquent on the related Determination Date, plus certain amounts
representing assumed payments not covered by any current net income on the
Mortgaged Properties acquired by foreclosure or deed in lieu of foreclosure as
determined pursuant to Section 4.01.
Pass-Through Margin: With respect to each Class of Offered
Certificates (except as set forth in the following sentence), the following
percentages: Class A-1 Certificates, 0.1700%; Class A-2a Certificates, 0.0700%;
Class A-2b Certificates, 0.1200%; Class A-2c Certificates, 0.1800%; Class A-2d
Certificates, 0.2700%; Class M-1 Certificates, 0.3300%; Class M-2 Certificates,
0.3500%; Class M-3 Certificates, 0.3700%; Class M-4 Certificates, 0.4800%; Class
M-5 Certificates, 0.4900%; Class M-6 Certificates, 0.5700%; Class B-1
Certificates, 1.1000%; Class B-2 Certificates, 1.2000%; and Class B-3
Certificates, 2.1500%. On the first Distribution Date after the Optional
Termination Date, the Pass-Through Margins shall increase to: Class A-1
Certificates, 0.3400%; Class A-2a Certificates, 0.1400%; Class A-2b
Certificates, 0.2400%; Class A-2c Certificates, 0.3600%; Class A-2d
Certificates, 0.5400%; Class M-1 Certificates, 0.4950%; Class M-2 Certificates,
0.5250%; Class M-3 Certificates, 0.5550%; Class M-4 Certificates, 0.7200%; Class
M-5 Certificates, 0.7350%; Class M-6 Certificates, 0.8550%; Class B-1
Certificates, 1.6500%; Class B-2 Certificates, 1.8000%; and Class B-3
Certificates, 3.2250%.
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 and each Upper-Tier Regular Interest,
the per annum rate set forth or calculated in the manner described in the
Preliminary Statement.
PCAOB: The Public Company Accounting Oversight Board.
Percentage Interest: As to any Certificate, the percentage interest
evidenced thereby in distributions required to be made on the related Class,
such percentage interest being set forth on the face thereof or equal to the
percentage obtained by dividing the Denomination of such Certificate by the
aggregate of the Denominations of all Certificates of the same Class.
Periodic Mortgage Rate Cap: With respect to an Adjustable Rate
Mortgage Loan, the periodic limit on each Mortgage Rate adjustment as set forth
in the related Mortgage Note.
Permitted Investments: Any one or more of the following obligations
or securities acquired at a purchase price of not greater than par, regardless
of whether issued by any Servicer, the Securities Administrator or any of their
respective Affiliates:
(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) demand and time deposits in, certificates of deposit of, or
bankers' acceptances (which shall each have an original maturity of not
more than 90 days and, in the case of bankers' acceptances, shall in no
event have an original maturity of more than 365 days or a remaining
maturity of more than 30 days) denominated in United States dollars and
issued by, any Depository Institution and rated "P-1" by Xxxxx'x, "F1+" by
Fitch and "A-1+" by Standard & Poor's (to the extent they are Rating
Agencies hereunder and are so rated by such Rating Agency);
(iii) repurchase obligations with respect to any security described
in clause (i) above entered into with a Depository Institution (acting as
principal);
(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
that rates such securities 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 that rates such securities in
its highest short-term unsecured debt rating available at the time of such
investment;
(vi) units of money market funds, including money market funds
advised by the Depositor, the Securities Administrator or an Affiliate
thereof, that have been rated "Aaa" by Xxxxx'x, "AAAm" by Standard &
Poor's and at least "AA" by Fitch (to the extent they are Rating Agencies
hereunder and such funds are so rated by such Rating Agency); and
(vii) if previously confirmed in writing to 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 as a permitted investment of funds backing "Aaa" or "AAA"
rated securities;
provided, however, that no instrument described hereunder shall evidence either
the right to receive (a) only interest with respect to the obligations
underlying such instrument or (b) both principal and interest payments derived
from obligations underlying such instrument and the interest and principal
payments with respect to such instrument provide a yield to maturity at par
greater than 120% of the yield to maturity at par of the underlying obligations.
Permitted Transferee: Any Person other than (i) the United States,
any State or political subdivision thereof, or any agency or instrumentality of
any of the foregoing, (ii) a foreign government, international organization or
any agency or instrumentality of either of the foregoing, (iii) an organization
(except certain farmers' cooperatives described in Section 521 of the Code)
which is exempt from tax imposed by Chapter 1 of the Code (including the tax
imposed by Section 511 of the Code on unrelated business taxable income) on any
excess inclusions (as defined in Section 860E(c)(1) of the Code) with respect to
any Residual Certificate, (iv) rural electric and telephone cooperatives
described in Section 1381(a)(2)(C) of the Code, (v) a Person that is not a U.S.
Person or a U.S. Person with respect to whom income from a 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, a U.S. Person that is a partnership for U.S. federal income tax
purposes, any partner in which, directly or indirectly (other than through a
U.S. corporation) is not a U.S. Person, (vi) an "electing large partnership"
within the meaning of Section 775 of the Code and (vii) any other Person so
designated by the Depositor based upon an Opinion of Counsel that the Transfer
of an Ownership Interest in a Residual Certificate to such Person may cause any
Trust REMIC to fail to qualify as a REMIC at any time that the Certificates are
outstanding. The terms "United States", "State" and "international organization"
shall have the meanings set forth in Section 7701 of the Code or successor
provisions. A corporation will not be treated as an instrumentality of the
United States or of any State or political subdivision thereof for these
purposes if all of its activities are subject to tax and, with the exception of
Freddie Mac, a majority of its board of directors is not selected by such
government unit.
Person: Any individual, corporation, partnership, joint venture,
association, limited liability company, joint-stock company, trust,
unincorporated organization or government, or any agency or political
subdivision thereof.
Physical Certificates: As specified in the Preliminary Statement.
Pool Stated Principal Balance: As to any Distribution Date, the
aggregate of the Stated Principal Balances of the Mortgage Loans for such
Distribution Date that were Outstanding Mortgage Loans on the Due Date in the
related Due Period.
Pooling-Tier Interest Rate: As specified in the Preliminary
Statement.
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 Loan Group I WAC Rate: With respect to the
Group I Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group I
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and the actual number of days in the related Interest Accrual Period.
Pooling-Tier REMIC-1 Loan Group II WAC Rate: With respect to the
Group II Mortgage Loans as of any Distribution Date, a per annum rate equal to
the weighted average of the Adjusted Net Mortgage Rates for each such Mortgage
Loan then in effect on the beginning of the related Due Period on the Group II
Mortgage Loans, adjusted in each case to accrue on the basis of a 360-day year
and 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 IO Notional Balance: As described in the
Preliminary Statement.
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 Charge: Any prepayment premium, penalty or charge
collected by any Servicer with respect to a Mortgage Loan from a Mortgagor in
connection with any voluntary Principal Prepayment pursuant to the terms of the
related Mortgage Note.
Prepayment Interest Excess: With respect to any Distribution Date,
any interest collected by a Servicer with respect to any Mortgage Loan serviced
by such Servicer as to which a Principal Prepayment in Full occurs from the 1st
day of the month through the 15th day of the month in which such Distribution
Date occurs and that represents interest that accrues from the 1st day of such
month to the date of such Principal Prepayment in Full.
Prepayment Interest Shortfall: With respect to any Distribution
Date, the sum of, for each Mortgage Loan that was during the portion of the
Prepayment Period from and including the 16th day of the month preceding the
month in which such Distribution Date occurs (or from the day following the
Cut-off Date, in the case of the first Distribution Date) through the last day
of such month, the subject of a Principal Prepayment which is not accompanied by
an amount equal to one month of interest that would have been due on such
Mortgage Loan on the Due Date in the following month and which was applied by
the applicable Servicer to reduce the outstanding principal balance of such
Mortgage Loan on a date preceding such Due Date an amount equal to the product
of (a) the Mortgage Rate net of the Servicing Fee Rate for such Mortgage Loan,
(b) the amount of the Principal Prepayment for such Mortgage Loan, (c) 1/360 and
(d) the number of days commencing on the date on which such Principal Prepayment
was applied and ending on the last day of the calendar month in which the
related Prepayment Period begins.
Prepayment Period: With respect to any Distribution Date, either (i)
with respect to any Principal Prepayments in Full, the period from and including
the 16th day of the month preceding the month in which such Distribution Date
occurs (or, in the case of the first Distribution Date, from and including the
Cut-off Date) to and including the 15th day of the month in which such
Distribution Date occurs, or (ii) with respect to any partial Principal
Prepayments or any involuntary Principal Prepayments, the calendar month
preceding the month in which such Distribution Date occurs.
Principal Distribution Amount: For any Distribution Date, the sum of
(i) the Basic Principal Distribution Amount for such Distribution Date and (ii)
the Extra Principal Distribution Amount for such Distribution Date.
Principal Prepayment: Any full or partial payment or other recovery
of principal on a Mortgage Loan (including upon liquidation of a Mortgage Loan)
which is received by the applicable Servicer in advance of its scheduled Due
Date, excluding any Prepayment Charge thereon.
Principal Prepayment in Full: Any Principal Prepayment made by a
Mortgagor of the entire principal balance of a Mortgage Loan.
Principal Remittance Amount: With respect to any Distribution Date,
the amount equal to the sum of the following amounts (without duplication) with
respect to the related Due Period: (i) each scheduled payment of principal on a
Mortgage Loan due during such Due Period and received by the applicable Servicer
on or prior to the related Determination Date or advanced by the applicable
Servicer for the related Remittance Date, and all Principal Prepayments received
during the related Prepayment Period; (ii) all Liquidation Proceeds,
Condemnation Proceeds and Insurance Proceeds on the Mortgage Loans allocable to
principal actually collected by the applicable Servicer during the related
Prepayment Period; (iii) the portion of the Repurchase Price allocable to
principal with respect to each Mortgage Loan repurchased with respect to such
Distribution Date; (iv) all Substitution Adjustment Amounts allocable to
principal received in connection with the substitutions of Mortgage Loans with
respect to such Distribution Date; (v) with respect to the Distribution Date in
May 2006 only, the portion of the Closing Date Deposit Amount allocable to
principal; and (vi) the allocable portion of the proceeds received with respect
to the termination of the Trust Fund pursuant to clause (a) of Section 10.01 (to
the extent such proceeds relate to principal).
Private Certificates: As specified in the Preliminary Statement.
Prospectus Supplement: The Prospectus Supplement, dated April 24,
2006, relating to the Offered Certificates.
PTCE 95-60: As defined in Section 5.02(b).
Purchase Agreements: Collectively, the WMC Purchase Agreement and
the Decision One Purchase Agreement.
Rating Agency: Each of the Rating Agencies specified in the
Preliminary Statement. If such organization or a successor is no longer in
existence, "Rating Agency" shall be such nationally recognized statistical
rating organization, or other comparable Person, as is designated by the
Depositor, notice of which designation shall be given to the Securities
Administrator. References herein to a given rating or rating category of a
Rating Agency shall mean such rating category without giving effect to any
modifiers. For purposes of Section 11.05(b), the addresses for notices to each
Rating Agency shall be the address specified therefor in the definition
corresponding to the name of such Rating Agency, or such other address as either
such Rating Agency may hereafter furnish to the Depositor, the Securities
Administrator, the Trustee and the Servicers.
Realized Losses: With respect to any date of determination and any
Liquidated Mortgage Loan, the amount, if any, by which (a) the unpaid principal
balance of such Liquidated Mortgage Loan together with accrued and unpaid
interest thereon exceeds (b) the Liquidation Proceeds with respect thereto net
of the expenses incurred by the applicable Servicer in connection with the
liquidation of such Liquidated Mortgage Loan and net of the amount of
unreimbursed Servicing Advances with respect to such Liquidated Mortgage Loan.
Record Date: With respect to any Distribution Date, the close of
business on the Business Day immediately preceding such Distribution Date;
provided, however, that for any Certificate issued in definitive form, the
Record Date shall be the close of business on the last Business Day of the month
preceding the month in which such applicable Distribution Date occurs.
Reference Bank: As defined in Section 4.04.
Regular Certificates: As specified in the Preliminary Statement.
Regulation AB: Subpart 229.1100 - Asset Backed Securities
(Regulation AB), 17 C.F.R. ss.ss.229.1100-229.1123, as such may be amended from
time to time, and subject to such clarification and interpretation as have been
provided by the Commission in the adopting release (Asset-Backed Securities,
Securities Act Release No. 33-8518, 70 Fed. Reg. 1,506, 1,531 (January 7, 2005))
or by the staff of the Commission, or as may be provided by the Commission or
its staff from time to time.
Relief Act Interest Shortfall: With respect to any Distribution Date
and any Mortgage Loan, any reduction in the amount of interest collectible on
such Mortgage Loan for the most recently ended Due Period as a result of the
application of the Servicemembers Civil Relief Act or any similar state
statutes.
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 Sections 860A
through 860G of Subchapter M of Chapter 1 of the Code, and related provisions,
and regulations promulgated thereunder, as the foregoing may be in effect from
time to time as well as provisions of applicable state laws.
Remittance Date: With respect to any Distribution Date, the second
Business Day immediately preceding such Distribution Date.
REO Disposition: The final sale by the applicable Servicer of any
REO Property.
REO Imputed Interest: As to any REO Property, for any period, an
amount equivalent to interest (at the Mortgage Rate net of the Servicing Fee
Rate that would have been applicable to the related Mortgage Loan had it been
outstanding) on the unpaid principal balance of the Mortgage Loan as of the date
of acquisition thereof (as such balance is reduced pursuant to Section 3.17 by
any income from the REO Property treated as a recovery of principal).
REO Mortgage Loan: A Mortgage Loan where title to the related
Mortgaged Property has been obtained by the applicable Servicer in the name of
the Trustee on behalf of the Certificateholders.
REO Property: A Mortgaged Property acquired by the Trust Fund
through foreclosure or deed-in-lieu of foreclosure in connection with a
defaulted Mortgage Loan.
Replacement Swap Provider Payment: Any payments that have been
received by the Trust as a result of entering into a replacement interest rate
swap agreement following an Additional Termination Event described in Part
1(h)(ii) of the Interest Rate Swap Agreement.
Reportable Event: As defined in Section 8.12(f).
Repurchase Price: With respect to any Mortgage Loan for which a
breach of a representation and warranty made by the Depositor or a Responsible
Party hereunder exists, an amount equal to the sum of (i) the unpaid principal
balance of such Mortgage Loan as of the date of repurchase, (ii) interest on
such unpaid principal balance of such Mortgage Loan at the Mortgage Rate from
the last date through which interest has been paid and distributed to the
Securities Administrator to the date of repurchase, (iii) all unreimbursed
Servicing Advances and (iv) all costs and expenses incurred by the Trustee
arising out of or based upon such breach, including without limitation, costs
and expenses relating to the Trustee's enforcement of the repurchase obligation
of the Depositor or a Responsible Party hereunder. In addition to the Repurchase
Price, the applicable Responsible Party is obligated to make certain payments
for material breaches of representations and warranties as further set forth in
Section 2.03(n) in this Agreement.
Request for Release: The Request for Release submitted by the
applicable Servicer to the applicable Custodian, substantially in the form of
Exhibit J.
Residual Certificates: As specified in the Preliminary Statement.
Responsible Officer: When used with respect to the Trustee, the
Securities Administrator, any managing director, any vice president, any
assistant vice president, any assistant secretary, any assistant treasurer, any
associate, or any other officer of the Trustee or the Securities Administrator
customarily performing functions similar to those performed by any of the above
designated officers who at such time shall be officers to whom, with respect to
a particular matter, such matter is referred because of such officer's knowledge
of and familiarity with the particular subject and who shall have direct
responsibility for the administration of this Agreement.
Responsible Parties: WMC and Decision One.
Rule 144A Letter: As defined in Section 5.02(b).
Sarbanes Certification: As defined in Section 8.12(c).
Scheduled Payment: The scheduled monthly payment on a Mortgage Loan
due on any Due Date allocable to principal and/or interest on such Mortgage Loan
which, unless otherwise specified herein, shall give effect to any related Debt
Service Reduction and any Deficient Valuation that affects the amount of the
monthly payment due on such Mortgage Loan.
Second Lien Mortgage Loan: A Mortgage Loan secured by a second lien
Mortgage on the related Mortgaged Property.
Securities Act: The Securities Act of 1933, as amended.
Securities Administrator: Xxxxx Fargo Bank, National Association,
and its successors in interest, if any, and, if a successor securities
administrator is appointed hereunder, such successor.
Securities Administrator Float Period: With respect to the
Distribution Date and the related amounts in the Distribution Account, the
period commencing on the Business Day immediately preceding such Distribution
Date and ending on such Distribution Date.
Senior Defaulted Swap Termination Payment: As of any date, the
lesser of (x) any Replacement Swap Provider Payment and (y) any Swap Termination
Payment owed to the Swap Provider.
Senior Enhancement Percentage: With respect to any Distribution
Date, the percentage obtained by dividing (x) the sum of (i) the aggregate Class
Certificate Balance of the Subordinated Certificates and (ii) the Subordinated
Amount, in each case after taking into account the distribution of the Principal
Distribution Amount and any principal payments on those Classes of Certificates
from the Swap Account on that Distribution Date, by (y) the aggregate Stated
Principal Balance of the Mortgage Loans for such Distribution Date.
Senior Specified Enhancement Percentage: As of any date of
determination, 41.00%.
Servicer: Xxxxx Fargo, JPMorgan or HomEq, and if a successor
servicer to any is appointed hereunder, such successor. When the term "Servicer"
is used in this Agreement in connection with the administration of servicing
obligations with respect to any Mortgage Loan, Mortgaged Property, REO Property
or Mortgage File, "Servicer" shall mean the Person identified as the Servicer of
such Mortgage Loan on the Mortgage Loan Schedule.
Servicer Remittance Report: As defined in Section 4.03(e).
Servicing Advances: The reasonable "out-of-pocket" costs and
expenses (including legal fees) incurred by the applicable Servicer in the
performance of its servicing obligations in connection with a default,
delinquency or other unanticipated event, including, but not limited to, the
cost of (i) the preservation, restoration, inspection and protection of a
Mortgaged Property, (ii) any enforcement, administrative or judicial
proceedings, including foreclosures and litigation, in respect of a particular
Mortgage Loan, (iii) the management (including reasonable fees in connection
therewith) and liquidation of any REO Property and (iv) the performance of its
obligations under Sections 3.01, 3.09, 3.13 and 3.15. The Servicing Advances
shall also include any reasonable "out-of-pocket" costs and expenses (including
legal fees) incurred by the applicable Servicer in connection with executing and
recording instruments of satisfaction, deeds of reconveyance or Assignments of
Mortgage in connection with any foreclosure in respect of any Mortgage Loan to
the extent not recovered from the Mortgagor or otherwise payable under this
Agreement. None of the Servicers shall be required to make any Nonrecoverable
Servicing Advances.
Servicing Criteria: The "servicing criteria" set forth in Item
1122(d) of Regulation AB, which as of the Closing Date are listed on Exhibit R
hereto.
Servicing Fee: With respect to each Servicer, each Mortgage Loan
serviced by such Servicer and for any calendar month, an amount equal to one
month's interest at the Servicing Fee Rate on the applicable Stated Principal
Balance of such Mortgage Loan as of the first day of such calendar month. Such
fee shall be payable monthly, solely from the interest portion (including
recoveries with respect to interest from Liquidation Proceeds, Insurance
Proceeds, Condemnation Proceeds and proceeds received with respect to REO
Properties, to the extent permitted by Section 3.11) of such Scheduled Payment
collected by such Servicer, or as otherwise provided under Section 3.11.
Servicing Fee Rate: With respect to each Mortgage Loan, 0.50% per
annum.
Servicing File: With respect to each Mortgage Loan, the file
retained by the applicable Servicer consisting of originals or copies of all
documents in the Mortgage File which are not delivered to the applicable
Custodian in the Custodial File and copies of the Mortgage Loan Documents set
forth in Exhibit K hereto.
Servicing Function Participant: As defined in Section 3.23(a).
Servicing Officer: Any officer of any Servicer involved in, or
responsible for, the administration and servicing of the Mortgage Loans whose
name and facsimile signature appear on a list of servicing officers furnished to
the Securities Administrator by such Servicer on the Closing Date pursuant to
this Agreement, as such list may from time to time be amended.
Servicing Transfer Date: With respect to any Mortgage Loan, the date
on which servicing of such Mortgage Loan was transferred to the applicable
Servicer (as set forth on the Mortgage Loan Schedule).
Similar Law: As defined in Section 5.02(b).
60+ Day Delinquent Mortgage Loan: (i) Each Mortgage Loan with
respect to which any portion of a Scheduled Payment is, as of the last day of
the prior Due Period, two months or more past due (without giving effect to any
grace period), including, without limitation, such Mortgage Loans that are
subject to bankruptcy proceedings, (ii) each Mortgage Loan in foreclosure and
(iii) all REO Property.
Specified Subordinated Amount: Prior to the Stepdown Date, an amount
equal to 3.50% of the Cut-off Date Pool Principal Balance. On and after the
Stepdown Date, an amount equal to 7.00% of the aggregate Stated Principal
Balance of the Mortgage Loans for such Distribution Date, subject, until the
Class Certificate Balance of each Class of Offered Certificates has been reduced
to zero, to a minimum amount equal to 0.50% of the Cut-off Date Pool Principal
Balance; provided, however, that if, on any Distribution Date, a Trigger Event
exists, the Specified Subordinated Amount shall not be reduced to the applicable
percentage of the then current aggregate Stated Principal Balance of the
Mortgage Loans until the Distribution Date on which a Trigger Event no longer
exists. When the Class Certificate Balance of each Class of Offered Certificates
has been reduced to zero, the Specified Subordinated Amount will thereafter
equal zero.
Sponsor: Xxxxxx Xxxxxxx Mortgage Capital Inc., a New York
corporation, and its successors in interest, as purchaser of the Mortgage Loans
under each of the Purchase Agreements.
Standard & Poor's: Standard & Poor's Ratings Services, a division of
The XxXxxx-Xxxx Companies, Inc., and its successors in interest. If Standard &
Poor's is designated as a Rating Agency in the Preliminary Statement, for
purposes of Section 11.05(b) the address for notices to Standard & Poor's shall
be Standard & Poor's, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Residential Mortgage Surveillance Group - Xxxxxx Xxxxxxx Capital I Inc. Trust
2006-HE2, or such other address as Standard & Poor's may hereafter furnish to
the Depositor, the Securities Administrator, the Trustee and the Servicers.
Standard & Poor's Glossary: The Standard & Poor's LEVELS(R)
Glossary, as may be in effect from time to time.
Startup Day: The Closing Date.
Stated Principal Balance: As to each Mortgage Loan and as of any
date of determination, (i) the principal balance of the Mortgage Loan at the
Cut-off Date after giving effect to payments of principal due on or before such
date (whether or not received), minus (ii) all amounts previously remitted to
the Securities Administrator with respect to the related Mortgage Loan
representing payments or recoveries of principal including advances in respect
of scheduled payments of principal. For purposes of any Distribution Date, the
Stated Principal Balance of any Mortgage Loan will give effect to any scheduled
payments of principal received by the related Servicer on or prior to the
related Determination Date or advanced by the related Servicer for the related
Remittance Date and any unscheduled principal payments and other unscheduled
principal collections received during the related Prepayment Period, and the
Stated Principal Balance of any Mortgage Loan that has prepaid in full or has
become a Liquidated Mortgage Loan during the related Prepayment Period shall be
zero.
Stepdown Date: The later to occur of (i) the earlier to occur of (a)
the Distribution Date in May 2009 and (b) the Distribution Date following the
Distribution Date on which the aggregate Class Certificate Balances of the Class
A Certificates have been reduced to zero and (ii) the first Distribution Date on
which the Senior Enhancement Percentage (calculated for this purpose only after
taking into account payments of principal on the Mortgage Loans applied to
reduce the Stated Principal Balances of the Mortgage Loans for the applicable
Distribution Date but prior to any allocation of the Principal Distribution
Amount and principal payments from the Swap Account to the Certificates on such
Distribution Date) is greater than or equal to the Senior Specified Enhancement
Percentage.
Subcontractor: Any third-party or Affiliated vendor, subcontractor
or other Person utilized by a Servicer, a Subservicer, the Securities
Administrator or a Custodian, as applicable, that is not responsible for the
overall servicing (as "servicing" is commonly understood by participants in the
mortgage-backed securities market) of Mortgage Loans but performs one or more
discrete functions identified in Item 1122(d) of Regulation AB with respect to
Mortgage Loans.
Subordinated Amount: With respect to any Distribution Date, the
excess, if any, of (a) the aggregate Stated Principal Balance of the Mortgage
Loans for such Distribution Date over (b) the aggregate of the Class Certificate
Balances of the Offered Certificates as of such Distribution Date (after giving
effect to the payment of the Principal Remittance Amount on such Certificates on
such Distribution Date).
Subordinated Certificates: As specified in the Preliminary
Statement.
Subordination Deficiency: With respect to any Distribution Date, the
excess, if any, of (a) the Specified Subordinated Amount applicable to such
Distribution Date over (b) the Subordinated Amount applicable to such
Distribution Date.
Subordination Reduction Amount: With respect to any Distribution
Date, an amount equal to the lesser of (a) the Excess Subordinated Amount and
(b) the Net Monthly Excess Cash Flow.
Subsequent Recovery: With respect to any Mortgage Loan or related
Mortgaged Property that became a Liquidated Mortgage Loan or was otherwise
disposed of, all amounts received in respect of such Liquidated Mortgage Loan
after an Applied Realized Loss Amount related to such Mortgage Loan or Mortgaged
Property is allocated to reduce the Class Certificate Balance of any Class of
Subordinated Certificates. Any Subsequent Recovery that is received during a
Prepayment Period will be treated as Liquidation Proceeds and included as part
of the Principal Remittance Amount for the related Distribution Date.
Subservicer: Any Person that services Mortgage Loans on behalf of a
Servicer or any Subservicer and 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 by a Servicer under
this Agreement, with respect to some or all of the Mortgage Loans, that are
identified in Item 1122(d) of Regulation AB.
Subservicing Account: As defined in Section 3.08.
Subservicing Agreements: As defined in Section 3.02(a).
Substitute Mortgage Loan: A Mortgage Loan (i) substituted by the
Depositor or the applicable Responsible Party for a Deleted Mortgage Loan that
satisfies the criteria set forth in the definition of "Qualified Substitute
Mortgage Loan" in the applicable Purchase Agreement or (ii) substituted by the
Depositor for a Deleted Mortgage Loan, which, if substituted by the Depositor,
must, on the date of such substitution, as confirmed in a Request for Release,
substantially in the form of Exhibit J, (a) have a Stated Principal Balance,
after deduction of the principal portion of the Scheduled Payment due in the
month of substitution, not in excess of, and not more than 10% less than, the
Stated Principal Balance of the Deleted Mortgage Loan; (b) be accruing interest
at a rate no lower than and not more than 1% per annum higher than, that of the
Deleted Mortgage Loan; (c) have a Loan-to-Value Ratio or a Combined
Loan-to-Value Ratio, as applicable, no higher than that of the Deleted Mortgage
Loan; (d) have a remaining term to maturity no greater than (and not more than
one year less than that of) the Deleted Mortgage Loan; and (e) comply with each
representation and warranty set forth in Section 2.03.
Substitution Adjustment Amount: As defined in Section 2.03.
Swap Account: As defined in Section 4.06.
Swap Assets: Collectively, the Swap Account, 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 4.06.
Swap LIBOR: With respect to any Distribution Date (and the related
Interest Accrual Period), the product of (i) USD-LIBOR-BBA (as used in the
Interest Swap Agreement), (ii) two, and (iii) the quotient of (a) the actual
number of days in the Interest Accrual Period for the Offered Certificates
divided by (b) 30.
Swap Payment Allocation: For any Class of Certificates and any
Distribution Date, that Class's pro rata share of the Net Swap Receipts, if any,
for that Distribution Date, based on the Class Certificate Balances of the
Classes of Certificates.
Swap Payment Rate: For any Distribution Date, a fraction, the
numerator of which is any Net Swap Payment or Swap Termination Payment owed to
the Swap Provider for such Distribution Date and the denominator of which is the
aggregate Stated Principal Balance of the Mortgage Loans at the beginning of the
related Due Period, multiplied by 12.
Swap Provider: Xxxxxx Xxxxxxx Capital Services Inc., a Delaware
corporation, and its successors in interest.
Swap Termination Payment: Any payment payable by the Trust or the
Swap Provider upon termination of the Interest Rate Swap Agreement as a result
of an Event of Default (as defined in the Interest Rate Swap Agreement) or a
Termination Event (as defined in the Interest Rate Swap Agreement).
Tax Matters Person: The Holder of the Class R Certificates
designated as "tax matters person" of each Trust REMIC in the manner provided
under Treasury Regulations Section 1.860F-4(d) and Treasury Regulations Section
301.6231(a)(7)-1.
Tax Service Contract: As defined in Section 3.09(a).
Telerate Page 3750: The display page currently so designated on the
Bridge Telerate Service (or such other page as may replace that page on that
service for displaying comparable rates or prices).
Total Monthly Excess Spread: As to any Distribution Date, an amount
equal to the excess if any, of (i) the interest on the Mortgage Loans received
by the Servicers on or prior to the related Determination Date (other than
Prepayment Interest Excesses) or advanced by the Servicers for the related
Remittance Date (net of Expense Fees) over (ii) the sum of (A) the amounts
payable to the Certificates pursuant to Section 4.02(a)(i) on such Distribution
Date, (B) any Net Swap Payments to the Swap Provider and (C) any Swap
Termination Payment (other than a Defaulted Swap Termination Payment that is not
a Senior Defaulted Swap Termination Payment) to the Swap Provider.
Transfer: Any direct or indirect transfer or sale of any Ownership
Interest in a Residual Certificate.
Transfer Affidavit: As defined in Section 5.02(c).
Transferor Certificate: As defined in Section 5.02(b).
Trigger Event: Either a Cumulative Loss Trigger Event or a
Delinquency Trigger Event.
Trust: The express trust created hereunder in Section 2.01(c).
Trust Fund: The corpus of the trust created hereunder consisting of
(i) the Mortgage Loans and all interest and principal with respect thereto
received on or after the related Cut-off Date, other than such amounts which
were due on the Mortgage Loans on or prior to the related Cut-off Date; (ii) the
Collection Accounts, Excess Reserve Fund Account, the Distribution Account, and
all amounts deposited therein pursuant to the applicable provisions of this
Agreement; (iii) property that secured a Mortgage Loan and has been acquired by
foreclosure, deed-in-lieu of foreclosure or otherwise; (iv) the Interest Rate
Swap Agreement; (v) the Swap Assets; and (vi) all proceeds of the conversion,
voluntary or involuntary, of any of the foregoing.
Trust REMIC: Any of Pooling-Tier REMIC-1, Pooling-Tier REMIC-2, the
Lower-Tier REMIC or the Upper-Tier REMIC, as applicable.
Trustee: Deutsche Bank National Trust Company, a national banking
association, and its successors in interest and, if a successor trustee is
appointed hereunder, such successor.
Underwriters' Exemption: Any exemption listed under footnote 1 of,
and amended by, Prohibited Transaction Exemption 2002-41, 67 Fed. Reg. 54487
(2002), or any successor exemption.
Underwriting Guidelines: The underwriting guidelines attached to the
Purchase Agreements.
Unpaid Interest Amount: As of any Distribution Date and any Class of
Certificates, the sum of (a) the portion of the Accrued Certificate Interest
Distribution Amount from Distribution Dates prior to the current Distribution
Date remaining unpaid immediately prior to the current Distribution Date and (b)
interest on the amount in clause (a) above at the applicable Pass-Through Rate
(to the extent permitted by applicable law).
Unpaid Realized Loss Amount: With respect to any Class of
Subordinated Certificates and as to any Distribution Date, is the excess of (i)
the Applied Realized Loss Amounts with respect to such Class over (ii) the sum
of (a) all distributions in reduction of such Applied Realized Loss Amounts on
all previous Distribution Dates, and (b) the amount by which the Class
Certificate Balance of such Class has been increased due to the distribution of
any Subsequent Recoveries on all previous Distribution Dates. Any amounts
distributed to a Class of Subordinated Certificates in respect of any Unpaid
Realized Loss Amount will not be applied to reduce the Class Certificate Balance
of such Class.
Upper-Tier CarryForward Amount: With respect to each Class of
Offered Certificates, as of any Distribution Date, the sum of (A) if on such
Distribution Date the Upper-Tier Interest Rate for the Class of Corresponding
Upper-Tier REMIC Regular Interest is based upon the Upper-Tier REMIC Loan Group
I Rate or Upper-Tier REMIC Loan Group II Rate, as and if applicable, or the
Upper-Tier REMIC WAC Rate, the excess, if any, of (i) the amount of interest
such Class of Upper-Tier Regular Interest would otherwise be entitled to receive
on such Distribution Date had such Upper-Tier REMIC Regular Interest not been
subject to the Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group
II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate, over (ii) the
amount of interest payable on such Class of Certificates on such Distribution
Date taking into account the Upper-Tier REMIC Loan Group I Rate or Upper-Tier
REMIC Loan Group II Rate, as and if applicable, or the Upper-Tier REMIC WAC Rate
and (B) the Upper-Tier CarryForward Amount for such Class of Certificates for
all previous Distribution Dates not previously paid, together with interest
thereon at a rate equal to the applicable Upper-Tier Interest Rate for such
Class of Certificates for such Distribution Date, without giving effect to the
Upper-Tier REMIC Loan Group I Rate or Upper-Tier REMIC Loan Group II Rate, as
and if applicable, or the Upper-Tier REMIC WAC Rate.
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 Loan Group I Rate: As described in the Preliminary
Statement.
Upper-Tier REMIC Loan Group II Rate: 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.
U.S. Person: (i) A citizen or resident of the United States; (ii) a
corporation (or entity treated as a corporation for tax purposes) created or
organized in the United States or under the laws of the United States or of any
State thereof, including, for this purpose, the District of Columbia; (iii) a
partnership (or entity treated as a partnership for tax purposes) organized in
the United States or under the laws of the United States or of any State
thereof, including, for this purpose, the District of Columbia (unless provided
otherwise by future Treasury regulations); (iv) an estate whose income is
includible in gross income for United States income tax purposes regardless of
its source; or (v) 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 U.S. Persons have authority to control substantial decisions of the trust.
Notwithstanding the last clause of the preceding sentence, to the extent
provided in Treasury regulations, certain trusts in existence on August 20,
1996, and treated as U.S. Persons prior to such date, may elect to continue to
be U.S. Persons.
Voting Rights: The portion of the voting rights of all of the
Certificates which is allocated to any Certificate. As of any date of
determination, (a) 1% of all Voting Rights shall be allocated to the Class X
Certificates, if any (such Voting Rights to be allocated among the holders of
Certificates of each such Class in accordance with their respective Percentage
Interests), (b) 1% of all Voting Rights shall be allocated to the Class P
Certificates, if any, and (c) the remaining Voting Rights shall be allocated
among Holders of the remaining Classes of Certificates in proportion to the
Certificate Balances of their respective Certificates on such date.
WAC Cap: With respect to the Mortgage Loans as of any Distribution
Date, the weighted average of the Adjusted Net Mortgage Rates then in effect on
the beginning of the related Due Period on the Mortgage Loans minus the Swap
Payment Rate, adjusted in each case to accrue on the basis of a 360-day year and
the actual number of days in the related Interest Accrual Period.
Xxxxx Fargo: Xxxxx Fargo Bank, National Association, a national
banking association, and its successors in interest.
WMC: WMC Mortgage Corp., a California corporation, and its
successors in interest.
WMC Mortgage Loans: The Mortgage Loans purchased by the Sponsor
pursuant to the WMC Purchase Agreement for which WMC is identified as
Responsible Party on the Mortgage Loan Schedule.
WMC Purchase Agreement: The Third Amended and Restated Mortgage Loan
Purchase and Warranties Agreement, dated as of January 1, 2006, by and between
WMC and the Sponsor, a copy of which is attached hereto as Exhibit O.
ARTICLE II
CONVEYANCE OF MORTGAGE LOANS;
REPRESENTATIONS AND WARRANTIES
Section 2.01 Conveyance of Mortgage Loans. (a) The Depositor,
concurrently with the execution and delivery hereof, hereby sells, transfers,
assigns, sets over and otherwise conveys to the Trustee for the benefit of the
Certificateholders, without recourse, all the right, title and interest of the
Depositor in and to the Trust Fund, and the Trustee, on behalf of the Trust,
hereby accepts the Trust Fund.
(b) In connection with the transfer and assignment of each Mortgage
Loan, the Depositor has delivered or caused to be delivered to Xxxxx Fargo, in
its capacity as Custodian, with respect to the WMC Mortgage Loans and to LaSalle
with respect to the Decision One Mortgage Loans, for the benefit of the
Certificateholders the following documents or instruments with respect to each
Mortgage Loan so assigned:
(i) the original Mortgage Note bearing all intervening endorsements,
endorsed "Pay to the order of _____________, without recourse" and signed
(which may be by facsimile signature) in the name of the last endorsee by
an authorized officer. To the extent that there is no room on the face of
the Mortgage Note for endorsements, the endorsement may be contained on an
allonge, unless the applicable Custodian is advised in writing by the
applicable Responsible Party (pursuant to the applicable Purchase
Agreement) that state law does not so allow;
(ii) the original of any guaranty executed in connection with the
Mortgage Note;
(iii) the original Mortgage with evidence of recording thereon or a
certified true copy of such Mortgage submitted for recording. If, in
connection with any Mortgage Loan, the original Mortgage cannot be
delivered with evidence of recording thereon on or prior to the Closing
Date because of a delay caused by the public recording office where such
Mortgage has been delivered for recordation or because such Mortgage has
been lost or because such public recording office retains the original
recorded Mortgage, the applicable Responsible Party shall deliver or cause
to be delivered to the applicable Custodian a photocopy of such Mortgage
certified by the applicable Responsible Party to be a true and complete
copy of such Mortgage and shall forward to the applicable Custodian such
original recorded Mortgage within 14 days following the applicable
Responsible Party's receipt of such Mortgage from the applicable public
recording office; or in the case of a Mortgage where a public recording
office retains the original recorded Mortgage or in the case where a
Mortgage is lost after recordation in a public recording office, a copy of
such Mortgage certified by such public recording office to be a true and
complete copy of the original recorded Mortgage;
(iv) the originals of all assumption, modification, consolidation or
extension agreements, with evidence of recording thereon or a certified
true copy of such agreement submitted for recording;
(v) the original Assignment of Mortgage for each Mortgage Loan
endorsed in blank (except with respect to MERS Designated Mortgage Loans);
(vi) the originals of all intervening assignments of Mortgage (if
any) evidencing a complete chain of assignment from the applicable
originator (or MERS with respect to each MERS Designated Mortgage Loan) to
the last endorsee with evidence of recording thereon or a certified true
copy of such intervening assignments of Mortgage submitted for recording,
or if any such intervening assignment has not been returned from the
applicable recording office or has been lost or if such public recording
office retains the original recorded assignments of Mortgage, the
applicable Responsible Party shall deliver or cause to be delivered a
photocopy of such intervening assignment, certified by the applicable
Responsible Party to be a true and complete copy of such intervening
assignment and shall forward to the applicable Custodian such original
recorded intervening assignment within 14 days following the applicable
Responsible Party's receipt of such from the applicable public recording
office; or in the case of an intervening assignment where a public
recording office retains the original recorded intervening assignment or
in the case where an intervening assignment is lost after recordation in a
public recording office, a copy of such intervening assignment certified
by such public recording office to be a true and complete copy of the
original recorded intervening assignment;
(vii) the original mortgagee title insurance policy or, in the event
such original title policy is unavailable, a certified true copy of the
related policy binder or commitment for title certified to be true and
complete by the title insurance company; and
(viii) the original of any security agreement, chattel mortgage or
equivalent document executed in connection with the Mortgage (if
provided).
The applicable Responsible Party shall cause to be delivered to the
applicable Custodian the applicable recorded document promptly upon receipt from
the respective recording office but, solely with respect to the WMC Mortgage
Loans, in no event later than one year from the date such Mortgage Loan was sold
by WMC to the Sponsor.
If any Mortgage has been recorded in the name of Mortgage Electronic
Registration System, Inc. ("MERS") or its designee, no Assignment of Mortgage in
favor of the Trustee will be required to be prepared or delivered and instead,
the applicable Servicer shall take all reasonable actions as are necessary at
the expense of the applicable Responsible Party to cause the Trust 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.
From time to time, the Depositor or the applicable Servicer, as
applicable, shall forward to the applicable Custodian additional original
documents, additional documents evidencing an assumption, modification,
consolidation or extension of a Mortgage Loan in accordance with the terms of
this Agreement upon receipt of such documents. All such mortgage documents held
by the applicable Custodian as to each Mortgage Loan shall constitute the
"Custodial File".
On or prior to the Closing Date, each Responsible Party shall
deliver to the applicable Custodian Assignments of Mortgages, in blank, for each
Mortgage Loan. The Responsible Parties shall cause the Assignments of Mortgages
and complete recording information to be provided to the applicable Servicer in
a reasonably acceptable manner. No later than thirty (30) Business Days
following the later of the Closing Date and the date of receipt by the
applicable Servicer of the complete recording information for a Mortgage, the
applicable Servicer shall promptly submit or cause to be submitted for
recording, at the expense of the applicable Responsible Party as required
pursuant to the related Purchase Agreement and at no expense to the Trust Fund,
the Trustee, the applicable Servicer, or the Depositor, in the appropriate
public office for real property records, each Assignment of Mortgage referred to
in Section 2.01(b)(v). Notwithstanding the foregoing, however, for
administrative convenience and facilitation of servicing and to reduce closing
costs, the Assignments of Mortgage shall not be required to be completed and
submitted for recording with respect to any Mortgage Loan (i) if the Trustee,
the Custodians and each Rating Agency have received an Opinion of Counsel,
satisfactory in form and substance to the Trustee and each Rating Agency to the
effect that the recordation of such Assignments of Mortgage in any specific
jurisdiction is not necessary to protect the Trustee's interest in the related
Mortgage Note, (ii) if such Mortgage Loan is a MERS Designated Mortgage Loan or
(iii) if the Rating Agencies have each notified the Depositor in writing that
not recording any such Assignments of Mortgage would not cause the initial
ratings on any Offered Certificates to be downgraded or withdrawn; provided,
however, that no Servicer shall be held responsible or liable for any loss that
occurs because an Assignment of Mortgage was not recorded, but only to the
extent the applicable Servicer does not have prior knowledge of the act or
omission that causes such loss. Unless the Depositor gives the Servicers notice
to the contrary, the Depositor is deemed to have given the Servicers notice that
the condition set forth in clause (iii) above is applicable. However, with
respect to the Assignments of Mortgage referred to in clauses (i) and (ii)
above, if foreclosure proceedings occur against a Mortgaged Property, the
applicable Servicer shall record such Assignment of Mortgage at the expense of
the applicable Responsible Party (and at no expense to such Servicer) as
required pursuant to the related Purchase Agreement. If the Assignment of
Mortgage is to be recorded, the Mortgage shall be assigned to "Deutsche Bank
National Trust Company, as trustee under the Pooling and Servicing Agreement
dated as of April 1, 2006, Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2." In the
event that any such Assignment of Mortgage is lost or returned unrecorded
because of a defect therein, the applicable Responsible Party shall promptly
cause to be delivered a substitute Assignment of Mortgage to cure such defect
and thereafter cause each such assignment to be duly recorded.
In the event that such original or copy of any document submitted
for recordation to the appropriate public recording office is not so delivered
to the applicable Custodian within one year following the date such Mortgage
Loan was sold by such Responsible Party to the Sponsor, and in the event that
such Responsible Party does not cure such failure within 30 days of discovery or
receipt of written notification of such failure from the Depositor, the related
Mortgage Loan shall, upon the request of the Depositor, be repurchased by such
Responsible Party at the price and in the manner specified in Section 2.03. The
foregoing repurchase obligation shall not apply in the event that the applicable
Responsible Party cannot deliver such original or copy of any document submitted
for recordation to the appropriate public recording office within the specified
period due to a delay caused by the recording office in the applicable
jurisdiction; provided, that such Responsible Party shall instead deliver a
recording receipt of such recording office or, if such recording receipt is not
available, an officer's certificate of an officer of such Responsible Party,
confirming that such document has been accepted for recording.
Notwithstanding anything to the contrary contained in this Section
2.01, in those instances where the public recording office retains or loses the
original Mortgage or assignment after it has been recorded, the obligations of
the applicable Responsible Party shall be deemed to have been satisfied upon
delivery by the applicable Responsible Party to the applicable Custodian prior
to the Closing Date of a copy of such Mortgage or assignment, as the case may
be, certified (such certification to be an original thereof) by the public
recording office to be a true and complete copy of the recorded original
thereof.
On or prior to the Closing Date, the Depositor shall deliver to the
Custodians, a copy of the Data Tape Information in an electronic, machine
readable medium in a form acceptable to the Depositor and the Custodians.
(c) The Depositor does hereby establish, pursuant to the further
provisions of this Agreement and the laws of the State of New York, an express
trust (the "Trust") to be known, for convenience, as "XXXXXX XXXXXXX CAPITAL I
INC. TRUST 2006-HE2" and Deutsche Bank National Trust Company is hereby
appointed as Trustee in accordance with the provisions of this Agreement. The
parties hereto acknowledge and agree that it is the policy and intention of the
Trust to acquire only Mortgage Loans meeting the requirements set forth in this
Agreement, including without limitation, the representations and warranties set
forth in paragraph (aaa) of Schedule VI and paragraph (yy) of Schedule VIII to
this Agreement. The Trust's fiscal year is the calendar year.
(d) The Trust shall have the capacity, power and authority, and the
Trustee on behalf of the Trust is hereby authorized, to accept the sale,
transfer, assignment, set over and conveyance by the Depositor to the Trust of
all the right, title and interest of the Depositor in and to the Trust Fund
(including, without limitation, the Mortgage Loans) pursuant to Section 2.01(a).
The Securities Administrator on behalf of the Trust is hereby directed to enter
into the Interest Rate Swap Agreement.
Section 2.02 Acceptance by the Trustee of the Mortgage Loans. The
Custodians shall acknowledge, on the Closing Date, receipt by the applicable
Custodian on behalf of the Trustee of the documents identified in the Initial
Certification in the form annexed hereto as Exhibit E, and each Custodian
declares that it holds and will hold such documents and the other documents
delivered to it pursuant to Section 2.01, and that it holds or will hold such
other assets as are included in the Trust Fund, in trust for the exclusive use
and benefit of all present and future Certificateholders. The Custodians shall
maintain possession of the related Mortgage Notes in the States of California,
Minnesota or Utah unless otherwise permitted by the Rating Agencies.
In connection with the Closing Date, the Custodians shall be
required to deliver via facsimile (with original to follow the next Business
Day) to the Depositor and the Servicers an Initial Certification prior to the
Closing Date, or, with the Depositor's consent, on the Closing Date, certifying
receipt of a Mortgage Note and Assignment of Mortgage for each applicable
Mortgage Loan. The Custodians shall not be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, each Custodian shall, for the
benefit of the Holders of the Certificates, ascertain that all documents
identified in the Document Certification and Exception Report in the form
attached hereto as Exhibit F with respect to the Mortgage Loans for which it is
the Custodian, are in its possession, and shall deliver to the Depositor, the
Servicers and the Trustee a Document Certification and Exception Report, in the
form annexed hereto as Exhibit F, to the effect that, as to each applicable
Mortgage Loan listed in the Mortgage Loan Schedule (other than any Mortgage Loan
paid in full or any Mortgage Loan specifically identified in such certification
as an exception and not covered by such certification): (i) all documents
identified in the Document Certification and Exception Report and required to be
reviewed by it are in its possession; (ii) such documents have been reviewed by
it and appear regular on their face and relate to such Mortgage Loan; (iii)
based on its examination and only as to the foregoing documents, the information
set forth in items (1), (2), (7) and (9) of the Mortgage Loan Schedule and items
(1), (9) and (17) of the Data Tape Information respecting such Mortgage Loan
accurately reflects the information set forth in the Custodial File; and (iv)
each Mortgage Note has been endorsed as provided in Section 2.01 of this
Agreement. The Custodians shall not be responsible to verify the validity,
sufficiency or genuineness of any document in any Custodial File.
Within 90 days after the Closing Date, the applicable Servicer (for
the benefit of the Holders of the Certificates, based solely on the list of MERS
Designated Mortgage Loans and screen printouts from the MERS(R) System provided
to such Servicer by each applicable Responsible Party no later than 45 days
after the Closing Date) shall confirm, on behalf of the Trust, that the Trustee
is shown as the Investor with respect to each MERS Designated Mortgage Loan on
such screen printouts. If the Trustee is not shown as the Investor with respect
to any MERS Designated Mortgage Loans on such screen printouts, the applicable
Servicer shall promptly notify the applicable Responsible Party of such fact,
and such Person shall then either cure such defect or repurchase such Mortgage
Loan in accordance with Section 2.03.
The Custodians shall retain possession and custody of each
applicable Custodial File in accordance with and subject to the terms and
conditions set forth herein. The applicable Servicer shall promptly deliver to
the applicable Custodian, upon the execution or receipt thereof, the originals
of such other documents or instruments constituting the Custodial File as come
into the possession of such Servicer from time to time.
Each Responsible Party shall deliver to the applicable Servicer
copies of all trailing documents required to be included in the Custodial File
at the same time the original or certified copies thereof are delivered to the
applicable Custodian, including but not limited to such documents as the title
insurance policy and any other Mortgage Loan Documents upon return from the
public recording office. Such documents shall be delivered by the applicable
Responsible Party at such Responsible Party's expense to such Servicer.
Section 2.03 Representations and Warranties; Remedies for Breaches
of Representations and Warranties with Respect to the Mortgage Loans. (a) Xxxxx
Fargo in its capacity as Servicer hereby makes the representations and
warranties set forth in Schedule II hereto to the Depositor and the Trustee as
of the dates set forth in such Schedule. JPMorgan hereby makes the
representations and warranties set forth in Schedule III hereto to the
Depositor, the Securities Administrator and the Trustee as of the dates set
forth in such Schedule. HomEq hereby makes the representations and warranties
set forth in Schedule IV hereto the Depositor, the Securities Administrator and
the Trustee as of the dates set forth in such Schedule.
(b) WMC hereby makes the representations and warranties, set forth
in Schedule VI and Schedule VII hereto to the Depositor, the Servicer, the
Securities Administrator and the Trustee as of the dates set forth in such
Schedule. Decision One hereby makes the representations and warranties, set
forth in Schedule VIII hereto to the Depositor, the Securities Administrator and
the Trustee as of the dates set forth in such Schedule.
(c) Xxxxx Fargo in its capacity as Custodian hereby makes the
representations and warranties, set forth in Schedule IX hereto to the Trustee
as of the dates set forth in such Schedule IX. LaSalle hereby makes the
representations and warranties, set forth in Schedule X hereto to the Trustee
and the Securities Administrator as of the dates set forth in such Schedule X.
(d) The Depositor hereby makes the representations and warranties
set forth in Schedule V hereto to the Trustee and the Securities Administrator
as of the dates set forth in such Schedule.
(e) It is understood and agreed by the parties hereto that the
representations and warranties set forth in this Section 2.03 shall survive the
transfer of the Mortgage Loans by the Depositor to the Trustee, and shall inure
to the benefit of the parties to whom the representations and warranties were
made notwithstanding any restrictive or qualified endorsement on any Mortgage
Note or Assignment of Mortgage or the examination or failure to examine any
Mortgage File. Upon discovery by any of the parties to this Agreement of a
breach of any of the foregoing representations and warranties that materially
and adversely affect the value of any Mortgage Loan or the interest of the
Trustee or the Certificateholders therein, the party discovering such breach
shall give prompt written notice to the other parties.
(f) Upon discovery by any of the parties hereto of a breach of a
representation or warranty made by a Responsible Party under this Agreement,
that materially and adversely affects the value of any Mortgage Loan or the
interests of the Trustee or the Certificateholders therein, the party
discovering such breach shall give prompt written notice thereof to the other
parties. Upon receiving written notice of a breach of a representation and
warranty or written notice that a Mortgage Loan does not constitute a "qualified
mortgage" within the meaning of Section 860G(a)(3) of the Code, the Trustee
shall in turn notify the applicable Responsible Party in writing to correct or
cure, in accordance with this Agreement, any such breach of a representation or
warranty made by the applicable Responsible Party under this Agreement within
sixty (60) days from the date of notice from the Trustee or the discovery by the
applicable Responsible Party of the breach, and if the applicable Responsible
Party fails or is unable to correct or cure the defect or breach within such
period, the Trustee shall notify the Depositor of such failure to correct or
cure. Unless otherwise directed by the Depositor within five (5) Business Days
after notifying the Depositor of such failure by the applicable Responsible
Party to correct or cure, the Trustee shall notify the applicable Responsible
Party to repurchase the Mortgage Loan (a "Deleted Mortgage Loan") at the
Repurchase Price or, if permitted hereunder, substitute a Substitute Mortgage
Loan for such Mortgage Loan, in each case, pursuant to this Agreement.
Notwithstanding the foregoing, in the event that the Trustee receives notice of
a breach by (i) WMC of any of the representations and warranties set forth in
paragraphs (g), (i), (rr), (zz), (aaa), (jjj), (kkk), (lll), (mmm), (nnn),
(ooo), (ppp), (qqq) and (rrr) of Schedule VI or (ii) Decision One of any
representations and warranties set forth in paragraphs (g), (i), (xx), (yy),
(ggg), (hhh), (iii), (jjj), (kkk), (lll), (mmm), (nnn) and (ooo), (ppp), (qqq),
(sss) and (ttt) of Schedule VIII, the Trustee shall notify the applicable
Responsible Party to repurchase the Mortgage Loan at the Repurchase Price within
sixty (60) days of the applicable Responsible Party's receipt of such notice.
If, within ten (10) Business Days of receipt of such notice by the applicable
Responsible Party such Responsible Party fails to repurchase such Mortgage Loan,
the Trustee shall notify the Depositor of such failure. The Trustee shall pursue
all legal remedies available to the Trustee against the applicable Responsible
Party under this Agreement, if the Trustee has received written notice from the
Depositor directing the Trustee to pursue such remedies.
(g) In the event any Mortgage Loan does not conform to the
requirements as determined in the applicable Custodian's review of the related
Custodial File, such Custodian shall notify the applicable Responsible Party,
the applicable Servicer, the Trustee and the Depositor by delivery of the
certification of such Custodian required by Section 2.02 to such parties, which
shall be a request that such Responsible Party correct or cure such defect as
required under this Agreement, and if such Responsible Party fails or is unable
to correct or cure the defect within the period set forth in this Agreement,
such Custodian shall notify the Depositor and the Trustee of such failure to
correct or cure. Unless otherwise directed by the Depositor within five (5)
Business Days after notifying the Depositor and the Trustee of such failure by
the applicable Responsible Party to correct or cure, the Trustee shall notify
the applicable Responsible Party to repurchase the Mortgage Loan at the
Repurchase Price or, if permitted hereunder, substitute a Substitute Mortgage
Loan for such Mortgage Loan, in each case, pursuant to the terms of this
Agreement, as applicable. If, within ten (10) Business Days of receipt of such
notice by the applicable Responsible Party, such Responsible Party fails to
repurchase such Mortgage Loan, the Custodian shall notify the Depositor and the
Trustee of such failure. The Trustee shall pursue all legal remedies available
to the Trustee against the applicable Responsible Party under this Agreement, if
the Trustee has received written notice from the Depositor directing the Trustee
to pursue such remedies.
(h) Within 90 days of the earlier of either discovery by or notice
to the applicable Responsible Party of any breach of a representation or
warranty set forth on Schedule VI or Schedule VIII, as applicable, that
materially and adversely affects the value of any Mortgage Loan or the interest
of the Trustee or the Certificateholders therein, the applicable Responsible
Party shall use its best efforts to promptly cure such breach in all material
respects and, if such defect or breach cannot be remedied, the applicable
Responsible Party shall, at the Depositor's option, purchase such Mortgage Loan
at the Repurchase Price or, if permitted hereunder, substitute a Substitute
Mortgage Loan for such Mortgage Loan, if applicable.
(i) Any substitution of a Substitute Mortgage Loan by a Responsible
Party shall be made in accordance with the substitution procedures set forth in
the applicable Purchase Agreement, which provisions shall be as set forth in
such agreements as if they were set forth herein. With respect to any Substitute
Mortgage Loan or Loans substituted by the Depositor or any Responsible Party,
the Depositor or such Responsible Party, as applicable, shall deliver to the
applicable Custodian, for the benefit of the Certificateholders the Mortgage
Note, the Mortgage, the related Assignment of Mortgage, and such other documents
and agreements as are required by Section 2.01, with the Mortgage Note endorsed
and the Mortgage assigned as required by Section 2.01. Notwithstanding anything
to the contrary set forth in this Agreement, no substitution under this
Agreement is permitted to be made (a) in any calendar month after the
Determination Date for such month or (b) if the substitution were to be made on
or after the second anniversary of the Closing Date. Scheduled Payments due with
respect to Substitute Mortgage Loans in the Due Period of substitution shall not
be part of the Trust Fund and will be retained by the Depositor or the
applicable Responsible Party, as applicable, on the next succeeding Distribution
Date. For the Due Period of substitution, distributions to Certificateholders
will include the Scheduled Payment due on any Deleted Mortgage Loan for such Due
Period and thereafter the Depositor or the applicable Responsible Party, as
applicable, shall be entitled to retain all amounts received in respect of such
Deleted Mortgage Loan.
(j) The applicable Servicer, based upon information provided by the
Depositor or the applicable Responsible Party, as applicable, shall amend the
Mortgage Loan Schedule for the benefit of the Certificateholders to reflect the
removal of such Deleted Mortgage Loan and the substitution of the Substitute
Mortgage Loan or Loans and such Servicer shall deliver the amended Mortgage Loan
Schedule to the Securities Administrator and the applicable Custodian. Upon such
substitution, the Substitute Mortgage Loan or Loans shall be subject to the
terms of this Agreement in all respects, and, if the substitution is made by the
Depositor, the Depositor shall be deemed to have made with respect to such
Substitute Mortgage Loan or Loans, as of the date of substitution, the
representations and warranties made pursuant to Section 2.03(b) with respect to
such Substitute Mortgage Loan. Upon receipt of a Request for Release in
connection with any such substitution indicating the deposit into the applicable
Collection Account of the amount required to be deposited therein in connection
with such substitution as described in Section 2.03(k), the applicable Custodian
shall release the Mortgage File held for the benefit of the Certificateholders
relating to such Deleted Mortgage Loan to the applicable Responsible Party and
the Trustee shall execute and deliver at the direction of the Depositor or the
applicable Responsible Party, as applicable, such instruments of transfer or
assignment prepared by the Depositor or the applicable Responsible Party, as
applicable, in each case without recourse, as shall be necessary to vest title
in the Depositor or the applicable Responsible Party, as applicable, of the
Trustee's interest in any Deleted Mortgage Loan substituted for pursuant to this
Section 2.03.
(k) For any month in which the Depositor or any Responsible Party
substitutes one or more Substitute Mortgage Loans for one or more Deleted
Mortgage Loans, the applicable Servicer will determine the amount (if any) by
which the aggregate unpaid principal balance of all such Substitute Mortgage
Loans as of the date of substitution is less than the aggregate unpaid principal
balance of all such Deleted Mortgage Loans. The amount of such shortage, plus an
amount equal to the sum of (i) any accrued and unpaid interest on the Deleted
Mortgage Loans and (ii) all unreimbursed Servicing Advances with respect to such
Deleted Mortgage Loans, or the amount of any similar shortage with respect to a
Substitute Mortgage Loan substituted by a Responsible Party under this Agreement
(collectively, the "Substitution Adjustment Amount"), shall be deposited into
the applicable Collection Account of the related Servicer by the Depositor or
the Responsible Party, as applicable, on or before the Distribution Account
Deposit Date for the Distribution Date following the Prepayment Period during
which the related Mortgage Loan became required to be purchased or replaced
hereunder.
(l) Any Mortgage Loan repurchased pursuant to this Section 2.03 will
be removed from the Trust Fund. The applicable Servicer shall amend the Mortgage
Loan Schedule for the benefit of the Certificateholders to reflect the removal
of any Mortgage Loan repurchased and such Servicer shall deliver the amended
Mortgage Loan Schedule to the Securities Administrator and the applicable
Custodian. For purposes of determining the applicable Repurchase Price, any such
repurchase shall occur or shall be deemed to occur as of the last day of the
applicable Prepayment Period.
(m) In the event that the Depositor or any Responsible Party shall
have repurchased a Mortgage Loan pursuant to this Agreement, the Repurchase
Price therefor shall be deposited by the applicable Servicer in the applicable
Collection Account of the related Servicer pursuant to Section 3.10 on or before
the Distribution Account Deposit Date for the Distribution Date following the
Prepayment Period during which the Depositor or such Responsible Party, as
applicable, repurchased such Mortgage Loan and upon such deposit of the
Repurchase Price and receipt of a Request for Release in the form of Exhibit J
hereto, indicating such deposit, the applicable Custodian shall release the
related Custodial File held for the benefit of the Certificateholders to such
Person as directed by the applicable Servicer, and the Trustee shall execute and
deliver at such Person's direction such instruments of transfer or assignment
prepared by such Person, in each case without recourse, representation or
warranty, as shall be necessary to transfer title from the Trustee.
(n) In addition to any repurchase or substitution obligation by any
Responsible Party under this Agreement, each Responsible Party shall indemnify
the Depositor and its Affiliates, the Securities Administrator, the Servicers,
the Sponsor, the Trustee, the Custodians and the Trust for any breach of any
representation and warranty of such Responsible Party set forth in this
Agreement, in accordance with the indemnification provisions relating to
breaches of representations and warranties (including without limitation, the
representations and warranties set forth in paragraph (aaa) of Schedule VI and
paragraph (yy) of Schedule VIII, as applicable, to this Agreement) and defective
Mortgage Loans set forth in the WMC Purchase Agreement or the Decision One
Purchase Agreement, as applicable, as if such indemnification provisions were
set forth herein for the benefit of the Depositor and its Affiliates, the
Servicers, the Sponsor, the Trustee, the Custodians and the Trust. This
indemnity shall survive the termination of this Agreement.
(o) It is understood and agreed by the parties hereto that the
obligation of the Depositor under this Agreement or any Responsible Party under
this Agreement to cure, repurchase or substitute any Mortgage Loan as to which a
breach of a representation and warranty has occurred and is continuing, together
with any related indemnification obligations set forth herein, shall constitute
the sole remedies against such Persons respecting such breach available to
Certificateholders, the Depositor (if applicable), or the Trustee on their
behalf.
The provisions of this Section 2.03 shall survive delivery of the
respective Custodial Files to the applicable Custodian for the benefit of the
Certificateholders.
Section 2.04 Execution and Delivery of Certificates. The Trustee
acknowledges the transfer and assignment to it of the Trust Fund and,
concurrently with such transfer and assignment, the Securities Administrator has
executed and delivered to or upon the order of the Depositor, the Certificates
in authorized Denominations evidencing directly or indirectly the entire
ownership of the Trust Fund. The Trustee agrees to hold the Trust Fund and
exercise the rights referred to above for the benefit of all present and future
Holders of the Certificates.
Section 2.05 REMIC Matters. The Preliminary Statement sets forth the
designations for federal income tax purposes of all interests created hereby.
The "Startup Day" of each Trust REMIC for purposes of the REMIC Provisions shall
be the Closing Date. The "latest possible maturity date" of the regular interest
in each Trust REMIC is the Distribution Date occurring in March 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 X
Certificates (prior to any reduction for any Basis Risk Payment or Swap
Termination Payment), exclusive of any amounts received from the Swap Provider,
shall be deemed paid from the Upper-Tier REMIC in respect of the Class X
Interest to the Holders of the Class X Certificates prior to distribution of any
Basis Risk Payments to the Offered Certificates. For federal income tax
purposes, any amount distributed on the Offered 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 Swap Account, 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 Offered Certificates on such
Distribution Date shall be treated as having been paid to the Swap Account, all
pursuant to and as further provided in Section 8.13.
Section 2.06 Representations and Warranties of the Depositor. The
Depositor hereby represents, warrants and covenants to the Trustee and the
Servicers that as of the date of this Agreement or as of such date specifically
provided herein:
(a) The Depositor is a corporation duly organized, validly existing
and in good standing under the laws of the State of Delaware;
(b) The Depositor has the corporate power and authority to convey
the Mortgage Loans and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by, this Agreement;
(c) This Agreement has been duly and validly authorized, executed
and delivered by the Depositor, all requisite corporate action having been
taken, and, assuming the due authorization, execution and delivery hereof by the
other parties hereto, constitutes or will constitute the legal, valid and
binding agreement of the Depositor, enforceable against the Depositor in
accordance with its terms, except as such enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or other similar laws
relating to or affecting the rights of creditors generally, and by general
equity principles (regardless of whether such enforcement is considered in a
proceeding in equity or at law);
(d) No consent, approval, authorization or order of or registration
or filing with, or notice to, any governmental authority or court is required
for the execution, delivery and performance of or compliance by the Depositor
with this Agreement or the consummation by the Depositor of any of the
transactions contemplated hereby, except as have been made on or prior to the
Closing Date;
(e) None of the execution and delivery of this Agreement, the
consummation of the transactions contemplated hereby or thereby, or the
fulfillment of or compliance with the terms and conditions of this Agreement,
(i) conflicts or will conflict with or results or will result in a breach of, or
constitutes or will constitute a default or results or will result in an
acceleration under (A) the charter or bylaws of the Depositor, or (B) of any
term, condition or provision of any material indenture, deed of trust, contract
or other agreement or instrument to which the Depositor or any of its
subsidiaries is a party or by which it or any of its subsidiaries is bound; (ii)
results or will result in a violation of any law, rule, regulation, order,
judgment or decree applicable to the Depositor of any court or governmental
authority having jurisdiction over the Depositor or its subsidiaries; or (iii)
results in the creation or imposition of any lien, charge or encumbrance which
would have a material adverse effect upon the Mortgage Loans or any documents or
instruments evidencing or securing the Mortgage Loans;
(f) There are no actions, suits or proceedings before or against or
investigations of, the Depositor pending, or to the knowledge of the Depositor,
threatened, before any court, administrative agency or other tribunal, and no
notice of any such action, which, in the Depositor's reasonable judgment, might
materially and adversely affect the performance by the Depositor of its
obligations under this Agreement, or the validity or enforceability of this
Agreement;
(g) The Depositor is not in default with respect to any order or
decree of any court or any order, regulation or demand of any federal, state,
municipal or governmental agency that may materially and adversely affect its
performance hereunder; and
(h) Immediately prior to the transfer and assignment by the
Depositor to the Trustee on the Closing Date, the Depositor had good title to,
and was the sole owner of each Mortgage Loan, free of any interest of any other
Person, and the Depositor has transferred all right, title and interest in each
Mortgage Loan to the Trustee. The transfer of the Mortgage Note and the Mortgage
as and in the manner contemplated by this Agreement is sufficient either (i)
fully to transfer to the Trustee, for the benefit of the Certificateholders, all
right, title, and interest of the Depositor thereto as note holder and mortgagee
or (ii) to grant to the Trustee, for the benefit of the Certificateholders, the
security interest referred to in Section 11.04.
It is understood and agreed that the representations, warranties and
covenants set forth in this Section 2.06 shall survive delivery of the
respective Custodial Files to a Custodian and shall inure to the benefit of the
Trustee.
ARTICLE III
ADMINISTRATION AND SERVICING
OF MORTGAGE LOANS
Section 3.01 Servicers to Service Mortgage Loans. (a) For and on
behalf of the Certificateholders, each Servicer shall service and administer the
Mortgage Loans for which it is acting as Servicer in accordance with the terms
of this Agreement and the respective Mortgage Loans and, to the extent
consistent with such terms, in the same manner in which it services and
administers similar mortgage loans for its own portfolio, giving due
consideration to customary and usual standards of practice of mortgage lenders
and loan servicers administering similar mortgage loans but without regard to:
(i) any relationship that such Servicer, any Subservicer or any
Affiliate of such Servicer or any Subservicer may have with the related
Mortgagor;
(ii) the ownership or non-ownership of any Certificate by such
Servicer or any Affiliate of such Servicer;
(iii) such Servicer's obligation to make P&I Advances or Servicing
Advances; or
(iv) such Servicer's or any Subservicer's right to receive
compensation for its services hereunder or with respect to any particular
transaction.
To the extent consistent with the foregoing, each Servicer shall
seek to maximize the timely and complete recovery of principal and interest on
the Mortgage Notes. Subject only to the above-described servicing standards and
the terms of this Agreement and of the respective Mortgage Loans, each Servicer
shall have full power and authority, acting alone or through Subservicers as
provided in Section 3.02, to do or cause to be done any and all things in
connection with such servicing and administration which it may deem necessary or
desirable. Without limiting the generality of the foregoing, each Servicer in
its own name or in the name of a Subservicer is hereby authorized and empowered
by the Trustee when the applicable Servicer believes it appropriate in its best
judgment in accordance with Accepted Servicing Practices, to execute and deliver
any and all instruments of satisfaction or cancellation, or of partial or full
release or discharge, and all other comparable instruments, with respect to the
Mortgage Loans and the Mortgaged Properties and to institute foreclosure
proceedings or obtain a deed-in-lieu of foreclosure so as to convert the
ownership of such properties, and to hold or cause to be held title to such
properties, on behalf of the Trustee. Each Servicer shall service and administer
the Mortgage Loans in accordance with applicable state and federal law and shall
provide to the Mortgagors any reports required to be provided to them thereby.
Each Servicer covenants that its computer and other systems used in servicing
the Mortgage Loans operate in a manner such that the applicable Servicer can
service the Mortgage Loans in accordance with the terms of this Pooling and
Servicing Agreement. Each Servicer shall also comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
standard hazard insurance policy. Subject to Section 3.16, the Trustee or the
Custodian, as applicable, shall execute, at the written request of a Servicer,
and furnish to such Servicer and any Subservicer such documents provided to the
Trustee or the Custodian, as applicable, as are necessary or appropriate to
enable such Servicer or any Subservicer to carry out its servicing and
administrative duties hereunder, and the Trustee hereby grants to each Servicer,
and this Agreement shall constitute, a power of attorney to carry out such
duties, including a power of attorney in the form of Exhibit Q hereto to take
title to Mortgaged Properties after foreclosure in the name of and on behalf of
the Trustee. The Trustee shall execute a separate power of attorney in favor of
each Servicer for the purposes described herein to the extent necessary or
desirable to enable each Servicer to perform its duties hereunder. The Trustee
shall not be liable for the actions of any Servicer or any Subservicers under
such powers of attorney. Notwithstanding anything contained herein to the
contrary, no Servicer or Subservicer shall without the Trustee's consent: (i)
initiate any action, suit or proceeding solely under the Trustee's name without
indicating such Servicer's or Subservicer's, as applicable, representative
capacity, or (ii) take any action with the intent to, or which actually does
cause, the Trustee to be registered to do business in any state.
(b) Subject to Section 3.09(b), in accordance with the standards of
the preceding paragraph, each Servicer shall advance or cause to be advanced
funds as necessary for the purpose of effecting the timely payment of taxes and
assessments on the Mortgaged Properties, which advances shall be Servicing
Advances reimbursable in the first instance from related collections from the
Mortgagors pursuant to Section 3.09(b), and further as provided in Section 3.11.
Any cost incurred by a Servicer or by Subservicers in effecting the timely
payment of taxes and assessments on a Mortgaged Property shall not be added to
the unpaid principal balance of the related Mortgage Loan, notwithstanding that
the terms of such Mortgage Loan so permit.
(c) Notwithstanding anything in this Agreement to the contrary, a
Servicer may not make any future advances with respect to a Mortgage Loan
(except as provided in Section 4.01) and none of the Servicers shall (i) permit
any modification with respect to any Mortgage Loan that would change the
Mortgage Rate, reduce or increase the principal balance (except for reductions
resulting from actual payments of principal) or change the final maturity date
on such Mortgage Loan (except for a reduction of interest payments resulting
from the application of the Servicemembers Civil Relief Act or any similar state
statutes) or (ii) permit any modification, waiver or amendment of any term of
any Mortgage Loan that would both (A) effect an exchange or reissuance of such
Mortgage Loan under Section 1001 of the Code (or final, temporary or proposed
Treasury regulations promulgated thereunder) and (B) 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 date" under the
REMIC Provisions, or (iii) except as provided in Section 3.07(a), waive any
Prepayment Charges.
(d) Each Servicer may delegate its responsibilities under this
Agreement; provided, however, that no such delegation shall release such
Servicer from the responsibilities or liabilities arising under this Agreement.
(e) In the event that the Mortgage Loan Documents relating to any
Mortgage Loan contain provisions requiring the related Mortgagor to submit to
binding arbitration any disputes arising in connection with such Mortgage Loan,
the applicable Servicer shall be entitled to waive any such provisions on behalf
of the Trust and to send written notice of such waiver to the related Mortgagor,
although the Mortgagor may still require arbitration of such disputes at its
option.
Section 3.02 Subservicing Agreements between a Servicer and
Subservicers. (a) Each Servicer may enter into subservicing agreements with
Subservicers for the servicing and administration of the Mortgage Loans
("Subservicing Agreements"). Each Servicer represents and warrants to the other
parties hereto that, except as otherwise set forth herein, no Subservicing
Agreement is in effect as of the Closing Date with respect to any Mortgage Loans
required to be serviced by it hereunder. The applicable Servicer shall give
notice to the Depositor and the Securities Administrator of any such Subservicer
and Subservicing Agreement, which notice shall contain all information
(including without limitation a copy of the Subservicing Agreement) reasonably
necessary to enable the Securities Administrator, pursuant to Section 8.12(g),
to accurately and timely report the event under Item 6.02 of Form 8-K pursuant
to the Exchange Act (if such reports under the Exchange Act are required to be
filed under the Exchange Act). No Subservicing Agreement shall be effective
until 30 days after such written notice is received by both the Depositor and
the Securities Administrator. The Securities Administrator shall not be required
to review or consent to such Subservicing Agreements and shall have no liability
in connection therewith.
(b) Each Subservicer shall be (i) authorized to transact business in
the state or states in which the related Mortgaged Properties it is to service
are situated, if and to the extent required by applicable law to enable the
Subservicer to perform its obligations hereunder and under the Subservicing
Agreement, (ii) an institution approved as a mortgage loan originator by the
Federal Housing Administration or an institution that has deposit accounts
insured by the FDIC and (iii) a Freddie Mac or Xxxxxx Xxx approved mortgage
servicer. Each Subservicing Agreement must impose on the Subservicer
requirements conforming to the provisions set forth in Section 3.08 and provide
for servicing of the Mortgage Loans consistent with the terms of this Agreement.
Each Servicer will examine each Subservicing Agreement to which it is a party
and will be familiar with the terms thereof. The terms of any Subservicing
Agreement will not be inconsistent with any of the provisions of this Agreement.
Each Servicer and the respective Subservicers may enter into and make amendments
to the Subservicing Agreements or enter into different forms of Subservicing
Agreements; provided, however, that any such amendments or different forms shall
be consistent with and not violate the provisions of this Agreement, and that no
such amendment or different form shall be made or entered into which could be
reasonably expected to be materially adverse to the interests of the Trustee,
without the consent of the Trustee. Any variation without the consent of the
Trustee from the provisions set forth in Section 3.08 relating to insurance or
priority requirements of Subservicing Accounts, or credits and charges to the
Subservicing Accounts or the timing and amount of remittances by the
Subservicers to such Servicer, are conclusively deemed to be inconsistent with
this Agreement and therefore prohibited. Each Servicer shall deliver to the
Trustee, the Securities Administrator and the Depositor copies of all
Subservicing Agreements, and any amendments or modifications thereof, promptly
upon such Servicer's execution and delivery of such instruments.
(c) As part of its servicing activities hereunder, each Servicer
(except as otherwise provided in the last sentence of this paragraph), for the
benefit of the Trustee, shall enforce the obligations of each Subservicer under
the related Subservicing Agreement to which such Servicer is a party, including,
without limitation, any obligation to make advances in respect of delinquent
payments as required by a Subservicing Agreement. Such enforcement, including,
without limitation, the legal prosecution of claims, termination of Subservicing
Agreements, and the pursuit of other appropriate remedies, shall be in such form
and carried out to such an extent and at such time as such Servicer, in its good
faith business judgment, would require were it the owner of the related Mortgage
Loans. Each Servicer shall pay the costs of such enforcement at its own expense,
and shall be reimbursed therefor only (i) from a general recovery resulting from
such enforcement, to the extent, if any, that such recovery exceeds all amounts
due in respect of the related Mortgage Loans or (ii) from a specific recovery of
costs, expenses or attorneys' fees against the party against whom such
enforcement is directed.
(d) Each Servicer shall cause any Subservicer engaged by such
Servicer (or by any Subservicer) for the benefit of the Depositor and the
Trustee to comply with the provisions of this Section 3.02 and with Sections
3.22, 3.23, 6.02 and 6.05 of this Agreement to the same extent as if such
Subservicer were such Servicer, and to provide the information required with
respect to such Subservicer under Section 8.12 of this Agreement. Such Servicer
shall be responsible for obtaining from each such Subservicer and delivering to
applicable Persons any servicer compliance statement required to be delivered by
such Subservicer under Section 3.22 and any assessment of compliance report and
related accountant's attestation required to be delivered by such Subservicer
under Section 3.23, in each case as and when required to be delivered.
(e) Subject to the conditions set forth in this Section 3.02(e),
each Servicer and any Subservicer engaged by such Servicer is permitted to
utilize one or more Subcontractors to perform certain of its obligations
hereunder. Such Servicer shall promptly upon request provide to the Depositor a
written description (in form and substance satisfactory to the Depositor) of the
role and function of each Subcontractor utilized by such Servicer or any such
Subservicer, specifying no later than the date specified for delivery of the
annual report on assessment of compliance set forth in Section 3.23(d) (i) the
identity of each such Subcontractor, if any, that is "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, and (ii)
which elements of the Servicing Criteria will be addressed in assessments of
compliance provided by each Subcontractor identified pursuant to clause (i) of
this paragraph. As a condition to the utilization by such Servicer or any such
Subservicer of any Subcontractor determined to be "participating in the
servicing function" within the meaning of Item 1122 of Regulation AB, such
Servicer shall cause any such Subcontractor used by such Servicer (or by any
such Subservicer) for the benefit of the Depositor and the Trustee to comply
with the provisions of Section 3.23 of this Agreement to the same extent as if
such Subcontractor were such Servicer. Such Servicer shall be responsible for
obtaining from each such Subcontractor and delivering to the applicable Persons
any assessment of compliance report and related accountant's attestation
required to be delivered by such Subcontractor under Section 3.23, in each case
as and when required to be delivered.
Notwithstanding the foregoing, if a Servicer engages a Subcontractor
in connection with the performance of any of its duties under this Agreement,
such Servicer shall be responsible for determining whether such Subcontractor is
a "servicer" within the meaning of Item 1101 of Regulation AB and whether any
such affiliate or third-party vendor meets the criteria in Item 1108(a)(2)(i)
through (iii) of Regulation AB. If a Servicer determines, pursuant to the
preceding sentence, that such Subcontractor is a "servicer" within the meaning
of Item 1101 of Regulation AB and meets the criteria in Item 1108(a)(2)(i)
through (iii) of Regulation AB, then such Subcontractor shall be deemed to be a
Subservicer for purposes of this Agreement, the engagement of such Subservicer
shall not be effective unless and until notice is given pursuant to Section
3.02(a) and such Servicer shall comply with Section 3.02(d) with respect
thereto.
(f) As of the Closing Date, JPMorgan has appointed Chase Home
Finance LLC ("CHF") to act as the sole Subservicer pursuant to a Subservicing
Agreement (a copy of which is attached hereto as Exhibit W) with respect to
JPMorgan's servicing obligations under this Agreement. So long as JPMorgan is
not a rated servicer by each Rating Agency, JPMorgan agrees that prior to
replacing CHF as Subservicer, other than with an affiliate of JPMorgan that is a
rated servicer, it will obtain confirmation from each Rating Agency that such
replacement of CHF as Subservicer with respect to JPMorgan's servicing
obligations related to the Mortgage Loans will not cause the then current rating
on any Class of Certificates to be qualified, withdrawn or lowered by any Rating
Agency and agrees that any replacement subservicer shall agree to subservice in
accordance with the terms of this Agreement, including but not limited to the
consideration of whether to waive a Prepayment Charge hereunder.
Section 3.03 Successor Subservicers. Each Servicer shall be entitled
to terminate any Subservicing Agreement to which such Servicer is a party and
the rights and obligations of any Subservicer pursuant to any such Subservicing
Agreement in accordance with the terms and conditions of such Subservicing
Agreement; provided, however, that the termination, resignation or removal of a
Subservicer shall not be effective until 30 days after written notice is
received by both the Depositor and the Securities Administrator that contains
all information reasonably necessary to enable the Securities Administrator,
pursuant to Section 8.12(g), to accurately and timely report the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are required to be filed under the Exchange Act). In the event of
termination of any Subservicer, all servicing obligations of such Subservicer
shall be assumed simultaneously by the applicable Servicer party to the related
Subservicing Agreement without any act or deed on the part of such Subservicer
or such Servicer, and such Servicer either shall service directly the related
Mortgage Loans or shall enter into a Subservicing Agreement with a successor
Subservicer which qualifies under Section 3.02.
Any Subservicing Agreement shall include the provision that such
agreement may be immediately terminated by the Depositor or the Trustee without
fee, in accordance with the terms of this Agreement, in the event that the
Servicer who is party to the related Subservicing Agreement shall, for any
reason, no longer be a Servicer (including termination due to an Event of
Default).
Section 3.04 Liability of the Servicers. Notwithstanding any
Subservicing Agreement, any of the provisions of this Agreement relating to
agreements or arrangements between a Servicer and a Subservicer or reference to
actions taken through a Subservicer or otherwise, such Servicer shall remain
obligated and primarily liable to the Trustee for the servicing and
administering of the Mortgage Loans in accordance with the provisions of Section
3.01 without diminution of such obligation or liability by virtue of such
Subservicing Agreements or arrangements or by virtue of indemnification from the
Subservicer and to the same extent and under the same terms and conditions as if
such Servicer alone were servicing and administering such Mortgage Loans. Each
Servicer shall be entitled to enter into any agreement with a Subservicer for
indemnification of such Servicer by such Subservicer and nothing contained in
this Agreement shall be deemed to limit or modify such indemnification.
Section 3.05 No Contractual Relationship between Subservicers and
the Trustee. Any Subservicing Agreement that may be entered into and any
transactions or services relating to the Mortgage Loans involving a Subservicer
in its capacity as such shall be deemed to be between the Subservicer and the
related Servicer alone, and the Trustee (or any other successor to such
Servicer) shall not be deemed a party thereto and shall have no claims, rights,
obligations, duties or liabilities with respect to the Subservicer except as set
forth in Section 3.06. Each Servicer shall be solely liable for all fees owed by
it to any Subservicer, irrespective of whether such Servicer's compensation
pursuant to this Agreement is sufficient to pay such fees.
Section 3.06 Assumption or Termination of Subservicing Agreements by
Trustee. In the event a Servicer at any time shall for any reason no longer be a
Servicer (including by reason of the occurrence of an Event of Default), the
Trustee, as successor servicer, or its designee, or another successor servicer
if the successor is not the Trustee, shall thereupon assume all of the rights
and obligations of such Servicer under each Subservicing Agreement that such
Servicer may have entered into, with copies thereof provided to the Trustee, or
another successor servicer if the successor is not the Trustee, prior to the
Trustee, or such other successor servicer if the successor is not the Trustee,
assuming such rights and obligations, unless the Trustee elects to terminate any
Subservicing Agreement in accordance with its terms as provided in Section 3.03.
Upon such assumption, the Trustee, as successor servicer, its
designee or the successor servicer shall be deemed, subject to Section 3.03, to
have assumed all of such Servicer's interest therein and to have replaced such
Servicer as a party to each Subservicing Agreement to which the predecessor
servicer was a party to the same extent as if each Subservicing Agreement had
been assigned to the assuming party, except that (i) such Servicer shall not
thereby be relieved of any liability or obligations under any such Subservicing
Agreement that arose before it ceased to be a Servicer and (ii) none of the
Depositor, the Trustee, their designees or any successor to such Servicer shall
be deemed to have assumed any liability or obligation of such Servicer that
arose before it ceased to be a Servicer.
Each Servicer at its expense shall, upon request of the Trustee, its
designee or the successor servicer deliver to the assuming party all documents
and records relating to each Subservicing Agreement to which it is a party and
the Mortgage Loans then being serviced by it and an accounting of amounts
collected and held by or on behalf of it, and otherwise use its best efforts to
effect the orderly and efficient transfer of the Subservicing Agreements to the
assuming party.
Section 3.07 Collection of Certain Mortgage Loan Payments. (a) Each
Servicer shall make reasonable efforts to collect all payments called for under
the terms and provisions of the Mortgage Loans, and shall, to the extent such
procedures shall be consistent with this Agreement and the terms and provisions
of any applicable Insurance Policies, follow such collection procedures as it
would follow with respect to mortgage loans comparable to the Mortgage Loans and
held for its own account. Consistent with the foregoing and Accepted Servicing
Practices, each Servicer may (i) waive any late payment charge or, if
applicable, any penalty interest, or (ii) extend the Due Dates for the Scheduled
Payments due on a Mortgage Note for a period of not greater than 180 days;
provided that any extension pursuant to clause (ii) above shall not affect the
amortization schedule of any Mortgage Loan for purposes of any computation
hereunder, except as provided below. In the event of any such arrangement
pursuant to clause (ii) above, the applicable Servicer shall make timely
advances on such Mortgage Loan during such extension pursuant to Section 4.01
and in accordance with the amortization schedule of such Mortgage Loan without
modification thereof by reason of such arrangements, subject to Section 4.01(d)
pursuant to which such Servicer shall not be required to make any such advances
that are Nonrecoverable P&I Advances. Notwithstanding the foregoing, a Servicer
may waive, or permit a Subservicer to waive, in whole or in part, a Prepayment
Charge only under the following circumstances: (i) such waiver relates to a
default or a reasonably foreseeable default and would, in the reasonable
judgment of such Servicer, maximize recovery of total proceeds taking into
account the value of such Prepayment Charge and the related Mortgage Loan;
provided, however, that the applicable Servicer or Subservicer shall waive such
Prepayment Charge if the Mortgage Loan is accelerated or paid-off in connection
with the workout of a delinquent Mortgage Loan or due to the related Mortgagor's
default, notwithstanding that the terms of the Mortgage Loan or federal or state
law might permit the imposition of such Prepayment Charge, (ii) such Prepayment
Charge is not permitted to be collected by applicable federal, state or local
law or regulation or (iii) the collection of such Prepayment Charge would be
considered "predatory" pursuant to written guidance published or issued by any
applicable federal, state or local regulatory authority acting in its official
capacity and having jurisdiction over such matters. If a Prepayment Charge is
waived other than as permitted by the prior sentence, then the applicable
Servicer is required to pay the amount of such waived Prepayment Charge, for the
benefit of the Holders of the Class P Certificates, by depositing such amount
into the related Collection Account together with and at the time that the
amount prepaid on the related Mortgage Loan is required to be deposited into the
related Collection Account; provided, however, that the applicable Servicer
shall not have an obligation to pay the amount of any uncollected Prepayment
Charge if the failure to collect such amount is the direct result of inaccurate
or incomplete information on the Mortgage Loan Schedule in effect at such time.
(b) (i) The Securities Administrator shall establish and maintain
the Excess Reserve Fund Account, on behalf of the Class X Certificateholders, to
receive any Basis Risk Payment and to secure their limited recourse obligation
to pay to the Offered Certificateholders Basis Risk CarryForward Amounts (prior
to using any Net Swap Receipts). For the avoidance of doubt, any Basis Risk
CarryForward Amounts shall be paid to the Offered Certificates first from the
Excess Reserve Fund Account and then from the Swap Account.
(ii) On each Distribution Date, the Securities Administrator shall
deposit the amount of any Basis Risk Payment for such date into the Excess
Reserve Fund Account.
(c) (i) On each Distribution Date on which there exists a Basis Risk
CarryForward Amount on any Class of Certificates, the Securities Administrator
shall (1) withdraw from the Distribution Account and deposit in the Excess
Reserve Fund Account, as set forth in Section 4.02(a)(iii)(S), the lesser of (x)
the Class X Distributable Amount (without regard to the reduction in clause
(iii) in the definition thereof) (to the extent remaining after the
distributions specified in Sections 4.02(a)(iii)(A)-(R)) and (y) the aggregate
Basis Risk CarryForward Amounts for such Distribution Date and (2) withdraw from
the Excess Reserve Fund Account amounts necessary to pay to such Class or
Classes of Certificates the Basis Risk CarryForward Amount. Such payments, along
with payments from the Swap Account, shall be allocated to those Classes on a
pro rata basis based upon the amount of Basis Risk CarryForward Amount owed to
each such Class and shall be paid in the priority set forth in Section
4.02(a)(iii)(T).
(ii) The Securities Administrator shall account for the Excess
Reserve Fund Account as an asset of a grantor trust under subpart E, Part
I of the subchapter J of the Code and not an asset of any Trust REMIC. The
beneficial owners of the Excess Reserve Fund Account are the Class X
Certificateholders. For all federal tax purposes, amounts transferred by
the Upper-Tier REMIC to the Excess Reserve Fund Account shall be treated
as distributions by the Securities Administrator to the Class X
Certificateholders.
(iii) Any Basis Risk CarryForward Amounts paid by the Securities
Administrator to the Offered Certificateholders shall be accounted for by
the Securities Administrator as amounts paid first to the Holders of the
Class X Certificates and then to the respective Class or Classes of
Offered Certificates. In addition, the Securities Administrator shall
account for the Offered Certificateholders' rights to receive payments of
Basis Risk CarryForward Amounts (along with payments of Basis Risk
CarryForward Amounts and Upper-Tier CarryForward Amounts from the Swap
Account) as rights in a limited recourse interest rate cap contract
written by the Class X Certificateholders in favor of the Offered
Certificateholders.
(iv) Notwithstanding any provision contained in this Agreement, the
Securities Administrator shall not be required to make any payments from
the Excess Reserve Fund Account except as expressly set forth in this
Section 3.07(c) and Sections 4.02(a)(iii)(T) and (V).
(d) The Securities Administrator shall establish and maintain the
Distribution Account on behalf of the Certificateholders. The Depositor shall
cause to be deposited into the Distribution Account on the Closing Date the
Closing Date Deposit Amount. The Securities Administrator shall, promptly upon
receipt, deposit in the Distribution Account and retain therein the following:
(i) the aggregate amounts remitted by the Servicers to the
Securities Administrator pursuant to Section 3.11;
(ii) any amounts deposited by the Servicers pursuant to Section
3.12(b) in connection with any losses on Permitted Investments; and
(iii) any other amounts deposited hereunder which are required to be
deposited in the Distribution Account.
In the event that any Servicer shall remit any amount not required
to be remitted, it may at any time direct the Securities Administrator in
writing to withdraw such amount from the Distribution Account, any provision
herein to the contrary notwithstanding. Such direction may be accomplished by
delivering notice to the Securities Administrator which describes the amounts
deposited in error in the Distribution Account. All funds deposited in the
Distribution Account shall be held by the Securities Administrator in trust for
the Certificateholders until disbursed in accordance with this Agreement or
withdrawn in accordance with Section 4.02.
(e) The Securities Administrator may invest the funds in the
Distribution Account, in one or more Permitted Investments, in accordance with
Section 3.12. Each Servicer shall direct the Securities Administrator to
withdraw from the Distribution Account and to remit to such Servicer no less
than monthly, all income and gain realized from the investment of the portion of
funds deposited in the Distribution Account by such Servicer (except during the
Securities Administrator Float Period). The Securities Administrator may
withdraw from the Distribution Account any income or gain earned from the
investment of funds deposited therein during the Securities Administrator Float
Period for its own benefit.
(f) Each Servicer shall give notice to the Securities Administrator,
and the Securities Administrator shall give notice to each Rating Agency and the
Depositor of any proposed change of the location of the related Collection
Account within a reasonable period of time prior to any change thereof.
(g) In order to comply with its duties under the USA Patriot Act of
2001, the Securities Administrator shall obtain and verify certain information
and documentation from the other parties to this Agreement including, but not
limited to, each such party's name, address and other identifying information.
(h) In order to comply with laws, rules and regulations applicable
to banking institutions, including those relating to the funding of terrorist
activities and money laundering, the Trustee is required to obtain, verify and
record certain information relating to individuals and entities which maintain a
business relationship with the Trustee. Accordingly, each of the parties agrees
to provide to the Trustee upon its request from time to time such party's
complete name, address, tax identification number and such other identifying
information together with copies of such party's constituting documentation,
securities disclosure documentation and such other identifying documentation as
may be available for such party.
(i) On or prior to the Determination Date, each Custodian shall
deliver an invoice to the Securities Administrator, setting forth the amount of
each Custodian Fee for the related Distribution Date. On each Distribution Date,
the Securities Administrator shall remit each Custodian Fee to the applicable
Custodian from funds in the Distribution Account.
Section 3.08 Subservicing Accounts. In those cases where a
Subservicer is servicing a Mortgage Loan pursuant to a Subservicing Agreement,
the Subservicer will be required to establish and maintain one or more
segregated accounts (collectively, the "Subservicing Account"). The Subservicing
Account shall be an Eligible Account and shall otherwise be acceptable to the
related Servicer. The Subservicer shall deposit in the clearing account (which
account must be an Eligible Account) in which it customarily deposits payments
and collections on mortgage loans in connection with its mortgage loan servicing
activities on a daily basis, and in no event more than one Business Day after
the Subservicer's receipt thereof, all proceeds of Mortgage Loans received by
the Subservicer less its servicing compensation to the extent permitted by the
Subservicing Agreement, and shall thereafter deposit such amounts in the
Subservicing Account, in no event more than two Business Days after the deposit
of such funds into the clearing account. The Subservicer shall thereafter
deposit such proceeds in the related Collection Account of the applicable
Servicer or remit such proceeds to such Servicer for deposit in the related
Collection Account of such Servicer not later than two Business Days after the
deposit of such amounts in the Subservicing Account. For purposes of this
Agreement, such Servicer shall be deemed to have received payments on the
Mortgage Loans when the Subservicer receives such payments.
Section 3.09 Collection of Taxes, Assessments and Similar Items;
Escrow Accounts. (a) Each Servicer shall enforce the obligations under each
paid-in-full, life-of-the-loan tax service contract in effect with respect to
each First Lien Mortgage Loan (each, a "Tax Service Contract") serviced by such
Servicer. Each Tax Service Contract shall be assigned to the Trustee, or a
successor servicer at the applicable Servicer's expense in the event that a
Servicer is terminated as Servicer of the related Mortgage Loan.
(b) To the extent that the services described in this paragraph (b)
are not otherwise provided pursuant to the Tax Service Contracts described in
paragraph (a) above, each Servicer undertakes to perform such functions with
respect to the Mortgage Loans serviced by such Servicer. To the extent the
related Mortgage provides for Escrow Payments, the related Servicer shall
establish and maintain, or cause to be established and maintained, one or more
segregated accounts (the "Escrow Accounts"), which shall be Eligible Accounts.
Each Servicer shall deposit in the clearing account (which account must be an
Eligible Account) in which it customarily deposits payments and collections on
mortgage loans in connection with its mortgage loan servicing activities on a
daily basis, and in no event more than one Business Day after such Servicer's
receipt thereof, all collections from the Mortgagors (or related advances from
Subservicers) for the payment of taxes, assessments, hazard insurance premiums
and comparable items for the account of the Mortgagors ("Escrow Payments")
collected on account of the Mortgage Loans and shall thereafter deposit such
Escrow Payments in the Escrow Accounts, in no event more than two Business Days
after the deposit of such funds in the clearing account, for the purpose of
effecting the payment of any such items as required under the terms of this
Agreement. Withdrawals of amounts from an Escrow Account may be made only to (i)
effect payment of taxes, assessments, hazard insurance premiums, and comparable
items; (ii) reimburse such Servicer (or a Subservicer to the extent provided in
the related Subservicing Agreement) out of related collections for any advances
made pursuant to Section 3.01 (with respect to taxes and assessments) and
Section 3.13 (with respect to hazard insurance); (iii) refund to Mortgagors any
sums as may be determined to be overages; (iv) pay interest, if required and as
described below, to Mortgagors on balances in the Escrow Account; (v) clear and
terminate the Escrow Account at the termination of such Servicer's obligations
and responsibilities in respect of the Mortgage Loans under this Agreement; (vi)
to transfer such funds to a replacement Escrow Account that meets the
requirements hereof; or (vii) recover amounts deposited in error. As part of its
servicing duties, each Servicer or Subservicers shall pay to the Mortgagors
interest on funds in Escrow Accounts, to the extent required by law and, to the
extent that interest earned on funds in the Escrow Accounts is insufficient, to
pay such interest from its or their own funds, without any reimbursement
therefor. To the extent that a Mortgage does not provide for Escrow Payments,
the applicable Servicer shall determine whether any such payments are made by
the Mortgagor in a manner and at a time that avoids the loss of the Mortgaged
Property due to a tax sale or the foreclosure of a tax lien. The applicable
Servicer assumes full responsibility for the payment of all such bills within
such time 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 advances from its own funds to effect such
payments; provided, however, that such advances are deemed to be Servicing
Advances.
Section 3.10 Collection Accounts. (a) On behalf of the Trustee, each
Servicer shall establish and maintain, or cause to be established and
maintained, one or more separate Eligible Accounts (each such account or
accounts, a "Collection Account"), held in trust for the benefit of the Trustee.
On behalf of the Trustee, each Servicer shall deposit or cause to be deposited
in the clearing account (which account must be an Eligible Account) in which it
customarily deposits payments and collections on mortgage loans in connection
with its mortgage loan servicing activities on a daily basis, and in no event
more than one Business Day after such Servicer's receipt thereof, and shall
thereafter deposit in the related Collection Account, in no event more than two
Business Days after the deposit of such funds into the clearing account, as and
when received or as otherwise required hereunder, the following payments and
collections received or made by it subsequent to the Cut-off Date (other than in
respect of principal or interest on the related Mortgage Loans due on or before
the Cut-off Date), or payments (other than Principal Prepayments) received by it
on or prior to the Cut-off Date but allocable to a Due Period subsequent
thereto:
(i) all payments on account of principal, including Principal
Prepayments, on the Mortgage Loans;
(ii) all payments on account of interest (net of the related
Servicing Fee) on each Mortgage Loan;
(iii) all Insurance Proceeds and Condemnation Proceeds to the extent
such Insurance Proceeds and Condemnation Proceeds are not to be applied to
the restoration of the related Mortgaged Property or released to the
related Mortgagor in accordance with the express requirements of law or in
accordance with Accepted Servicing Practices and Liquidation Proceeds;
(iv) any amounts required to be deposited pursuant to Section 3.12
in connection with any losses realized on Permitted Investments with
respect to funds held in the related Collection Account;
(v) any amounts required to be deposited by such Servicer pursuant
to the second paragraph of Section 3.13(a) in respect of any blanket
policy deductibles;
(vi) all proceeds of any Mortgage Loan repurchased or purchased in
accordance with this Agreement; and
(vii) all Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by such Servicer.
The foregoing requirements for deposit in the Collection Accounts
shall be exclusive, it being understood and agreed that, without limiting the
generality of the foregoing, payments in the nature of late payment charges, NSF
fees, reconveyance fees, assumption fees and other similar fees and charges need
not be deposited by each Servicer in the related Collection Account and shall,
upon collection, belong to the applicable Servicer as additional compensation
for its servicing activities. In the event a Servicer shall deposit in the
related Collection Account any amount not required to be deposited therein, it
may at any time withdraw such amount from its Collection Account, any provision
herein to the contrary notwithstanding.
(b) Funds in the Collection Accounts may be invested in Permitted
Investments in accordance with the provisions set forth in Section 3.12. Each
Servicer shall give notice to the Securities Administrator of the location of
the related Collection Account maintained by it when established and prior to
any change thereof in accordance with Section 3.07(f).
Section 3.11 Withdrawals from the Collection Accounts. (a) Each
Servicer shall, from time to time, make withdrawals from the related Collection
Account for any of the following purposes or as described in Section 4.01:
(i) on or prior to each Remittance Date, to remit to the Securities
Administrator all Available Funds (without reduction for amounts owed to
the Depositor, the Securities Administrator, the Trustee or the Custodians
as provided for in the definition of "Available Funds") in respect of the
related Distribution Date together with all amounts representing
Prepayment Charges from the Mortgage Loans received by the applicable
Servicer during the related Prepayment Period;
(ii) to reimburse such Servicer for P&I Advances, but only to the
extent of amounts received which represent Late Collections (net of the
related Servicing Fees) of Scheduled Payments on Mortgage Loans with
respect to which such P&I Advances were made in accordance with the
provisions of Section 4.01 (such Servicer's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(iii) to pay such Servicer or any Subservicer (a) any unpaid
Servicing Fees or (b) any unreimbursed Servicing Advances with respect to
each Mortgage Loan serviced by such Servicer or Subservicer, but only to
the extent of any Late Collections, Liquidation Proceeds, Condemnation
Proceeds, Insurance Proceeds or other amounts as may be collected by such
Servicer from a Mortgagor, or otherwise received with respect to such
Mortgage Loan (or the related REO Property) (such Servicer's right for
recovery or reimbursement has priority over the Trust as stated in the
definition of "Available Funds");
(iv) to pay to such Servicer as servicing compensation (in addition
to the Servicing Fee) on each Remittance Date any interest or investment
income earned on funds deposited in its Collection Account;
(v) to pay to the applicable Responsible Party or the Depositor, as
applicable, with respect to each Mortgage Loan that has previously been
repurchased or replaced pursuant to this Agreement, all amounts received
thereon subsequent to the date of purchase or substitution, as further
described herein;
(vi) to reimburse such Servicer for (A) any P&I Advance or Servicing
Advance previously made which such Servicer has determined to be a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance in
accordance with the provisions of Section 4.01 and (B) any unpaid
Servicing Fees related to any Second Lien Mortgage Loan to the extent not
recoverable from Liquidation Proceeds, Insurance Proceeds or other amounts
received with respect to the related Second Lien Mortgage Loan under
Section 3.11(a)(iii) (such Servicer's right for recovery or reimbursement
has priority over the Trust as stated in the definition of "Available
Funds");
(vii) to pay, or to reimburse such Servicer for advances in respect
of, expenses incurred in connection with any Mortgage Loan serviced by
such Servicer pursuant to Section 3.15 (such Servicer's right for recovery
or reimbursement has priority over the Trust);
(viii) to reimburse such Servicer or the Depositor for expenses
incurred by or reimbursable to such Servicer or the Depositor, as the case
may be, pursuant to Section 6.03 (such Xxxxxxxx's right for recovery or
reimbursement has priority over the Trust as stated in the definition of
"Available Funds");
(ix) to reimburse such Servicer or the Trustee, as the case may be,
for expenses reasonably incurred in respect of the breach or defect giving
rise to the repurchase obligation of any Responsible Party or the
Depositor, as applicable, that were included in the Repurchase Price of
the Mortgage Loan, including any expenses arising out of the enforcement
of the repurchase obligation, to the extent not otherwise paid pursuant to
the terms hereof (such Servicer's right for recovery or reimbursement has
priority over the Trust as stated in the definition of "Available Funds");
(x) to withdraw any amounts deposited in the related Collection
Account in error;
(xi) to withdraw any amounts held in the related Collection Account
and not required to be remitted to the Securities Administrator on the
Remittance Date occurring in the month in which such amounts are deposited
into such Collection Account, to reimburse such Servicer for unreimbursed
P&I Advances;
(xii) to invest funds in Permitted Investments in accordance with
Section 3.12; and
(xiii) to clear and terminate the related Collection Account upon
termination of this Agreement.
(b) Each Servicer shall keep and maintain separate accounting, on a
Mortgage Loan by Mortgage Loan basis, for the purpose of justifying any
withdrawal from the related Collection Account, to the extent held by or on
behalf of it, pursuant to subclauses (a)(ii), (iii), (v), (vi), (vii), (viii)
and (ix) above. Each Servicer shall provide written notification (as set forth
in Section 4.01(d)) to the Securities Administrator, on or prior to the next
succeeding Remittance Date, upon making any withdrawals from the related
Collection Account pursuant to subclause (a)(vi) above.
(c) Each Servicer shall be responsible for reviewing and reconciling
the applicable Collection Account in accordance with Accepted Servicing
Practices. Each Servicer shall act promptly to resolve any discrepancies.
Section 3.12 Investment of Funds in the Collection Accounts and the
Distribution Account. (a) Each Servicer may invest the funds in the related
Collection Account and the related Escrow Account (to the extent permitted by
law and the related Mortgage Loan documents) and the Securities Administrator
may (but is not obligated to) invest funds in the Distribution Account during
the Securities Administrator Float Period, and, with respect to the portion of
funds in the Distribution Account deposited by a Servicer, shall (except during
the Securities Administrator Float Period) invest such funds in the Distribution
Account at the direction of such Servicer in the Xxxxx Fargo Advantage Prime
Investments Money Market Fund (for purposes of this Section 3.12, such Account
is referred to as the "Investment Account"). All such Permitted Investments
shall be held to maturity, unless payable on demand. Any investment of funds in
an Investment Account (other than investments made during the Securities
Administrator Float Period) shall be made in the name of the Securities
Administrator in Permitted Investments selected by the applicable Servicer. The
applicable Servicer shall be entitled to the income from (except with respect to
investment direction of funds and any income and gain realized on any investment
in the Distribution Account during the Securities Administrator Float Period,
which shall be for the sole benefit of the Securities Administrator) such
related investment, and any certificate or other instrument evidencing any such
investment shall be delivered directly to the applicable Servicer, or with
respect to investments during the Securities Administrator Float Period, the
Securities Administrator or its agent (with a copy to the Securities
Administrator or its agent if related to investment of funds in the Distribution
Account not during the Securities Administrator Float Period), together with any
document of transfer necessary to transfer title to such investment to the
applicable Servicer, or with respect to investments during the Securities
Administrator Float Period, the Securities Administrator or its agent. In the
event amounts on deposit in an Investment Account are at any time invested in a
Permitted Investment payable on demand, the applicable Servicer, or with respect
to investments during the Securities Administrator Float Period, the Securities
Administrator may:
(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 that
such Permitted Investment would not constitute a
Permitted Investment in respect of funds thereafter
on deposit in an Investment Account.
(b) All income and gain realized from the investment of funds
deposited in the related Collection Account or Escrow Account held by or on
behalf of the related Servicer, shall be for the benefit of such Servicer and
shall be subject to its withdrawal in the manner set forth in Section 3.11. Such
Servicer shall deposit in its Collection Account or Escrow Account, as
applicable, the amount of any loss of principal incurred in respect of any such
Permitted Investment made with funds in such accounts immediately upon
realization of such loss.
(c) All income and gain realized from the investment of the portion
of funds deposited in the Distribution Account by a Servicer and held by the
Securities Administrator, shall be for the benefit of such Servicer (except for
any income or gain realized from the investment of funds on deposit in the
Distribution Account during the Securities Administrator Float Period, which
shall be for the benefit of the Securities Administrator) and shall be subject
to the Securities Administrator's withdrawal in the manner set forth in Section
3.07(e). Each Servicer shall deposit in the Distribution Account (except with
respect to losses incurred during the Securities Administrator Float Period) the
amount of any loss of principal incurred in respect of any such Permitted
Investment made with funds in such accounts immediately upon realization of such
loss.
(d) 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 shall take such action as may be
appropriate to enforce such payment or performance, including the institution
and prosecution of appropriate proceedings.
(e) The Securities Administrator shall not be liable for the amount
of any loss incurred with respect of any investment or lack of investment of
funds held in any Investment Account or the Distribution Account (except that if
any losses are incurred from the investment of funds deposited in the
Distribution Account during the Securities Administrator Float Period, the
Securities Administrator shall be responsible for reimbursing the Trust for such
loss immediately upon realization of such loss) if made in accordance with this
Section 3.12.
(f) The Securities Administrator or its Affiliates shall be
permitted to receive additional compensation that could be deemed to be in the
Securities Administrator's economic self-interest for (i) serving as investment
adviser, administrator, shareholder, servicing agent, custodian or sub-custodian
with respect to certain of the Permitted Investments, (ii) using Affiliates to
effect transactions in certain Permitted Investments and (iii) effecting
transactions in certain Permitted Investments. Such compensation shall not be
considered an amount that is reimbursable or payable pursuant to this Agreement.
Section 3.13 Maintenance of Hazard Insurance and Errors and
Omissions and Fidelity Coverage. (a) Each Servicer shall cause to be maintained
for each Mortgage Loan serviced by such Servicer fire insurance with extended
coverage on the related Mortgaged Property in an amount which is at least equal
to the least of (i) the outstanding principal balance of such Mortgage Loan,
(ii) the amount necessary to fully compensate for any damage or loss to the
improvements that are a part of such property on a replacement cost basis and
(iii) the maximum insurable value of the improvements which are a part of such
Mortgaged Property, in each case in an amount not less than such amount as is
necessary to avoid the application of any coinsurance clause contained in the
related hazard insurance policy. Each Servicer shall also cause to be maintained
fire insurance with extended coverage on each REO Property serviced by such
Servicer in an amount which is at least equal to the lesser of (i) the maximum
insurable value of the improvements which are a part of such property and (ii)
the outstanding principal balance of the related Mortgage Loan at the time it
became an REO Property. Each Servicer will comply in the performance of this
Agreement with all reasonable rules and requirements of each insurer under any
such hazard policies. Any amounts to be collected by any Servicer under any such
policies (other than amounts to be applied to the restoration or repair of the
property subject to the related Mortgage or amounts to be released to the
Mortgagor in accordance with the procedures that such Servicer would follow in
servicing loans held for its own account, subject to the terms and conditions of
the related Mortgage and Mortgage Note) shall be deposited in the related
Collection Account, subject to withdrawal pursuant to Section 3.11. Any cost
incurred by any Servicer in maintaining any such insurance shall not, for the
purpose of calculating distributions to the Securities Administrator, be added
to the unpaid principal balance of the related Mortgage Loan, notwithstanding
that the terms of such Mortgage Loan so permit. It is understood and agreed that
no earthquake or other additional insurance is to be required of any Mortgagor
other than pursuant to the applicable laws and regulations as shall at any time
be in force and as shall require such additional insurance. If the Mortgaged
Property or REO Property is at any time in an area identified in the Federal
Register by the Federal Emergency Management Agency as having special flood
hazards and flood insurance has been made available, the applicable Servicer
will cause to be maintained a flood insurance policy in respect thereof. Such
flood insurance shall be in an amount equal to the lesser of (i) the amount
necessary to fully compensate for any damage or loss to the improvements that
are a part of such property on a replacement cost basis and (ii) the maximum
amount of such insurance available for the related Mortgaged Property under the
national flood insurance program (assuming that the area in which such Mortgaged
Property is located is participating in such program).
In the event that any Servicer shall obtain and maintain a blanket
policy with an insurer either (i) acceptable to Xxxxxx Xxx or Freddie Mac or
(ii) having a General Policy Rating of B:III or better from Best's (or such
other rating that is comparable to such rating) insuring against hazard losses
on all of the Mortgage Loans, it shall conclusively be deemed to have satisfied
its obligations as set forth in the first two sentences of this Section 3.13, it
being understood and agreed that such policy may contain a deductible clause, in
which case such Servicer shall, in the event that there shall not have been
maintained on the related Mortgaged Property or REO Property a policy complying
with the first two sentences of this Section 3.13, and there shall have been one
or more losses which would have been covered by such policy, deposit to the
related Collection Account from its own funds the amount not otherwise payable
under the blanket policy because of such deductible clause. In connection with
its activities as administrator and servicer of the Mortgage Loans, each
Servicer agrees to prepare and present, on behalf of itself and the Trustee
claims under any such blanket policy in a timely fashion in accordance with the
terms of such policy.
(b) Each Servicer shall keep in force during the term of this
Agreement a policy or policies of insurance covering errors and omissions for
failure in the performance of such Servicer's obligations under this Agreement,
which policy or policies shall be in such form and amount that would meet the
requirements of Xxxxxx Xxx or Freddie Mac if it were the purchaser of the
Mortgage Loans, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Xxx or Freddie Mac. Each Servicer shall also maintain a fidelity
bond in the form and amount that would meet the requirements of Xxxxxx Xxx or
Freddie Mac, unless such Servicer has obtained a waiver of such requirements
from Xxxxxx Xxx or Freddie Mac. Each Servicer shall provide the Trustee upon
request with copies of any such insurance policies and fidelity bond. Each
Servicer shall be deemed to have complied with this provision if an Affiliate of
the applicable Servicer has such errors and omissions and fidelity bond coverage
and, by the terms of such insurance policy or fidelity bond, the coverage
afforded thereunder extends to such Servicer. Any such errors and omissions
policy and fidelity bond shall by its terms not be cancelable without thirty
days' prior written notice to the Trustee. Each Servicer shall also cause each
Subservicer to maintain a policy of insurance covering errors and omissions and
a fidelity bond which would meet such requirements.
Section 3.14 Enforcement of Due-on-Sale Clauses; Assumption
Agreements. Each Servicer will, to the extent it has knowledge of any conveyance
or prospective conveyance of any Mortgaged Property by any Mortgagor (whether by
absolute conveyance or by contract of sale, and whether or not the Mortgagor
remains or is to remain liable under the Mortgage Note and/or the Mortgage),
exercise its rights to accelerate the maturity of such Mortgage Loan under the
"Due-on-Sale" clause, if any, applicable thereto; provided, however, that no
Servicer shall be required to take such action if, in its sole business
judgment, such Servicer believes it is not in the best interests of the Trust
Fund and shall not exercise any such rights if prohibited by law from doing so.
If a Servicer reasonably believes it is unable under applicable law to enforce
such "Due-on-Sale" clause or if any of the other conditions set forth in the
proviso to the preceding sentence apply, such Servicer will enter into an
assumption and modification agreement from or with the person to whom such
property has been conveyed or is proposed to be conveyed, pursuant to which such
person becomes liable under the Mortgage Note and, to the extent permitted by
applicable state law, the Mortgagor remains liable thereon. Each Servicer is
also 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 the Mortgagor and becomes liable under the
Mortgage Note; provided, that no such substitution shall be effective unless
such person satisfies the underwriting criteria of such Servicer and such
substitution is in the best interest of the Certificateholders as determined by
such Servicer. In connection with any assumption, modification or substitution,
such Servicer shall apply such underwriting standards and follow such practices
and procedures as shall be normal and usual in its general mortgage servicing
activities and as it applies to other mortgage loans owned solely by it. No
Servicer shall take or enter into any assumption and modification agreement,
however, unless (to the extent practicable in the circumstances) it shall have
received confirmation, in writing, of the continued effectiveness of any
applicable hazard insurance policy, or a new policy meeting the requirements of
this Section is obtained. Any fee collected by a Servicer in respect of an
assumption or substitution of liability agreement will be retained by such
Servicer as additional servicing compensation. In connection with any such
assumption, no material term of the Mortgage Note (including but not limited to
the related Mortgage Rate and the amount of the Scheduled Payment) may be
amended or modified, except as otherwise required pursuant to the terms thereof.
Each Servicer shall notify the Trustee that any such substitution, modification
or assumption agreement has been completed and shall forward to the applicable
Custodian the executed original of such substitution or assumption agreement,
which document shall be added to the related Mortgage File and 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.
Notwithstanding the foregoing paragraph or any other provision of
this Agreement, a 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 by the terms of the Mortgage Note or any
assumption which such Servicer may be restricted by law from preventing, for any
reason whatsoever. For purposes of this Section 3.14, the term "assumption" is
deemed to also include a sale (of the Mortgaged Property) subject to the
Mortgage that is not accompanied by an assumption or substitution of liability
agreement.
Section 3.15 Realization upon Defaulted Mortgage Loans. Each
Servicer shall use its best efforts, consistent with Accepted Servicing
Practices, to foreclose upon or otherwise comparably convert (which may include
an acquisition of REO Property) the ownership of properties securing such of the
Mortgage Loans as come into and continue in default and as to which no
satisfactory arrangements can be made for collection of delinquent payments
pursuant to Section 3.07, and which are not released from this Agreement
pursuant to any other provision hereof. Each Servicer shall use reasonable
efforts to realize upon such defaulted Mortgage Loans in such manner as will
maximize the receipt of principal and interest by the Securities Administrator,
taking into account, among other things, the timing of foreclosure proceedings;
provided, however, with respect to any Second Lien Mortgage Loan for which the
related first lien mortgage loan is not included in the Trust Fund, if, after
such Mortgage Loan becomes 180 days or more delinquent, the applicable Servicer
determines that a significant net recovery is not possible through foreclosure,
such Mortgage Loan may be charged off and the Mortgage Loan will be treated as a
Liquidated Mortgage Loan giving rise to a Realized Loss. The foregoing is
subject to the provisions that, in any case in which Mortgaged Property shall
have suffered damage from an uninsured cause, a Servicer shall not be required
to expend its own funds toward the restoration of such property unless it shall
determine in its sole discretion (i) that such restoration will increase the net
proceeds of liquidation of the related Mortgage Loan to the Securities
Administrator, after reimbursement to itself for such expenses, and (ii) that
such expenses will be recoverable by such Servicer through Insurance Proceeds,
Condemnation Proceeds or Liquidation Proceeds from the related Mortgaged
Property, as contemplated in Section 3.11. Each Servicer shall be responsible
for all other costs and expenses incurred by it in any such proceedings;
provided, however, that it shall be entitled to reimbursement thereof from the
related property, as contemplated in Section 3.11.
The proceeds of any liquidation or REO Disposition, as well as any
recovery resulting from a partial collection of Insurance Proceeds, Condemnation
Proceeds or Liquidation Proceeds or any income from an REO Property, will be
applied in the following order of priority: first, to reimburse the applicable
Servicer or any Subservicer for any related unreimbursed Servicing Advances,
pursuant to Section 3.11 or 3.17; second, to reimburse the applicable Servicer
for any related unreimbursed P&I Advances, pursuant to Section 3.11; third, to
accrued and unpaid interest on the Mortgage Loan or REO Imputed Interest, at the
Mortgage Rate, to the date of the liquidation or REO Disposition, or to the Due
Date prior to the Remittance Date on which such amounts are to be distributed if
not in connection with a liquidation or REO Disposition; and fourth, as a
recovery of principal of the Mortgage Loan. If the amount of the recovery so
allocated to interest is less than a full recovery thereof, that amount will be
allocated as follows: first, to unpaid Servicing Fees; and second, as interest
at the Mortgage Rate (net of the Servicing Fee Rate). The portion of the
recovery so allocated to unpaid Servicing Fees shall be reimbursed to the
applicable Servicer or any Subservicer pursuant to Section 3.11 or 3.17. The
portions of the recovery so allocated to interest at the Mortgage Rate (net of
the Servicing Fee Rate) and to principal of the Mortgage Loan shall be applied
as follows: first, to reimburse the applicable Servicer or any Subservicer for
any related unreimbursed Servicing Advances in accordance with Section 3.11 or
3.17, and second, to the Securities Administrator in accordance with the
provisions of Section 4.02, subject to the last paragraph of Section 3.17(f)
with respect to certain excess recoveries from an REO Disposition.
Notwithstanding anything to the contrary contained herein, in
connection with a foreclosure or acceptance of a deed in lieu of foreclosure, in
the event a Servicer has received actual notice of, or has actual knowledge of
the presence of, hazardous or toxic substances or wastes on the related
Mortgaged Property, or if the Trustee otherwise requests, such Servicer shall
cause an environmental inspection or review of such Mortgaged Property to be
conducted by a qualified inspector. Upon completion of the inspection, such
Servicer shall promptly provide the Trustee and the Depositor with a written
report of the environmental inspection.
After reviewing the environmental inspection report, the applicable
Servicer shall determine consistent with Accepted Servicing Practices how such
Servicer shall proceed with respect to the Mortgaged Property. In the event (a)
the environmental inspection report indicates that the Mortgaged Property is
contaminated by hazardous or toxic substances or wastes and (b) the applicable
Servicer determines, consistent with Accepted Servicing Practices, to proceed
with foreclosure or acceptance of a deed in lieu of foreclosure, such Servicer
shall be reimbursed for all reasonable costs associated with such foreclosure or
acceptance of a deed in lieu of foreclosure and any related environmental
clean-up costs, as applicable, from the related Liquidation Proceeds, or if the
Liquidation Proceeds are insufficient to fully reimburse such Servicer, such
Servicer shall be entitled to be reimbursed from amounts in the related
Collection Account pursuant to Section 3.11. In the event the applicable
Servicer determines not to proceed with foreclosure or acceptance of a deed in
lieu of foreclosure, such Servicer shall be reimbursed from general collections
for all Servicing Advances made with respect to the related Mortgaged Property
from the related Collection Account pursuant to Section 3.11. The Trustee shall
not be responsible for any determination made by the applicable Servicer
pursuant to this paragraph or otherwise.
In the event Xxxxx Fargo or HomEq elects to charge-off a Second Lien
Mortgage Loan 180 days or more delinquent pursuant to this Section 3.15, no
Second Lien Mortgage Loan shall be characterized as a Liquidated Mortgage Loan,
unless the Depositor consents in writing to such characterization after Xxxxx
Fargo or HomEq, as applicable, has provided the Depositor with a combined equity
analysis of such Second Lien Mortgage Loan and the related first lien mortgage
loan; provided, that if the Depositor has failed to notify Xxxxx Fargo or HomEq,
as applicable, within 3 Business Days of receipt of such combined equity
analysis, then the Depositor shall be deemed to have consented to such
characterization. In the event Xxxxx Fargo or HomEq elects to charge off a
Second Lien Mortgage Loan 180 days or more delinquent pursuant to this Section
3.15, Xxxxx Fargo or HomEq, as applicable, shall notify the Securities
Administrator of such election, which notice may be provided in a Servicer
Remittance Report delivered pursuant to Section 4.03(d). JPMorgan may elect to
charge-off a Second Lien Mortgage Loan pursuant to this Section 3.15 without
such written consent, so long as such Second Lien Mortgage Loan is 180 days or
more delinquent. JPMorgan shall notify the Securities Administrator of such
election, which notice may be provided in a Servicer Remittance Report delivered
pursuant to Section 4.03(d).
Section 3.16 Release of Mortgage Files. (a) Upon the payment in full
of any Mortgage Loan, or the receipt by a Servicer of a notification that
payment in full shall be escrowed in a manner customary for such purposes, such
Servicer will, on or before the last day of the month in which such payment in
full occurs, notify the applicable Custodian by a certification (which
certification shall include a statement to the effect that all amounts received
or to be received in connection with such payment which are required to be
deposited in the related Collection Account pursuant to Section 3.10 have been
or will be so deposited) of a Servicing Officer and shall request delivery to it
of the Custodial File by submitting a Request for Release (in writing or an
electronic format acceptable to the Custodian) to the Custodian. Upon receipt of
such certification and Request for Release, such Custodian shall promptly
release the related Custodial File to such Servicer within two (2) Business
Days. No expenses incurred in connection with any instrument of satisfaction or
deed of reconveyance shall be chargeable to the related Collection Account or to
the Trustee.
(b) From time to time and as appropriate for the servicing or
foreclosure of any Mortgage Loan, including, for this purpose, collection under
any Insurance Policy relating to the Mortgage Loans, the applicable Custodian
shall, upon request of a Servicer and delivery to such Custodian of a Request
for Release in written or electronic form, release the related Custodial File to
such Servicer, and the Trustee shall, at the direction of such Servicer, execute
such documents as shall be necessary to the prosecution of any such proceedings
and such Servicer shall retain the Mortgage File in trust for the benefit of the
Trustee. Such Request for Release shall obligate the applicable Servicer to
return each and every document previously requested from the Custodial File to
such Custodian when the need therefor by such Servicer no longer exists, unless
the Mortgage Loan has been charged off or liquidated and the Liquidation
Proceeds relating to the Mortgage Loan have been deposited in the related
Collection Account or the Mortgage 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, and
such Servicer has delivered to the applicable Custodian a certificate of a
Servicing Officer certifying as to the name and address of the Person to which
such Mortgage File or such document was delivered and the purpose or purposes of
such delivery. Upon receipt of a certificate of a Servicing Officer stating that
such Mortgage Loan was charged off or liquidated and that all amounts received
or to be received in connection with such liquidation that are required to be
deposited into the related Collection Account have been so deposited, or that
such Mortgage Loan has become an REO Property, a copy of the Request for Release
shall be released by the applicable Custodian to the applicable Servicer or its
designee upon request therefor. Upon receipt of a Request for Release under this
Section 3.16, the applicable Custodian shall deliver the related Custodial File
to the requesting Servicer; provided, however, that in the event a Servicer has
not previously received copies of the relevant Mortgage Loan Documents necessary
to service the related Mortgage Loan in accordance with Accepted Servicing
Practices, the applicable Responsible Party shall reimburse the applicable
Custodian for any overnight courier charges incurred for the requested Custodial
Files.
Upon written certification of a Servicing Officer, the Trustee shall
execute and deliver to the applicable Servicer copies of any court pleadings,
requests for trustee's sale or other documents reasonably 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, or shall exercise and deliver to such Servicer a power of attorney
sufficient to authorize such Servicer to execute such documents on its behalf.
Each such certification 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 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 or
trustee's sale.
Section 3.17 Title, Conservation and Disposition of REO Property.
(a) This Section shall apply only to REO Properties acquired for the account of
the Trustee and shall not apply to any REO Property relating to a Mortgage Loan
which was purchased or repurchased from the Trustee pursuant to any provision
hereof. In the event that title to any such REO Property is acquired, the
applicable Servicer shall cause the deed or certificate of sale to be issued in
the name of the Trustee, on behalf of the Certificateholders. Upon written
request by the applicable Servicer, the Trustee shall provide such Servicer with
a power of attorney prepared by such Servicer with respect to such REO Property
in the form of Exhibit Q.
(b) Each Servicer shall manage, conserve, protect and operate each
related REO Property for the Trustee solely for the purpose of its prompt
disposition and sale. Each Servicer, either itself or through an agent selected
by such Servicer, shall manage, conserve, protect and operate the REO Property
in the same manner that it manages, conserves, protects and operates other
foreclosed property for its own account, and in the same manner that similar
property in the same locality as the REO Property is managed. Each Servicer
shall attempt to sell the same (and may temporarily rent the same for a period
not greater than one year, except as otherwise provided below) on such terms and
conditions as such Servicer deems to be in the best interest of the Trustee. The
Trustee shall have no obligations with respect to any REO Dispositions.
(c) Each Servicer shall segregate and hold all funds collected and
received in connection with the operation of any REO Property separate and apart
from its own funds and general assets and shall deposit such funds in the
related Collection Account.
(d) Each Servicer shall deposit net of reimbursement to such
Servicer for any related outstanding Servicing Advances and unpaid Servicing
Fees provided in Section 3.11, or cause to be deposited, in no event more than
two (2) Business Days following such Servicer's receipt thereof, in the related
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.
(e) Each Servicer, upon an REO Disposition, shall be entitled to
reimbursement for any related unreimbursed Servicing Advances as well as any
unpaid Servicing Fees from proceeds received in connection with the REO
Disposition, as further provided in Section 3.11.
(f) Any net proceeds from an REO Disposition which are in excess of
the unpaid principal balance of the related Mortgage Loan, plus all unpaid REO
Imputed Interest thereon through the date of the REO Disposition, shall be
retained by the applicable Servicer as additional servicing compensation.
(g) Each Servicer shall use its reasonable best efforts, to sell, or
cause its Subservicer to sell, in accordance with Accepted Servicing Practices,
any REO Property serviced by such Servicer or Subservicer as soon as possible,
but in no event later than the conclusion of the third calendar year beginning
after the year of its acquisition by Pooling-Tier REMIC-1 unless (i) such
Servicer applies for and receives an extension of such period from the Internal
Revenue Service pursuant to the REMIC Provisions and Code Section 856(e)(3), in
which event such REO Property shall be sold within the applicable extension
period, or (ii) such Servicer obtains for the Trustee and the Securities
Administrator an Opinion of Counsel, addressed to the Depositor, the Trustee,
the Securities Administrator and such Servicer, to the effect that the holding
by the Pooling Tier REMIC 1 of such REO Property subsequent to such period will
not result in the imposition of taxes on "prohibited transactions" as defined in
Section 860F of the Code or cause any Trust REMIC to fail to qualify as a REMIC
under the REMIC Provisions or comparable provisions of relevant state laws at
any time. Each Servicer shall manage, conserve, protect and operate each REO
Property serviced by such Servicer for the Trustee 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) or result in the receipt by the Pooling Tier REMIC 1 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 Section 860G(a)(1) of the Code. Pursuant to its efforts to sell such REO
Property, the applicable Servicer shall either itself or through an agent
selected by such Servicer protect and conserve such REO Property in the same
manner and to such extent as is customary in the locality where such REO
Property is located and may, incident to its conservation and protection of the
interests of the Trustee on behalf of the Certificateholders, rent the same, or
any part thereof, as such Servicer deems to be in the best interest of the
Trustee on behalf of the Certificateholders for the period prior to the sale of
such REO Property; provided, however, that any rent received or accrued with
respect to such REO Property qualifies as "rents from real property" as defined
in Section 856(d) of the Code.
Section 3.18 Notification of Adjustments. With respect to each
Adjustable Rate Mortgage Loan, the applicable Servicer shall adjust the Mortgage
Rate on the related Adjustment Date and shall adjust the Scheduled Payment on
the related mortgage payment adjustment date, if applicable, in compliance with
the requirements of applicable law and the related Mortgage and Mortgage Note.
In the event that an Index becomes unavailable or otherwise unpublished, the
related Servicer shall select a comparable alternative index over which it has
no direct control and which is readily verifiable. Each Servicer shall execute
and deliver any and all necessary notices required under applicable law and the
terms of the related Mortgage Note and Mortgage regarding the Mortgage Rate and
Scheduled Payment adjustments. Each Servicer shall promptly, upon written
request therefor, deliver to the Securities Administrator such notifications and
any additional applicable data regarding such adjustments and the methods used
to calculate and implement such adjustments. Upon the discovery by a Servicer or
the receipt of notice from the Securities Administrator that a Servicer has
failed to adjust a Mortgage Rate or Scheduled Payment in accordance with the
terms of the related Mortgage Note, such Servicer shall deposit in the related
Collection Account from its own funds the amount of any interest loss caused as
such interest loss occurs.
Section 3.19 Access to Certain Documentation and Information
Regarding the Mortgage Loans. The applicable Servicer shall provide, or cause
the Subservicer to provide, to the Depositor, the Trustee, the OTS or the FDIC
and the examiners and supervisory agents thereof, access to the documentation
regarding the Mortgage Loans in its possession required by applicable
regulations of the OTS. Such access shall be afforded without charge, but only
upon five (5) Business Days' prior written request and during normal business
hours at the offices of the applicable Servicer or any Subservicer. Nothing in
this Section shall derogate from the obligation of any such party to observe any
applicable law prohibiting disclosure of information regarding the Mortgagors
and the failure of any such party to provide access as provided in this Section
as a result of such obligation shall not constitute a breach of this Section.
Section 3.20 Documents, Records and Funds in Possession of the
Servicers to Be Held for the Trustee. Each Servicer shall account fully to the
Securities Administrator for any funds received by such Servicer or which
otherwise are collected by such Servicer as Liquidation Proceeds, Condemnation
Proceeds or Insurance Proceeds in respect of any Mortgage Loan serviced by such
Servicer. All Mortgage Files and funds collected or held by, or under the
control of, a Servicer in respect of any Mortgage Loans, whether from the
collection of principal and interest payments or from Liquidation Proceeds,
including, but not limited to, any funds on deposit in its Collection Account,
shall be held by such Servicer for and on behalf of the Trustee and shall be and
remain the sole and exclusive property of the Trustee, subject to the applicable
provisions of this Agreement. Each Servicer also agrees that it shall not
create, incur or subject any Mortgage File or any funds that are deposited in
any Collection Account, the Distribution Account or any Escrow Account, or any
funds that otherwise are or may become due or payable to the Securities
Administrator for the benefit of the Certificateholders, to any claim, lien,
security interest, judgment, levy, writ of attachment or other encumbrance, or
assert by legal action or otherwise any claim or right of setoff against any
Mortgage File or any funds collected on, or in connection with, a Mortgage Loan,
except, however, that such Servicer shall be entitled to set off against and
deduct from any such funds any amounts that are properly due and payable to such
Servicer under this Agreement.
Section 3.21 Servicing Compensation. (a) As compensation for its
activities hereunder, each Servicer shall, with respect to each Mortgage Loan
serviced by it, be entitled to retain from deposits to its Collection Account
and from Liquidation Proceeds, Condemnation Proceeds, Insurance Proceeds and REO
Proceeds related to such Mortgage Loan, the Servicing Fee with respect to each
Mortgage Loan (less any portion of such amounts retained by any Subservicer). In
addition, each Servicer shall be entitled to recover unpaid Servicing Fees out
of related late collections to the extent permitted in Section 3.11. The right
to receive the Servicing Fee may not be transferred in whole or in part except
in connection with the transfer of all of a Servicer's responsibilities and
obligations under this Agreement; provided, however, that each Servicer may pay
from the Servicing Fee any amounts due to a Subservicer pursuant to a
Subservicing Agreement entered into under Section 3.02.
(b) Additional servicing compensation in the form of assumption or
modification fees, late payment charges, NSF fees, reconveyance fees and other
similar fees and charges (other than Prepayment Charges) shall be retained by a
Servicer only to the extent such fees or charges are received by such Servicer.
Each Servicer shall also be entitled pursuant to Section 3.11(a)(iv) to withdraw
from the related Collection Account, and pursuant to Section 3.07(e), to direct
the Securities Administrator to withdraw from the Distribution Account and remit
to the applicable Servicer (except for monies invested during the Securities
Administrator Float Period), as additional servicing compensation, interest or
other income earned on the related portions of deposits therein. Each Servicer
shall also be entitled, as additional servicing compensation, to interest or
other income earned on deposits in the related Escrow Account (to the extent
permitted by law and the related Mortgage Loan documents) in accordance with
Section 3.12. Each Servicer shall also be entitled to retain net Prepayment
Interest Excesses (to the extent not required to offset Prepayment Interest
Shortfalls), but only to the extent such amounts are received by such Servicer.
(c) Each Servicer shall be required to pay all expenses incurred by
it in connection with its servicing activities hereunder (including payment of
premiums for any blanket policy insuring against hazard losses pursuant to
Section 3.13, servicing compensation of the Subservicer to the extent not
retained by it and the fees and expenses of independent accountants and any
agents appointed by such Servicer), and shall not be entitled to reimbursement
therefor from the Trust Fund except as specifically provided in Section 3.11.
Section 3.22 Annual Statement as to Compliance. Each Servicer and
the Securities Administrator shall deliver and shall cause each Subservicer
engaged by such Servicer or the Securities Administrator, as applicable, to
deliver or cause to be delivered to the Securities Administrator (and the
Securities Administrator shall deliver or otherwise make available to the
Depositor, the Rating Agencies and the Trustee) on or before March 5th of each
calendar year, commencing in 2007, an Officer's Certificate stating, as to each
signatory thereof, that (i) a review of the activities of the Securities
Administrator, such Servicer or Subservicer, as applicable, during the preceding
calendar year and of its performance under this Agreement or the applicable
Subservicing Agreement, as the case may be, has been made under such officers'
supervision, and (ii) to the best of such officers' knowledge, based on such
review, the Securities Administrator, such Servicer or Subservicer, as
applicable, has fulfilled all of its obligations under this Agreement or the
applicable Subservicing Agreement, as the case may be, in all material respects,
throughout such year, or, if there has been a default in the fulfillment of any
such obligation in any material respect, specifying each such default known to
such officers and the nature and status thereof. Promptly after receipt of each
such Officer's Certificate, the Depositor shall review each such Officer's
Certificate and, if applicable, consult with the Securities Administrator, the
applicable Servicer or Subservicer as to the nature of any defaults by the
Securities Administrator, such Servicer or any related Subservicer in the
fulfillment of any of the Securities Administrator's, such Servicer's or any
related Subservicer's obligations. The obligations of the Securities
Administrator, each Servicer and each Subservicer under this Section apply to
the Securities Administrator, each Servicer and each Subservicer that serviced a
Mortgage Loan during the applicable period, whether or not the Securities
Administrator, such Servicer or such Subservicer is acting as the Securities
Administrator, a Servicer or a Subservicer at the time such Officer's
Certificate is required to be delivered. None of the Servicers, the Securities
Administrator or any Servicing Function Participant shall be required to cause
the delivery of any Officer's Certificate required by this Section until March
10th in any given year so long as it has received written confirmation from the
Depositor that a Form 10-K is not required to be filed in respect of the Trust
for the preceding calendar year.
Section 3.23 Annual Reports on Assessment of Compliance with
Servicing Criteria; Annual Independent Public Accountants' Attestation Report.
(a) Not later than March 5th of each calendar year commencing in
2007, each Servicer shall deliver, and shall cause each Subservicer engaged by
such Servicer to deliver, and the Securities Administrator and each Custodian
shall deliver or otherwise make available, and each Servicer, the Securities
Administrator and the Custodian shall cause each Subcontractor utilized by such
Servicer (or by any such Subservicer), the Securities Administrator or the
Custodian, as applicable, and determined by such Servicer, the Securities
Administrator or the Custodian, as applicable, pursuant to Section 3.02(e) to be
"participating in a servicing function" within the meaning of Item 1122 of
Regulation AB (in each case, a "Servicing Function Participant"), to deliver,
each at its own expense, to the Securities Administrator (and the Securities
Administrator shall make available to the Depositor), a report on an assessment
of compliance with the Servicing Criteria applicable to it that contains (A) a
statement by such party of its responsibility for assessing compliance with the
Servicing Criteria applicable to it, (B) a statement that such party used the
Servicing Criteria to assess compliance with the applicable Servicing Criteria,
(C) such party's assessment of compliance with the applicable Servicing Criteria
as of and for the period ending the end of the fiscal year covered by the Form
10-K required to be filed pursuant to Section 8.12, including, if there has been
any material instance of noncompliance with the applicable Servicing Criteria, a
discussion of each such failure and the nature and status thereof, and (D) a
statement that a registered public accounting firm has issued an attestation
report on such Person's assessment of compliance with the applicable Servicing
Criteria as of and for such period. Each such assessment of compliance report
shall be addressed to the Depositor and signed by an authorized officer of the
applicable company, and shall address each of the applicable Servicing Criteria
set forth on Exhibit R hereto, or as set forth in the notification furnished to
the Depositor and the Securities Administrator pursuant to Section 3.23(c). The
Servicers, the Securities Administrator and the Custodians hereby acknowledge
and agree that their respective assessments of compliance will cover the items
identified on Exhibit R hereto as being covered by such party. The parties to
this Agreement acknowledge that where a particular Servicing Criteria has
multiple components, each party's assessment of compliance (and related
attestation of compliance) will relate only to those components that are
applicable to such party. Promptly after receipt of each such report on
assessment of compliance, the Depositor shall review each such report and, if
applicable, consult with the applicable Servicer, the Securities Administrator
or the applicable Custodian, as to the nature of any material instance of
noncompliance with the Servicing Criteria applicable to it (and each Subservicer
or Servicing Function Participant engaged or utilized by the applicable
Servicer, such Subservicer, the Securities Administrator or the Custodian, as
applicable), as the case may be. None of the Servicers, the Securities
Administrator, the Custodian or any Subservicer or any Servicing Function
Participant shall be required to cause the delivery of any such assessments
until March 10th in any given year, and the Custodians shall not be required to
deliver any such assessment, so long as it has received written confirmation
from the Depositor that a Form 10-K is not required to be filed in respect of
the Trust for the preceding calendar year.
(b) Not later than March 5th of each calendar year commencing in
2007, each Servicer, the Securities Administrator and each Custodian shall
cause, and such Servicer shall cause each Subservicer engaged by such Servicer
and such Servicer, the Securities Administrator and the Custodian shall cause
each Servicing Function Participant utilized by the Securities Administrator,
the Custodian or such Servicer, as applicable (or by any Subservicer engaged by
such Servicer) to cause, each at its own expense, a registered public accounting
firm (which may also render other services to such party) and that is a member
of the American Institute of Certified Public Accountants to furnish a report to
the Securities Administrator (and the Securities Administrator shall make
available to the Depositor with a copy to the Rating Agencies), to the effect
that (i) it has obtained a representation regarding certain matters from the
management of such Person, which includes an assertion that such Person has
complied with the Servicing Criteria applicable to it pursuant to Section
3.23(a) and (ii) on the basis of an examination conducted by such firm in
accordance with standards for attestation engagements issued or adopted by the
PCAOB, that attests to and reports on such Person's assessment of compliance
with the Servicing Criteria applicable to it. 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. Each such related
accountant's attestation report shall be made in accordance with Rules
1-02(a)(3) and 2-02(g) of Regulation S-X under the Securities Act and the
Exchange Act. Such report must be available for general use and not contain
restricted use language. Promptly after receipt of each such accountants'
attestation report, the Depositor shall review the report and, if applicable,
consult with the applicable Servicer, the Securities Administrator or the
applicable Custodian as to the nature of any defaults by the applicable
Servicer, the Securities Administrator or the applicable Custodian (and each
Subservicer or Servicing Function Participant engaged or utilized by any
Servicer, the Securities Administrator or the Custodian, as applicable or by any
Subservicer engaged by the Servicer), as the case may be, in the fulfillment of
any of the Servicer's, the Securities Administrator's, the Custodian's, any of
the Custodian's or the applicable Subservicer's or Servicing Function
Participant's obligations hereunder or under any applicable sub-servicing
agreement. None of the Servicers, the Securities Administrator, the Custodians
or any Servicing Function Participant shall be required to cause the delivery of
any such attestation required by this paragraph until March 10th in any given
year, and the Custodians shall not be required to deliver any such assessment,
so long as it has received written confirmation from the Depositor that a Form
10-K is not required to be filed in respect of the Trust for the preceding
calendar year.
(c) Promptly upon written request from the Depositor, each Servicer
shall notify the Securities Administrator and the Depositor as to the name of
each Subservicer engaged by such Servicer and each Servicing Function
Participant utilized by such Servicer and by each Subservicer engaged by such
Servicer, but only to the extent there has been a change in the information in
such notification from notices previously delivered and the Securities
Administrator shall notify the Depositor as to the name of each Servicing
Function Participant utilized by it, and each such notice will specify what
specific Servicing Criteria will be addressed in the report on assessment of
compliance prepared by such Subservicer and Servicing Function Participant in
each case, to the extent of any change from the prior year's notice, if any.
When a Servicer or the Securities Administrator submits its assessment pursuant
to Section 3.23(a), such Servicer and the Securities Administrator, as
applicable, will also at such time include the assessment (and related
attestation pursuant to Section 3.23(b)) of each Servicing Function Participant
utilized by it and by each Subservicer engaged by it.
Section 3.24 Trustee to Act as Servicer. (a) Subject to Section
7.02, in the event that any Servicer shall for any reason no longer be a
Servicer hereunder (including by reason of an Event of Default), the Trustee or
its successor shall thereupon assume all of the rights and obligations of such
Servicer hereunder arising thereafter (except that the Trustee shall not be (i)
liable for losses of such predecessor servicer pursuant to Section 3.10 or any
acts or omissions of such predecessor servicer hereunder), (ii) obligated to
effectuate repurchases or substitutions of Mortgage Loans hereunder, including
but not limited to repurchases or substitutions pursuant to Section 2.03, (iii)
responsible for expenses of such predecessor servicer pursuant to Section 2.03
or (iv) deemed to have made any representations and warranties of such Servicer
hereunder. Any such assumption shall be subject to Section 7.02.
(b) Every Subservicing Agreement entered into by a Servicer shall
contain a provision giving the successor servicer the option to terminate such
agreement in the event a successor servicer is appointed.
(c) If any Servicer shall for any reason no longer be a Servicer
(including by reason of any Event of Default), the Trustee (or any other
successor servicer) may, at its option, succeed to any rights and obligations of
such Servicer under any Subservicing Agreement in accordance with the terms
thereof; provided that the Trustee (or any other successor servicer) shall not
incur any liability or have any obligations in its capacity as successor
servicer under a Subservicing Agreement arising prior to the date of such
succession unless it expressly elects to succeed to the rights and obligations
of such Servicer thereunder; and such Servicer shall not thereby be relieved of
any liability or obligations under the Subservicing Agreement arising prior to
the date of such succession.
(d) The applicable Servicer shall, upon request of the Trustee, but
at the expense of such Servicer, deliver to the assuming party all documents and
records relating to each Subservicing Agreement (if any) to which it is party
and the Mortgage Loans then being serviced thereunder and an accounting of
amounts collected and held by it and otherwise use its best efforts to effect
the orderly and efficient transfer of such Subservicing Agreement to the
assuming party.
Section 3.25 Compensating Interest. Each Servicer shall remit to the
Securities Administrator on each Remittance Date for deposit in the Distribution
Account an amount from such Servicer's own funds equal to the Compensating
Interest payable by such Servicer for the related Distribution Date.
Section 3.26 Credit Reporting; Xxxxx-Xxxxx-Xxxxxx Act. (a) With
respect to each Mortgage Loan, each Servicer agrees to fully furnish, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (e.g., favorable and unfavorable) on its
borrower credit files to Equifax, Experian and TransUnion Credit Information
Company (three of the credit repositories), on a monthly basis.
(b) Each Servicer shall comply with Title V of the
Xxxxx-Xxxxx-Xxxxxx Act of 1999 and all applicable regulations promulgated
thereunder, relating to the Mortgage Loans required to be serviced by it and the
related borrowers and shall provide all required notices thereunder.
ARTICLE IV
DISTRIBUTIONS AND
ADVANCES BY THE SERVICERS
Section 4.01 Advances. (a) The amount of P&I Advances to be made by
each Servicer for any Remittance Date shall equal, subject to Section 4.01(c),
the sum of (i) the aggregate amount of Scheduled Payments (with each interest
portion thereof net of the related Servicing Fee), due during the Due Period
immediately preceding such Remittance Date in respect of the Mortgage Loans
serviced by such Servicer, which Scheduled Payments were not received as of the
close of business on the related Determination Date (provided, however, that
with respect to any Balloon Loan that is delinquent on its maturity date, the
applicable Servicer will not be required to advance the principal portion of the
related balloon payment but will be required to continue to make P&I Advances in
accordance with this Section 4.01(a) with respect to such Balloon Loan in an
amount equal to the assumed scheduled interest that would otherwise be due based
on the original amortization schedule for such Balloon Loan (with interest at
the Adjusted Net Mortgage Rate)), plus (ii) with respect to each REO Property
serviced by such Servicer, which REO Property was acquired during or prior to
the related Prepayment Period and as to which such REO Property an REO
Disposition did not occur during the related Prepayment Period, an amount equal
to the excess, if any, of the Scheduled Payments (with each interest portion
thereof net of the related Servicing Fee) that would have been due on the
related Due Date in respect of the related Mortgage Loans, over the net income
from such REO Property transferred to the related Collection Account for
distribution on such Remittance Date.
(b) On each Remittance Date, each Servicer shall remit in
immediately available funds to the Securities Administrator an amount equal to
the aggregate amount of P&I Advances, if any, to be made in respect of the
Mortgage Loans and REO Properties serviced by such Servicer for the related
Remittance Date either (i) from its own funds or (ii) from the related
Collection Account, to the extent of funds held therein for future distribution
(in which case, such Servicer will cause to be made an appropriate entry in the
records of the related Collection Account that Amounts Held for Future
Distribution have been, as permitted by this Section 4.01, used by such Servicer
in discharge of any such P&I Advance) or (iii) in the form of any combination of
(i) and (ii) aggregating the total amount of P&I Advances to be made by such
Servicer with respect to such Mortgage Loans and REO Properties. Any Amounts
Held for Future Distribution and so used shall be appropriately reflected in
such Servicer's records and replaced by such Servicer by deposit in the related
Collection Account on or before any future Remittance Date to the extent
required.
(c) The obligation of each Servicer to make such P&I Advances is
mandatory, notwithstanding any other provision of this Agreement but subject to
paragraph (d) below, and, with respect to any Mortgage Loan or REO Property,
shall continue until a Final Recovery Determination in connection therewith or
the removal thereof from coverage under this Agreement, except as otherwise
provided in this Section.
(d) Notwithstanding anything herein to the contrary, no P&I Advance
or Servicing Advance shall be required to be made hereunder by any Servicer if
such P&I Advance or Servicing Advance would, if made, constitute a
Nonrecoverable P&I Advance or Nonrecoverable Servicing Advance. The
determination by any Servicer that it has made a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance or that any proposed P&I Advance or Servicing
Advance, if made, would constitute a Nonrecoverable P&I Advance or a
Nonrecoverable Servicing Advance, respectively, shall be evidenced by an
Officer's Certificate of such Servicer delivered to the Securities
Administrator.
(e) Except as otherwise provided herein, the applicable Servicer
shall be entitled to reimbursement pursuant to Section 3.11 for Servicing
Advances from recoveries from the related Mortgagor or from all Liquidation
Proceeds and other payments or recoveries (including Insurance Proceeds and
Condemnation Proceeds) with respect to the related Mortgage Loan.
Section 4.02 Priorities of Distribution. (a) On each Distribution
Date, the Securities Administrator shall allocate from amounts then on deposit
in the Distribution Account in the following order of priority and to the extent
of the Available Funds (including for this purpose any Senior Defaulted Swap
Termination Payment to the extent received from a replacement swap provider)
remaining and, on such Distribution Date, shall make distributions on the
Certificates in accordance with such allocation:
(i) to the holders of each Class of Offered Certificates and to the
Swap Account in the following order of priority:
(A) to the Swap Account, the sum of (x) all Net Swap Payments and
(y) any Swap Termination Payment owed to the Swap Provider,
including, without limitation, any Senior Defaulted Swap
Termination Payment, but not including any other Defaulted
Swap Termination Payment;
(B) from the Interest Remittance Amounts for both the Loan Groups,
to the Class A Certificates, the related Accrued Certificate
Interest Distribution Amounts and any related Unpaid Interest
Amounts for such Distribution Date, pursuant to the allocation
set forth in clauses (iv) and (v) of this Section 4.02(a);
(C) from any remaining Interest Remittance Amounts, to the Class
M-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(D) from any remaining Interest Remittance Amounts, to the Class
M-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(E) from any remaining Interest Remittance Amounts, to the Class
M-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(F) from any remaining Interest Remittance Amounts, to the Class
M-4 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(G) from any remaining Interest Remittance Amounts, to the Class
M-5 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(H) from any remaining Interest Remittance Amounts, to the Class
M-6 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(I) from any remaining Interest Remittance Amounts, to the Class
B-1 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(J) from any remaining Interest Remittance Amounts, to the Class
B-2 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
and
(K) from any remaining Interest Remittance Amounts, to the Class
B-3 Certificates, the Accrued Certificate Interest
Distribution Amount for such Class on such Distribution Date;
(ii) (A) on each Distribution Date (1) before the Stepdown
Date or (2) with respect to which a Trigger Event is in effect, to
the holders of the related Class or Classes of Offered Certificates
then entitled to distributions of principal as set forth below, from
amounts remaining on deposit in the Distribution Account after
making distributions pursuant to clause (i) above, an amount equal
to the Principal Distribution Amount in the following order of
priority:
(1) to the Class A Certificates, allocated as
described in Section 4.02(c), until the respective Class
Certificate Balances thereof are reduced to zero; and
(2) sequentially to the Class M-1, Class M-2,
Class M-3, Class M-4, Class M-5, Class M-6, Class B-1,
Class B-2 and Class B-3 Certificates, in that order,
until the respective Class Certificate Balances are
reduced to zero;
(B) on each Distribution Date (1) on and after the
Stepdown Date and (2) as long as a Trigger Event is not in effect,
to the holders of the related Class or Classes of Offered
Certificates then entitled to distribution of principal, from
amounts remaining on deposit in the Distribution Account after
making distributions pursuant to clause (i) above, an amount equal
to, in the aggregate, the Principal Distribution Amount in the
following amounts and order of priority:
(1) to the Class A Certificates, the lesser of (x)
the Principal Distribution Amount and (y) the Class A
Principal Distribution Amount, allocated as described in
Section 4.02(c), until the respective Class Certificate
Balances thereof are reduced to zero;
(2) to the Class M-1 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and (y)
the Class M-1 Principal Distribution Amount, until the
Class Certificate Balance thereof has been reduced to
zero;
(3) to the Class M-2 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above and to the
Class M-1 Certificates in clause (ii)(B)(b) above and
(y) the Class M-2 Principal Distribution Amount, until
the Class Certificate Balance thereof has been reduced
to zero;
(4) to the Class M-3 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class M-1 Certificates in clause (ii)(B)(b) above and to
the Class M-2 Certificates in clause (ii)(B)(c) above
and (y) the Class M-3 Principal Distribution Amount,
until the Class Certificate Balance thereof has been
reduced to zero;
(5) to the Class M-4 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above
and to the Class M-3 Certificates in clause (ii)(B)(d)
above and (y) the Class M-4 Principal Distribution
Amount, until the Class Certificate Balance thereof has
been reduced to zero;
(6) to the Class M-5 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above,
to the Class M-3 Certificates in clause (ii)(B)(d) above
and to the Class M-4 Certificates in clause (ii)(B)(e)
above and (y) the Class M-5 Principal Distribution
Amount, until the Class Certificate Balance thereof has
been reduced to zero;
(7) to the Class M-6 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above,
to the Class M-3 Certificates in clause (ii)(B)(d)
above, to the Class M-4 Certificates in clause
(ii)(B)(e) above and to the Class M-5 Certificates in
clause (ii)(B)(f) above and (y) the Class M-6 Principal
Distribution Amount, until the Class Certificate Balance
thereof has been reduced to zero;
(8) to the Class B-1 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above,
to the Class M-3 Certificates in clause (ii)(B)(d)
above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in
clause (ii)(B)(f) above and to the Class M-6
Certificates in clause (ii)(B)(g) above and (y) the
Class B-1 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(9) to the Class B-2 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above,
to the Class M-3 Certificates in clause (ii)(B)(d)
above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in
clause (ii)(B)(f) above, to the Class M-6 Certificates
in clause (ii)(B)(g) above and to the Class B-1
Certificates in clause (ii)(B)(h) above and (y) the
Class B-2 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
and
(10) to the Class B-3 Certificates, the lesser of
(x) the excess of (i) the Principal Distribution Amount
over (ii) the amount distributed to the Class A
Certificateholders in clause (ii)(B)(a) above, to the
Class M-1 Certificates in clause (ii)(B)(b) above, to
the Class M-2 Certificates in clause (ii)(B)(c) above,
to the Class M-3 Certificates in clause (ii)(B)(d)
above, to the Class M-4 Certificates in clause
(ii)(B)(e) above, to the Class M-5 Certificates in
clause (ii)(B)(f) above, to the Class M-6 Certificates
in clause (ii)(B)(g) above, to the Class B-1
Certificates in clause (ii)(B)(h) above and to the Class
B-2 Certificates in clause (ii)(B)(i) above and (y) the
Class B-3 Principal Distribution Amount, until the Class
Certificate Balance thereof has been reduced to zero;
(iii) any amount remaining after the distributions in clauses
(i) and (ii) above, plus as specifically indicated below, from
amounts on deposit in the Excess Reserve Fund Account, shall be
distributed in the following order of priority:
(A) to the Class M-1 Certificates, any Unpaid Interest
Amount for such Class;
(B) to the Class M-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(C) to the Class M-2 Certificates, any Unpaid Interest
Amount for such Class;
(D) to the Class M-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(E) to the Class M-3 Certificates, any Unpaid Interest
Amount for such Class;
(F) to the Class M-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(G) to the Class M-4 Certificates, any Unpaid Interest
Amount for such Class;
(H) to the Class M-4 Certificates, any Unpaid Realized
Loss Amount for such Class;
(I) to the Class M-5 Certificates, any Unpaid Interest
Amount for such Class;
(J) to the Class M-5 Certificates, any Unpaid Realized
Loss Amount for such Class;
(K) to the Class M-6 Certificates, any Unpaid Interest
Amount for such Class;
(L) to the Class M-6 Certificates, any Unpaid Realized
Loss Amount for such Class;
(M) to the Class B-1 Certificates, any Unpaid Interest
Amount for such Class;
(N) to the Class B-1 Certificates, any Unpaid Realized
Loss Amount for such Class;
(O) to the Class B-2 Certificates, any Unpaid Interest
Amount for such Class;
(P) to the Class B-2 Certificates, any Unpaid Realized
Loss Amount for such Class;
(Q) to the Class B-3 Certificates, any Unpaid Interest
Amount for such Class;
(R) to the Class B-3 Certificates, any Unpaid Realized
Loss Amount for such Class;
(S) to the Excess Reserve Fund Account, the amount of
any Basis Risk Payment (without regard to Net Swap Receipts)
for such Distribution Date;
(T) from funds on deposit in the Excess Reserve Fund
Account with respect to such Distribution Date, an amount
equal to any remaining Basis Risk CarryForward Amount with
respect to the Offered Certificates for such Distribution
Date, allocated to the Offered Certificates in the same order
and priority in which the Accrued Certificate Interest
Distribution Amount is allocated among such Classes of
Certificates, with the allocation to the Class A Certificates
being (a) first, among the Class A Certificates, pro rata,
based on their respective Class Certificate Balances and (b)
second, any remaining amounts to the Class A Certificates, pro
rata, based on any Basis Risk CarryForward Amounts remaining
unpaid, in order to reimburse such unpaid amounts;
(U) to the Swap Account, the amount of any remaining
Defaulted Swap Termination Payment owed to the Swap Provider;
(V) to the Class X Certificates, the remainder of the
Class X Distributable Amount not distributed pursuant to
Sections 4.02(a)(iii)(A)-(U); and
(W) to the Class R Certificates, any remaining amount in
the Trust REMICs;
(iv) Solely for purposes of interest allocation calculations,
the Interest Remittance Amount attributable to Group I Mortgage
Loans will be allocated:
(1) first, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid
Interest Amount for the Class A-1 Certificates; and
(2) second, concurrently, to the Class A-2a, Class A-2b,
Class A-2c and Class A-2d Certificates, pro rata (based on the
amounts distributable or payable under Section 4.02(a)(i)(B)
to such Classes of Certificates), the Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amount
for the Class A-2a, Class A-2b, Class A-2c and Class A-2d
Certificates, respectively, to the extent not otherwise
previously paid from the Interest Remittance Amount
attributable to Group II Mortgage Loans.
(v) Solely for purposes of interest allocation calculations,
the Interest Remittance Amount attributable to Group II Mortgage
Loans will be allocated:
(1) first, concurrently, to the Class A-2a, Class A-2b,
Class A-2c and Class A-2d Certificates, pro rata (based on the
amounts distributable or payable under Section 4.02(a)(i)(B)
to such Classes of Certificates), the Accrued Certificate
Interest Distribution Amount and any Unpaid Interest Amount
for the Class A-2a, Class A-2b, Class A-2c and Class A-2d
Certificates, respectively; and
(2) second, to the Class A-1 Certificates, the Accrued
Certificate Interest Distribution Amount and any Unpaid
Interest Amount for the Class A-1 Certificates, to the extent
not otherwise previously paid from the Interest Remittance
Amount attributable to Group I Mortgage Loans.
If on any Distribution Date, as a result of the foregoing allocation
rules, any Class of Class A Certificates does not receive in full the related
Accrued Certificate Interest Distribution Amount or the related Unpaid Interest
Amount, if any, then such shortfall will be allocated to the Holders of such
Class, with interest thereon, on future Distribution Dates, as an Unpaid
Interest Amount, subject to the priorities described above.
(b) On each Distribution Date, prior to any distributions on any
other Class of Certificates, all amounts representing Prepayment Charges from
the Mortgage Loans received during the related Prepayment Period shall be
distributed by the Securities Administrator to the holders of the Class P
Certificates.
(c) All principal distributions to the Holders of the Class A
Certificates on any Distribution Date shall be allocated concurrently between
the Group I Class A Certificates, on the one hand, and the Group II Class A
Certificates, on the other hand, on a pro rata basis, based on the Class A
Principal Allocation Percentage for the Group I Class A Certificates and the
Group II Class A Certificates, as applicable, for such Distribution Date;
provided, however, that if the Class Certificate Balances of the Class A
Certificates in either Class A Certificate Group are reduced to zero, then the
remaining amount of principal distributions distributable to the Class A
Certificates on such Distribution Date, and the amount of such principal
distributions distributable on all subsequent Distribution Dates, shall be
distributed to the holders of the Class A Certificates in the other Class A
Certificate Group remaining Outstanding, in accordance with the principal
distribution allocations described in this Section 4.02(c), until their
respective Class Certificate Balances have been reduced to zero. Any
distributions of principal to the Group I Class A Certificates shall be made
first from Available Funds relating to the Group I Mortgage Loans, and any
distributions of principal to the Group II Class A Certificates shall be made
first from Available Funds relating to the Group II Mortgage Loans.
(d) Any principal distributions allocated to the Group II Class A
Certificates shall be allocated sequentially, first to the Class A-2a
Certificates, until their Class Certificate Balance has been reduced to zero,
then to the Class A-2b Certificates, until their Class Certificate Balance has
been reduced to zero, then to the Class A-2c Certificates, until their Class
Certificate Balance has been reduced to zero, and then to the Class A-2d
Certificates, until their Class Certificate Balance has been reduced to zero.
Notwithstanding the foregoing, on and after the Distribution Date on which the
aggregate Class Certificate Balances of the Subordinated Certificates and the
principal balance of the Class X Certificates have been reduced to zero, any
principal distributions allocated to the Group II Class A Certificates shall be
allocated pro rata among the Classes of Group II Class A Certificates, based on
their respective Class Certificate Balances, until their respective Class
Certificate Balances have been reduced to zero.
(e) On any Distribution Date, any Relief Act Shortfalls and Net
Prepayment Interest Shortfalls for such Distribution Date shall be allocated by
the Securities Administrator as a reduction in the following order:
(1) First, to the amount of interest payable to the
Class X Certificates; and
(2) Second, pro rata, as a reduction of the Accrued
Certificate Interest Distribution Amount for the Class A,
Class M and Class B Certificates, based on the amount of
interest to which such Classes would otherwise be entitled.
Section 4.03 Monthly Statements to Certificateholders. (a) Not later
than each Distribution Date, the Securities Administrator shall make available
to each Certificateholder, the Servicers, the Depositor and each Rating Agency a
statement setting forth with respect to the related distribution:
(i) the actual Distribution Date, the related Record Date, the
Interest Accrual Period(s) for each Class for such Distribution Date and
the LIBOR Determination Date for such Interest Accrual Period;
(ii) the amount of Available Funds;
(iii) the amount of Available Funds allocable to principal, the
Principal Remittance Amount (separately identifying the components
thereof) and the Principal Distribution Amount (and the calculation
thereof);
(iv) the amount of Available Funds allocable to interest and each
Interest Remittance Amount;
(v) the amount of any Unpaid Interest Amount for each Class included
in such distribution and any remaining Unpaid Interest Amounts after
giving effect to such distribution, any Basis Risk CarryForward Amount for
each Class and the amount of such Basis Risk CarryForward Amount covered
by withdrawals from the Excess Reserve Fund Account on such Distribution
Date;
(vi) if the distribution to the Holders of such Class of
Certificates is less than the full amount that would be distributable to
such Holders if there were sufficient funds available therefor, the amount
of the shortfall and the allocation of the shortfall as between principal
and interest, including any Basis Risk CarryForward Amount not covered by
amounts in the Excess Reserve Fund Account;
(vii) the Class Certificate Balance of each Class of Certificates
before and after giving effect to the distribution of principal on such
Distribution Date;
(viii) the Pool Stated Principal Balance for the Distribution Date;
(ix) the amount of the Expense Fees paid to or retained by the
Servicers, the Securities Administrator and the Custodians (stated
separately and in the aggregate) with respect to such Distribution Date,
in each case, identifying the general purpose of such fees;
(x) the Pass-Through Rate for each such Class of Certificates with
respect to such Distribution Date;
(xi) the amount of P&I Advances included in the distribution on such
Distribution Date reported by the Servicers (and the Trustee as successor
servicer and any other successor servicer, if applicable) as of the close
of business on the Determination Date immediately preceding such
Distribution Date;
(xii) the number and aggregate outstanding principal balances of
Mortgage Loans (1) as to which the Scheduled Payment is delinquent 31 to
60 days, 61 to 90 days and 91 or more days, (2) that have become REO
Property, (3) that are in foreclosure and (4) that are in bankruptcy, in
each case as of the close of business on the last Business Day of the
immediately preceding month;
(xiii) with respect to any Mortgage Loans that became REO Properties
during the preceding calendar month, the aggregate number of such Mortgage
Loans and the aggregate Stated Principal Balance of such Mortgage Loans as
of the close of business on the last Business Day of the immediately
preceding month and month and year of acquisition of such REO Properties;
(xiv) the total number and principal balance of any REO Properties
(and market value, if available) as of the close of business on the last
Business Day of the immediately preceding month;
(xv) whether a Trigger Event has occurred and is continuing
(including the calculation demonstrating the existence of the Trigger
Event;
(xvi) the amount on deposit in the Excess Reserve Fund Account
(after giving effect to distributions on such Distribution Date);
(xvii) in the aggregate and for each Class of Certificates, the
aggregate amount of Applied Realized Loss Amounts incurred during the
preceding calendar month and aggregate Applied Realized Loss Amounts
through such Distribution Date;
(xviii) the amount of any Net Monthly Excess Cash Flow on such
Distribution Date and the allocation of it to the Certificateholders with
respect to Unpaid Interest Amounts, Unpaid Realized Loss Amounts or Basis
Risk CarryForward Amounts;
(xix) the amount of any Net Swap Payments, Net Swap Receipts, Swap
Termination Payments or Defaulted Swap Termination Payments;
(xx) the calculations of LIBOR and Swap LIBOR;
(xxi) the Subordinated Amount and Specified Subordinated Amount;
(xxii) Prepayment Charges collected or paid (pursuant to Section
3.07(a)) by the Servicers;
(xxiii) the Cumulative Loss Percentage and the aggregate amount of
Realized Losses used to calculate the Cumulative Loss Percentage;
(xxiv) the amount distributed on the Class X Certificates;
(xxv) the amount of any Subsequent Recoveries for such Distribution
Date; and
(xxvi) the number of Mortgage Loans at the end of the applicable
reporting period, the pool factor, and the weighted average interest rate,
and weighted average remaining term;
In addition, each Form 10-D prepared and filed by the Securities
Administrator pursuant to Section 8.12 shall include the following information
with respect to the related distribution (to the extent such information is
provided by the Trustee to the Securities Administrator):
(i) material breaches of Mortgage Loan representations and
warranties of which the Securities Administrator has knowledge or has
received written notice; and
(ii) material breaches of any covenants under this Agreement of
which the Securities Administrator has knowledge or received written
notice.
(b) The Securities Administrator's responsibility for providing the
above statement to the Certificateholders, each Rating Agency and the Depositor
is limited, if applicable, to the availability, timeliness and accuracy of the
information derived from the Servicers and the Swap Provider. The Securities
Administrator shall make available the above statement via the Securities
Administrator's internet website. The Securities Administrator's website will
initially be located at xxxx://xxx.xxxxxxx.xxx and assistance in using the
website can be obtained by calling the Securities Administrator's customer
service desk at (000) 000-0000. Parties that are unable to use the website are
entitled to have a paper copy mailed to them via first class mail by calling the
customer service desk and indicating such. The Securities Administrator may
change the way the monthly statements to Certificateholders are distributed in
order to make such distribution more convenient and/or more accessible to the
above parties and the Securities Administrator shall provide timely and adequate
notification to all above parties regarding any such changes. The Securities
Administrator will not be liable for the dissemination of information in
accordance with this Agreement.
The Securities Administrator shall make available to each Analytics
Company, either electronically or via the Securities Administrator's internet
website, each statement to Certificateholders prepared pursuant to this Section
4.03(a). The Securities Administrator (and the applicable Servicer, if such
discrepancy results from or arises out of any information provided by such
Servicer pursuant to this Agreement) shall cooperate in good faith with the
Depositor to reconcile any discrepancies in such statements, and the Securities
Administrator shall provide any corrections to such statements to each Analytics
Company no more than 10 Business Days after such discrepancies have been
identified and resolved.
The Securities Administrator will also be entitled to rely on but
shall not be responsible for the content or accuracy of any information provided
by third parties for purposes of preparing the monthly statement to
Certificateholders and may affix thereto any disclaimer it deems appropriate in
its reasonable discretion (without suggesting liability on the part of any other
party hereto).
(c) Within a reasonable period of time after the end of each
calendar year, the Securities Administrator shall cause to be furnished to each
Person who at any time during the calendar year was a Certificateholder, a
statement containing the information set forth in clauses (a)(i) and (a)(ii) of
this Section 4.03 aggregated for such calendar year or applicable portion
thereof during which such Person was a Certificateholder. Such obligation of the
Securities Administrator shall be deemed to have been satisfied to the extent
that substantially comparable information shall be provided by the Securities
Administrator pursuant to any requirements of the Code as from time to time in
effect.
(d) The Securities Administrator shall be entitled to rely on
information provided by third parties for purposes of preparing the foregoing
report, but shall not be responsible for the accuracy of such information.
(e) Not later than the Determination Date for each Distribution Date
(and in the case of JPMorgan, not later than three Busienss Days after the end
of the related Prepayment Period in the case of any supplemental reporting of
Principal Prepayments made during such Prepayment Period) each Servicer shall
furnish to the Securities Administrator, a monthly remittance advice statement
(the "Servicer Remittance Report") containing the data fields set forth on
Exhibit X attached hereto (in such format mutually agreed upon by such Servicer
and the Securities Administrator) such information as shall be reasonably
requested (i) by the Depositor to enable the Depositor to disclose "static pool
information", as required by Item 1105 of Regulation AB, with respect to the
Mortgage Loans, and (ii) by the Securities Administrator to enable the
Securities Administrator to provide the reports required by Section 4.03(a) as
to the accompanying remittance and applicable Due Period and Prepayment Period
to which such remittance relates.
The Servicer Remittance Report shall, at a minimum, document, on
such Determination Date, Mortgage Loan payment activity on an individual
Mortgage Loan basis, as follows:
(i) with respect to each Scheduled Payment, the amount of such
remittance allocable to principal (including a separate breakdown of any
Principal Prepayment, including the date of such prepayment, and any
Prepayment Charges, received during the related Prepayment Period along
with a detailed report of interest on principal prepayment amounts
remitted in accordance with Section 3.25);
(ii) with respect to each Scheduled Payment, the amount of such
remittance allocable to interest;
(iii) the amount of servicing compensation received by such Servicer
during the prior distribution period; and
(iv) the individual and aggregate Stated Principal Balance of the
Mortgage Loans.
(v) the aggregate expenses reimbursed to such Servicer during the
prior distribution period pursuant to Section 3.11; and
(vi) the number and aggregate outstanding principal balances of
Mortgage Loans (a) delinquent 31 to 60 days, 61 to 90 days and 91 or more
days; (b) as to which foreclosure or bankruptcy proceedings of the related
mortgagor have commenced; and (c) as to which REO Property has been
acquired.
(f) Notwithstanding anything in Section 4.03(e) to the contrary
(other than any supplemental reports of Principal Prepayments by JPMorgan), the
Servicers shall be deemed to have satisfied the requirement to timely deliver
the Servicer Remittance Report if such report is received by the Securities
Administrator and the Depositor on or prior to the 18th calendar day of such
month in which the related Determination Date occurs; provided, however, that if
such 18th calendar day is a Sunday or a Monday which is not a Business Day, the
Servicers shall be deemed to have satisfied the requirement to timely deliver
the Servicer Remittance Report if the Securities Administrator and the Depositor
receive such report (i) on the next Business Day succeeding such 18th calendar
day, or (ii) on the Business Day immediately preceding such 18th calendar day,
if such succeeding Business Day is later than the 20th calendar day of such
calendar month.
(g) For all purposes of this Agreement, with respect to any Mortgage
Loan, delinquencies shall be determined by the Securities Administrator from
information provided by the Servicers and reported by the Securities
Administrator based on the "OTS" methodology for determining delinquencies on
mortgage loans similar to the Mortgage Loans. By way of example, a Mortgage Loan
would be delinquent with respect to a Scheduled Payment due on a Due Date if
such Scheduled Payment is not made by the close of business on the Mortgage
Loan's next succeeding Due Date, and a Mortgage Loan would be more than 30-days
Delinquent with respect to such Scheduled Payment if such Scheduled Payment were
not made by the close of business on the Mortgage Loan's second succeeding Due
Date. Each Servicer hereby represents and warrants to the Depositor that such
Servicer is not subject to any delinquency recognition policy established by the
primary safety and soundness regulator, if any, of such Servicer, that is more
restrictive than the foregoing delinquency recognition policy.
Section 4.04 Certain Matters Relating to the Determination of LIBOR.
LIBOR shall be calculated by the Securities Administrator in accordance with the
definition of LIBOR. Until all of the Offered Certificates are paid in full, the
Securities Administrator shall at all times retain at least four Reference Banks
for the purpose of determining LIBOR with respect to each LIBOR Determination
Date. The Securities Administrator initially shall designate the Reference Banks
(after consultation with the Depositor). Each "Reference Bank" shall be a
leading bank engaged in transactions in Eurodollar deposits in the international
Eurocurrency market, shall not control, be controlled by, or be under common
control with, the Securities Administrator and shall have an established place
of business in London. If any such Reference Bank should be unwilling or unable
to act as such or if the Securities Administrator should terminate its
appointment as Reference Bank, the Securities Administrator shall promptly
appoint or cause to be appointed another Reference Bank (after consultation with
the Depositor). The Securities Administrator shall have no liability or
responsibility to any Person for (i) the selection of any Reference Bank for
purposes of determining LIBOR or (ii) any inability to retain at least four
Reference Banks which is caused by circumstances beyond its reasonable control.
The Pass-Through Rate for each Class of Offered Certificates for
each Interest Accrual Period shall be determined by the Securities Administrator
on each LIBOR Determination Date so long as the Offered Certificates are
Outstanding on the basis of LIBOR and the respective formulae appearing in
footnotes corresponding to the Offered Certificates in the table relating to the
Certificates in the Preliminary Statement. The Securities Administrator shall
not have any liability or responsibility to any Person for its inability,
following a good-faith reasonable effort, to obtain quotations from the
Reference Banks or to determine the arithmetic mean referred to in the
definition of LIBOR, all as provided for in this Section 4.04 and the definition
of LIBOR. The establishment of LIBOR and each Pass-Through Rate for the Offered
Certificates by the Securities Administrator shall (in the absence of manifest
error) be final, conclusive and binding upon each Holder of a Certificate and
the Securities Administrator.
Section 4.05 Allocation of Applied Realized Loss Amounts. Any
Applied Realized Loss Amounts shall be allocated by the Securities Administrator
to the most junior Class of Subordinated Certificates then Outstanding in
reduction of the Class Certificate Balance thereof.
Section 4.06 Swap Account. On the Closing Date, the Securities
Administrator shall establish and maintain in its name, a separate non-interest
bearing trust account for the benefit of the holders of the Certificates (the
"Swap Account") as a part of the Trust Fund. The Swap Account shall be an
Eligible Account, and funds on deposit therein shall be held separate and apart
from, and shall not be commingled with, any other moneys, including, without
limitation, other moneys of the Securities Administrator held pursuant to this
Agreement.
On the Business Day immediately preceding each Distribution Date,
Swap Termination Payments, Net Swap Payments owed to the Swap Provider and Net
Swap Receipts for that Distribution Date will be deposited into the Swap
Account. Funds in the Swap Account will be distributed in the following order of
priority:
(i) to the Swap Provider, all Net Swap Payments, if any, owed to the
Swap Provider for that Distribution Date;
(ii) to the Swap Provider, any Swap Termination Payment, including,
without limitation, any Senior Defaulted Swap Termination Payment but not
including any other Defaulted Swap Termination Payment owed to the Swap
Provider for that Distribution Date;
(iii) to the Class A Certificates, to pay Accrued Certificate
Interest Distribution Amounts and, if applicable, any Unpaid Interest
Amounts as described in Section 4.02(a)(i), to the extent unpaid from
Available Funds;
(iv) sequentially, to the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, in that order, to pay Accrued Certificate Interest
Distribution Amounts and, if applicable, any Unpaid Interest Amounts as
described in Section 4.02(a)(i) and Section 4.02(a)(iii), to the extent
unpaid from Available Funds;
(v) to the Offered Certificates, to pay principal as described and,
in the same manner and order of priority as set forth, in Section
4.02(a)(ii)(A) or Section 4.02(a)(ii)(B), as applicable, but only to the
extent necessary to restore the Subordinated Amount to the Specified
Subordinated Amount for prior or current Realized Losses not previously
reimbursed, after giving effect to payments and distributions from
Available Funds;
(vi) to the Class A Certificates, to pay Basis Risk CarryForward
Amounts and, without duplication, Upper Tier CarryForward Amounts, pro
rata, based on their Class Certificate Balances for such Distribution
Date, up to the Swap Payment Allocation for each Class of Class A
Certificates and to the extent unpaid from Available Funds (including
Basis Risk Payments on deposit in the Excess Reserve Fund Account);
(vii) sequentially, to the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay Basis Risk CarryForward Amounts, and, without
duplication, Upper Tier CarryForward Amounts, up to the Swap Payment
Allocation for each Class of Class M and Class B Certificates and to the
extent unpaid from Available Funds (including Basis Risk Payments on
deposit in the Excess Reserve Fund Account);
(viii) to the Offered Certificates, any remaining unpaid Basis Risk
CarryForward Amount, and, without duplication, Upper Tier CarryForward
Amounts, pro rata, based on their respective remaining unpaid Basis Risk
CarryForward Amount after the allocation of payments as set forth in
clauses (vi) and (vii) above;
(ix) sequentially, to the Class M-1, Class M-2, Class M-3, Class
M-4, Class M-5, Class M-6, Class B-1, Class B-2 and Class B-3
Certificates, to pay any Unpaid Realized Loss Amount, to the extent unpaid
from Available Funds;
(x) to the Swap Provider, any remaining Defaulted Swap Termination
Payment owed to the Swap Provider for that Distribution Date; and
(xi) to the holders of the Class X Certificates, any remaining
amounts.
Notwithstanding the foregoing, in the event that the Trust receives
a Swap Termination Payment, the Securities Administrator shall use the Swap
Termination Payment to enter into a replacement interest rate swap agreement as
directed by the Depositor with a successor Swap Provider (or its guarantor)
meeting the ratings requirements set forth in the Interest Rate Swap Agreement
being terminated on the same remaining terms as those in the Interest Rate Swap
Agreement being terminated, so long as the Swap Termination Payment is
sufficient to obtain such replacement interest rate swap agreement. In the event
that the Trust receives a Swap Termination Payment and a successor Swap Provider
cannot be obtained, then the Securities Administrator shall deposit the Swap
Termination Payment into the reserve account that is a sub-account of the Swap
Account. On each subsequent Distribution Date (so long as funds are available in
the reserve account), the Securities Administrator shall withdraw from the
reserve account and deposit into the Swap Account an amount equal to the amount
of any Net Swap Receipt due the Trust (calculated in accordance with the terms
of the original Interest Rate Swap Agreement) and treat such amount as a Net
Swap Receipt for purposes of determining the distributions from the Swap
Account. In no event shall the Securities Administrator be responsible for the
selection of any successor or replacement swap provider or any shortfalls caused
by a failure to enter into a replacement interest rate swap agreement.
Upon termination of the Trust, any amounts remaining in the Swap
Account shall be distributed pursuant to the priorities set forth in this
Section 4.06.
In the event that, upon the Trust entering into a replacement
interest rate swap following the occurrence of an Additional Termination Event
of the type described in Part 1(h)(ii) of the Interest Rate Swap Agreement, the
Trust is entitled to receive a payment from a replacement swap provider, the
Securities Administrator shall direct the replacement swap provider to make such
payment to the Swap Account. Any Senior Defaulted Swap Termination Payment shall
be made from the Swap Account to the Swap Provider immediately upon receipt of
such payment, regardless of whether the date of receipt thereof is a
Distribution Date. To the extent that any Replacement Swap Provider Payment is
made to an account other than the Swap Account, then, notwithstanding anything
to the contrary contained in this Agreement, any Senior Defaulted Swap
Termination Payment shall be paid to the Swap Provider immediately upon receipt
of such Replacement Swap Provider Payment, regardless of whether the date of
receipt thereof is a Distribution Date and without regard to anything to the
contrary contained in this Agreement. For the avoidance of doubt, the parties
agree that the Swap Provider shall have first priority to any Replacement Swap
Provider Payment over the payment by the Trust to Certificateholders, the
Securities Administrator, any Servicer, any Custodian, any Responsible Party,
the Trustee or any other Person.
The Securities Administrator shall account for the Swap Account as
an asset of a grantor trust under subpart E, Part I of subchapter J of the Code
and not as an asset of any Trust REMIC created pursuant to this Agreement. The
beneficial owners of the Swap Account are the Class X Certificateholders. For
federal income tax purposes, Net Swap Payments and Swap Termination Payments
(other than Senior Defaulted Swap Termination Payments) payable to the Swap
Provider shall be deemed to be paid to the Swap Account from the Upper-Tier
REMIC, first, by the Holder of the Class X Certificates (in respect of the Class
IO Interest and, if applicable, the Class X Interest) and second, other than any
Defaulted Swap Termination Payment, from the Upper-Tier REMIC by the Holders of
the applicable Class or Classes of Offered Certificates (in respect of Class IO
Shortfalls) as and to the extent provided in Section 8.13.
Any Basis Risk CarryForward Amounts and, without duplication,
Upper-Tier CarryForward Amounts distributed by the Securities Administrator to
the Offered Certificateholders shall be accounted for by the Securities
Administrator, for federal income tax purposes, as amounts paid first to the
Holders of the Class X Certificates in respect of the Class X Interest and (to
the extent remaining after payments to the Swap Provider) the Class IO Interest,
and then to the respective Class or Classes of Offered Certificates. In
addition, the Securities Administrator shall account for the rights of Holders
of each Class of Offered Certificates to receive payments of Upper-Tier
CarryForward Amounts (including, but without duplication Basis Risk CarryForward
Amounts) from the Swap Account (along with Basis Risk CarryForward Amounts
payable from the Excess Reserve Fund Account) as rights in a separate limited
recourse interest rate cap contract written by the Class X Certificateholders in
favor of Holders of each such Class.
The Swap Account shall be an "outside reserve fund" for federal
income tax purposes and not an asset of any Trust REMIC. Furthermore, the
Holders of the Class X Certificates shall be the beneficial owners of the Swap
Account for all federal income tax purposes, and shall be taxable on all income
earned thereon.
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. To the extent that the Swap Provider fails to make any payment
required under terms of the Interest Rate Swap Agreement, the Securities
Administrator shall immediately demand that Xxxxxx Xxxxxxx, the guarantor of the
Swap Provider's obligations under the guarantee of Xxxxxx Xxxxxxx relating to
the Interest Rate Swap Agreement, make any and all payments then required to be
made by Xxxxxx Xxxxxxx pursuant to such guarantee. 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.
ARTICLE V
THE CERTIFICATES
Section 5.01 The Certificates. The Certificates shall be
substantially in the forms attached hereto as exhibits. The Certificates shall
be issuable in registered form, in the minimum denominations, integral multiples
in excess thereof (except that one Certificate in each Class may be issued in a
different amount) and aggregate denominations per Class set forth in the
Preliminary Statement.
The Depositor hereby directs the Securities Administrator to
register the Class X and Class P Certificates in the name of the Depositor or
its designee. On a date as to which the Depositor notifies the Securities
Administrator, the Securities Administrator shall transfer the Class X and Class
P Certificates in the name of the NIM Trustee, or such other name or names as
the Depositor shall request, and to deliver the Class X and Class P Certificates
to the NIM Trustee or to such other Person or Persons as the Depositor shall
request.
Subject to Section 10.02 respecting the final distribution on the
Certificates, on each Distribution Date the Securities Administrator shall make
distributions to each Certificateholder of record on the preceding Record Date
either (x) by wire transfer in immediately available funds to the account of
such Holder at a bank or other entity having appropriate facilities therefor, if
such Holder has so notified the Securities Administrator at least five Business
Days prior to the related Record Date or (y) by check mailed by first class mail
to such Certificateholder at the address of such Holder appearing in the
Certificate Register.
The Certificates shall be executed by manual or facsimile signature
on behalf of the Securities Administrator by an authorized officer. Certificates
bearing the manual or facsimile signatures of individuals who were, at the time
such signatures were affixed, authorized to sign on behalf of the Securities
Administrator shall bind the Securities Administrator, notwithstanding that such
individuals or any of them have ceased to be so authorized prior to the
authentication and delivery of any 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 authenticated
by the Securities Administrator by manual signature, and such authentication
upon any Certificate shall be conclusive evidence, and the only evidence, that
such Certificate has been duly executed and delivered hereunder. All
Certificates shall be dated the date of their authentication. On the Closing
Date, the Securities Administrator shall authenticate the Certificates to be
issued at the direction of the Depositor or any Affiliate thereof.
Section 5.02 Certificate Register; Registration of Transfer and
Exchange of Certificates. (a) The Securities Administrator shall maintain, or
cause to be maintained in accordance with the provisions of Section 5.06, a
Certificate Register for the Trust Fund in which, subject to the provisions of
subsections (b) and (c) below and to such reasonable regulations as it may
prescribe, the Securities Administrator shall provide for the registration of
Certificates and of transfers and exchanges of Certificates as herein provided.
Upon surrender for registration of transfer of any Certificate, the Securities
Administrator shall execute and deliver, in the name of the designated
transferee or transferees, one or more new Certificates of the same Class and
aggregate Percentage Interest.
At the option of a Certificateholder, Certificates may be exchanged
for other Certificates of the same Class in authorized denominations and
evidencing the same aggregate Percentage Interest upon surrender of the
Certificates to be exchanged at the office or agency of the Securities
Administrator. Whenever any Certificates are so surrendered for exchange, the
Securities Administrator shall execute, authenticate, and deliver the
Certificates which the Certificateholder making the exchange is entitled to
receive. Every Certificate presented or surrendered for registration of transfer
or exchange shall be accompanied by a written instrument of transfer in form
satisfactory to the Securities Administrator duly executed by the Holder thereof
or his attorney duly authorized in writing.
No service charge to the Certificateholders shall be made for any
registration of transfer or exchange of Certificates, but payment of a sum
sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Certificates may be required.
All Certificates surrendered for registration of transfer or
exchange shall be cancelled and subsequently destroyed by the Securities
Administrator in accordance with the Securities Administrator's customary
procedures.
(b) No transfer of a Private Certificate shall be made unless such
transfer is made pursuant to an effective registration statement under the
Securities Act and any applicable state securities laws or is exempt from the
registration requirements under said Act and such state securities laws. In
determining whether a transfer is being made pursuant to an effective
registration statement, the Securities Administrator shall be entitled to rely
solely upon a written notice to such effect from the Depositor. Except with
respect to (i) the transfer of the Class X, Class P or Class R Certificates to
the Depositor or an Affiliate of the Depositor, (ii) the transfer of the Class X
or Class P Certificates to the NIM Issuer or the NIM Trustee, or (iii) a
transfer of the Class X or Class P Certificates from the NIM Issuer or the NIM
Trustee to the Depositor or an Affiliate of the Depositor, in the event that a
transfer of a Private Certificate which is a Physical Certificate is to be made
in reliance upon an exemption from the Securities Act and such laws, in order to
assure compliance with the Securities Act and such laws, the Certificateholder
desiring to effect such transfer shall certify to the Securities Administrator
in writing the facts surrounding the transfer in substantially the form set
forth in Exhibit H (the "Transferor Certificate") and either (i) there shall be
delivered to the Securities Administrator a letter in substantially the form of
Exhibit I (the "Rule 144A Letter") or (ii) there shall be delivered to the
Securities Administrator at the expense of the transferor an Opinion of Counsel
that such transfer may be made without registration under the Securities Act. In
the event that a transfer of a Private Certificate which is a Book-Entry
Certificate is to be made in reliance upon an exemption from the Securities Act
and such laws, in order to assure compliance with the Securities Act and such
laws, the Certificateholder desiring to effect such transfer will be deemed to
have made as of the transfer date each of the certifications set forth in the
Transferor Certificate in respect of such Certificate and the transferee will be
deemed to have made as of the transfer date each of the certifications set forth
in the Rule 144A Letter in respect of such Certificate, in each case as if such
Certificate were evidenced by a Physical Certificate. The Depositor shall
provide to any Holder of a Private Certificate and any prospective transferee
designated by any such Holder, information regarding the related Certificates
and the Mortgage Loans and such other information as shall be necessary to
satisfy the condition to eligibility set forth in Rule 144A(d)(4) for transfer
of any such Certificate without registration thereof under the Securities Act
pursuant to the registration exemption provided by Rule 144A. The Securities
Administrator and the Servicers shall cooperate with the Depositor in providing
the Rule 144A information referenced in the preceding sentence, including
providing to the Depositor such information regarding the Certificates, the
Mortgage Loans and other matters regarding the Trust Fund as the Depositor shall
reasonably request to meet its obligation under the preceding sentence. Each
Holder of a Private Certificate desiring to effect such transfer shall, and does
hereby agree to, indemnify the Trustee, the Depositor, the Securities
Administrator and each 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.
Except with respect to (i) the transfer of the Class R, Class X or
Class P Certificates to the Depositor or an Affiliate of the Depositor, (ii) the
transfer of the Class X or Class P Certificates to the NIM Issuer or the NIM
Trustee, or (iii) a transfer of the Class X or Class P Certificates from the NIM
Issuer or the NIM Trustee to the Depositor or an Affiliate of the Depositor, no
transfer of an ERISA-Restricted Certificate shall be made unless the Securities
Administrator shall have received either (i) a representation from the
transferee of such Certificate acceptable to and in form and substance
satisfactory to the Securities Administrator (in the event such Certificate is a
Private Certificate or a Residual Certificate, such requirement is satisfied
only by the Securities Administrator's receipt of a representation letter from
the transferee 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 to effect
such transfer, or (ii) in the case of an ERISA-Restricted Certificate other than
a Residual Certificate or a Class P Certificate that has been the subject of an
ERISA-Qualifying Underwriting, and the purchaser 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 (iii) in the
case of any such ERISA-Restricted Certificate other than a Residual Certificate
or Class P Certificate presented for registration in the name of an employee
benefit plan subject to Title I of ERISA, a plan or arrangement subject to
Section 4975 of the Code (or comparable provisions of any subsequent
enactments), or a plan subject to Similar Law, or a trustee of any such plan or
any other person acting on behalf of any such plan or arrangement or using such
plan's or arrangement's assets, an Opinion of Counsel satisfactory to the
Securities Administrator, which Opinion of Counsel shall not be an expense of
the Servicers, the Depositor, the Securities Administrator or the Trust Fund,
addressed to the Securities Administrator, 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 Depositor, the Securities
Administrator or the Servicers 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 an ERISA-Restricted Certificate that is not a Private
Certificate or a Residual Certificate, in the event the representation letter
referred to in the preceding sentence is not furnished, such representation
shall be deemed to have been made to the Securities Administrator 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 an ERISA-Restricted Certificate, other
than a Class P Certificate or Residual Certificate, to or on behalf of an
employee benefit plan subject to ERISA, the Code or Similar Law without the
delivery to the Securities Administrator 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 or Residual
Certificate to a transferee that does not make the representation in clause (i)
above shall be void and of no effect.
To the extent permitted under applicable law (including, but not
limited to, ERISA), the Securities Administrator 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(b) or for making any payments
due on such Certificate to the Holder thereof or taking any other action with
respect to such Holder under the provisions of this Agreement so long as the
transfer was registered by the Securities Administrator 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.
(c) Each Person who has or who acquires any Ownership Interest in a
Residual Certificate shall be deemed by the acceptance or acquisition of such
Ownership Interest to have agreed to be bound by the following provisions, and
the rights of each Person acquiring any Ownership Interest in a Residual
Certificate are expressly subject to the following provisions:
(i) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall be a Permitted Transferee and shall promptly
notify the Securities Administrator of any change or impending change in
its status as a Permitted Transferee;
(ii) No Ownership Interest in a Residual Certificate may be
registered on the Closing Date or thereafter transferred, and the
Securities Administrator shall not register the Transfer of any Residual
Certificate unless, in addition to the certificates required to be
delivered to the Securities Administrator under subparagraph (b) above,
the Securities Administrator shall have been furnished with an affidavit
(a "Transfer Affidavit") of the initial owner or the proposed transferee
in the form attached hereto as Exhibit G;
(iii) Each Person holding or acquiring any Ownership Interest in a
Residual Certificate shall agree (A) to obtain a Transfer Affidavit from
any other Person to whom such Person attempts to Transfer its Ownership
Interest in a Residual Certificate, (B) to obtain a Transfer Affidavit
from any Person for whom such Person is acting as nominee, trustee or
agent in connection with any Transfer of a Residual Certificate and (C)
not to Transfer its Ownership Interest in a Residual Certificate or to
cause the Transfer of an Ownership Interest in a Residual Certificate to
any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee;
(iv) Any attempted or purported Transfer of any Ownership Interest
in a Residual Certificate in violation of the provisions of this Section
5.02(c) shall be absolutely null and void and shall vest no rights in the
purported Transferee. If any purported transferee shall become a Holder of
a Residual Certificate in violation of the provisions of this Section
5.02(c), then the last preceding Permitted Transferee shall be restored to
all rights as Holder thereof retroactive to the date of registration of
Transfer of such Residual Certificate. The Securities Administrator shall
not have any liability to any Person for any registration of Transfer of a
Residual Certificate that is in fact not permitted by Section 5.02(b) and
this Section 5.02(c) 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 after receipt of the related Transfer Affidavit, Transferor
Certificate and the Rule 144A Letter. The Securities Administrator shall
be entitled but not obligated to recover from any Holder of a Residual
Certificate that was in fact a Non-Permitted Transferee at the time it
became a Holder or, at such subsequent time as it became a Non-Permitted
Transferee, all payments made on such Residual Certificate at and after
either such time. Any such payments so recovered by the Securities
Administrator shall be paid and delivered by the Securities Administrator
to the last preceding Permitted Transferee of such Certificate; and
(v) The Depositor shall use its best efforts to make available, upon
receipt of written request from the Securities Administrator, all
information necessary to compute any tax imposed under Section 860E(e) of
the Code as a result of a Transfer of an Ownership Interest in a Residual
Certificate to any Holder who is a Non-Permitted Transferee.
The restrictions on Transfers of a Residual Certificate set forth in
this Section 5.02(c) shall cease to apply (and the applicable portions of the
legend on a Residual Certificate may be deleted) with respect to Transfers
occurring after delivery to the Securities Administrator of an Opinion of
Counsel, which Opinion of Counsel shall not be an expense of the Trust Fund or
the Securities Administrator, to the effect that the elimination of such
restrictions will not cause any Trust REMIC hereunder to fail to qualify as a
REMIC at any time that the Certificates are Outstanding or result in the
imposition of any tax on the Trust Fund, a Certificateholder or another Person.
Each Person holding or acquiring any Ownership Interest in a Residual
Certificate hereby consents to any amendment of this Agreement which, based on
an Opinion of Counsel furnished to the Securities Administrator, is reasonably
necessary (a) to ensure that the record ownership of, or any beneficial interest
in, a Residual Certificate is not transferred, directly or indirectly, to a
Person that is a Non-Permitted Transferee and (b) to provide for a means to
compel the Transfer of a Residual Certificate which is held by a Person that is
a Non-Permitted Transferee to a Holder that is a Permitted Transferee.
(d) The preparation and delivery of all certificates and opinions
referred to above in this Section 5.02 in connection with transfer shall be at
the expense of the parties to such transfers.
(e) Except as provided 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 the 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 Book-Entry Certificates; (iii)
ownership and transfers of registration of the Book-Entry 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 deal with the Depository, Depository Participants and
indirect participating firms as representatives of the Certificate Owners of the
Book-Entry Certificates for purposes of exercising the rights of holders under
this Agreement, and requests and directions for and votes of such
representatives shall not be deemed to be inconsistent if they are made with
respect to different Certificate Owners; and (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.
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 Owner. Each
Depository Participant shall only transfer Book-Entry Certificates of
Certificate Owners it represents or of brokerage firms for which it acts as
agent in accordance with the Depository's normal procedures.
If (x) (i) the Depository or the Depositor advises the Securities
Administrator in writing that the Depository is no longer willing or able to
properly discharge its responsibilities as Depository, and (ii) the Securities
Administrator or the Depositor is unable to locate a qualified successor, or (y)
the Depositor notifies the Depository (and the Securities Administrator
consents) of its intent to terminate the book-entry system through the
Depository, and, upon receipt of notice of such intent from the Depository, the
Depository Participants holding beneficial interests in the Book-Entry
Certificates agree to initiate such termination, the Securities Administrator
shall notify all Certificate Owners, through the Depository, of the occurrence
of any such event and of the availability of definitive, fully-registered
Certificates (the "Definitive Certificates") to Certificate Owners requesting
the same. Upon surrender to the Securities Administrator of the related Class of
Certificates by the Depository, accompanied by the instructions from the
Depository for registration, the Securities Administrator shall issue the
Definitive Certificates. None of the Servicers, the Depositor or the Securities
Administrator shall be liable for any delay in delivery of such instruction and
each may conclusively rely on, and shall be protected in relying on, such
instructions. The Depositor shall provide the Securities Administrator with an
adequate inventory of Certificates to facilitate the issuance and transfer of
Definitive Certificates. Upon the issuance of Definitive Certificates all
references herein to obligations imposed upon or to be performed by the
Depository shall be deemed to be imposed upon and performed by the Securities
Administrator, to the extent applicable with respect to such Definitive
Certificates and the Securities Administrator and the Trustee shall recognize
the Holders of the Definitive Certificates as Certificateholders hereunder;
provided that the Securities Administrator shall not by virtue of its assumption
of such obligations become liable to any party for any act or failure to act of
the Depository.
(f) Each Private Certificate presented or surrendered for
registration of transfer or exchange shall be accompanied by a written
instrument of transfer and accompanied by IRS Form W-8ECI, W-8BEN, W-8IMY (and
all appropriate attachments) or W-9 in form satisfactory to the Securities
Administrator, duly executed by the Certificateholder or his attorney duly
authorized in writing. Each Certificate presented or surrendered for
registration of transfer or exchange shall be canceled and subsequently disposed
of by the Securities Administrator in accordance with its customary practice. No
service charge shall be made for any registration of transfer or exchange of
Private Certificates, but the Securities Administrator may require payment of a
sum sufficient to cover any tax or governmental charge that may be imposed in
connection with any transfer or exchange of Private Certificates.
Section 5.03 Mutilated, Destroyed, Lost or Stolen Certificates. If
(a) any mutilated Certificate is surrendered to the Securities Administrator, or
the Securities Administrator receives evidence to its satisfaction of the
destruction, loss or theft of any Certificate and (b) there is delivered to the
Depositor, the Servicers and the Securities Administrator such security or
indemnity as may be required by them to hold each of them harmless, then, in the
absence of notice to the Securities Administrator that such Certificate has been
acquired by a bona fide purchaser, the Securities Administrator shall execute,
authenticate and deliver, in exchange for or in lieu of any such mutilated,
destroyed, lost or stolen Certificate, a new Certificate of like Class, tenor
and Percentage Interest. In connection with the issuance of any new Certificate
under this Section 5.03, the Securities Administrator may require the payment of
a sum sufficient to cover any tax or other governmental charge that may be
imposed in relation thereto and any other expenses (including the fees and
expenses of the Securities Administrator) connected therewith. Any replacement
Certificate issued pursuant to this Section 5.03 shall constitute complete and
indefeasible evidence of ownership, 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 Servicers, the Securities
Administrator, the Trustee, the Depositor, and any agent of a Servicer, the
Depositor, the Securities Administrator, or the Trustee may treat the Person in
whose name any Certificate is registered as the owner of such Certificate for
the purpose of receiving distributions as provided in this Agreement and for all
other purposes whatsoever, and none of the Servicers, the Securities
Administrator, the Trustee, the Depositor, or any agent of a Servicer, the
Depositor, the Securities Administrator, or the Trustee shall be affected by any
notice to the contrary.
Section 5.05 Access to List of Certificateholders' Names and
Addresses. If three or more Certificateholders (a) request such information in
writing from the Securities Administrator, (b) state that such
Certificateholders desire to communicate with other Certificateholders with
respect to their rights under this Agreement or under the Certificates, and (c)
provide a copy of the communication which such Certificateholders propose to
transmit, or if the Depositor, the Trustee or a Servicer shall request such
information in writing from the Securities Administrator, then the Securities
Administrator shall, within ten Business Days after the receipt of such request,
provide the Depositor, the Trustee, such Servicer or the Certificateholders at
such recipients' expense the most recent list of the Certificateholders of such
Trust Fund held by the Securities Administrator, if any. The Depositor and every
Certificateholder, by receiving and holding a Certificate, agree that the
Securities Administrator shall not be held accountable by reason of the
disclosure of any such information as to the list of the Certificateholders
hereunder, regardless of the source from which such information was derived.
Section 5.06 Maintenance of Office or Agency. The Securities
Administrator initially designates its Corporate Trust Office for registration
of transfer or exchange purposes located at Sixth Street and Marquette Avenue,
Minneapolis, Minnesota 55479, Attention: Corporate Trust Services - MSM
2006-HE2. The Securities Administrator shall give prompt written notice to the
Certificateholders of any change in such location of any such office or agency.
ARTICLE VI
THE DEPOSITOR AND THE SERVICERS
Section 6.01 Respective Liabilities of the Depositor and the
Servicers. The Depositor and each of the Servicers shall each be liable in
accordance herewith only to the extent of the obligations specifically and
respectively imposed upon and undertaken by them herein.
Section 6.02 Merger or Consolidation of the Depositor or a Servicer.
The Depositor and each of the Servicers will each keep in full effect its
existence, rights and franchises as a corporation or federally chartered savings
bank, as the case may be, under the laws of the United States or under the laws
of one of the states thereof and will each obtain and preserve its qualification
to do business as a foreign corporation in each jurisdiction in which such
qualification is or shall be necessary to protect the validity and
enforceability of this Agreement, or any of the Mortgage Loans and to perform
its respective duties under this Agreement.
Any Person into which the Depositor or a Servicer may be merged or
consolidated, or any Person resulting from any merger or consolidation to which
the Depositor or a Servicer shall be a party, or any person succeeding to the
business of the Depositor or a Servicer, shall be the successor of the Depositor
or such Servicer, 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 the
successor or surviving Person to such Servicer shall be qualified to service
mortgage loans on behalf of, Xxxxxx Xxx or Freddie Mac. As a condition to any
succession to any Servicer under this Agreement by any Person (i) into which a
Servicer may be merged or consolidated, or (ii) which may be appointed as a
successor to a Servicer, such Servicer shall provide to the Depositor, at least
15 calendar days prior to the effective date of such succession or appointment,
(x) written notice to the Depositor of such succession or appointment and (y) in
writing and in form and substance reasonably satisfactory to the Depositor, all
information reasonably necessary to enable the Securities Administrator,
pursuant to Section 8.12(g), to accurately and timely report the event under
Item 6.02 of Form 8-K pursuant to the Exchange Act (if such reports under the
Exchange Act are then required to be filed under the Exchange Act).
Section 6.03 Limitation on Liability of the Depositor, the Servicers
and Others. Neither the Depositor, the Servicers nor any of their respective
directors, officers, employees or agents shall be under any liability to 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, the
Servicers or any such Person against any breach of representations or warranties
made by it herein or protect the Depositor, the Servicers or any such Person
from any liability which would otherwise be imposed by reasons of willful
misfeasance, bad faith or negligence (or gross negligence in the case of the
Depositor) in the performance of duties or by reason of reckless disregard of
obligations and duties hereunder. The Depositor, each Servicer and any director,
officer, employee or agent of the Depositor and each 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 Depositor and its
Affiliates, the Sponsor, each Servicer and any director, officer, employee or
agent of the Depositor, the Sponsor or each Servicer shall be indemnified by the
Trust Fund and held harmless against any loss, liability or expense incurred in
connection with any audit, controversy or judicial proceeding relating to a
governmental taxing authority or 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 willful misfeasance, bad faith
or negligence (or gross negligence in the case of the Depositor) in the
performance of duties hereunder or by reason of reckless disregard of
obligations and duties hereunder. Neither the Depositor nor any Servicer shall
be under any obligation to appear in, prosecute or defend any legal action that
is not incidental to its respective duties hereunder and which in its opinion
may involve it in any expense or liability; provided, however, that each of the
Depositor and each Servicer may in its discretion undertake any such action (or
direct the Trustee to undertake such actions pursuant to Section 2.03 for the
benefit of the Certificateholders) that it may deem necessary or desirable in
respect of this Agreement and the rights and duties of the parties hereto and
interests of the Trustee and the Certificateholders hereunder. In such event,
the legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and the
Depositor and the applicable Servicer shall be entitled to be reimbursed
therefor out of the applicable Collection Account.
Section 6.04 Limitation on Resignation of a Servicer. Subject to
Sections 7.01 and 10.07, no Servicer shall assign this Agreement or resign from
the obligations and duties hereby imposed on it except by mutual consent of the
applicable Servicer, the Depositor and the Trustee or upon the determination
that its duties hereunder are no longer permissible under applicable law and
such incapacity cannot be cured by such Servicer without the incurrence of
unreasonable expense. Any such determination permitting the resignation of a
Servicer shall be evidenced by an Opinion of Counsel to such effect delivered to
the Depositor and the Trustee which Opinion of Counsel shall be in form and
substance acceptable to the Depositor and the Trustee. No such resignation shall
become effective until a successor shall have assumed such Servicer's
responsibilities and obligations hereunder.
Notwithstanding the provisions of Section 6.04 herein to the
contrary, in the event that a Servicer determines that it will no longer engage
in the business of servicing mortgage loans, such Servicer may assign its rights
under this Agreement, provided that, (i) the Depositor in its sole discretion
has consented, which consent shall not be unreasonably withheld, (ii) the Rating
Agencies' ratings of the Certificates in effect immediately prior to such action
will not be qualified, reduced or withdrawn as a result thereof (as evidenced by
a letter to such effect from the Rating Agencies) and (iii) such Servicer shall
be liable for all costs and expenses associated with the transfer of servicing,
provided, further, that such Servicer shall indemnify and hold each of the Trust
Fund, the Trustee, the Custodians, the Depositor, the Securities Administrator,
the other Servicers hereunder, any sub-servicer, the successor servicer 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 such party may sustain in any way related to such
assignment except with respect to a successor servicer's failure to comply with
the terms of this Agreement. No assignment by such Servicer shall become
effective until a successor servicer acceptable to the Depositor and the Trustee
shall have assumed in writing such Servicer's responsibilities, duties,
liabilities (other than those liabilities arising prior to the appointment of
such successor) and obligations under this Agreement. Any such assignment shall
not relieve the applicable Servicer of responsibility for any of the obligations
specified herein except to the extent that such responsibilities have been
expressly assumed by the successor servicer.
Section 6.05 Additional Indemnification by the Servicers;
Third-Party Claims. (a) Each Servicer, severally and not jointly, shall
indemnify the applicable Responsible Party, the Depositor, the Sponsor, the
Securities Administrator and the Trustee and any director, officer, employee or
agent of the Depositor, the Sponsor, the Securities Administrator or the Trustee
and hold them harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
in any way related to (i) any breach by such Servicer of any of its
representations and warranties referred to in Section 2.03(a), (ii) any error in
any tax or information return prepared by such Servicer or (iii) the failure of
such Servicer to perform its duties and service the Mortgage Loans in compliance
with the terms of this Agreement (including, without limitation, the failure to
deliver accurate and complete information on a timely basis pursuant to Section
4.03(e). The applicable Servicer immediately shall notify the Depositor, the
Securities Administrator and the Trustee if such claim is made by a third-party
with respect to this Agreement or the Mortgage Loans, assume (with the prior
written consent of the Depositor and the Securities Administrator) 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 it or the Depositor, the Sponsor, the
applicable Responsible Party, the Securities Administrator or the Trustee in
respect of such claim.
(b) Notwithstanding anything to the contrary contained in this
Agreement, each Servicer shall indemnify the Depositor, the Sponsor, the
Trustee, the Securities Administrator and any director, officer, employee or
agent of the Depositor, the Sponsor, the Trustee or the Securities Administrator
and hold them harmless against any and all claims, losses, damages, penalties,
fines, forfeitures, reasonable and necessary legal fees and related costs,
judgments, and any other costs, fees and expenses that any of them may sustain
in any way related to any failure by such Servicer or any Subservicer engaged by
such Servicer or any Subcontractor utilized by such Servicer to deliver any
information, report, certification or accountants' letter when and as required
under Sections 3.22, 3.23, 6.02 or 8.12, including without limitation any
failure by such Servicer to identify pursuant to Section 3.02(e) any
Subcontractor "participating in the servicing function" within the meaning of
Item 1122 of Regulation AB.
(c) If the indemnification provided for in this Section 6.05 is
unavailable or insufficient to hold harmless any Person entitled to
indemnification thereunder, then such Servicer shall contribute to the amount
paid or payable to the Person entitled to indemnification as a result of the
losses, claims, damages or liabilities of such Person in such proportion as is
appropriate to reflect the relative fault of such Person on the one hand and
such Servicer, on the other, in connection with the Servicer's obligations
pursuant to this Section 6.05. This Section 6.05 shall survive the termination
of this Agreement or the earlier resignation or removal of each Servicer.
ARTICLE VII
DEFAULT
Section 7.01 Events of Default. "Event of Default", wherever used
herein, means, with respect to each Servicer individually, any one of the
following events:
(a) any failure by a Servicer to remit to the Securities
Administrator any payment required to be made under the terms of this Agreement
which continues unremedied for a period of one Business Day, or in the case of
Xxxxx Fargo, two Business Days, after the date upon which written notice of such
failure, requiring the same to be remedied, shall have been given to such
Servicer by the Depositor, the Securities Administrator, or to such Servicer,
the Depositor, the Securities Administrator and the Trustee by
Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates; or
(b) any failure on the part of a Servicer duly to observe or perform
in any material respect any other of the covenants or agreements on the part of
such Servicer set forth in this Agreement which continues unremedied for a
period of sixty (60) days (except that (x) such number of days shall be fifteen
in the case of a failure to pay any premium for any insurance policy required to
be maintained under this Agreement and (y) such number of days shall be nine in
the case of a failure to observe or perform any of the obligations set forth in
Sections 3.02, 3.22, 3.23, 6.02 or 8.12), after the earlier of (i) the date on
which written notice of such failure, requiring the same to be remedied, shall
have been given to such Servicer by the Depositor, the Securities Administrator
or the Trustee, or to such Servicer, the Depositor, the Securities Administrator
and the Trustee by Certificateholders entitled to at least 25% of the Voting
Rights in the Certificates and (ii) actual knowledge of such failure by a
Servicing Officer of such Servicer; or
(c) a decree or order of a court or agency or supervisory authority
having jurisdiction for the appointment of a conservator or receiver or
liquidator in any insolvency, bankruptcy, 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 a Servicer and such
decree or order shall have remained in force undischarged or unstayed for a
period of sixty days; or
(d) a Servicer shall consent to the appointment of a conservator or
receiver or liquidator in any insolvency, bankruptcy, readjustment of debt,
marshalling of assets and liabilities or similar proceedings of or relating to a
Servicer or of or relating to all or substantially all of its property; or
(e) a 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
(f) a breach of any representation and warranty of a Servicer
referred to in Section 2.03(a), which materially and adversely affects the
interests of the Certificateholders and which continues unremedied for a period
of thirty days after the date upon which written notice of such breach is given
to such Servicer by the Trustee, the Securities Administrator or the Depositor,
or to such Servicer, the Trustee, the Securities Administrator or the Depositor
by Certificateholders entitled to at least 25% of the Voting Rights in the
Certificates; or
(g) either (i) with respect to Xxxxx Fargo or JPMorgan, any
withdrawal or downgrade of two or more levels (i.e., from "Above Average" to
"Below Average" or the equivalent) of the servicer rating, as of the Closing
Date, of such Servicer by any Rating Agency which results in a downgrade,
qualification or withdrawal of the rating assigned to any Class of Certificates
by any Rating Agency or (ii) with respect to HomEq, Fitch reduces its servicer
rating of HomEq to "RPS2-" or lower, Xxxxx'x reduces its servicer rating of
HomEq to "SQ3" or lower, or S&P reduces its servicer rating of HomEq to
"Average" or lower.
If an Event of Default described in clauses (a) through (g) of this
Section 7.01 shall occur, then, and in each and every such case, so long as such
Event of Default shall not have been remedied, the Trustee may, and at the
direction of a majority of the Voting Rights, the Trustee shall, by notice in
writing to the applicable Servicer (with a copy to the Securities Administrator
and each Rating Agency), terminate all of the rights and obligations of such
Servicer under this Agreement and in and to the Mortgage Loans serviced by such
Servicer and the proceeds thereof, other than its rights as a Certificateholder
hereunder; provided, however, that the Trustee shall not be required to give
written notice to such Servicer of the occurrence of an Event of Default
described in clauses (b) through (g) of this Section 7.01 unless and until a
Responsible Officer of the Trustee has actual knowledge of the occurrence of
such an event. In the event that a Responsible Officer of the Trustee has actual
knowledge of the occurrence of an Event of Default described in clause (a) of
this Section 7.01, the Trustee shall give written notice to the applicable
Servicer of the occurrence of such an event within one Business Day of the first
day on which such Responsible Officer obtains actual knowledge of such
occurrence; provided, that if such failure is the failure to make a P&I Advance,
the Trustee shall send such notice prior to 12:00 noon New York time on the
Distribution Date and, if the Event of Default of such Servicer was the failure
to make a P&I Advance, the Trustee, as successor servicer, shall make such P&I
Advance on the Distribution Date that such notice was delivered. On and after
the receipt by such Servicer of such written notice, all authority and power of
such Servicer hereunder, whether with respect to the Mortgage Loans or
otherwise, shall pass to and be vested in the Trustee. Subject to Section 7.02,
the Trustee is hereby authorized and empowered to execute and deliver, on behalf
of such 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 or assignment of the Mortgage Loans and
related documents, or otherwise. Unless expressly provided in such written
notice, no such termination shall affect any obligation of such Servicer to pay
amounts owed pursuant to Article VIII. Such Servicer agrees to cooperate with
the Trustee in effecting the termination of such Servicer's responsibilities and
rights hereunder, including, without limitation, the transfer to the Trustee of
all cash amounts which shall at the time be credited to the related Collection
Account of such predecessor Servicer, or thereafter be received with respect to
the Mortgage Loans.
Notwithstanding any termination of the activities of a Servicer
hereunder, such Servicer shall be entitled to receive from the Trust Fund, prior
to transfer of its servicing obligations hereunder, payment of all accrued and
unpaid Servicing Fees and reimbursement for all outstanding P&I Advances and
Servicing Advances.
Section 7.02 Trustee to Act; Appointment of Successor. On and after
the time a Servicer receives a notice of termination pursuant to Section 3.24 or
Section 7.01, the Trustee shall, subject to and to the extent provided in
Section 3.05, be the successor to such 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 such Servicer by the terms and provisions hereof and
applicable law including the obligation to make P&I Advances or Servicing
Advances pursuant to Section 3.24 or Section 7.01. As compensation therefor, the
Trustee shall be entitled to all funds relating to the Mortgage Loans that such
Servicer would have been entitled to charge to its Collection Account if such
Servicer had continued to act hereunder including, if such Servicer was
receiving the Servicing Fee, the Servicing Fee and the income on investments or
gain related to its Collection Account and the Distribution Account which such
Servicer would be entitled to receive. Notwithstanding the foregoing, if the
Trustee has become the successor to such Servicer in accordance with Section
7.01, (a) the Trustee shall have a period not to exceed 90 days to complete the
transfer of servicing and all data and to correct or manipulate such servicing
data as may be required by the Trustee to correct any errors or insufficiencies
in the servicing data or otherwise enable the Trustee or other successor
servicer to service the Mortgage Loans in accordance with Accepted Servicing
Practices and (b) the Trustee may, if it shall be unwilling to so act, or shall,
if it is prohibited by applicable law from making P&I Advances and Servicing
Advances pursuant to Section 4.01, if it is otherwise unable to so act or at the
written request of Certificateholders entitled to at least a majority of the
Voting Rights, appoint, or petition a court of competent jurisdiction to
appoint, any established mortgage loan servicing institution the appointment of
which does not adversely affect the then current rating of the Certificates by
each Rating Agency, as the successor to such servicer hereunder in the
assumption of all or any part of the responsibilities, duties or liabilities of
such servicer hereunder. Any successor to such servicer shall be an institution
which is a Xxxxxx Xxx and Freddie Mac approved servicer in good standing, which
has a net worth of at least $30,000,000, which is willing to service the
Mortgage Loans and which executes and delivers to the Depositor and the Trustee
an agreement accepting such delegation and assignment, containing an assumption
by such Person of the rights, powers, duties, responsibilities, obligations and
liabilities of such terminated servicer (other than liabilities of such
terminated servicer under Section 6.03 incurred prior to termination of such
Servicer under Section 7.01), with like effect as if originally named as a party
to this Agreement; provided, that each Rating Agency acknowledges that its
rating of the Certificates in effect immediately prior to such assignment and
delegation will not be qualified or reduced, as a result of such assignment and
delegation. Pending appointment of a successor to a servicer hereunder, the
Trustee, unless the Trustee is prohibited by law from so acting, shall, subject
to Section 3.05, act in such capacity as hereinabove provided. In connection
with such appointment and assumption, the Trustee may make such arrangements for
the compensation of such successor out of payments on Mortgage Loans as it and
such successor shall agree; provided, however, that no such compensation shall
be in excess of the Servicing Fee Rate and amounts paid to the predecessor
servicer from investments. The Trustee and such successor shall take such
action, consistent with this Agreement, as shall be necessary to effectuate any
such succession. Neither the Trustee nor any other successor servicer shall be
deemed to be in default hereunder by reason of any failure to make, or any delay
in making, any distribution hereunder or any portion thereof or any failure to
perform, or any delay in performing, any duties or responsibilities hereunder,
in either case caused by the failure of the predecessor servicer to deliver or
provide, or any delay in delivering or providing, any cash, information,
documents or records to it.
In the event that a Servicer is terminated pursuant to Section 7.01,
such terminated Servicer shall be responsible for the servicing transfer,
provide notices to the Mortgagors, arrange for and transfer the Servicing Files
to a successor servicer, pay all of its own out-of-pocket costs and expenses at
its own expense and pay all costs and expenses of all other parties hereto
relating to the transfer of the related Servicing Files to a successor servicer
(excluding set-up costs and other administrative expenses of the successor
servicer), and in all other cases the successor servicer shall pay for such
costs and expenses but shall not be entitled to reimbursement therefor from the
Trust Fund. Such amounts payable by the terminated Servicer shall be paid by the
terminated Servicer promptly upon presentation of reasonable documentation of
such costs. If the Trustee is the predecessor Servicer (except in the case where
the Trustee in its role as successor servicer is being terminated pursuant to
Section 7.01 by reason of an Event of Default caused solely by the Trustee as
the successor servicer and not by the predecessor Servicer's actions or
omissions), such costs shall be paid by the prior terminated Servicer promptly
upon presentation of reasonable documentation of such costs.
Any successor to a Servicer as servicer shall give notice to the
related Mortgagors of such change of servicer and shall, during the term of its
service as servicer, maintain in force the policy or policies that each Servicer
is required to maintain pursuant to Section 3.13.
Section 7.03 Notification to Certificateholders. (a) Upon any
termination of or appointment of a successor to a Servicer, the Securities
Administrator shall give prompt written notice thereof to Certificateholders and
to each Rating Agency.
(b) Within 60 days after the occurrence of any Event of Default, the
Securities Administrator shall transmit by mail to all Certificateholders and
each Rating Agency notice of each such Event of Default hereunder known to the
Securities Administrator, unless such event shall have been cured or waived.
ARTICLE VIII
CONCERNING THE TRUSTEE
Section 8.01 Duties of the Trustee. The Trustee, before the
occurrence of an Event of Default and after the curing of all Events of Default
that may have occurred, shall undertake to perform such duties and only such
duties as are specifically set forth in this Agreement. In case an Event of
Default has occurred and remains uncured, 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.
The Trustee, upon receipt of all resolutions, certificates,
statements, opinions, reports, documents, orders or other instruments furnished
to the Trustee that are specifically required to be furnished pursuant to any
provision of this Agreement shall examine them to determine whether they are in
the form required by this Agreement. The Trustee shall not be responsible for
the accuracy or content of any resolution, certificate, statement, opinion,
report, document, order, or other instrument.
No provision of this Agreement shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct.
Unless an Event of Default known to the Trustee has occurred and is
continuing:
(a) the duties and obligations of the Trustee shall be determined
solely by the express provisions of this Agreement, the Trustee shall not be
liable except for the performance of the duties and obligations specifically set
forth in this Agreement, no implied covenants or obligations shall be read into
this Agreement against the Trustee, and the Trustee 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 and
conforming on their face to the requirements of this Agreement which it believed
in good faith to be genuine and to have been duly executed by the proper
authorities respecting any matters arising hereunder;
(b) the Trustee shall not be liable for an error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it is finally proven that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be 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 Holders of Certificates evidencing not less than 25% of the
Voting Rights of Certificates relating to the time, method, and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee under this Agreement.
Section 8.02 Certain Matters Affecting the Trustee and the
Custodians. Except as otherwise provided in Section 8.01: (a) the Trustee and
the Custodians 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
believed by it to be genuine and to have been signed or presented by the proper
party or parties and neither the Trustee nor the Custodians shall have
responsibility to ascertain or confirm the genuineness of any signature of any
such party or parties;
(b) the Trustee and the Custodians may consult with counsel,
financial advisers or accountants and the advice of any such counsel, financial
advisers or accountants and any 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 Opinion of
Counsel;
(c) neither the Trustee nor the Custodians shall be 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;
(d) the Trustee shall not be bound to make any investigation into
the facts or matters stated in any resolution, certificate, statement,
instrument, opinion, report, notice, request, consent, order, approval, bond or
other paper or document, unless requested in writing to do so by the Holders of
Certificates evidencing not less than 25% of the Voting Rights allocated to each
Class of Certificates;
(e) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents,
accountants or attorneys and the Trustee shall not be responsible for any
misconduct or negligence on the part of any agents, accountants or attorneys
appointed with due care by it hereunder; provided, further, the Trustee shall
not be responsible for any act or omission of any Custodian;
(f) the Trustee shall not be required to risk or expend its own
funds or otherwise incur any financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers hereunder if it
shall have reasonable grounds for believing that repayment of such funds or
adequate indemnity against such risk or liability is not assured to it;
(g) the Trustee shall not be liable for any loss on any investment
of funds pursuant to this Agreement;
(h) unless a Responsible Officer of the Trustee has actual knowledge
of the occurrence of an Event of Default, the Trustee shall not be deemed to
have knowledge of an Event of Default, until a Responsible Officer of the
Trustee shall have received written notice thereof; and
(i) the Trustee shall be under no obligation to exercise any of the
trusts, 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 any of the Certificateholders, pursuant to this Agreement,
unless such Certificateholders shall have offered to the Trustee reasonable
security or indemnity satisfactory to the Trustee against the costs, expenses
and liabilities which may be incurred therein or thereby.
Section 8.03 Trustee 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 the Trustee assumes no responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Agreement or of the Certificates or of any Mortgage Loan or
related document. The Trustee shall not be accountable for the use or
application by the Depositor, the Securities Administrator or a Servicer of any
funds paid to the Depositor, the Securities Administrator or a Servicer in
respect of the Mortgage Loans or deposited in or withdrawn from any Collection
Account or the Distribution Account by the Depositor, the Securities
Administrator or a Servicer.
The Trustee shall have no responsibility for filing or recording 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 (unless the Trustee shall have become the successor
servicer).
Section 8.04 Trustee May Own Certificates. The Trustee 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 the Trustee.
Section 8.05 Trustee's Fees and Expenses. As compensation for its
activities under this Agreement, the Trustee shall be paid its fee by the
Securities Administrator from the Securities Administrator's own funds pursuant
to a separate agreement. The Trustee and any director, officer, employee, or
agent of the Trustee shall be indemnified by the Trust Fund against any loss,
liability, or expense (including reasonable attorney's fees) resulting from any
error in any tax or information return prepared by any Servicer or incurred in
connection with any claim or legal action relating to (a) this Agreement, (b)
the Certificates or the Interest Rate Swap Agreement, or (c) the performance of
any of the Trustee's duties under this Agreement (including any unreimbursed
out-of-pocket costs resulting from a servicing transfer), the Certificates or
the Interest Rate Swap Agreement, other than any loss, liability, or expense (i)
resulting from any breach of any Servicer's obligations in connection with this
Agreement for which the related Servicer has performed its obligation to
indemnify the Trustee pursuant to Section 6.05, (ii) resulting from any breach
of any Responsible Party's obligations in connection with this Agreement for
which the related Responsible Party has performed its obligations to indemnify
the Trustee pursuant to Section 2.03(j) or (iii) incurred because of willful
misconduct, bad faith, or negligence in the performance of any of the Trustee's
duties under this Agreement. This indemnity shall survive the termination of
this Agreement or the resignation or removal of the Trustee under this
Agreement. Without limiting the foregoing, except as otherwise agreed upon in
writing by the Depositor and the Trustee, and except for any expense,
disbursement, or advance arising from the Trustee's negligence, bad faith, or
willful misconduct, the Trust Fund shall pay or reimburse the Trustee, for all
reasonable expenses, disbursements, and advances incurred or made by the Trustee
in accordance with this Agreement with respect to:
(A) the reasonable compensation, expenses, and disbursements of
its counsel not associated with the closing of the issuance of
the Certificates, and
(B) the reasonable compensation, expenses, and disbursements of
any accountant, engineer, or appraiser that is not regularly
employed by the Trustee, to the extent that the Trustee must
engage them to perform services under this Agreement.
Except as otherwise provided in this Agreement or a separate letter
agreement between the Trustee and the Depositor, the Trustee shall not be
entitled to payment or reimbursement for any routine ongoing expenses incurred
by the Trustee in the ordinary course of its duties as Trustee under this
Agreement or for any other expenses incurred by the Trustee; provided, however,
that no expense shall be reimbursed by the Trust Fund under this Agreement if it
would not constitute an "unanticipated expense incurred by the REMIC" within the
meaning of the REMIC Provisions.
Section 8.06 Eligibility Requirements for the Trustee. The Trustee
hereunder shall at all times be a corporation or association organized and doing
business under the laws of a state or the United States of America, authorized
under such laws to exercise corporate trust powers, having a combined capital
and surplus of at least $50,000,000, subject to supervision or examination by
federal or state authority and with a credit rating which would not cause any of
the Rating Agencies to reduce their respective then current ratings of the
Certificates (or having provided such security from time to time as is
sufficient to avoid such reduction) as evidenced in writing by each Rating
Agency. If such corporation or association 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 corporation or association shall be
deemed to be its combined capital and surplus as set forth in its most recent
report of condition so published. In case at any time the Trustee shall cease to
be eligible in accordance with this Section 8.06, the Trustee shall resign
immediately in the manner and with the effect specified in Section 8.07. The
entity serving as Trustee may have normal banking and trust relationships with
the Depositor and its Affiliates or the Servicers and their Affiliates;
provided, however, that such entity cannot be an Affiliate of the Depositor or a
Servicer other than the Trustee in its role as successor to a Servicer.
Section 8.07 Resignation and Removal of the Trustee. The Trustee may
at any time resign and be discharged from the trusts hereby created by giving
written notice of resignation to the Depositor, the Securities Administrator,
the Servicers and each Rating Agency not less than 60 days before the date
specified in such notice, when, subject to Section 8.08, such resignation is to
take effect, and acceptance by a successor trustee in accordance with Section
8.08 meeting the qualifications set forth in Section 8.06. If no successor
trustee meeting such qualifications shall have been so appointed and have
accepted appointment within 30 days after the giving of such notice or
resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee.
If at any time the Trustee shall cease to be eligible in accordance
with Section 8.06 and shall fail to resign after written request thereto by the
Depositor, or if at any time the Trustee shall become incapable of acting, or
shall be adjudged as bankrupt or insolvent, or a receiver of the Trustee or of
its property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation, or a tax is imposed with respect to
the Trust Fund by any state in which the Trustee or the Trust Fund is located
and the imposition of such tax would be avoided by the appointment of a
different trustee, then the Depositor may remove the Trustee and appoint a
successor trustee by written instrument, in triplicate, one copy of which shall
be delivered to the Trustee, one copy to each Servicer and one copy to the
successor trustee.
The Holders of Certificates entitled to at least a majority of the
Voting Rights may at any time remove the Trustee and appoint a successor trustee
by written instrument or instruments, in triplicate, signed by such Holders or
their attorneys-in-fact duly authorized, one complete set of which shall be
delivered by the successor Trustee to each Servicer, one complete set to the
Trustee so removed and one complete set to the successor so appointed. The
successor trustee shall notify each Rating Agency of any removal of the Trustee.
Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to this Section 8.07 shall become effective upon
acceptance of appointment by the successor trustee as provided in Section 8.08.
Section 8.08 Successor Trustee. Any successor trustee appointed as
provided in Section 8.07 shall execute, acknowledge and deliver to the Depositor
and to its predecessor trustee and the Servicers an instrument accepting such
appointment hereunder and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become fully vested with all the
rights, powers, duties and obligations of its predecessor hereunder, with the
like effect as if originally named as trustee herein. The Depositor, the
Servicers and the predecessor trustee shall execute and deliver such instruments
and do such other things as may reasonably be required for more fully and
certainly vesting and confirming in the successor trustee all such rights,
powers, duties, and obligations.
No successor trustee shall accept appointment as provided in this
Section 8.08 unless at the time of its acceptance, the successor trustee is
eligible under Section 8.06 and its appointment does not adversely affect the
then current rating of the Certificates.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.08, the Depositor shall mail notice of the succession of such
trustee hereunder to all Holders of Certificates. If the Depositor fails to mail
such notice within 10 days after acceptance of appointment by the successor
trustee, the successor trustee shall cause such notice to be mailed at the
expense of the Depositor.
Section 8.09 Merger or Consolidation of the Trustee. Any corporation
into which the Trustee may be merged or converted or with which it may be
consolidated or any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any corporation
succeeding to the business of the Trustee, shall be the successor of the Trustee
hereunder; provided, that such corporation shall be eligible under Section 8.06
without the execution or filing of any paper or further act on the part of any
of the parties hereto, anything herein to the contrary notwithstanding. In
connection with the succession to the Trustee under this Agreement by any Person
(i) into which the Trustee may be merged or consolidated, or (ii) which may be
appointed as a successor to the Trustee, the Trustee shall notify the Depositor
of such succession or appointment and shall furnish to the Depositor in writing
and in form and substance reasonably satisfactory to the Depositor, all
information reasonably necessary for the Depositor to accurately and timely
report, pursuant to Section 8.12(g), the event under Item 6.02 of Form 8-K
pursuant to the Exchange Act (if such reports under the Exchange Act are
required to be filed under the Exchange Act).
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 Fund or property securing any Mortgage Note may at the time be
located, the applicable Servicer 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 Fund, and to vest in such Person or Persons, in such capacity and for the
benefit of the Certificateholders, such title to the Trust Fund or any part
thereof, whichever is applicable, and, subject to the other provisions of this
Section 8.10, such powers, duties, obligations, rights and trusts as the
applicable Servicer and the Trustee may consider appropriate. If any Servicer
shall not have joined in such appointment within 15 days after the receipt by
such Servicer of a request to do so or in the case an Event of Default 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:
(a) To the extent necessary to effectuate the purposes of this
Section 8.10, all rights, powers, duties and obligations conferred or imposed
upon the Trustee, except for the obligation of the Trustee as successor Servicer
under this Agreement to advance funds, 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 (whether as Trustee hereunder or as successor to a
Servicer hereunder), the Trustee shall be incompetent or unqualified to perform
such act or acts, in which event such rights, powers, duties and obligations
(including the holding of title to the applicable Trust Fund 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;
(b) No trustee hereunder shall be held personally liable because of
any act or omission of any other trustee hereunder and such appointment shall
not, and shall not be deemed to, constitute any such separate trustee or
co-trustee as agent of the Trustee;
(c) The Trustee may at any time accept the resignation of or remove
any separate trustee or co-trustee; and
(d) The Trust Fund, and not the Trustee, shall be liable for the
payment of reasonable compensation, reimbursement and indemnification to any
such 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 separate trustees and co-trustees, when
and 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 each
Servicer and the Depositor.
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 Tax Matters. It is intended that the assets with
respect to which any REMIC election pertaining to the Trust Fund is to be made,
as set forth in the Preliminary Statement, shall constitute, and that the
conduct of matters relating to such assets shall be such as to qualify such
assets as, a "real estate mortgage investment conduit" as defined in and in
accordance with the REMIC Provisions. In furtherance of such intention, the
Securities Administrator covenants and agrees that it shall act as agent (and
the Securities Administrator is hereby appointed to act as agent) on behalf of
each Trust REMIC and that in such capacity it shall:
(a) prepare for the Trustee to sign, and the Trustee shall sign, and
the Securities Administrator shall file, in a timely manner, a U.S. Real Estate
Mortgage Investment Conduit (REMIC) Income Tax Return (Form 1066 or any
successor form adopted by the Internal Revenue Service) and prepare for the
Trustee to sign, and the Trustee shall sign, and the Securities Administrator
shall file with the Internal Revenue Service and applicable state or local tax
authorities income tax or information returns for each taxable year with respect
to each Trust REMIC containing such information and at the times and in the
manner as may be required by the Code or state or local tax laws, regulations,
or rules, and furnish to Certificateholders the schedules, statements or
information at such times and in such manner as may be required thereby;
(b) within thirty days of the Closing Date, apply for an employer
identification number from the Internal Revenue Service via Form SS-4 or any
other acceptable method for all tax entities and shall also furnish to the
Internal Revenue Service, on Form 8811 or as otherwise may be required by the
Code, the name, title, address, and telephone number of the person that the
Holders of the Certificates may contact for tax information relating thereto,
together with such additional information as may be required by such Form, and
update such information at the time or times in the manner required by the Code;
(c) make an election that each of Pooling-Tier REMIC-1, Pooling-Tier
REMIC-2, the Lower-Tier REMIC and the Upper-Tier REMIC be treated as a REMIC on
the federal tax return for its first taxable year (and, if necessary, under
applicable state law);
(d) prepare and forward to the Certificateholders and to the
Internal Revenue Service and, if necessary, state tax authorities, all
information returns and reports as and when required to be provided to them in
accordance with the REMIC Provisions, including the calculation of any original
issue discount using the prepayment assumption (as described in the Prospectus
Supplement);
(e) provide information necessary for the computation of tax imposed
on the Transfer of a Residual Certificate to a Person that is a Non-Permitted
Transferee, or an agent (including a broker, nominee or other middleman) of a
Non-Permitted Transferee, or a pass-through entity in which a Non-Permitted
Transferee is the record holder of an interest (the reasonable cost of computing
and furnishing such information may be charged to the Person liable for such
tax);
(f) to the extent that they are under its control, conduct matters
relating to such assets at all times that any Certificates are Outstanding so as
to maintain the status of each Trust REMIC as a REMIC under the REMIC
Provisions;
(g) not knowingly or intentionally take any action or omit to take
any action that would cause the termination of the REMIC status of any Trust
REMIC created hereunder;
(h) pay, from the sources specified in the last paragraph of this
Section 8.11, the amount of any federal or state tax, including prohibited
transaction taxes as described below, imposed on any Trust REMIC created
hereunder before its termination when and as the same shall be due and payable
(but such obligation shall not prevent the Securities Administrator or any other
appropriate Person from contesting any such tax in appropriate proceedings and
shall not prevent the Securities Administrator from withholding payment of such
tax, if permitted by law, pending the outcome of such proceedings);
(i) cause federal, state or local income tax or information returns
to be signed by the Trustee or such other Person as may be required to sign such
returns by the Code or state or local laws, regulations or rules; and
(j) maintain records relating to each Trust REMIC created hereunder,
including the income, expenses, assets, and liabilities thereof on a calendar
year basis and on the accrual method of accounting and the fair market value and
adjusted basis of the assets determined at such intervals as may be required by
the Code, as may be necessary to prepare the foregoing returns, schedules,
statements or information.
The Holder of the largest Percentage Interest of the Class R
Certificates shall act as Tax Matters Person for each Trust REMIC, within the
meaning of Treasury Regulations Section 1.860F-4(d), and the Securities
Administrator is hereby designated as agent of such Certificateholder 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 each Trust REMIC created hereunder 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
each Trust REMIC created hereunder, enter into settlement agreements with any
governmental taxing agency, extend any statute of limitations relating to any
tax item of each Trust REMIC created hereunder, and otherwise act on behalf of
each Trust REMIC in relation to any tax matter or controversy involving it.
The Securities Administrator shall treat the rights of the Class P
Certificateholders to Prepayment Charges, the rights of the Class X
Certificateholders to receive amounts in the Excess Reserve Fund Account and the
Swap Account (subject to the obligation to pay Basis Risk CarryForward Amounts
and Upper-Tier CarryForward Amounts) and the rights of the Offered
Certificateholders to receive Basis Risk CarryForward Amounts and Upper-Tier
CarryForward Amounts as the beneficial ownership of interests in a grantor
trust, and not as obligations of any Trust REMIC created hereunder, for federal
income tax purposes. The Securities Administrator shall file or cause to be
filed with the Internal Revenue Service Form 1041 or such other form as may be
applicable and shall furnish or cause to be furnished, to the Class P
Certificateholders, Class X Certificateholders and Offered Certificateholders,
the respective amounts described above that are received, in the time or times
and in the manner required by the Code.
To enable the Securities Administrator to perform its duties under
this Agreement, the Depositor shall provide to the Securities Administrator
within ten days after the Closing Date all information or data that the
Securities Administrator requests in writing and determines to be relevant for
tax purposes to the valuations and offering prices of the Certificates,
including the price, yield, prepayment assumption, and projected cash flows of
the Certificates and the Mortgage Loans. Moreover, the Depositor shall provide
information to the Securities Administrator concerning the value, if any, to
each Class of Certificates of the right to receive Basis Risk CarryForward
Amounts from the Excess Reserve Fund Account and Basis Risk CarryForward Amounts
and Upper-Tier CarryForward Amounts from the Swap Account. 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 that the applicable Servicer is required to provide
to the Securities Administrator pursuant to this Agreement. The Depositor hereby
indemnifies the Securities Administrator for any losses, liabilities, damages,
claims, or expenses of the Securities Administrator arising from any errors or
miscalculations of the Securities Administrator that result from any failure of
the Depositor to provide pursuant to this paragraph accurate information or data
to the Securities Administrator on a timely basis.
None of the Servicers, the Trustee or the Securities Administrator
shall (i) permit the creation of any interests in any Trust REMIC other than the
regular and residual interests set forth in the Preliminary Statement, (ii)
receive any amount representing a fee or other compensation for services (except
as otherwise permitted by this Agreement or the related Mortgage Loan documents)
or (iii) otherwise knowingly or intentionally take any action, cause the Trust
Fund to take any action or fail to take (or fail to cause to be taken) any
action reasonably within its control and the scope of duties more specifically
set forth herein, that, under the REMIC Provisions, if taken or not taken, as
the case may be, could (i) endanger the status of any Trust REMIC as a REMIC or
(ii) result in the imposition of a tax upon any Trust REMIC or the Trust Fund
(including but not limited to the tax on "prohibited transactions" as defined in
Section 860F(a)(2) of the Code and the tax on contributions to a REMIC set forth
in Section 860G(d) of the Code, or the tax on "net income from foreclosure
property") unless the Trustee and the Securities Administrator receive an
Opinion of Counsel (at the expense of the party seeking to take such action or,
if such party fails to pay such expense, and the Securities Administrator
determines that taking such action is in the best interest of the Trust Fund and
the Certificateholders, at the expense of the Trust Fund, but in no event at the
expense of the Trustee or the Securities Administrator) to the effect that the
contemplated action will not, with respect to the Trust Fund, any Trust REMIC
created hereunder, endanger such status or, unless the Trustee determines in its
sole discretion to indemnify the Trust Fund against such tax, result in the
imposition of such a tax).
If any tax is imposed on "prohibited transactions" of any Trust
REMIC as defined in Section 860F(a)(2) of the Code, on the "net income from
foreclosure property" of the Pooling-Tier REMIC-1 as defined in Section 860G(c)
of the Code, on any contribution to any Trust REMIC after the Start-up Day
pursuant to Section 860G(d) of the Code, or any other tax is imposed, including,
if applicable, any minimum tax imposed on any Trust REMIC pursuant to Sections
23153 and 24878 of the California Revenue and Taxation Code, if not paid as
otherwise provided for herein, the tax shall be paid by (i) the Trustee or the
Securities Administrator, respectively, if such tax arises out of or results
from negligence of the Trustee or the Securities Administrator in the
performance of any of its obligations under this Agreement, (ii) the applicable
Servicer and the Responsible Party, jointly, in the case of any such minimum
tax, and the applicable Servicer if such tax arises out of or results from a
breach by such Servicer of any of its obligations under this Agreement, (iii)
the applicable Responsible Party if such tax arises out of or results from the
applicable Responsible Party's obligation to repurchase a Mortgage Loan pursuant
to Section 2.03, or (iv) in all other cases, or if the Trustee, the Securities
Administrator, the applicable Servicer or the applicable Responsible Party fails
to honor its obligations under the preceding clause (i), (ii), or (iii), any
such tax will be paid with amounts otherwise to be distributed to the
Certificateholders, as provided in Section 4.02(a).
Section 8.12 Periodic Filings. (a) The Securities Administrator and
each Servicer shall reasonably cooperate with the Depositor in connection with
the reporting requirements of the Trust under the Exchange Act. The Securities
Administrator shall prepare for execution by the Depositor any Forms 8-K (other
than the initial Form 8-K relating to this Agreement, which shall be the
responsibility of the Depositor to prepare and file), 10-D and 10-K required by
the Exchange Act and the rules and regulations of the Commission thereunder, in
order to permit the timely filing thereof, pursuant to the terms of this Section
8.12, and the Securities Administrator shall file (via the Commission's
Electronic Data Gathering and Retrieval System, or XXXXX) such Forms executed by
the Depositor.
(b) The Securities Administrator shall prepare and file 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 will utilize
reasonable best efforts to file such Form 10-D on or by the 14th calendar day
after each Distribution Date, but in no event later than the filing deadline for
such Form 10-D (subject to permitted extensions under the Exchange Act). The
Securities Administrator shall file each Form 10-D with a copy of the related
Monthly Statement attached thereto. Any disclosure in addition to the Monthly
Statement that is required to be included on Form 10-D ("Additional Form 10-D
Disclosure") shall be prepared by the party responsible for preparing such
disclosure as set forth in Exhibit S hereto and the Securities Administrator
shall compile such disclosure pursuant to the following paragraph. The
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-D Disclosure, except as
set forth in the next paragraph.
As set forth on Exhibit S hereto, within 5 calendar days after the
related Distribution Date, the parties to this Agreement shall be required to
provide to the Securities Administrator and the Depositor, in XXXXX-compatible
format, or in such other form as otherwise agreed upon by the Securities
Administrator and such party, to the extent known by such applicable parties,
any Additional Form 10-D Disclosure, if applicable. 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. The Depositor will be responsible for all
reasonable fees and expenses assessed or incurred by the Securities
Administrator in connection with including any Additional Form 10-D Disclosure
on Form 10-D pursuant to this paragraph, including converting any such
disclosure to an XXXXX-compatible format.
The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 10-D to the Depositor sufficiently far
in advance of, but in no event later than the 11th calendar day after the
related Distribution Date, for the Depositor to review, verify and execute such
Form 10-D. No later than 2 Business Days prior to the 15th calendar day after
the related Distribution Date, an officer of the Depositor shall sign the Form
10-D and return an electronic or fax copy of such signed Form 10-D (with an
original executed hard copy to follow by overnight mail) to the Securities
Administrator. If a Form 10-D cannot be filed on time or if a previously filed
Form 10-D needs to be amended, the Securities Administrator will follow the
procedures set forth in Section 8.12(e)(ii). Promptly (but in any case within
one 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 prepared and filed by the Securities Administrator. The signing party at
the Depositor can be contacted at the Depositor's address for notices set forth
in Section 11.05(b)(ii)(a) or such other address as to which the Depositor has
provided prior written notice to the Securities Administrator. The Depositor
acknowledges that the performance by the Securities Administrator of its duties
under this Section 8.12(b) related to the timely preparation and filing of Form
10-D is contingent, in part, upon the Servicers, the Depositor and any other
Person obligated to provide Additional Form 10-D Disclosure as set forth on
Exhibit R hereto, observing all applicable deadlines in the performance of their
duties under this Section 8.12(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-D, where such
failure results from the Securities Administrator's inability or failure to
obtain or receive, on a timely basis, any information from any party hereto
(other than the Securities Administrator or any Subcontractor utilized by the
Securities Administrator) needed to prepare, arrange for execution or file such
Form 10-D, not resulting from its own negligence, bad faith or willful
misconduct.
(c) On any date within 90 days (including the 90th day) after the
end of each fiscal year of the Trust or such earlier date as may be required by
the Exchange Act (the "10-K Filing Deadline"), commencing in March 2007, the
Securities Administrator shall prepare and file 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 time frames set
forth in this Agreement, (i) an annual compliance statement for the Securities
Administrator, each Servicer and each Subservicer engaged by a Servicer and the
Securities Administrator, as described under Section 3.22, (ii)(A) the annual
reports on assessment of compliance with servicing criteria for the Securities
Administrator, each Servicer, each Custodian, each Subservicer engaged by a
Servicer and each Servicing Function Participant utilized by a Servicer, each
Custodian or the Securities Administrator, as described under Section 3.23, and
(B) if any such report on assessment of compliance with servicing criteria
described under Section 3.23 identifies any material instance of noncompliance,
disclosure identifying such instance of noncompliance, or such report on
assessment of compliance with servicing criteria described under Section 3.23 is
not included as an exhibit to such Form 10-K, disclosure that such report is not
included and an explanation why such report is not included, (iii)(A) the
registered public accounting firm attestation report for the Securities
Administrator, each Servicer, each Custodian, each Subservicer engaged by a
Servicer and each Servicing Function Participant utilized by a Servicer, the
Securities Administrator or any Custodian, as described under Section 3.23, and
(B) if any registered public accounting firm attestation report described under
Section 3.23 identifies any material instance of noncompliance, disclosure
identifying such instance of noncompliance, or if any such registered public
accounting firm attestation report is not included as an exhibit to such Form
10-K, disclosure that such report is not included and an explanation why such
report is not included, and (iv) a certification in the form attached hereto as
Exhibit L, with such changes as may be necessary or appropriate as a result of
changes promulgated by the Commission (the "Sarbanes Certification"), which
shall be signed by the senior officer of the Depositor in charge of
securitization. Any disclosure or information in addition to (i) through (iv)
above that is required to be included on Form 10-K ("Additional Form 10-K
Disclosure") shall be prepared by the party responsible for preparing such
disclosure as set forth on Exhibit T hereto, and the Securities Administrator
shall compile such disclosure pursuant to the following paragraph. The
Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Additional Form 10-K Disclosure, except as
set forth in the next paragraph.
As set forth on Exhibit T hereto, no later than March 1st of each
year (or, in the case of each Servicer, March 5th of each year) that the Trust
is subject to the Exchange Act reporting requirements, commencing in 2007, the
parties to this Agreement shall be required to provide to the Securities
Administrator and the Depositor, in XXXXX-compatible format, or in such other
form as otherwise agreed upon by the Securities Administrator and such party, to
the extent known by such applicable parties, any Additional Form 10-K
Disclosure, if applicable. 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. The Depositor will be responsible for all 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, including converting any such disclosure to an XXXXX-compatible
format. The Securities Administrator shall compile all such information provided
to it in a Form 10-K prepared by it.
The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 10-K to the Depositor sufficiently far
in advance of, but in no event less than three (3) Business Days prior to, when
the Depositor is required to execute such Form 10-K to permit the Depositor to
review, verify and execute such Form 10-K. No later than 5:00 p.m. EST on the
4th Business Day prior to the 10-K Filing Deadline, an officer of the Depositor
shall sign the Form 10-K and return an electronic or fax copy of such signed
Form 10-K (with an original executed hard copy to follow by overnight mail) to
the Securities Administrator. If a Form 10-K cannot be filed on time or if a
previously filed Form 10-K needs to be amended, the Securities Administrator
will follow the procedures set forth in Section 8.12(f)(ii). Promptly (but in
any case within one 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 prepared and filed by the Securities
Administrator. The Depositor acknowledges that the performance by the Securities
Administrator of its duties under this Section 8.12(c) related to the timely
preparation and filing of Form 10-K is contingent, in part, upon the Servicers
(and any Subservicer or Servicing Function Participant engaged by a Servicer)
and the Depositor and any other Person obligated to provide Additional Form 10-K
Disclosure as set forth on Exhibit T hereto, observing all applicable deadlines
in the performance of their duties under this Section 8.12(c), Section 8.12(d),
Section 3.22 and Section 3.23. The Securities Administrator shall have no
liability for any loss, expense, damage or claim arising out of or with respect
to any failure to properly prepare and/or timely file such Form 10-K, where such
failure results from the Securities Administrator's inability or failure to
obtain or receive, on a timely basis, any information from any party hereto
(other than the Securities Administrator or any Subcontractor utilized by the
Securities Administrator) needed to prepare, arrange for execution or file such
Form 10-K, not resulting from its own negligence, bad faith or willful
misconduct.
(d) In connection with the execution of a Sarbanes Certification,
the Securities Administrator shall sign a certification (in the form attached
hereto as Exhibit M, with such changes as may be necessary or appropriate as a
result of changes promulgated by the Commission) for the benefit of the
Depositor and its officers, directors and Affiliates, and each Servicer shall
sign a certification solely with respect to such Servicer (substantially in the
form attached hereto as Exhibit N, with such changes as may be necessary or
appropriate as a result of changes promulgated by the Commission) for the
benefit of the Depositor, the Securities Administrator and their respective
officers, directors and Affiliates. Each such certification shall be delivered
to the Depositor no later than March 10th of each year (or if such day is not a
Business Day, the immediately preceding Business Day) and the Depositor shall
deliver the Sarbanes Certification no later than the time set forth for the
delivery to the Securities Administrator of the signed Form 10-K pursuant to
Section 8.12(d) for such year. In the event that prior to the filing date of the
Form 10-K in March of each year, a Servicer or the Securities Administrator has
actual knowledge of information material to the Sarbanes Certification, that
party shall promptly notify the Depositor and each of the other parties signing
the certifications. In addition, (i) the Securities Administrator shall
indemnify and hold harmless the Depositor and the Sponsor and their officers,
directors, employees, agents 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 any breach of the Securities Administrator's obligations under this Section
8.12(d) or any material misstatement or material omission in (w) any compliance
certificate delivered by the Securities Administrator or any Subcontractor of
the Securities Administrator pursuant to Section 3.22 of this Agreement, (x) any
assessment or attestation delivered by or on behalf of the Securities
Administrator or any Subcontractor of the Securities Administrator pursuant to
Section 3.23 of this Agreement, (y) any back-up certification in the form of
Exhibit M delivered by the Securities Administrator pursuant to Section 8.12(d)
of this Agreement or (z) any information about the Securities Administrator
provided by it pursuant to Item 2 (Legal Proceedings) of Exhibit S, Item 1117
and Item 1119 of Exhibit T or Item 6.02 (Change of Securities Administrator) of
Exhibit U (collectively, the "Securities Administrator Information"), or the
Securities Administrator's negligence, bad faith or willful misconduct in
connection therewith, and (ii) each Servicer shall indemnify and hold harmless
the Depositor, the Sponsor, the Securities Administrator and their respective
officers, directors, employees, agents 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 any breach of such Servicer's obligations under this Section 8.12(d)
or any material misstatement or material omission, negligence, bad faith or
willful misconduct of such Servicer in connection therewith. If the
indemnification provided for herein is unavailable or insufficient to hold
harmless any indemnified party, then (i) the Securities Administrator agrees in
connection with a breach of the Securities Administrator's obligations under
this Section 8.12(d) or any material misstatement or material omission contained
in any Securities Administrator Information, negligence, bad faith or willful
misconduct in connection therewith that it shall contribute to the amount paid
or payable by the Depositor and the Sponsor as a result of the losses, claims,
damages or liabilities of the Depositor and the Sponsor in such proportion as is
appropriate to reflect the relative fault of the Depositor and the Sponsor on
the one hand and the Securities Administrator on the other and (ii) each
Servicer, several and not jointly, agrees that it shall contribute to the amount
paid or payable by such indemnified party as a result of the losses, claims,
damages or liabilities of such indemnified party in such proportion as is
appropriate to reflect the relative fault of such indemnified party, on the one
hand, and such Servicer, on the other hand, in connection with a breach of such
Servicer's obligations under this Section 8.12(d) or any material misstatement
or material omission, negligence, bad faith or willful misconduct of such
Servicer in connection therewith.
(e) (i) The obligations set forth in paragraphs (a) through (d) of
this Section shall only apply with respect to periods for which reports are
required to be filed with respect to the Trust under the Exchange Act. Prior to
January 30 of the first year in which the Securities Administrator is able to do
so under applicable law, the Securities Administrator shall prepare and file a
Form 15 Suspension Notification with respect to the Trust, with a copy to the
Depositor. At the beginning of the immediately succeeding calendar year after
the filing of a Form 15 Suspension Notification, if the number of Holders of the
Offered Certificates 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-K, 10-D and 8-K as required pursuant to this Section 8.12 and
the parties hereto shall again have the obligations set forth in this Section.
(ii) In the event that the Securities Administrator is unable
to timely file with the Commission all or any required portion of
any Form 8-K (other than the initial Form 8-K filed by the Depositor
with respect to this Agreement), 10-D or 10-K required to be filed
pursuant to this Agreement because required disclosure information
was either not delivered to it or delivered to it after the delivery
deadlines (and the expiration of the applicable grace period with
respect to such deadline prior to such failure to deliver resulting
in an Event of Default) set forth in this Agreement, the Securities
Administrator will promptly notify the Depositor and if necessary,
or applicable, the Servicers. In the case of Form 10-D and 10-K, the
Depositor, Servicers and the Securities Administrator will thereupon
cooperate to prepare and file a Form 12b-25 and a 10-DA and 10-KA as
applicable, pursuant to Rule 12b-25 of the Exchange Act. In the case
of Form 8-K, the Securities Administrator will, upon receipt of all
disclosure information required to be included on Form 8-K, 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
party to this Agreement deciding that an amendment to such Form 8-K,
10-D or 10-K is required will notify the Depositor if the amendment
pertains to an additional disclosure item and the Depositor will
cooperate to prepare any necessary Form 8-KA, 10-DA or 10-KA. Any
Form 15, Form 12b-25 or any amendment to Form 8-K, 10-D or 10-K
shall be signed by an officer of the Depositor. The Depositor
acknowledges that the performance by the Securities Administrator of
its duties under this Section 8.12(f) related to the timely
preparation and filing of Form 15, a Form 12b-25 or any amendment to
Form 8-K, 10-D or 10-K is contingent upon the Servicers and the
Depositor observing all applicable deadlines (and the related grace
periods thereto) in the performance of their duties under this
Section 8.12 and Section 3.22 and Section 3.23. 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 15, Form 12b-25 or any
amendments to Forms 8-K, 10-D or 10-K, where such failure results
from the Securities Administrator's inability or failure to obtain
or receive, on a timely basis, any information from any party hereto
(other than the Securities Administrator or any Subcontractor
utilized by the Securities Administrator) needed to prepare, arrange
for execution or file such Form 15, Form 12b-25 or any amendments to
Forms 8-K, 10-D or 10-K, not resulting from its own negligence, bad
faith or willful misconduct.
(f) On any date within four (4) Business Days after the occurrence
of an event requiring disclosure on Form 8-K (each such event, a "Reportable
Event"), and if requested by the Depositor, the Securities Administrator shall
prepare and file on behalf of the Trust any Form 8-K, as required by the
Exchange Act, provided that the Depositor shall file the initial Form 8-K in
connection with the issuance of the Certificates. Any disclosure or information
related to a Reportable Event or that is otherwise required to be included on
Form 8-K ("Form 8-K Disclosure Information") shall be prepared by the party
responsible for preparing such disclosure as set forth on Exhibit U hereto and
compiled by the Securities Administrator pursuant to the following paragraph.
The Securities Administrator will have no duty or liability for any failure
hereunder to determine or prepare any Form 8-K Disclosure Information or any
Form 8-K, except as set forth in the next paragraph.
As set forth on Exhibit U hereto, for so long as the Trust is
subject to the Exchange Act reporting requirements, no later than noon Eastern
Time on the 2nd Business Day after the occurrence of a Reportable Event, the
parties to this Agreement shall be required to provide to the Depositor and the
Securities Administrator, in XXXXX-compatible format, or in such other form as
otherwise agreed upon by the Securities Administrator and such party, to the
extent known by such applicable parties, any Form 8-K Disclosure Information, if
applicable. The Depositor will be responsible for all 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, including the conversion of any such disclosure into an
XXXXX-compatible format. 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.
(g) The Securities Administrator shall prepare and forward
electronically a draft copy of the Form 8-K to the Depositor sufficiently far in
advance of, but in no event later than noon (Eastern Standard Time) on the 3rd
Business Day after a Reportable Event, when the Depositor is required to execute
such Form 8-K to permit the Depositor to review, verify and execute such Form
8-K. No later than noon Eastern Time on the 4th Business Day after the
Reportable Event, an officer of the Depositor shall sign the Form 8-K and return
an electronic or fax copy of such signed Form 8-K (with an original executed
hard copy to follow by overnight mail) to the Securities Administrator. If a
Form 8-K cannot be filed on time or if a previously filed Form 8-K needs to be
amended, the Securities Administrator will follow the procedures set forth in
Section 8.12(e)(ii). Promptly (but in any case within one 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. The Depositor acknowledges that the performance
by the Securities Administrator of its duties under this Section 8.12(g) related
to the timely preparation and filing of Form 8-K is contingent, in part, upon
the Servicers, the Depositor and any other Person obligated to provide Form 8-K
Disclosure Information as set forth on Exhibit U hereto, observing all
applicable deadlines in the performance of their duties under this Section
8.12(f). The Securities Administrator shall have no liability for any loss,
expense, damage or claim arising out of or with respect to any failure to
properly prepare and/or timely file such Form 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 party hereto (other than the
Securities Administrator or any Subcontractor utilized by the Securities
Administrator) needed to prepare, arrange for execution or file such Form 8-K,
not resulting from its own negligence, bad faith or willful misconduct.
(h) The Securities Administrator shall have no liability for any
loss, expense, damage or claim arising out of or resulting from (i) the accuracy
or inaccuracy of any Additional Form 10-D Disclosure, Additional Form 10-K
Disclosure or Form 8-K Disclosure Information (excluding any information therein
provided by the Securities Administrator or any Subcontractor utilized by the
Securities Administrator) provided to the Securities Administrator in connection
with the preparation of Forms 10-D, 10-K and 8-K pursuant to this Section 8.12,
or (ii) the failure of the Depositor to timely execute and return for filing any
Forms 10-D, 10-K and 8-K required to be filed by the Securities Administrator
pursuant to this Section 8.12, in either case, not resulting from the Securities
Administrator's own negligence, bad faith or misconduct.
Section 8.13 Tax Treatment of Upper-Tier CarryForward Amounts, Basis
Risk CarryForward Amounts and Class IO Shortfalls; Tax Classification of the
Excess Reserve Fund Account, Swap Account and the Interest Rate Swap Agreement.
For federal income tax purposes, the Securities Administrator shall treat the
Excess Reserve Fund Account and the Swap Account as beneficially owned by the
holders of the Class X Certificates and shall treat such portion of the Trust
Fund as a grantor trust, within the meaning of subpart E, Part I of subchapter J
of the Code. The Securities Administrator shall treat the rights that each Class
of Offered Certificates has to receive payments of Basis Risk CarryForward
Amounts, and to the extent not paid from the Excess Reserve Fund Account, Basis
Risk CarryForward Amounts and, without duplication, Upper Tier CarryForward
Amounts from the Swap Account (together with Basis Risk CarryForward Amounts
from the Excess Reserve Fund Account) as rights to receive payments under an
interest rate cap contract written by the Class X Certificateholder in favor of
each such Class and beneficially owned by each such Class through the grantor
trust. Accordingly, each Class of Certificates (excluding the Class X, Class P
and Class R Certificates) will be comprised of two components - an Upper-Tier
Regular Interest and an interest in an interest rate cap contract, and the Class
X Certificates will be comprised of four components - two Upper-Tier Regular
Interests (the Class X Interest and the Class IO Interest), an interest in the
Excess Reserve Fund Account, subject to obligation to pay Basis Risk
CarryForward Amounts, and ownership of the Swap Account and the Interest Rate
Swap Agreement, subject to the obligation to pay Upper-Tier CarryForward Amounts
including, but without duplication, Basis Risk CarryForward Amounts. The
Securities Administrator shall allocate the issue price for a Class of
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 Securities Administrator is hereby
directed to assign a value of zero to the right of each Holder of an Offered
Certificate to receive the related Upper-Tier CarryForward Amount and, without
duplication, the related Basis Risk CarryForward Amount for purposes of
allocating the purchase price of an Offered Certificate acquired by an initial
Holder thereof between such right and the related Upper-Tier Regular Interest.
Holders of Offered Certificates shall also be treated as having
agreed to pay, on each Distribution Date, to the Holders of the Class X
Certificates an aggregate amount equal to the excess, if any, of (i) Net Swap
Payments and Swap Termination Payments (other than Defaulted Swap Termination
Payments) over (ii) the sum of amounts payable on the Class X 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 Offered Certificates. A Class IO Shortfall payable from interest
collections shall be allocated pro rata among such Offered Certificates based on
the amount of interest otherwise payable to such Class of Offered Certificates,
and a Class IO Shortfall payable from principal collections shall be allocated
in reverse sequential order beginning with the most subordinate Class of Offered
Certificates then Outstanding.
Any payments of Class IO Shortfalls shall be treated for tax
purposes as having been received by the Holders of such Class of Offered
Certificates in respect of the corresponding Upper-Tier Regular Interest and as
having been paid by such Holders to the Holders of the Class X Certificates
through the Swap Account. In the event any class of Upper-Tier Regular Interest
corresponding to a class of Offered Certificates is subject to the Upper-Tier
REMIC Loan Group I Rate, the Upper-Tier REMIC Loan Group II Rate or the
Upper-Tier REMIC WAC Rate, and such rate exceeds the applicable Pass-Through
Rate of the Corresponding Class of Certificates as a result of a Swap
Termination Payment or otherwise, such excess shall be deemed first paid to the
related Upper-Tier Regular Interest and then paid to the Class X Certificates in
a manner analogous to Class IO Shortfalls.
Section 8.14 Custodial Responsibilities. (a) Each Custodian shall
provide access to the Mortgage Loan Documents in possession of such Custodian
regarding the related Mortgage Loans and REO Property and the servicing thereof
to the Trustee, the Certificateholders, the FDIC, and the supervisory agents and
examiners of the FDIC, such access being afforded only upon two (2) Business
Days' prior written request and during normal business hours at the office of
the applicable Custodian. Each Custodian shall allow representatives of the
above entities to photocopy any of the records and documentation and shall
provide equipment for that purpose at the expense of the person requesting such
access.
Upon receipt of a written request made by a Servicer in the form of
the Request for Release, the applicable Custodian shall release within five
Business Days the related Mortgage File in accordance with Section 3.16.
(b) Each Custodian and any of its respective directors, officers,
employees or agents shall be indemnified by the Trust Fund and held harmless
against any loss, liability, or expense (including reasonable attorneys' fees)
incurred in connection with any claim or legal action relating to this Agreement
or the performance of any of the Custodian's duties under this Agreement other
than any loss, liability, or expense incurred (i) resulting from any breach of a
Servicer's obligations in connection with this Agreement for which such Servicer
has performed its obligations to indemnify the Custodians pursuant to Section
6.05, (ii) resulting from any breach of the applicable Responsible Party's
obligations in connection with this Agreement for which the applicable
Responsible Party has performed its obligations to indemnify the Custodians
pursuant to Section 2.03(k), or (iii) because of willful misfeasance, bad faith,
or negligence in the performance of any of the Custodian's duties under this
Agreement. This indemnity shall survive the termination of this Agreement or the
earlier resignation or removal of the Custodian. Except as otherwise provided in
this Agreement or a separate letter agreement between the Depositor and the
applicable Custodian, such Custodian shall not be entitled to payment or
reimbursement for any routine ongoing expenses incurred by such Custodian in the
ordinary course of its duties as Custodian under this Agreement or for any other
expenses incurred by the Custodian; provided, however, that no expense shall be
reimbursed by the Trust Fund under this Agreement if it would not constitute an
"unanticipated expense incurred by the REMIC" within the meaning of the REMIC
Provisions.
(c) Each Custodian may resign from its obligations hereunder upon 60
days' prior written notice to the Trustee, the Depositor and the Servicers. Such
resignation shall take effect upon (i) the appointment of a successor Custodian
reasonably acceptable to the Trustee within such 60 day period; and (ii)
delivery of all Custodial Files to the successor Custodian. The Trustee shall
have the right, but not the obligation, to become the successor Custodian. If no
successor Xxxxxxxxx is appointed within 60 days after written notice of the
applicable Custodian's resignation is received by the Trustee, such Custodian
may petition a court of competent jurisdiction to appoint a successor Xxxxxxxxx.
Upon such resignation and appointment of successor Xxxxxxxxx, the
applicable Custodian shall, at such Custodian's expense (unless for nonpayment,
then at the expense of the Trust), promptly transfer to the successor Custodian,
as directed in writing by the Trustee, all Mortgage Files being administered
under this Agreement.
(d) For so long as reports are required to be filed with the
Commission under the Exchange Act with respect to the Trust, the Custodians
shall not utilize any Subcontractor for the performance of its duties hereunder
if such Subcontractor would be "participating in the servicing function" within
the meaning of Item 1122 of Regulation AB. Each Custodian shall indemnify the
Depositor, the Sponsor and any director, officer, employee or agent of the
Depositor or the Sponsor and hold them harmless against any and all claims,
losses, damages, penalties, fines, forfeitures, reasonable and necessary legal
fees and related costs, judgments, and any other costs, fees and expenses that
any of them may sustain in any way related to the breach by the applicable
Custodian of its obligation set forth in the preceding sentence or the failure
of any Custodian to perform any of its obligations under Section 3.23. This
indemnity shall survive the termination of this Agreement or the earlier
resignation or removal of the Custodian.
(e) Notwithstanding anything in this Agreement to the contrary, no
Custodian shall be required to deliver, or to cause to be delivered, information
relating to Item 1117 of Regulation AB pursuant to Sections 8.12(b) and (c) and
Exhibits S and T to this Agreement for any reporting period of the Trust in
which the Custodian's Weighted Average Percentage is less than 20%. The
"Custodian's Weighted Average Percentage" means, for the applicable reporting
period of the Trust and each Custodian, the quotient, expressed as a percentage,
of (A) the aggregate of the Stated Principal Balance for each Distribution Date
in such reporting period of the Mortgage Loans for which such Custodian acted as
Custodian divided by (B) the aggregate of the Pool Stated Principal Balance for
each Distribution Date in such reporting period.
ARTICLE IX
CONCERNING THE SECURITIES ADMINISTRATOR
Section 9.01 Duties of Securities Administrator. The Securities
Administrator shall undertake to perform such duties and only such duties as are
specifically set forth in this Agreement.
The Securities Administrator, upon receipt of all resolutions,
certificates, statements, opinions, reports, documents, orders or other
instruments furnished to the Securities Administrator that are specifically
required to be furnished pursuant to any provision of this Agreement shall
examine them to determine whether they are in the form required by this
Agreement; provided, however, that the Securities Administrator shall not be
responsible for the accuracy or content of any such resolution, certificate,
statement, opinion, report, document, order or other instrument. If any such
instrument is found not to conform in any material respect to the requirements
of this Agreement, the Securities Administrator shall notify the
Certificateholders of such non conforming instrument in the event the Securities
Administrator, after so requesting, does not receive a satisfactorily corrected
instrument.
No provision of this Agreement shall be construed to relieve the
Securities Administrator from liability for its own negligent action, its own
negligent failure to act or its own willful misconduct; provided, however, that:
(i) the duties and obligations of the Securities Administrator shall
be determined solely by the express provisions of this Agreement, the
Securities Administrator shall not 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 Securities Administrator and the Securities
Administrator 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 Securities Administrator and conforming to
the requirements of this Agreement which it believed in good faith to be
genuine and to have been duly executed by the proper authorities
respecting any matters arising hereunder;
(ii) the Securities Administrator shall not be liable for an error
of judgment made in good faith by a Responsible Officer or Responsible
Officers of the Securities Administrator, unless it shall be conclusively
determined by a court of competent jurisdiction, such determination no
longer subject to appeal, that the Securities Administrator was negligent
in ascertaining the pertinent facts;
(iii) the Securities Administrator shall not be liable with respect
to any action or inaction taken, suffered or omitted to be taken by it in
good faith in accordance with the direction of Holders of Certificates
evidencing not less than 25% of the Voting Rights of Certificates relating
to the time, method and place of conducting any proceeding for any remedy
available to the Securities Administrator, or exercising or omitting to
exercise any trust or power conferred upon the Securities Administrator
under this Agreement; and
(iv) the Securities Administrator shall not be accountable, shall
have no liability and makes no representation as to any acts or omissions
hereunder of the Servicers or the Trustee.
Section 9.02 Certain Matters Affecting the Securities Administrator.
Except as otherwise provided in Section 9.01:
(i) the Securities Administrator may request and conclusively rely
upon and shall be fully 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
believed by it to be genuine and to have been signed or presented by the
proper party or parties and the Securities Administrator shall have no
responsibility to ascertain or confirm the genuineness of any signature of
any such party or parties;
(ii) the Securities Administrator may consult with counsel,
financial advisers or accountants and the advice of any such counsel,
financial advisers or accountants 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) the Securities Administrator shall not be liable for any
action or inaction 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;
(iv) the Securities Administrator shall not be bound to make any
investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
consent, order, approval, bond or other paper or document, unless
requested in writing so to do by Holders of Certificates evidencing not
less than 25% of the Voting Rights allocated to each Class of
Certificates; provided, however, that if the payment within a reasonable
time to 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 Securities Administrator, not reasonably assured to the
Securities Administrator by the security afforded to it by the terms of
this Agreement, the Securities Administrator may require reasonable
indemnity against such expense or liability as a condition to so
proceeding. Nothing in this clause (iv) shall derogate from the obligation
of the Securities Administrator to observe any applicable law prohibiting
disclosure of information regarding the Mortgagors, provided that the
Master Servicer shall have no liability for disclosure required by this
Agreement;
(v) 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 the Securities
Administrator shall not be responsible for any misconduct or negligence on
the part of any such agent, attorney or custodian appointed by the
Securities Administrator with due care;
(vi) the Securities Administrator shall not be required to risk or
expend its own funds or otherwise incur any financial liability in the
performance of any of its duties or in the exercise of any of its rights
or powers hereunder if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or
liability is not assured to it, and none of the provisions contained in
this Agreement shall in any event require the Securities Administrator to
perform, or be responsible for the manner of performance of, any of the
obligations of any Servicer under this Agreement;
(vii) the Securities Administrator shall be under no obligation to
exercise any of the trusts, 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 any of the
Certificateholders, pursuant to the provisions of this Agreement, unless
such Certificateholders shall have offered to the Securities Administrator
reasonable security or indemnity satisfactory to the Securities
Administrator against the costs, expenses and liabilities which may be
incurred therein or thereby; and
(viii) the Securities Administrator shall have no obligation to
appear in, prosecute or defend any legal action that is not incidental to
its duties hereunder and which in its opinion may involve it in any
expense or liability; provided, however, that the Securities Administrator
may in its discretion undertake any such action that 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 Trustee, the Securities
Administrator and the Certificateholders hereunder. In such event, the
legal expenses and costs of such action and any liability resulting
therefrom shall be expenses, costs and liabilities of the Trust Fund, and
the Securities Administrator shall be entitled to be reimbursed therefor
out of the Distribution Account.
The Securities Administrator shall have no duty (A) to see to any
recording, filing, or depositing of this Agreement or any agreement referred to
herein or any financing statement or continuation statement evidencing a
security interest, or to see to the maintenance of any such recording or filing
or depositing or to any rerecording, refiling or redepositing thereof, (B) to
see to the provision of any insurance or (C) to see to the payment or discharge
of any tax, assessment, or other governmental charge or any lien or encumbrance
of any kind owing with respect to, assessed or levied against, any part of the
Trust Fund other than from funds available in the Distribution Account.
Section 9.03 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 or the Purchaser, as the case may be,
and the Securities Administrator assumes no responsibility for their
correctness. The Securities Administrator makes no representations as to the
validity or sufficiency of this Agreement, the Interest Rate Swap Agreement or
of the Certificates or of any Mortgage Loan or related document other than with
respect to the Securities Administrator's execution and authentication of the
Certificates. The Securities Administrator shall not be accountable for the use
or application by the Depositor or any Servicer of any funds paid to the
Depositor or any Servicer in respect of the Mortgage Loans or deposited in or
withdrawn from the Collection Account by the Depositor or any Servicer.
The Securities Administrator executes the Interest Rate Swap
Agreement and the Certificates not in its individual capacity but solely as
Securities Administrator of the Trust Fund created by this Agreement, 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 on behalf of the Trust Fund in the Interest Rate Swap
Agreement and the Certificates is made and intended not as a personal
undertaking or agreement by the Trustee but is made and intended for the purpose
of binding only the Trust Fund.
Section 9.04 Securities Administrator May Own Certificates. The
Securities Administrator in its individual or any other capacity may become the
owner or pledgee of Certificates and may transact business with the parties
hereto and their Affiliates with the same rights as it would have if it were not
the Securities Administrator.
Section 9.05 Securities Administrator's Fees and Expenses. The
Securities Administrator shall be entitled to the investment income earned on
amounts in the Distribution Account during the Securities Administrator Float
Period. The Securities Administrator and any director, officer, employee, agent
or "control person" within the meaning of the Securities Act of 1933, as
amended, and the Securities Exchange of 1934, as amended ("Control Person"), of
the Securities Administrator shall be indemnified by the Trust and held harmless
against any loss, liability or expense (including reasonable attorney's fees)
(i) incurred in connection with any claim or legal action relating to (a) this
Agreement or the Interest Rate Swap Agreement, (b) the Mortgage Loans or (c) the
Certificates, other than any loss, liability or expense incurred by reason of
willful misfeasance, bad faith or negligence in the performance of any of the
Securities Administrator's duties hereunder, (ii) incurred in connection with
the performance of any of the Securities Administrator's duties hereunder or
under such other agreements, other than any loss, liability or expense incurred
by reason of willful misfeasance, bad faith or negligence in the performance of
any of the Securities Administrator's duties hereunder or (iii) incurred by
reason of any action of the Securities Administrator taken at the direction of
the Certificateholders, provided that any such loss, liability or expense
constitutes an "unanticipated expense incurred by the REMIC" within the meaning
of Treasury Regulations Section 1.860G-1(b)(3)(ii). Such indemnity shall survive
the termination of this Agreement or the resignation or removal of the
Securities Administrator hereunder. Without limiting the foregoing, and except
for any such expense, disbursement or advance as may arise from the Securities
Administrator's negligence, bad faith or willful misconduct, or which would not
be an "unanticipated expense" within the meaning of the second preceding
sentence, the Securities Administrator shall be reimbursed by the Trust for all
reasonable expenses, disbursements and advances incurred or made by the
Securities Administrator in accordance with any of the provisions of this
Agreement with respect to: (A) the reasonable compensation and the expenses and
disbursements of its counsel not associated with the closing of the issuance of
the Certificates, (B) the reasonable compensation, expenses and disbursements of
any accountant, engineer, appraiser or other agent that is not regularly
employed by the Securities Administrator, to the extent that the Securities
Administrator must engage such Persons to perform acts or services hereunder and
(C) printing and engraving expenses in connection with preparing any Definitive
Certificates. The Trust shall fulfill its obligations under this paragraph from
amounts on deposit from time to time in the Distribution Account. The Securities
Administrator shall be required to pay all expenses incurred by it in connection
with its activities hereunder and shall not be entitled to reimbursement
therefor except as provided in this Agreement.
Section 9.06 Eligibility Requirements for Securities Administrator.
The Securities Administrator hereunder shall at all times be a corporation or
association organized and doing business under the laws 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,
subject to supervision or examination by federal or state authority and with a
credit rating of at least investment grade. If such corporation or association
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 9.06 the combined capital and surplus of such
corporation or association shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Securities Administrator shall cease to be eligible in
accordance with the provisions of this Section 9.06, the Securities
Administrator shall resign immediately in the manner and with the effect
specified in Section 9.07 hereof. The entity serving as Securities Administrator
may have normal banking and trust relationships with the Depositor and its
affiliates or the Trustee and its affiliates.
Any successor Securities Administrator (i) may not be an originator,
the Servicer, the Depositor or an affiliate of the Depositor unless the
Securities Administrator functions are operated through an institutional trust
department of the Securities Administrator, (ii) must be authorized to exercise
corporate trust powers under the laws of its jurisdiction of organization, and
(iii) must be rated at least "A/F1" by Fitch, if Fitch is a Rating Agency and
rates such successor, or the equivalent rating by S&P or Xxxxx'x. 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 Section 9.07, then the Trustee may
(but shall not be obligated to) become the successor Securities Administrator.
The Depositor shall appoint a successor to the Securities Administrator in
accordance with Section 9.07. The Trustee shall notify the Rating Agencies of
any change of Securities Administrator.
Section 9.07 Resignation and Removal of Securities Administrator.
The Securities Administrator may at any time resign by giving written notice of
resignation to the Depositor and the Trustee and each Rating Agency not less
than 60 days before the date specified in such notice when, subject to Section
9.08, such resignation is to take effect, and acceptance by a successor
Securities Administrator in accordance with Section 9.08 meeting the
qualifications set forth in Section 9.06. If no successor Securities
Administrator meeting such qualifications shall have been so appointed by the
Depositor and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Securities Administrator may petition any
court of competent jurisdiction for the appointment of a successor Securities
Administrator.
If at any time the Securities Administrator shall cease to be
eligible in accordance with the provisions of Section 9.06 hereof and shall fail
to resign after written request thereto by the Depositor, or if at any time the
Securities Administrator shall become incapable of acting, or shall be adjudged
as bankrupt or insolvent, or a receiver of the Securities Administrator or of
its property shall be appointed, or any public officer shall take charge or
control of the Securities Administrator or of its property or affairs for the
purpose of rehabilitation, conservation or liquidation, or a tax is imposed with
respect to the Trust Fund by any state in which the Securities Administrator or
the Trust Fund is located and the imposition of such tax would be avoided by the
appointment of a different Securities Administrator, then the Depositor may
remove the Securities Administrator and appoint a successor Securities
Administrator by written instrument, in triplicate, one copy of which instrument
shall be delivered to the Securities Administrator so removed, one copy of which
shall be delivered to the Master Servicer and one copy to the successor
Securities Administrator.
The Holders of Certificates entitled to at least 51% of the Voting
Rights may at any time remove the Securities Administrator and appoint a
successor Securities Administrator by written instrument or instruments, in
triplicate, signed by such Holders or their attorneys in fact duly authorized,
one complete set of which instruments shall be delivered by the successor
Securities Administrator to the Trustee, one complete set to the Securities
Administrator so removed and one complete set to the successor so appointed.
Notice of any removal of the Securities Administrator shall be given to each
Rating Agency by the successor Securities Administrator.
Any resignation or removal of the Securities Administrator and
appointment of a successor Securities Administrator pursuant to any of the
provisions of this Section 9.07 shall become effective upon acceptance by the
successor Securities Administrator of appointment as provided in Section 9.08
hereof.
Section 9.08 Successor Securities Administrator. Any successor
Securities Administrator (which may be the Trustee) appointed as provided in
Section 9.07 hereof shall execute, acknowledge and deliver to the Depositor and
to its predecessor Securities Administrator and the Trustee an instrument
accepting such appointment hereunder and thereupon the resignation or removal of
the predecessor Securities Administrator shall become effective and such
successor Securities Administrator, without any further act, deed or conveyance,
shall become fully vested with all the rights, powers, duties and obligations of
its predecessor hereunder, with the like effect as if originally named as
Securities Administrator herein. The Depositor, the Trustee, the Master Servicer
and the predecessor Securities Administrator shall execute and deliver such
instruments and do such other things as may reasonably be required for more
fully and certainly vesting and confirming in the successor Securities
Administrator all such rights, powers, duties, and obligations.
No successor Securities Administrator shall accept appointment as
provided in this Section 9.08 unless at the time of such acceptance such
successor Securities Administrator shall be eligible under the provisions of
Section 9.06 hereof and its appointment shall not adversely affect the then
current rating of the Certificates, as confirmed in writing by each Rating
Agency.
Upon acceptance by a successor Securities Administrator of
appointment as provided in this Section 9.08, the Depositor shall mail notice of
the succession of such Securities Administrator hereunder to all Holders of
Certificates. If the Depositor fails to mail such notice within 10 days after
acceptance by the successor Securities Administrator of appointment, the
successor Securities Administrator shall cause such notice to be mailed at the
expense of the Depositor.
Section 9.09 Merger or Consolidation of Securities Administrator.
Any corporation or other entity into which the Securities Administrator may be
merged or converted or with which it may be consolidated or any corporation or
other entity resulting from any merger, conversion or consolidation to which the
Securities Administrator shall be a party, or any corporation or other entity
succeeding to the business of the Securities Administrator, shall be the
successor of the Securities Administrator hereunder, provided that such
corporation or other entity shall be eligible under the provisions of Section
9.06 hereof, without the execution or filing of any paper or further act on the
part of any of the parties hereto, anything herein to the contrary
notwithstanding.
Section 9.10 Assignment or Delegation of Duties by the Securities
Administrator. Except as expressly provided herein, the Securities Administrator
shall not assign or transfer any of its rights, benefits or privileges hereunder
to any other Person, or delegate to or subcontract with, or authorize or appoint
any other Person to perform any of the duties, covenants or obligations to be
performed by the Securities Administrator; provided, however, that the
Securities Administrator shall have the right with the prior written consent of
the Depositor (which shall not be unreasonably withheld or delayed), and upon
delivery to the Trustee and the Depositor of a letter from each Rating Agency to
the effect that such action shall not result in a downgrade of the ratings
assigned to any of the Certificates, to delegate or assign to or subcontract
with or authorize or appoint any qualified Person to perform and carry out any
duties, covenants or obligations to be performed and carried out by the
Securities Administrator hereunder. Notice of such permitted assignment shall be
given promptly by the Securities Administrator to the Depositor and the Trustee.
If, pursuant to any provision hereof, the duties of the Securities Administrator
are transferred to a successor securities administrator, the entire compensation
payable to the Securities Administrator pursuant hereto shall thereafter be
payable to such successor securities administrator but in no event shall the fee
payable to the successor Securities Administrator exceed that payable to the
predecessor Securities Administrator.
ARTICLE X
TERMINATION
Section 10.01 Termination upon Liquidation or Purchase of the
Mortgage Loans. Subject to Section 10.03, the obligations and responsibilities
of the Depositor, the Servicers, the Securities Administrator and the Trustee
created hereby with respect to the Trust Fund shall terminate upon the earlier
of (a) the purchase, on or after the Optional Termination Date, by any Servicer
individually, or all of the Servicers together, of all Mortgage Loans (and REO
Properties) at the price equal to the sum of (i) 100% of the unpaid principal
balance of each Mortgage Loan (other than in respect of REO Property) plus
accrued and unpaid interest thereon at the applicable Mortgage Rate, (ii) the
lesser of (x) the appraised value of any REO Property as determined by the
higher of two appraisals completed by two independent appraisers selected by
such Servicer(s) at the expense of such Servicer(s), plus accrued and unpaid
interest on each Mortgage Loan at the applicable Mortgage Rate and (y) the
unpaid principal balance of each Mortgage Loan related to any REO Property, in
each case plus accrued and unpaid interest thereon at the applicable Mortgage
Rate, and (iii) any Swap Termination Payment owed to the Swap Provider pursuant
to the Interest Rate Swap Agreement, and (b) the later of (i) the maturity or
other liquidation (or any Advance with respect thereto) of the last Mortgage
Loan remaining in the Trust Fund and the disposition of all REO Property and
(ii) the distribution to Certificateholders of all amounts required to be
distributed to them pursuant to this Agreement. In no event shall the trusts
created hereby continue beyond the expiration of 21 years from the death of the
survivor of the descendants of Xxxxxx X. Xxxxxxx, the late Ambassador of the
United States to the Court of St. James's, living on the date hereof.
Notwithstanding anything to the contrary contained herein, no such
purchase shall be permitted, unless (i) after distribution of the proceeds
thereof to the Certificateholders (other than the Holders of the Class X, Class
P and Residual Certificates) pursuant to Section 10.02, the distribution of the
remaining proceeds to the Class X and Class P Certificates is sufficient to pay
the outstanding principal amount of and accrued and unpaid interest on the NIM
Securities, to the extent the NIM Securities are then outstanding, or (ii) prior
to such purchase, the purchasing Servicer(s) shall have deposited in the related
Collection Account an amount to be remitted to the NIM Trustee that, together
with such remaining proceeds, will be sufficient to pay the outstanding
principal amount of and accrued and unpaid interest on the NIM Securities, to
the extent the NIM Securities are then outstanding.
Section 10.02 Final Distribution on the Certificates. If on any
Remittance Date, the Servicers determines that there are no Outstanding Mortgage
Loans and no other funds or assets in the Trust Fund other than the funds in the
Collection Account, the Servicers shall direct the Securities Administrator
promptly to send a Notice of Final Distribution to each Certificateholder and
the Swap Provider. If any Servicer individually elects to terminate the Trust
Fund pursuant to clause (a) of Section 10.01, such Servicer shall notify the
other Servicer of such election by the 15th day of the month preceding the month
of the final distribution and the other Servicer shall have 5 days to elect, by
notice to the other Servicer, to purchase the Mortgage Loans it services. If any
Servicer or all of the Servicers so elect to terminate the Trust Fund pursuant
to clause (a) of Section 10.01, by the 25th day of the month preceding the month
of the final distribution, such Servicer or Servicers shall notify the Depositor
and the Securities Administrator of the date such Servicer or Servicers intend
to terminate the Trust Fund and of the applicable repurchase price of the
Mortgage Loans and REO Properties.
A Notice of Final Distribution, specifying the Distribution Date on
which Certificateholders may surrender their Certificates for payment of the
final distribution and cancellation, shall be given promptly by the Securities
Administrator by letter to Certificateholders mailed not earlier than the 10th
day and not later than the 15th day of the month of such final distribution. Any
such Notice of Final Distribution shall specify (a) the Distribution Date upon
which final distribution on the Certificates will be made upon presentation and
surrender of Certificates at the office therein designated, (b) the amount of
such final distribution, (c) the location of the office or agency at which such
presentation and surrender must be made, and (d) that the Record Date otherwise
applicable to such Distribution Date is not applicable, distributions being made
only upon presentation and surrender of the Certificates at the office therein
specified. The Securities Administrator will give such Notice of Final
Distribution to each Rating Agency at the time such Notice of Final Distribution
is given to Certificateholders.
In the event such Notice of Final Distribution is given, each
Servicer shall cause all funds in the Collection Account to be remitted to the
Securities Administrator for deposit in the Distribution Account on the Business
Day prior to the applicable Distribution Date in an amount equal to the final
distribution in respect of the Certificates. Upon such final deposit with
respect to the Trust Fund and the receipt by the applicable Custodian of a
Request for Release therefor, the applicable Custodian shall promptly release to
the applicable Servicer the Custodial Files for the Mortgage Loans.
Upon presentation and surrender of the Certificates, the Securities
Administrator shall cause to be distributed to the Certificateholders of each
Class (after reimbursement of all amounts due to the Servicers, the Depositor,
the Securities Administrator and the Trustee hereunder), in each case on the
final Distribution Date and in the order set forth in Section 4.02, in
proportion to their respective Percentage Interests, with respect to
Certificateholders of the same Class, up to an amount equal to (i) as to each
Class of Regular Certificates (except the Class X Certificates), the Certificate
Balance thereof plus for each such Class and the Class X Certificates accrued
interest thereon in the case of an interest-bearing Certificate and all other
amounts to which such Classes are entitled pursuant to Section 4.02 and (ii) as
to the Residual Certificates, the amount, if any, which remains on deposit in
the Distribution Account (other than the amounts retained to meet claims) after
application pursuant to clause (i) above.
In the event that any affected Certificateholders shall not
surrender Certificates for cancellation within six months after the date
specified in the above mentioned written notice, the Securities Administrator
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 six months after the second notice all the
applicable Certificates shall not have been surrendered for cancellation, the
Securities Administrator may take appropriate steps, or may appoint an agent to
take appropriate steps, to contact the remaining Certificateholders concerning
surrender of their Certificates, and the cost thereof shall be paid out of the
funds and other assets which remain a part of the Trust Fund. If within one year
after the second notice all Certificates shall not have been surrendered for
cancellation, the Class R Certificateholders shall be entitled to all unclaimed
funds and other assets of the Trust Fund which remain subject hereto.
Section 10.03 Additional Termination Requirements. In the event the
applicable Servicer or all of the Servicers exercise their purchase option with
respect to the Mortgage Loans as provided in Section 10.01, the Trust Fund shall
be terminated in accordance with the following additional requirements, unless
the Trustee has been supplied with an Opinion of Counsel, at the expense of the
applicable Servicer or all of the Servicers, as the case may be, to the effect
that the failure to comply with the requirements of this Section 10.03 will not
(i) result in the imposition of taxes on "prohibited transactions" on any Trust
REMIC 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:
(a) The Securities Administrator shall sell all of the assets of the
Trust Fund to the applicable Servicer and, no later than the next Distribution
Date after such sale, shall distribute to the Certificateholders the proceeds of
such sale in complete liquidation of each Trust REMIC; and
(b) The Securities Administrator shall attach a statement to the
final federal income tax return for each Trust REMIC stating that pursuant to
Treasury Regulations Section 1.860F-1, the first day of the 90-day liquidation
period for each such Trust REMIC was the date on which the Securities
Administrator sold the assets of the Trust Fund to the applicable Servicer or
Servicers, as the case may be.
ARTICLE XI
MISCELLANEOUS PROVISIONS
Section 11.01 Amendment. This Agreement may be amended from time to
time by the Depositor, the Servicers, the Securities Administrator, the
Responsible Parties, the Custodians and the Trustee without the consent of any
of the Certificateholders (i) to cure any ambiguity or mistake, (ii) to correct
any defective provision herein or to supplement any provision herein which may
be inconsistent with any other provision herein, (iii) to add to the duties of
the Depositor, the Securities Administrator, the Custodians or the Servicers,
(iv) to add any other provisions with respect to matters or questions arising
hereunder or (v) to modify, alter, amend, add to or rescind any of the terms or
provisions contained in this Agreement; provided that any amendment pursuant to
clauses (iv) or (v) above shall not, as evidenced by an Opinion of Counsel
(which Opinion of Counsel shall not be an expense of the Trustee, the Securities
Administrator or the Trust Fund), adversely affect in any material respect the
interests of any Certificateholder; and provided, further, that any such
amendment pursuant to clause (iv) or (v) above shall not be deemed to adversely
affect in any material respect the interests of the Certificateholders if the
Person requesting the amendment obtains a letter from each Rating Agency stating
that the amendment would not result in the downgrading or withdrawal of the
respective ratings then assigned to the Certificates; it being understood and
agreed that any such letter in and of itself will not represent a determination
as to the materiality of any such amendment and will represent a determination
only as to the credit issues affecting any such rating. The Trustee, the
Custodians, the Depositor, the Securities Administrator, the Responsible Parties
and the Servicers also may at any time and from time to time amend this
Agreement, but without the consent of the Certificateholders to modify,
eliminate or add to any of its provisions to such extent as shall be necessary
or helpful to (i) maintain the qualification of each Trust REMIC under the Code,
(ii) avoid or minimize the risk of the imposition of any tax on any Trust REMIC
pursuant to the Code that would be a claim at any time prior to the final
redemption of the Certificates or (iii) comply with any other requirements of
the Code; provided that the Trustee has been provided an Opinion of Counsel,
which opinion shall be an expense of the party requesting such opinion but in
any case shall not be an expense of the Trustee or the Trust Fund, to the effect
that such action is necessary or helpful to, as applicable, (i) maintain such
qualification, (ii) avoid or minimize the risk of the imposition of such a tax
or (iii) comply with any such requirements of the Code.
This Agreement may also be amended from time to time by the
Depositor, the Securities Administrator, the Servicers, the Responsible Parties,
the Custodians and the Trustee with the consent of the Holders of Certificates
evidencing Percentage Interests aggregating not less than 66(2)/3% of each Class
of Certificates affected thereby 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 shall (i) reduce in any manner the amount of, or
delay the timing of, payments required to be distributed on any Certificate
without the consent of the Holder of such Certificate, (ii) 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 (i), without the consent of the
Holders of Certificates of such Class evidencing, as to such Class, Percentage
Interests aggregating not less than 66(2)/3%, or (iii) reduce the aforesaid
percentages of Certificates the Holders of which are required to consent to any
such amendment, without the consent of the Holders of all such Certificates then
Outstanding.
Notwithstanding any contrary provision of this Agreement, the
Trustee shall not consent to any amendment to this Agreement unless (i) it shall
have first received an Opinion of Counsel, which opinion shall not be an expense
of the Trustee or the Trust Fund, to the effect that such amendment will not
cause the imposition of any tax on any Trust REMIC or the Certificateholders or
cause any such 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 (ii) the party seeking such amendment shall have provided
written notice to the Rating Agencies (with a copy of such notice to the
Trustee) of such amendment, stating the provisions of the Agreement to be
amended.
Notwithstanding the foregoing provisions of this Section 11.01, with
respect to any amendment that significantly modifies the permitted activities of
the Trustee or the Servicers, any Certificate beneficially owned by the
Depositor shall be deemed not to be Outstanding (and shall not be considered
when determining the percentage of Certificateholders consenting or when
calculating the total number of Certificates entitled to consent) for purposes
of determining if the requisite consents of Certificateholders under this
Section 11.01 have been obtained.
Promptly after the execution of any amendment to this Agreement
requiring the consent of Certificateholders, the Trustee shall furnish written
notification of the substance or a copy of such amendment to each
Certificateholder 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, but it shall be sufficient if such consent shall approve the
substance thereof. The manner of obtaining such consents and of evidencing the
authorization of the execution thereof by Certificateholders shall be subject to
such reasonable regulations as the Trustee may prescribe.
Nothing in this Agreement shall require the Trustee or the
Securities Administrator to enter into an amendment without receiving an Opinion
of Counsel (which Opinion shall not be an expense of the Trustee, the Securities
Administrator or the Trust Fund), satisfactory to the Trustee or the Securities
Administrator that (i) such amendment is permitted and is not prohibited by this
Agreement and that all requirements for amending this Agreement have been
complied with (including the obtaining of any required consents); and (ii)
either (A) the amendment does not adversely affect in any material respect the
interests of any Certificateholder or (B) the conclusion set forth in the
immediately preceding clause (A) is not required to be reached pursuant to this
Section 11.01.
Notwithstanding the foregoing, any amendment to this Agreement shall
require the prior written consent of the Swap Provider if such amendment
materially and adversely affects the rights or interests of the Swap Provider.
Section 11.02 Recordation of Agreement; Counterparts. 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 Mortgaged Properties are situated, and in any other appropriate
public recording office or elsewhere, such recordation to be effected by the
applicable Servicer at the direction and expense of the Depositor, but only upon
receipt of 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 constitute but one and
the same instrument.
Section 11.03 Governing Law. THIS AGREEMENT SHALL BE CONSTRUED IN
ACCORDANCE WITH AND GOVERNED BY THE SUBSTANTIVE LAWS OF THE STATE OF NEW YORK
APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED IN THE STATE OF NEW YORK AND
THE OBLIGATIONS, RIGHTS AND REMEDIES OF THE PARTIES HERETO AND THE
CERTIFICATEHOLDERS SHALL BE DETERMINED IN ACCORDANCE WITH SUCH LAWS.
Section 11.04 Intention of Parties. It is the express intent of the
parties hereto that the conveyance (i) of the Mortgage Loans by the Depositor
and (ii) of the Trust Fund by the Depositor to the Trustee each be, and be
construed as, an absolute sale thereof. It is, further, not the intention of the
parties that such conveyances be deemed a pledge thereof. However, in the event
that, notwithstanding the intent of the parties, such assets are held to be the
property of the Depositor, as the case may be, or if for any other reason this
Agreement is held or deemed to create a security interest in either such assets,
then (i) this Agreement shall be deemed to be a security agreement within the
meaning of the Uniform Commercial Code of the State of New York and (ii) the
conveyances provided for in this Agreement shall be deemed to be an assignment
and a grant by the Depositor to the Trustee, for the benefit of the
Certificateholders, of a security interest in all of the assets transferred,
whether now owned or hereafter acquired.
The Depositor, for the benefit of the Certificateholders, shall, to
the extent consistent with this Agreement, take such actions as may be necessary
to ensure that, if this Agreement were deemed to create a security interest in
the Trust Fund, such security interest would be deemed to be a perfected
security interest of first priority under applicable law and will be maintained
as such throughout the term of the Agreement. The Depositor shall arrange for
filing any Uniform Commercial Code continuation statements in connection with
any security interest granted or assigned to the Trustee for the benefit of the
Certificateholders.
Section 11.05 Notices. (a) The Securities Administrator shall
promptly provide notice to each Rating Agency with respect to each of the
following of which it has actual knowledge:
(i) Any material change or amendment to this Agreement;
(ii) The occurrence of any Event of Default that has not been cured;
(iii) The resignation or termination of a Servicer, the Securities
Administrator, or the Trustee and the appointment of any successor;
(iv) The repurchase or substitution of Mortgage Loans pursuant to
Section 2.03; and
(v) The final payment to Certificateholders.
(b) In addition, the Securities Administrator shall promptly furnish
to each Rating Agency copies (which may be provided electronically via the
Securities Administrator's website) of the following:
(i) Each report to Certificateholders described in Section 4.03; and
(ii) Any notice of a purchase of a Mortgage Loan pursuant to Section
2.02, 2.03 or 3.11.
All directions, demands, consents and notices hereunder shall be in
writing (unless otherwise indicated in this paragraph) and shall be deemed to
have been duly given when delivered to: (a) in the case of the Depositor or the
Underwriter, Xxxxxx Xxxxxxx Capital I Inc. or Xxxxxx Xxxxxxx & Co. Incorporated,
(1) Xxxxxx Xxxxxxx, Xxxxxx Xxxxxxx - SPG Finance, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx
Xxxx, Xxx Xxxx 00000; (2) Xxxxxxxx Xxxxx, Xxxxxx Xxxxxxx - Legal Counsel
(Securities), 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; (3) Xxxx
Xxxxxxxx, Xxxxxx Xxxxxxx - Servicing Oversight, 0000 X-Xxx Xxx., Xxxxx 000, Xxxx
Xxxxx, Xxxxxxx 00000; (4) Xxxxx Xxxxxxxxxx, Xxxxxx Xxxxxxx - Whole Loan
Operations, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000; (5) Xxxxx Xxxxxx, Xxxxxx
Xxxxxxx - RFPG, 0000 Xxxxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000; and (6) in
the case of a direction or demand, notification to the following email
addresses: Xxxx.Xxxxxxxx@ xxxxxxxxxxxxx.xxx, Xxxxxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx,
Xxxxx.Xxxxxx@xxxxxxxxxxxxx.xxx and Xxxx.Xxxxxxxx@xxxxxxxxxxxxx.xxx; or such
other address as may be hereafter furnished to the other parties hereto by the
Depositor in writing; (b) in the case of Xxxxx Fargo in its capacity as
Securities Administrator, 0000 Xxx Xxxxxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx
00000-1951, or such other address as may be hereafter furnished to the other
parties hereto and the Swap Provider by Xxxxx Fargo in writing; (c) in the case
of Xxxxx Fargo in its capacity as Servicer, 1 Home Campus, Des Moines, Iowa
50328, Attention: Xxxx Xxxxx, Facsimile No. (000) 000-0000, with a copy to
General Counsel, or such other address as may be hereafter furnished to the
other parties hereto and the Swap Provider by Xxxxx Fargo in writing; (d) in the
case of JPMorgan, JPMorgan Chase Bank, National Association, in care of Chase
Home Finance LLC, 00000 Xxxxxx Xxxxxxxx, Xxx Xxxxx, Xxxxxxxxxx 00000, Attention:
Xxxxx Xxxxx, with a copy to: 000 Xxxx Xxxxxx Xxxxx, Xxxxxx, Xxx Xxxxxx 00000,
Attention: General Counsel, or such other address as may be hereafter furnished
to the other parties hereto and the Swap Provider by JPMorgan in writing; (e) in
the case of the HomEq Servicing Corporation, 0000 Xxxx Xxxxxx, Xxxxx Xxxxxxxxx,
Xxxxxxxxxx 00000-0000, Attention: Portfolio Management, Facsimile No. (916)
339-6995, with a copy to HomEq Servicing Corporation, 0000 Xxxx Xxxxxxxxx
Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxx, Xxxxxxxxx, Xxxxxxxxxx 00000, Attention: Legal
Department, Facsimile No. (000) 000-0000, or such other address as may be
hereafter furnished to the other parties hereto and the Swap Provider by HomEq
in writing; (f) in the case of the Trustee, to Deutsche Bank National Trust
Company, 0000 Xxxx Xx. Xxxxxx Xxxxx, Xxxxx Xxx, Xxxxxxxxxx 00000, Attention:
Trust Administration-MS06H2 or such other address as the Trustee may hereafter
furnish to the other parties hereto and the Swap Provider by the Trustee in
writing; (g) in the case of WMC, WMC Mortgage Corp., 0000 Xxxxxxxx Xxxxxx,
Xxxxxxx, Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxxxxx, Facsimile No. (818)
615-1157, with a copy to General Counsel, Facsimile No. (000) 000-0000, or such
other address as may be hereafter furnished to the other parties hereto and the
Swap Provider by WMC in writing; (h) in the case of Decision One, Decision One
Mortgage Company, LLC, 6060 J.A. Xxxxx Xxxxxxxxx, Xxxxx 0000, Xxxxxxxxx, Xxxxx
Xxxxxxxx 00000, Attention: General Counsel, or such other address as may be
hereafter furnished to the other parties hereto and the Swap Provider by
Decision One in writing; (i) in the case of Xxxxx Fargo in its capacity as
Custodian, 00 Xxxxxxxxx Xxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, or such other
address as may be hereafter furnished to the other parties hereto and the Swap
Provider by Xxxxx Fargo in writing; (j) in the case of LaSalle, LaSalle Bank
National Association, 0000 Xxxxx Xxxx, Xxxxx 000, Xxxxxxxx Xxxxxxx, Xxxxxxxx
00000, or such other address as may be hereafter furnished to the other parties
hereto and the Swap Provider by LaSalle in writing; (k) in the case of the Swap
Provider, Xxxxxx Xxxxxxx Capital Services Inc., Transaction Management Group,
0000 Xxxxxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000, Attention: Chief Legal Officer,
Facsimile No. (000) 000-0000, or such other address as may be hereafter
furnished to the other parties hereto by the Swap Provider in writing; and (l)
in the case of each of the Rating Agencies, the address specified therefor in
the definition corresponding to the name of such Rating Agency. Notices to
Certificateholders shall be deemed given when mailed, first class postage
prepaid, to their respective addresses appearing in the Certificate Register.
Section 11.06 Severability of Provisions. If any one or more of the
covenants, agreements, provisions or terms of this Agreement shall be for any
reason whatsoever held invalid, then such covenants, agreements, provisions or
terms shall be deemed severable from the remaining covenants, agreements,
provisions or terms of this Agreement and shall in no way affect the validity or
enforceability of the other provisions of this Agreement or of the Certificates
or the rights of the Holders thereof.
Section 11.07 Assignment; Sales; Advance Facilities. Notwithstanding
anything to the contrary contained herein, except as provided in Section 6.04,
this Agreement may not be assigned by any Servicer without the prior written
consent of the Trustee and the Depositor; provided, however, each Servicer is
hereby authorized to enter into an Advance Facility under which (l) such
Servicer sells, assigns or pledges to an Advancing Person the Servicer's rights
under this Agreement to be reimbursed for any P&I Advances or Servicing Advances
and/or (2) an Advancing Person agrees to fund some or all P&I Advances or
Servicing Advances required to be made by such Servicer pursuant to this
Agreement. No consent of the Trustee, Certificateholders or any other party is
required before a Servicer may enter into an Advance Facility. Notwithstanding
the existence of any Advance Facility under which an Advancing Person agrees to
fund P&I Advances and/or Servicing Advances on a Servicer's behalf, such
Servicer shall remain obligated pursuant to this Agreement to make P&I Advances
and Servicing Advances pursuant to and as required by this Agreement, and shall
not be relieved of such obligations by virtue of such Advance Facility.
Reimbursement amounts shall consist solely of amounts in respect of
P&I Advances and/or Servicing Advances made with respect to the Mortgage Loans
for which a Servicer would be permitted to reimburse itself in accordance with
this Agreement, assuming such Servicer had made the related P&I Advance(s)
and/or Servicing Advance(s).
The applicable Servicer shall maintain and provide to any successor
servicer a detailed accounting on a loan-by-loan basis as to amounts advanced
by, pledged or assigned to, and reimbursed to any Advancing Person. The
successor servicer shall be entitled to rely on any such information provided by
the predecessor Servicer, and the successor servicer shall not be liable for any
errors in such information.
An Advancing Person who purchases or receives an assignment or
pledge of the rights to be reimbursed for P&I Advances and/or Servicing
Advances, and/or whose obligations hereunder are limited to the funding of P&I
Advances and/or Servicing Advances shall not be required to meet the criteria
for qualification of a Subservicer set forth in this Agreement.
The documentation establishing any Advance Facility shall require
that reimbursement amounts distributed with respect to each Mortgage Loan be
allocated to outstanding unreimbursed P&I Advances or Servicing Advances (as the
case may be) made with respect to that Mortgage Loan on a "first-in, first out"
(FIFO) basis. Such documentation shall also require the applicable Servicer to
provide to the related Advancing Person or its designee loan-by-loan information
with respect to each such reimbursement amount distributed to such Advancing
Person or Advance Facility trustee on each Distribution Date, to enable the
Advancing Person or Advance Facility trustee to make the FIFO allocation of each
such reimbursement amount with respect to each applicable Mortgage Loan. The
applicable Servicer shall remain entitled to be reimbursed by the Advancing
Person or Advance Facility trustee for all P&I Advances and Servicing Advances
funded by such Servicer to the extent the related rights to be reimbursed
therefor have not been sold, assigned or pledged to an Advancing Person.
Any amendment to this Section 11.07 or to any other provision of
this Agreement that may be necessary or appropriate to effect the terms of an
Advance Facility as described generally in this Section 11.07, including
amendments to add provisions relating to a successor servicer, may be entered
into by the Trustee, the Depositor, the Securities Administrator, the
Responsible Parties, the Custodians and the Servicers without the consent of any
Certificateholder, notwithstanding anything to the contrary in this Agreement,
upon receipt by the Trustee of an Opinion of Counsel that such amendment has no
material adverse effect on the Certificateholders or written confirmation from
the Rating Agencies that such amendment will not adversely affect the ratings on
the Certificates. Prior to entering into an Advance Facility, the applicable
Servicer shall notify the lender under such facility in writing that: (a) the
Advances financed by and/or pledged to the lender are obligations owed to such
Servicer on a non-recourse basis payable only from the cash flows and proceeds
received under this Agreement for reimbursement of Advances only to the extent
provided herein, and none of the Trustee, the Securities Administrator and the
Trust are otherwise obligated or liable to repay any Advances financed by the
lender; (b) such Servicer will be responsible for remitting to the lender the
applicable amounts collected by it as reimbursement for Advances funded by the
lender, subject to the restrictions and priorities created in this Agreement;
and (c) neither the Securities Administrator nor the Trustee shall have any
responsibility to track or monitor the administration of the financing
arrangement between the applicable Servicer and the lender.
Section 11.08 Limitation on Rights of Certificateholders. The death
or incapacity of any Certificateholder shall not operate to terminate this
Agreement or the Trust created hereby, nor entitle such Certificateholder's
legal representative or heirs to claim an accounting or to take any action or
commence any proceeding in any court for a petition or winding up of the Trust
created hereby, or otherwise affect the rights, obligations and liabilities of
the parties hereto or any of them.
No Certificateholder shall have any right to vote (except as
provided herein) or in any manner otherwise control the operation and management
of the Trust Fund, or the obligations of the parties hereto, nor shall anything
herein set forth or contained in the terms of the Certificates be construed so
as to constitute the Certificateholders from time to time as partners or members
of an association; nor shall any Certificateholder be under any liability to any
third-party by reason of any action taken by the parties to this Agreement
pursuant to any provision hereof.
No Certificateholder shall have any right by virtue or by availing
itself of any provisions of this Agreement to institute any suit, action or
proceeding in equity or at law upon or under or with respect to this Agreement,
unless such Holder previously shall have given to the Trustee a written notice
of an Event of Default and of the continuance thereof, as herein provided, and
unless the Holders of Certificates evidencing not less than 25% of the Voting
Rights evidenced by the Certificates shall also have made written request to the
Trustee to institute such action, suit or proceeding in its own name as Trustee
hereunder and shall have offered to the Trustee such 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 being understood and intended, and being
expressly covenanted by each Certificateholder with every other
Certificateholder and the Trustee, that no one or more Holders of Certificates
shall have any right in any manner whatever by virtue or by availing itself or
themselves of any provisions of this Agreement to affect, disturb or prejudice
the rights of the Holders of any other of the Certificates, or to obtain or seek
to obtain priority over or preference to any other such Holder or to enforce any
right under this Agreement, except in the manner herein provided and for the
common benefit of all Certificateholders. For the protection and enforcement of
the provisions of this Section 11.08, each and every Certificateholder and the
Trustee shall be entitled to such relief as can be given either at law or in
equity.
Section 11.09 Inspection and Audit Rights. Each Servicer agrees
that, on 5 Business Days prior notice, it will permit any representative of the
Depositor or the Trustee during such Person's normal business hours, to examine
all the books of account, records, reports and other papers of such Person
relating to the Mortgage Loans, to make copies and extracts therefrom, to cause
such books to be audited by independent certified public accountants selected by
the Depositor or the Trustee and to discuss its affairs, finances and accounts
relating to the Mortgage Loans with its officers, employees and independent
public accountants (and by this provision each Servicer hereby authorizes said
accountants to discuss with such representative such affairs, finances and
accounts), all at such reasonable times and as often as may be reasonably
requested. Any out-of-pocket expense of a Servicer incident to the exercise by
the Depositor or the Trustee of any right under this Section 11.09 shall be
borne by such Servicer.
Section 11.10 Certificates Nonassessable and Fully Paid. It is the
intention of the Depositor that Certificateholders shall not be personally
liable for obligations of the Trust Fund, that the interests in the Trust Fund
represented by the Certificates shall be nonassessable for any reason
whatsoever, and that the Certificates, upon due authentication thereof by the
Securities Administrator pursuant to this Agreement, are and shall be deemed
fully paid.
Section 11.11 Rule of Construction. Article and section headings are
for the convenience of the reader and shall not be considered in interpreting
this Agreement or the intent of the parties hereto.
Section 11.12 Waiver of Jury Trial. EACH PARTY HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY, WAIVES (TO THE EXTENT PERMITTED BY APPLICABLE
LAW) ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE ARISING UNDER OR
RELATING TO THIS AGREEMENT AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED
BEFORE A JUDGE SITTING WITHOUT A JURY.
Section 11.13 Opinions of Internal Counsel of WMC. WMC acknowledges
and agrees that, in connection with any legal opinions delivered by any internal
counsel of WMC in connection with the execution, delivery and/or performance by
WMC of this Agreement (including any opinions rendered on the Closing Date), WMC
shall be liable to the addressees thereon for any and all claims or demands
arising out of or based upon any such legal opinion.
Section 11.14 Rights of the Swap Provider. 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 its rights under this
Agreement.
Section 11.15 Regulation AB Compliance; Intent of the 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 all reasonable requests made by the Depositor in good faith
for delivery of information under these provisions on the basis of evolving
interpretations of Regulation AB. In connection with the Trust, each Servicer,
the Securities Administrator and each Custodian shall cooperate fully with the
Depositor to deliver to the Depositor (including its assignees or designees),
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 to permit the Depositor to comply with the
provisions of Regulation AB, together with such disclosures relating to each
Servicer, the Securities Administrator and each Custodian, as applicable,
reasonably believed by the Depositor to be necessary in order to effect such
compliance.
[SIGNATURE PAGE FOLLOWS]
IN WITNESS WHEREOF, the parties hereto have caused their names
to be signed hereto by their respective officers thereunto duly authorized as of
the day and year first above written.
XXXXXX XXXXXXX CAPITAL I INC.,
as Depositor
By: /s/ Xxxxxx Xxxxxxx
-------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Securities Administrator
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Servicer
By: /s/ Xxxxxx XxXxxxxx
-------------------------------------
Name: Xxxxxx XxXxxxxx
Title: Vice President
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Custodian
By: /s/ Xxxxxxxx X. Xxxxx
-------------------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Vice President
JPMORGAN CHASE BANK, NATIONAL ASSOCIATION,
as Servicer
By: /s/ Xxx Xxxxxxx
-------------------------------------
Name: Xxx Xxxxxxx
Title: Assistant Vice President
HOMEQ SERVICING CORPORATION,
as Servicer
By: /s/ Xxxxx Xxxxxx
-------------------------------------
Name: Xxxxx Xxxxxx
Title: Chief Operating Officer
WMC MORTGAGE CORP.,
as Responsible Party
By: /s/ Xxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxx Xxxxxxxx
Title: Senior Vice President
DECISION ONE MORTGAGE
COMPANY, LLC,
as Responsible Party
By: /s/ Xxxxx X. Xxxxxxxx
-------------------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Vice President Secondary
DEUTSCHE BANK NATIONAL TRUST COMPANY,
solely as Trustee and not in its
individual capacity
By: /s/ Xxxxxx Xxxxx
-------------------------------------
Name: Xxxxxx Xxxxx
Title: Associate
By: /s/ Xxxxxxx Xxxxxxxx
-------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Vice President
LASALLE BANK NATIONAL ASSOCIATION,
as Custodian
By: /s/ Xxxx X. Xxxxx
-------------------------------------
Name: Xxxx X. Xxxxx
Title: Vice President
SCHEDULE I
Mortgage Loan Schedule
(Delivered to the Custodians and not attached to the Pooling and Servicing
Agreement)
SCHEDULE II
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2006-HE2
Representations and Warranties of Xxxxx Fargo, as Servicer
Xxxxx Fargo hereby makes the representations and warranties set
forth in this Schedule II to the Depositor and the Trustee as of the Closing
Date. Capitalized terms used but not otherwise defined in this Schedule II shall
have the meaning ascribed thereto in the Agreement.
(1) Xxxxx Fargo is duly organized as a corporation and is validly
existing and in good standing under the federal laws of the United States of
America and is duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by Xxxxx Fargo in any state in
which a Mortgaged Property securing a Mortgage Loan is located or is otherwise
not required under applicable law to effect such qualification and, in any
event, is in compliance with the doing business laws of any such State, to the
extent necessary to ensure its ability to enforce each Mortgage Loan and to
service the Mortgage Loans in accordance with the terms of this Agreement;
(2) Xxxxx Fargo has the full power and authority to service each
Mortgage Loan, and to execute, deliver and perform, and to enter into and
consummate the transactions contemplated by this Agreement and has duly
authorized by all necessary action on the part of Xxxxx Fargo the execution,
delivery and performance of this Agreement; and this Agreement, assuming the due
authorization, execution and delivery thereof by the other parties to the
Agreement, constitutes a legal, valid and binding obligation of Xxxxx Fargo,
enforceable against Xxxxx Fargo in accordance with its terms; except to the
extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought;
(3) The execution and delivery of this Agreement by Xxxxx Fargo, the
servicing of the Mortgage Loans required to be serviced by Xxxxx Fargo
hereunder, the consummation by Xxxxx Fargo of any other of the transactions
herein contemplated, and the fulfillment of or compliance with the terms hereof
are in the ordinary course of business of Xxxxx Fargo and will not (A) result in
a breach of any term or provision of the organizational documents of Xxxxx Fargo
or (B) conflict with, result in a breach, violation or acceleration of, or
result in a default under, the terms of any other material agreement or
instrument to which Xxxxx Fargo is a party or by which it may be bound, or any
law, statute, rule, order, regulation, judgment or decree applicable to Xxxxx
Fargo or its property of any court, regulatory body, administrative agency or
governmental body having jurisdiction over Xxxxx Fargo; and Xxxxx Fargo is not a
party to, bound by, or in breach or violation of any indenture or other
agreement or instrument, or subject to or in violation of any law, statute,
rule, order, regulation, judgment or decree of any court, regulatory body,
administrative agency or governmental body having jurisdiction over it, which
(w) materially and adversely affects or, to Xxxxx Fargo's knowledge, would in
the future materially and adversely affect, the ability of Xxxxx Fargo to
perform its obligations under this Agreement, (x) materially and adversely
affects or, to Xxxxx Fargo's knowledge, would in the future materially and
adversely affect, the business, operations, financial condition, properties or
assets of Xxxxx Fargo taken as a whole, (y) impair the ability of the Trust to
realize on the Mortgage Loans, or (z) impair the value of the Mortgage Loans;
(4) Xxxxx Fargo has the facilities, procedures, and experienced
personnel necessary for the sound servicing of mortgage loans of the same type
as the Mortgage Loans;
(5) Xxxxx Fargo 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;
(6) No action, suit, proceeding or investigation is pending or
threatened against Xxxxx Fargo, before any court, administrative agency or other
tribunal asserting the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of Xxxxx Fargo, or in any material impairment of the right or ability of
Xxxxx Fargo to carry on its business substantially as now conducted, or in any
material liability on the part of Xxxxx Fargo, or which would draw into question
the validity of this Agreement or the Mortgage Loans or of any action taken or
to be taken in connection with the obligations of Xxxxx Fargo contemplated
herein, or which would be likely to impair materially the ability of Xxxxx Fargo
to perform under the terms of this Agreement;
(7) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Xxxxx Fargo of, or compliance by Xxxxx Fargo with, this Agreement
or the servicing of the Mortgage Loans as evidenced by the consummation by Xxxxx
Fargo of the transactions contemplated by this Agreement, except for such
consents, approvals, authorizations or orders, if any, that have been obtained
prior to the Closing Date; and
(8) With respect to each Mortgage Loan serviced by Xxxxx Fargo
hereunder, to the extent Xxxxx Fargo serviced such Mortgage Loan and to the
extent Xxxxx Fargo provided monthly reports to the three credit repositories,
Xxxxx Fargo has fully furnished, in accordance with the Fair Credit Reporting
Act and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis.
SCHEDULE III
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2006-HE2
Representations and Warranties of JPMorgan, as Servicer
JPMorgan hereby makes the representations and warranties set forth
in this Schedule III to the Depositor, the Securities Administrator and the
Trustee as of the Closing Date. Capitalized terms used but not otherwise defined
in this Schedule III shall have the meanings ascribed thereto in the Agreement.
(1) JPMorgan is a national banking association duly organized,
validly existing and in good standing under the federal laws of the United
States of America and is duly authorized and qualified to transact any and all
business contemplated by this Agreement to be conducted by JPMorgan in any state
in which a Mortgaged Property securing a Mortgage Loan serviced by JPMorgan is
located or is otherwise not required under applicable law to effect such
qualification and, in any event, is in compliance with the doing business laws
of any such State, to the extent necessary to ensure its ability to enforce each
Mortgage Loan serviced by JPMorgan and to service each Mortgage Loan serviced by
JPMorgan in accordance with the terms of this Agreement;
(2) JPMorgan has the full power and authority to service each
Mortgage Loan serviced by JPMorgan, and to execute, deliver and perform, and to
enter into and consummate the transactions contemplated by this Agreement and
has duly authorized by all necessary action on the part of JPMorgan the
execution, delivery and performance of this Agreement; and this Agreement,
assuming the due authorization, execution and delivery thereof by the other
parties to the Agreement constitutes a legal, valid and binding obligation of
JPMorgan, enforceable against JPMorgan in accordance with its terms, except to
the extent that (a) the enforceability thereof may be limited by bankruptcy,
insolvency, moratorium, receivership and other similar laws relating to
creditors' rights generally and (b) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to the equitable
defenses and to the discretion of the court before which any proceeding therefor
may be brought;
(3) The execution and delivery of this Agreement by JPMorgan, the
servicing of the Mortgage Loans serviced by JPMorgan by JPMorgan hereunder, the
consummation by JPMorgan of any other of the transactions herein contemplated,
and the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of JPMorgan and will not (A) result in a breach of any term
or provision of the organizational documents of JPMorgan or (B) conflict with,
result in a breach, violation or acceleration of, or result in a default under,
the terms of any other material agreement or instrument to which JPMorgan is a
party or by which it may be bound, or any statute, order or regulation
applicable to JPMorgan of any court, regulatory body, administrative agency or
governmental body having jurisdiction over JPMorgan; and JPMorgan is not a party
to, bound by, or in breach or violation of any indenture or other agreement or
instrument, or subject to or in violation of any statute, order or regulation of
any court, regulatory body, administrative agency or governmental body having
jurisdiction over it, which materially and adversely affects or, to JPMorgan's
knowledge, would in the future materially and adversely affect, (x) the ability
of JPMorgan to perform its obligations under this Agreement or (y) the business,
operations, financial condition, properties or assets of JPMorgan taken as a
whole;
(4) JPMorgan is an approved seller/servicer for Xxxxxx Xxx, an
approved servicer for Freddie Mac in good standing and is a HUD approved
non-supervised mortgagee;
(5) No litigation is pending against JPMorgan that would materially
and adversely affect the execution, delivery or enforceability of this Agreement
or the ability of JPMorgan to service the Mortgage Loans serviced by JPMorgan or
to perform any of its other obligations hereunder in accordance with the terms
hereof;
(6) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by JPMorgan of, or compliance by JPMorgan with, this Agreement or
the consummation by JPMorgan of the transactions contemplated by this Agreement,
except for such consents, approvals, authorizations or orders, if any, that have
been obtained prior to the Closing Date; and
(7) JPMorgan has the facilities, procedures and experienced
personnel necessary for the sound servicing of mortgage loans of the same type
as the Mortgage Loans serviced by JPMorgan.
(8) With respect to each Mortgage Loan serviced by JPMorgan, to the
extent JPMorgan serviced such Mortgage Loan serviced by JPMorgan and to the
extent JPMorgan provided monthly reports to the three credit repositories,
JPMorgan has fully furnished, in accordance with the Fair Credit Reporting Act
and its implementing regulations, accurate and complete information (i.e.,
favorable and unfavorable) on its borrower credit files to Equifax, Experian,
and Trans Union Credit Information Company (three of the credit repositories),
on a monthly basis.
SCHEDULE IV
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2006-HE2
Representations and Warranties of HomEq, as Servicer
HomEq hereby makes the representations and warranties set forth in
this Schedule II to the Depositor, the Securities Administrator and the Trustee
as of the Closing Date. Capitalized terms used but not otherwise defined shall
have the meaning ascribed thereto in the Agreement.
(1) HomEq is duly organized as a corporation and is validly existing
and in good standing under the laws of the state of New Jersey, and is licensed
and qualified to transact any and all business contemplated by this Agreement to
be conducted by HomEq in any state in which a Mortgaged Property securing a
Mortgage Loan is located or is otherwise not required under applicable law to
effect such qualification and, in any event, is in compliance with the doing
business laws of any such State, to the extent necessary to ensure its ability
to enforce each Mortgage Loan and to service the Mortgage Loans in accordance
with the terms of this Agreement;
(2) HomEq has the full power and authority to service each Mortgage
Loan, and to execute, deliver and perform, and to enter into and consummate the
transactions contemplated by this Agreement and has duly authorized by all
necessary action on the part of HomEq the execution, delivery and performance of
this Agreement; and this Agreement, assuming the due authorization, execution
and delivery thereof by the other parties to the Agreement, constitutes a legal,
valid and binding obligation of HomEq, enforceable against HomEq in accordance
with its terms; except to the extent that (a) the enforceability thereof may be
limited by bankruptcy, insolvency, moratorium, receivership and other similar
laws relating to creditors' rights generally and (b) the remedy of specific
performance and injunctive and other forms of equitable relief may be subject to
the equitable defenses and to the discretion of the court before which any
proceeding therefor may be brought;
(3) The execution and delivery of this Agreement by HomEq, the
servicing of the Mortgage Loans required to be serviced by HomEq hereunder, the
consummation by HomEq of any other of the transactions herein contemplated, and
the fulfillment of or compliance with the terms hereof are in the ordinary
course of business of HomEq and will not (A) result in a breach of any term or
provision of the organizational documents of HomEq or (B) conflict with, result
in a breach, violation or acceleration of, or result in a default under, the
terms of any other material agreement or instrument to which HomEq is a party or
by which it may be bound, or any law, statute, rule, order, regulation, judgment
or decree applicable to HomEq or its property of any court, regulatory body,
administrative agency or governmental body having jurisdiction over HomEq; and
HomEq is not a party to, bound by, or in breach or violation of any indenture or
other agreement or instrument, or subject to or in violation of any law,
statute, rule, order, regulation, judgment or decree of any court, regulatory
body, administrative agency or governmental body having jurisdiction over it,
which (w) materially and adversely affects or, to HomEq's knowledge, would in
the future materially and adversely affect, the ability of HomEq to perform its
obligations under this Agreement, (x) materially and adversely affects or, to
HomEq's knowledge, would in the future materially and adversely affect, the
business, operations, financial condition, properties or assets of HomEq taken
as a whole, (y) impair the ability of the Trust to realize on the Mortgage
Loans, or (z) impair the value of the Mortgage Loans;
(4) HomEq has the facilities, procedures, and experienced personnel
necessary for the sound servicing of mortgage loans of the same type as the
Mortgage Loans;
(5) HomEq 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;
(6) No action, suit, proceeding or investigation is pending or
threatened against HomEq, before any court, administrative agency or other
tribunal asserting the invalidity of this Agreement, seeking to prevent the
consummation of any of the transactions contemplated by this Agreement or which,
either in any one instance or in the aggregate, may result in any material
adverse change in the business, operations, financial condition, properties or
assets of HomEq, or in any material impairment of the right or ability of HomEq
to carry on its business substantially as now conducted, or in any material
liability on the part of HomEq, or which would draw into question the validity
of this Agreement or the Mortgage Loans or of any action taken or to be taken in
connection with the obligations of HomEq contemplated herein, or which would be
likely to impair materially the ability of HomEq to perform under the terms of
this Agreement;
(7) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by HomEq of, or compliance by HomEq with, this Agreement or the
servicing of the Mortgage Loans as evidenced by the consummation by HomEq of the
transactions contemplated by this Agreement, except for such consents,
approvals, authorizations or orders, if any, that have been obtained prior to
the Closing Date; and
(8) With respect to each Mortgage Loan serviced by HomEq hereunder,
to the extent HomEq serviced such Mortgage Loan and to the extent HomEq provided
monthly reports to the three credit repositories, HomEq has fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing regulations,
accurate and complete information (i.e., favorable and unfavorable) on its
borrower credit files to Equifax, Experian, and Trans Union Credit Information
Company (three of the credit repositories), on a monthly basis.
SCHEDULE V
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2006-HE2
Representations and Warranties of Xxxxxx Xxxxxxx
Capital I Inc. as to the Mortgage Loans
The Depositor hereby makes with respect the Mortgage Loans the
following representations and warranties to the Trustee and the Securities
Administrator as of the Closing Date. Capitalized terms used but not otherwise
defined shall have the meaning ascribed thereto in the Agreement.
(1) Immediately prior to the transfer of the Mortgage Loans by the
Depositor to the Trust on the Closing Date, the Depositor had good title to the
Mortgage Loans, free and clear of any liens, charges, claims or encumbrances
whatsoever.
(2) The original loan balance of each Group I Mortgage Loan was
within Freddie Mac's and Fannie Mae's dollar amount limits for conforming one-
to four-family mortgage loans.
(3) None of the Group I Mortgage Loans originated on or after
October 1, 2002 has a prepayment premium period at origination in excess of
three years.
SCHEDULE VI
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2006-HE2
Representations and Warranties of WMC as to the Mortgage Loans
With respect to the Mortgage Loans for which WMC is specific as the
Responsible Party on the Mortgage Loan Schedule, WMC hereby makes the following
representations and warranties set forth in this Schedule VI to the Depositor,
the Servicers, the Securities Administrator and the Trustee as of the Closing
Date. Capitalized terms used but not otherwise defined in the Agreement shall
have the meanings ascribed thereto in the WMC Purchase Agreement.
(a) Mortgage Loans as Described. WMC Mortgage Corp. has delivered to
the Sponsor, as of April 1, 2006, the Data Tape Information and that Data
Tape Information set forth on the Mortgage Loan Schedule (other than
information regarding the Stated Principal Balances or Due Dates) are true
and correct, including, without limitation, the terms of the Prepayment
Charges, if any, as of the Closing Date. As of the Servicing Transfer Date
and with respect to each Mortgage Loan, the information regarding the
Stated Principal Balances and Due Dates set forth on the Data Tape
Information and the Mortgage Loan Schedule are true and correct;
(b) Payments Current. As of the related Servicing Transfer Date, all
payments required to be made up to the related Closing Date for the
Mortgage Loan under the terms of the Mortgage Note, other than payments
not yet 30 days delinquent, have been made and credited. No payment
required under the Mortgage Loan is 30 days or more delinquent nor has any
payment under the Mortgage Loan been 30 days or more delinquent, exclusive
of any period of grace, at any time since the origination of the Mortgage
Loan. The first Monthly Payment shall be made with respect to the Mortgage
Loan on its related Due Date or within the grace period, all in accordance
with the terms of the related Mortgage Note;
(c) No Outstanding Charges. As of the related Servicing Transfer
Date, there are no defaults in complying with the terms of the Mortgage,
and all taxes, governmental assessments, insurance premiums, water, sewer
and municipal charges, leasehold payments or ground rents which previously
became due and owing have been paid, or an escrow of funds has been
established in an amount sufficient to pay for every such item which
remains unpaid and which has been assessed but is not yet due and payable.
The Seller has not advanced funds, or induced, solicited or knowingly
received any advance of funds by a party other than the Mortgagor,
directly or indirectly, for the payment of any amount required under the
Mortgage Loan, except for interest accruing from the date of the Mortgage
Note or date of disbursement of the Mortgage Loan proceeds, whichever is
earlier, to the day which precedes by one month the related Due Date of
the first installment of principal and interest;
(d) Original Terms Unmodified. As of the related Servicing Transfer
Date, the terms of the Mortgage Note and Mortgage have not been impaired,
waived, altered or modified in any respect, from the date of origination
except by a written instrument which has been recorded, if necessary to
protect the interests of the Purchaser, and which has been delivered to
the Custodian or to such other Person as the Purchaser shall designate in
writing, and the terms of which are reflected in the related Mortgage Loan
Schedule. The substance of any such waiver, alteration or modification has
been approved by the title insurer, if any, to the extent required by the
policy, and its terms are reflected on the related Mortgage Loan Schedule,
if applicable. As of the related Servicing Transfer Date, no Mortgagor has
been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the
extent required by the policy, and which assumption agreement is part of
the Mortgage Loan File delivered to the Custodian or to such other Person
as the Purchaser shall designate in writing and the terms of which are
reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable, in whole or
in part and no such right of rescission, set-off, counterclaim or defense
has been asserted with respect thereto, subject to bankruptcy, equitable
principles and laws affecting creditor rights;
(f) Hazard Insurance. As of the related Servicing Transfer Date,
pursuant to the terms of the Mortgage, all buildings or other improvements
upon the Mortgaged Property are insured by an insurer acceptable in
accordance with Seller's Underwriting Guidelines against loss by fire,
hazards of extended coverage and such other hazards as are customary in
the area where the Mortgaged Property is situated as well as all
additional requirements set forth in Section 2.10 of the Interim Servicing
Agreement. As of the related Servicing Transfer Date, if required by the
National Flood Insurance Act of 1968, as amended, each Mortgage Loan is
covered by a flood insurance policy meeting the requirements of the
current guidelines of the Federal Insurance Administration as in effect
which policy conforms to Seller's Underwriting Guidelines as well as all
additional requirements set forth in Section 2.10 of the Interim Servicing
Agreement. As of the related Servicing Transfer Date, all individual
insurance policies contain a standard mortgagee clause naming the
originator and its successors and assigns as mortgagee, and all premiums
thereon have been paid. As of the related Servicing Transfer Date, the
Mortgage obligates the Mortgagor thereunder to maintain the hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Xxxxxxxxx's cost and expense,
and to seek reimbursement therefor from the Mortgagor. Where required by
state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy
is not a "master" or "blanket" hazard insurance policy covering a
condominium, or any hazard insurance policy covering the common facilities
of a planned unit development. As of the related Servicing Transfer Date,
the hazard insurance policy is the valid and binding obligation of the
insurer, is in full force and effect, and will be in full force and effect
and inure to the benefit of the Trustee upon the consummation of the
transactions contemplated by this Agreement. The Seller has not engaged
in, and has no knowledge of the Mortgagor's having engaged in, any act or
omission which would impair the coverage of any such policy, the benefits
of the endorsement provided for herein, or the validity and binding effect
of either including, without limitation, no unlawful fee, commission,
kickback or other unlawful compensation or value of any kind has been or
will be received, retained or realized by any attorney, firm or other
person or entity, and no such unlawful items have been received, retained
or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to prepayment penalties, have been
complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's or
the Trustee's inspection, and shall deliver to the Purchaser or the
Trustee upon demand, evidence of compliance with all such requirements to
the extent compliance therewith can be demonstrated and if required by
applicable law. This representation and warranty is a Deemed Material and
Adverse Representation;
(h) No Satisfaction of Mortgage. As of the related Servicing
Transfer Date, the Mortgage has not been satisfied, canceled, subordinated
or rescinded, in whole or in part, and the Mortgaged Property has not been
released from the lien of the Mortgage, in whole or in part, nor has any
instrument been executed that would effect any such release, cancellation,
subordination or rescission. The Seller has not waived the performance by
the Mortgagor of any action, if the Mortgagor's failure to perform such
action would cause the Mortgage Loan to be in default, nor has the Seller
waived any default resulting from any action or inaction by the Mortgagor;
(i) Type of Mortgaged Property. The Mortgaged Property is a fee
simple estate, or a leasehold estate located in a jurisdiction in which
the use of a leasehold estate for residential properties is a
widely-accepted practice, that consists of one or more separate and
complete tax parcels of real property improved by a Residential Dwelling;
provided, however, that any condominium unit or planned unit development
(other than a de minimis planned unit development) shall conform with the
Underwriting Guidelines. In the case of any Mortgaged Properties that are
Manufactured Homes (a "Manufactured Home Mortgage Loans"), (i) the related
manufactured dwelling is permanently affixed to the land, (ii) the related
manufactured dwelling and the related land are subject to a Mortgage
properly filed in the appropriate public recording office and naming
Seller as mortgagee, (iii) the applicable laws of the jurisdiction in
which the related Mortgaged Property is located will deem the manufactured
dwelling located on such Mortgaged Property to be a part of the real
property on which such dwelling is located, (iv) as of the origination
date of such Manufactured Home Mortgage Loan, the related Mortgagor
occupied the related Manufactured Home as its primary residence, and (v)
such Manufactured Home Mortgage Loan is (x) a qualified mortgage under
Section 860G(a)(3) of the Internal Revenue Code of 1986, as amended and
(y) secured by manufactured housing treated as a single family residence
under Section 25(e)(10) of the Code. No portion of the Mortgaged Property
is used for commercial purposes, and since the date of origination, no
portion of the Mortgaged Property has been used for commercial purposes;
provided, that Mortgaged Properties which contain a home office shall not
be considered as being used for commercial purposes as long as the
Mortgaged Property has not been altered for commercial purposes and is not
storing any chemicals or raw materials other than those commonly used for
homeowner repair, maintenance and/or household purposes. None of the
Mortgaged Properties are log homes, mobile homes, geodesic domes or other
unique property types. Clause (iv) above is a Deemed Material and Adverse
Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting
and enforceable first lien (with respect to a First Lien Loan) or second
lien (with respect to a Second Lien Loan) on the Mortgaged Property,
including all buildings and improvements on the Mortgaged Property and all
installations and mechanical, electrical, plumbing, heating and air
conditioning systems located in or annexed to such buildings, and all
additions, alterations and replacements made at any time with respect to
the foregoing. The lien of the Mortgage is subject only to (collectively,
the "Permitted Exceptions"):
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and which do not adversely affect the Appraised Value of the
Mortgaged Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related
to and delivered in connection with the Mortgage Loan establishes and
creates a valid, subsisting, enforceable and first lien (with respect
to a First Lien Loan) or second lien (with respect to a Second Lien
Loan) and first priority (with respect to a First Lien Loan) or second
priority (with respect to a Second Lien Loan) security interest on the
property described therein and the Seller has full right to sell and
assign the same to the Purchaser subject to the Permitted Exceptions;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms (including, without limitation, any provisions therein relating
to prepayment penalties), subject to bankruptcy, equitable principles and
laws affecting creditor rights. All parties to the Mortgage Note, the
Mortgage and any other such related agreement had legal capacity to enter
into the Mortgage Loan and to execute and deliver the Mortgage Note, the
Mortgage and any such agreement, and the Mortgage Note, the Mortgage and
any other such related agreement have been duly and properly executed by
other such related parties. No fraud, error, omission, misrepresentation,
negligence or similar occurrence with respect to a Mortgage Loan has taken
place on the part of the Seller in connection with the origination of the
Mortgage Loan or in the application of any insurance in relation to such
Mortgage Loan. Notwithstanding the foregoing, but without limiting the
other representations and warranties set forth elsewhere in this
Agreement, if any error, omission or negligence in the origination of such
Mortgage Loan occurred despite Seller's conformance with its Underwriting
Guidelines (as in effect at the time such Mortgage Loan was made), then
there shall be a presumptive conclusion that there was no error, omission
or negligence. No fraud, misrepresentation, or similar occurrence or, to
Seller's knowledge, error, omission, or negligence with respect to a
Mortgage Loan has taken place on the part of any Person (other than
Seller), including without limitation, the Mortgagor, any appraiser, any
builder or developer, or any other party involved in the origination of
the Mortgage Loan or in the application for any insurance in relation to
such Mortgage Loan. The Seller has reviewed all of the documents
constituting the Servicing File and has made such inquiries as it deems
necessary to make and confirm the accuracy of the representations set
forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(m) Ownership. Immediately prior to the transfer contemplated by the
WMC Purchase Agreement, the Seller was the sole owner of record and holder
of the Mortgage Loan and the indebtedness evidenced by each Mortgage Note
and upon the sale of the Mortgage Loans to the Sponsor, the Seller
retained the Mortgage Files or any part thereof with respect thereto not
delivered to the Custodian, the Purchaser or the Purchaser's designee, in
trust only for the purpose of servicing and supervising the servicing of
each Mortgage Loan. The Mortgage Loan was not assigned or pledged, and the
Seller had good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and
clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and has full right and authority
subject to no interest or participation of, or agreement with, any other
party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located to the
extent required to ensure enforceability of the Mortgage Loan, and (2)
either (i) organized under the laws of such state, or (ii) qualified to do
business in such state, or (iii) a federal savings and loan association, a
savings bank or a national bank having a principal office in such state,
or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV or a CLTV greater than 100%;
(p) Title Insurance. As of the related Servicing Transfer Date, the
Mortgage Loan is covered by an ALTA lender's title insurance policy, or
with respect to any Mortgage Loan for which the related Mortgaged Property
is located in California a CLTA lender's title insurance policy, or other
generally acceptable form of policy or insurance acceptable pursuant to
Seller's Underwriting Guidelines and each such title insurance policy is
issued by a title insurer acceptable to prudent lenders in the secondary
mortgage market and qualified to do business in the jurisdiction where the
Mortgaged Property is located, insuring the originator, its successors and
assigns, as to the first (with respect to a First Lien Loan) or second
(with respect to a Second Lien Loan) priority lien of the Mortgage in the
original principal amount of the Mortgage Loan (or to the extent a
Mortgage Note provides for negative amortization, the maximum amount of
negative amortization in accordance with the Mortgage), subject only to
the Permitted Exceptions, and in the case of Adjustable Rate Mortgage
Loans, against any loss by reason of the invalidity or unenforceability of
the lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. The Seller (or its
predecessor in interest), its successors and assigns, are the sole
insureds of such lender's title insurance policy, and such lender's title
insurance policy is valid and remains in full force and effect and will be
in force and effect upon the consummation of the transactions contemplated
by this Agreement. As of the related Servicing Transfer Date, no claims
have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. As of the related Servicing Transfer Date, there is
no default, breach, violation or event which would permit acceleration
existing under the Mortgage or the 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 which would
permit acceleration, and neither the Seller nor any of its affiliates nor
any of their respective predecessors, have waived any default, breach,
violation or event which would permit acceleration;
(r) No Mechanics' Liens. As of the related Servicing Transfer Date,
there are no mechanics' or similar liens or claims which have been filed
for work, labor or material (and no rights are outstanding that under the
law could give rise to such liens) affecting the related Mortgaged
Property which are or may be liens prior to, or equal or coordinate with,
the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being
part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings
and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and
examined by a federal or state authority, except with respect to a
Mortgage Loan purchased from a correspondent as indicated on the Mortgage
Loan Schedule. Principal payments on the Mortgage Loan commenced no more
than seventy days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap
are as set forth on the related Mortgage Loan Schedule. Unless specified
on the related Mortgage Loan Schedule as an interest-only loan or a
Balloon Mortgage Loan, the Mortgage Note is payable in equal monthly
installments of principal and interest, which installments of interest,
with respect to Adjustable Rate Mortgage Loans, are subject to change due
to the adjustments to the Mortgage Interest Rate on each Interest Rate
Adjustment Date, with interest calculated and payable in arrears,
sufficient to amortize the Mortgage Loan fully by the stated maturity
date, over an original term of not more than thirty years from
commencement of amortization (or forty years for Mortgage Loans identified
on the Mortgage Loan Schedule as a Balloon Mortgage Loan with a forty year
amortization period). Unless otherwise specified on the related Mortgage
Loan Schedule, the Mortgage Loan is payable on the first day of each month
and the Mortgage Loan does not require a balloon payment on its stated
maturity date;
(u) Customary Provisions. The 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 provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines, as may be amended from time to time by the Seller (a copy of
which is attached to each related Assignment and Conveyance Agreement).
The Mortgage Note and Mortgage are on forms acceptable to prudent mortgage
lenders in the secondary mortgage market and no representations have been
made to a Mortgagor that are inconsistent with the mortgage instruments
used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. As
of the related Servicing Transfer Date, all inspections, licenses and
certificates required to be made or issued with respect to all occupied
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. Unless otherwise specified on the
related Mortgage Loan Schedule, the Mortgagor represented at the time of
origination of the Mortgage Loan that the Mortgagor would occupy the
Mortgaged Property as the Mortgagor's primary residence;
(x) No Additional Collateral. As of the related Servicing Transfer
Date, the Mortgage Note is not and has not been secured by any collateral
except the lien of the corresponding Mortgage and the security interest of
any applicable security agreement or chattel mortgage referred to in
paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(z) [Reserved].
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under this Agreement for each Mortgage Loan have been
delivered to the Custodian. The Seller is in possession of a complete,
true and accurate Mortgage File in compliance with Exhibit A hereto,
except for such documents the originals of which have been delivered to
the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the Seller's
Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. Except with respect to MERS
Designated Mortgage Loans, the Assignment of Mortgage with respect to each
Mortgage Loan is in recordable form and is acceptable for recording under
the laws of the jurisdiction in which the Mortgaged Property is located.
The transfer, assignment and conveyance of the Mortgage Notes and the
Mortgages by the Seller are not subject to the bulk transfer or similar
statutory provisions in effect in any applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an provision for the acceleration of the payment of the
unpaid principal balance of the Mortgage Loan in the event that the
Mortgaged Property is sold or transferred without the prior written
consent of the mortgagee thereunder, and to the best of the Seller's
knowledge, such provision is enforceable subject to applicable bankruptcy,
equitable principles and laws affecting creditors' rights;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents do not allow an assumption of such
Mortgage Loan by any other party;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. As of the related Servicing Transfer Date, the Mortgage Loan
does not contain provisions pursuant to which Monthly Payments are paid or
partially paid with funds deposited in any separate account established by
the Seller, the Mortgagor, or anyone on behalf of the Mortgagor, or paid
by any source other than the Mortgagor nor does it contain any other
similar provisions which may constitute a "buydown" provision. The
Mortgage Loan is not a graduated payment mortgage loan and the Mortgage
Loan does not have a shared appreciation or other contingent interest
feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the applicable Cut-off Date have been consolidated
with the outstanding principal amount secured by the Mortgage, and the
secured principal amount, as consolidated, bears a single interest rate
and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first (with
respect to a First Lien Loan) or second (with respect to a Second Lien
Loan) lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title
evidence acceptable to prudent mortgage lenders in the secondary market.
The consolidated principal amount does not exceed the original principal
amount of the Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings. As
of the related Servicing Transfer Date, there is no proceeding pending or,
to Seller's knowledge, threatened for the total or partial condemnation of
the Mortgaged Property. The Mortgaged Property is undamaged by waste,
fire, earthquake or earth movement, windstorm, flood, tornado or other
casualty so as to affect adversely the value of the Mortgaged Property as
security for the Mortgage Loan or the use for which the premises were
intended and each Mortgaged Property is in at least the same condition or
better than its condition at the time of its appraisal. Since the time of
its appraisal, there have not been any condemnation proceedings with
respect to the Mortgaged Property;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
the Seller and the Interim Servicer with respect to the Mortgage Loan have
been in all respects in compliance with Accepted Servicing Practices,
applicable laws and regulations, and have been in all respects legal and
proper. As of the related Servicing Transfer Date, with respect to escrow
deposits and Escrow Payments, all such payments are in the possession of,
or under the control of, the Seller or the Interim Servicer and there
exist no deficiencies in connection therewith for which customary
arrangements for repayment thereof have not been made. As of the related
Servicing Transfer Date, all Escrow Payments have been collected in full
compliance with state and federal law and the provisions of the related
Mortgage Note and Mortgage. As of the related Servicing Transfer Date, an
escrow of funds is not prohibited by applicable law and has been
established in an amount sufficient to pay for every item that remains
unpaid and has been assessed but is not yet due and payable. No escrow
deposits or Escrow Payments or other charges or payments due the Seller
have been capitalized under the Mortgage or the Mortgage Note. All
Mortgage Interest Rate adjustments have been made in strict compliance
with state and federal law and the terms of the related Mortgage and
Mortgage Note on the related Interest Rate Adjustment Date. If, pursuant
to the terms of the Mortgage Note, another index was selected for
determining the Mortgage Interest Rate, the same index was used with
respect to each Mortgage Note which required a new index to be selected,
and such selection did not conflict with the terms of the related Mortgage
Note. As of the related Servicing Transfer Date, the Seller or the Interim
Servicer executed and delivered any and all notices required under
applicable law and the terms of the related Mortgage Note and Mortgage
regarding the Mortgage Interest Rate and the Monthly Payment adjustments.
As of the related Servicing Transfer Date, any interest required to be
paid pursuant to state, federal and local law has been properly paid and
credited;
(jj) Conversion to Fixed Interest Rate. The Mortgage Loan does not
contain a provision whereby the Mortgagor is permitted to convert the
Mortgage Interest Rate from adjustable rate to a fixed rate;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed
on or prior to the Closing Date that has resulted or will result in the
exclusion from, denial of, or defense to coverage under any applicable
hazard insurance policy, PMI Policy or bankruptcy bond (including, without
limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured), irrespective of the cause
of such failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the
Seller or any designee of the Seller or any corporation in which the
Seller or any officer, director, or employee had a financial interest at
the time of placement of such insurance;
(ll) No Violation of Environmental Laws. As of the related Servicing
Transfer Date and to the best of the Seller's knowledge, (i) there is no
pending action or proceeding directly involving the Mortgaged Property in
which compliance with any environmental law, rule or regulation is an
issue; and (ii) there is no violation of any environmental law, rule or
regulation with respect to the Mortgaged Property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Relief Act or other
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage
Loan application by a Qualified Appraiser who had no interest, direct or
indirect in the Mortgaged Property or in any loan made on the security
thereof, and whose compensation is not affected by the approval or
disapproval of the Mortgage Loan, and the appraisal and appraiser both
satisfy the requirements of Seller's Underwriting Guidelines and Title XI
of the Financial Institutions Reform, Recovery, and Enforcement Act of
1989 and the regulations promulgated thereunder, all as in effect on the
date the Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans. The Seller shall maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which
the Mortgaged Property is located, the original lender has filed for
record a request for notice of any action by the related senior
lienholder, and the Seller has notified the senior lienholder in writing
of the existence of the Second Lien Loan and requested notification of any
action to be taken against the Mortgagor by the senior lienholder. Either
(a) no consent for the Second Lien Loan is required by the holder of the
related first lien or (b) such consent has been obtained and is contained
in the Mortgage File;
(rr) Credit Reporting. As of the related Servicing Transfer Date,
the Seller (or its sub-servicer) has caused to be fully furnished, in
accordance with the Fair Credit Reporting Act and its implementing
regulations, accurate and complete information (i.e., favorable and
unfavorable) on its borrower credit files to Equifax, Experian, and Trans
Union Credit Information Company (three of the credit repositories), on a
monthly basis. This representation and warranty is a Deemed Material and
Adverse Representation;
(ss) Reports. On or prior to the related Closing Date, Seller has
provided the Custodian and the Purchaser with a MERS Report listing the
Purchaser as the Investor and the Custodian as the Custodian with respect
to each MERS Designated Mortgage Loan;
(tt) MERS Designations. With respect to each MERS Designated
Mortgage Loan, Seller shall designate the Purchaser as the Investor, the
Custodian as the Custodian and no Person shall be listed as Interim Funder
on the MERS(R) System;
(uu) No Default Under First Lien. As of the related Servicing
Transfer Date, with respect to each Second Lien Loan, the related First
Lien Loan related thereto is in full force and effect, and as of the
related Servicing Transfer Date, there is no default, breach, violation or
event which would permit acceleration existing under such first Mortgage
or Mortgage Note, and as of the related Servicing Transfer Date, 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 which would permit acceleration thereunder;
(vv) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides
for giving notice of default or breach to the mortgagee under the Mortgage
Loan and allows such mortgagee to cure any default under the related first
lien Mortgage;
(ww) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(xx) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by the Seller to the Purchaser, that Seller has full
right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or prospective
purchaser of such Mortgage. The Seller shall hold the Purchaser harmless
from any and all damages, losses, costs and expenses (including attorney's
fees) arising from disclosure of credit information in connection with the
Purchaser's secondary marketing operations and the purchase and sale of
mortgages or Servicing Rights thereto;
(yy) Leaseholds. If the Mortgage Loan is secured by a leasehold
estate, such lease conforms to the requirements required by Xxxxxx Xxx
pursuant to the Xxxxxx Xxx Guide;
(zz) Prepayment Penalty. Each Mortgage Loan that is subject to a
Prepayment Penalty as provided in the related Mortgage Note is identified
on the related Mortgage Loan Schedule. Each such Prepayment Penalty is in
an amount not more than the maximum amount permitted under applicable law
and no such Prepayment Penalty may be imposed for a term in excess of five
(5) years with respect to Mortgage Loans originated prior to October, 1,
2002. With respect to Mortgage Loans originated on or after October 1,
2002, the duration of the Prepayment Penalty period shall not exceed three
(3) years from the date of the Mortgage Note unless the Mortgage Loan was
modified to reduce the Prepayment Penalty period to no more than three (3)
years from the date of the related Mortgage Note and the Mortgagor was
notified in writing of such reduction in Prepayment Penalty period. The
second and third sentences of this representation and warranty are a
Deemed Material and Adverse Representation;
(aaa) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or
after October 1, 2002 through March 6, 2003 is governed by the Georgia
Fair Lending Act. No Mortgage Loan is covered by the Home Ownership and
Equity Protection Act of 1994 and no Mortgage Loan is in violation of any
comparable state or local law. This representation and warranty is a
Deemed Material and Adverse Representation;
(bbb) [Reserved];
(ccc) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(ddd) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National
Tax Service, and such contract is transferable;
(eee) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to
the ability of the Mortgagor to repay and the extension of credit which
has no apparent benefit to the Mortgagor, were employed in the origination
of the Mortgage Loan;
(fff) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment
to the Purchaser) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as
against creditors of the Seller, or is in the process of being recorded;
(ggg) Mortgagor Bankruptcy. As of the related Servicing Transfer
Date, on or prior to the date 60 days after the related Closing Date, the
Mortgagor has not filed and will not file a bankruptcy petition or has not
become the subject and will not become the subject of involuntary
bankruptcy proceedings or has not consented to or will not consent to the
filing of a bankruptcy proceeding against it or to a receiver being
appointed in respect of the related Mortgaged Property;
(hhh) No Prior Offer. The Mortgage Loan has not been previously
rejected by a third-party purchaser;
(iii) [Reserved];
(jjj) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of Xxxxxx Xxx Guides. This representation and
warranty is a Deemed Material and Adverse Representation;
(kkk) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Seller which is a higher
cost product designed for less creditworthy mortgagors, unless at the time
of the Mortgage Loan's origination, such Xxxxxxxxx did not qualify taking
into account credit history and debt-to-income ratios for a lower-cost
credit product then offered by the Seller or any Affiliate of the Seller
with which the Seller has a referral relationship or mechanism in place.
If, at the time of loan application, the Mortgagor may have qualified for
a lower-cost credit product then offered by any mortgage lending Affiliate
of the Seller with which the Seller has a referral relationship or
mechanism in place, the Seller referred the related Mortgagor's
application to such Affiliate for underwriting consideration. This
representation and warranty is a Deemed Material and Adverse
Representation;
(lll) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor's equity
in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time
of origination (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(mmm) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium; provided, that such offer may have been
evidenced by the Seller's rate sheet/pricing grid relating to such
Mortgage Loan, which provided that the Mortgage Loan had a full prepayment
premium buy-out pricing adjustment available, (iii) the prepayment premium
is disclosed to the related Mortgagor in the Mortgage Loan documents
pursuant to applicable state and federal law, and (iv) notwithstanding any
state or federal law to the contrary, the Seller, as servicer, shall not
impose such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments. This representation and warranty is a Deemed
Material and Adverse Representation;
(nnn) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, mortgage,
disability, property, accident, unemployment or health insurance product)
or debt cancellation agreement as a condition of obtaining the extension
of credit. No Mortgagor obtained a prepaid single-premium credit insurance
policy (e.g., life, mortgage, disability, property, accident,
unemployment, mortgage or health insurance) in connection with the
origination of the Mortgage Loan. No proceeds from any Mortgage Loan were
used to purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(ooo) Points and Fees. No Mortgagor was charged "points and fees"
(whether or not financed) in an amount greater than (i) $1,000, or (ii) 5%
of the principal amount of such Mortgage Loan, whichever is greater. For
purposes of this representation, such 5% limitation is calculated in
accordance with Fannie Mae's anti-predatory lending requirements as set
forth in the Xxxxxx Xxx Guides and "points and fees" (x) include
origination, underwriting, broker and finder fees and charges that the
mortgagee imposed as a condition of making the Mortgage Loan, whether they
are paid to the mortgagee or a third party; and (y) exclude bona fide
discount points, fees paid for actual services rendered in connection with
the origination of the Mortgage Loan (such as attorneys' fees, notaries
fees and fees paid for property appraisals, credit reports, surveys, title
examinations and extracts, flood and tax certifications, and home
inspections), the cost of mortgage insurance or credit-risk price
adjustments, the costs of title, hazard, and flood insurance policies,
state and local transfer taxes or fees, escrow deposits for the future
payment of taxes and insurance premiums, and other miscellaneous fees and
charges that, in total, do not exceed 0.25% of the principal amount of
such Mortgage Loan. This representation and warranty is a Deemed Material
and Adverse Representation;
(ppp) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected
or to be collected in connection with the origination and servicing of
each Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation. This
representation and warranty is a Deemed Material and Adverse
Representation;
(qqq) No Arbitration. No Mortgage Loan originated on or after August
1, 2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction. This representation and warranty is a Deemed Material and
Adverse Representation; and
(rrr) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property was the Mortgagor's principal residence at
the time of the origination of such Second Lien Loan. This representation
and warranty is a Deemed Material and Adverse Representation.
SCHEDULE VII
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass-Through Certificates,
Series 2006-HE2
Representations and Warranties of WMC as to WMC
WMC hereby makes the representations and warranties set forth in
this Schedule VII to the Depositor, the Servicers, the Securities Administrator
and the Trustee as of the Closing Date. Capitalized terms used but not otherwise
defined shall have the meaning ascribed thereto in the Agreement.
(a) Due Organization and Authority. WMC is a corporation, validly
existing, and in good standing under the laws of the state of
California and has all licenses necessary to carry on its
business as now being conducted and is licensed, qualified and
in good standing in the states where the Mortgaged Properties
are located if the laws of such state require licensing or
qualification in order to conduct business of the type
conducted by WMC. WMC has corporate power and authority to
execute and deliver this Agreement and to perform its
obligations hereunder; the execution, delivery and performance
of this Agreement (including all instruments of transfer to be
delivered pursuant to this Agreement) by WMC and the
consummation of the transactions contemplated hereby have been
duly and validly authorized; this Agreement has been duly
executed and delivered and constitutes the valid, legal,
binding and enforceable obligation of WMC, except as
enforceability may be limited by (i) bankruptcy, insolvency,
liquidation, receivership, moratorium, reorganization or other
similar laws affecting the enforcement of the rights of
creditors and (ii) general principles of equity, whether
enforcement is sought in a proceeding in equity or at law. All
requisite corporate action has been taken by WMC to make this
Agreement valid and binding upon WMC in accordance with its
terms;
(b) No Conflicts. Neither the execution and delivery of this
Agreement, the acquisition or origination of the Mortgage
Loans by WMC, the sale of the Mortgage Loans to the Sponsor,
the consummation of the transactions contemplated hereby, nor
the fulfillment of or compliance with the terms and conditions
of this Agreement, will conflict with or result in a breach of
any of the terms, conditions or provisions of WMC's charter,
by-laws or other organizational documents or any legal
restriction or any agreement or instrument to which WMC is now
a party or by which it is bound, or constitute a default or
result in an acceleration under any of the foregoing, or
result in the violation of any law, rule, regulation, order,
judgment or decree to which WMC or its property is subject, or
result in the creation or imposition of any lien, charge or
encumbrance that would have an adverse effect upon any of its
properties pursuant to the terms of any mortgage, contract,
deed of trust or other instrument, or impair the ability of
the Sponsor to realize on the Mortgage Loans, impair the value
of the Mortgage Loans, or impair the ability of the Sponsor to
realize the full amount of any insurance benefits accruing
pursuant to this Agreement;
(c) No Litigation Pending. There is no action, suit, proceeding or
investigation pending or, to WMC's knowledge, threatened
against WMC, before any court, administrative agency or other
tribunal asserting the invalidity of this Agreement, seeking
to prevent the consummation of any of the transactions
contemplated by this Agreement or which, either in any one
instance or in the aggregate, would likely result in any
material adverse change in the business, operations, financial
condition, properties or assets of WMC, or in any material
impairment of the right or ability of WMC to carry on its
business substantially as now conducted, or in any material
liability on the part of WMC, or which would draw into
question the validity of this Agreement or the Mortgage Loans
or of any action taken or to be taken in connection with the
obligations of WMC contemplated herein, or which would be
likely to impair materially the ability of WMC to perform
under the terms of this Agreement;
(d) No Consent Required. No consent, approval, authorization or
order is required for the transactions contemplated by this
Agreement from any court, governmental agency or body, or
federal or state regulatory authority having jurisdiction over
WMC is required or, if required, such consent, approval,
authorization or order has been or will, prior to the Closing
Date, be obtained;
(e) Ordinary Course of Business. The consummation of the
transactions contemplated by this Agreement are in the
ordinary course of business of WMC, and the transfer,
assignment and conveyance of the Mortgage Notes and the
Mortgages by WMC pursuant to this Agreement are not subject to
the bulk transfer or any similar statutory provisions in
effect in any applicable jurisdiction; and
(f) Ability to Perform; Solvency. WMC 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. WMC is
solvent and the sale of the Mortgage Loans will not cause WMC
to become insolvent. The sale of the Mortgage Loans is not
undertaken with the intent to hinder, delay or defraud any of
WMC's creditors.
SCHEDULE VIII
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass Through Certificates,
Series 2006-HE2
Representations and Warranties of Decision One
as to the Decision One Mortgage Loans
With respect to the Mortgage Loans for which Decision One is
specific as the Responsible Party on the Mortgage Loan Schedule, Decision One
hereby makes the following representations and warranties set forth in this
Schedule VIII to the other parties to the Agreement to which this Schedule VIII
is attached as of the Closing Date. Capitalized terms used but not otherwise
defined in the Agreement shall have the meanings ascribed thereto in the
Decision One Purchase Agreement.
(a) Mortgage Loans as Described. The information set forth in the
Mortgage Loan Schedule as prepared by the Sponsor is complete, true and
correct as of the Closing Date;
(b) Payments Current. All payments required to be made up to the
related Closing Date for the Mortgage Loan under the terms of the Mortgage
Note, other than payments not yet 30 days delinquent, have been made and
credited. No payment required under the Mortgage Loan is 30 days or more
delinquent nor has any payment under the Mortgage Loan been 30 days or
more delinquent at any time since the origination of the Mortgage Loan.
The first Monthly Payment shall be made with respect to the Mortgage Loan
on its related Due Date or within the grace period, all in accordance with
the terms of the related Mortgage Note;
(c) No Outstanding Charges. There are no defaults in complying with
the terms of the Mortgage, and all taxes, governmental assessments,
insurance premiums, water, sewer and municipal charges, leasehold payments
or ground rents which previously became due and owing have been paid, or
an escrow of funds has been established in an amount sufficient to pay for
every such item which remains unpaid and which has been assessed but is
not yet due and payable. The Seller has not advanced funds, or induced,
solicited or knowingly received any advance of funds by a party other than
the Mortgagor, directly or indirectly, for the payment of any amount
required under the Mortgage Loan, except for interest accruing from the
date of the Mortgage Note or date of disbursement of the Mortgage Loan
proceeds, whichever is earlier, to the day which precedes by one month the
related Due Date of the first installment of principal and interest;
(d) Original Terms Unmodified. The terms of the Mortgage Note and
Mortgage have not been impaired, waived, altered or modified in any
respect, from the date of origination except by a written instrument which
has been recorded, if necessary to protect the interests of the Purchaser,
and which has been delivered to the Custodian or to such other Person as
the Purchaser shall designate in writing, and the terms of which are
reflected in the related Mortgage Loan Schedule. The substance of any such
waiver, alteration or modification has been approved by the title insurer,
if any, to the extent required by the policy, and its terms are reflected
on the related Mortgage Loan Schedule, if applicable. No Mortgagor has
been released, in whole or in part, except in connection with an
assumption agreement, approved by the issuer of the title insurer, to the
extent required by the policy, and which assumption agreement is part of
the Mortgage Loan File delivered to the Custodian or to such other Person
as the Purchaser shall designate in writing and the terms of which are
reflected in the related Mortgage Loan Schedule;
(e) No Defenses. The Mortgage Loan is not subject to any right of
rescission, set-off, counterclaim or defense, including without limitation
the defense of usury, nor will the operation of any of the terms of the
Mortgage Note or the Mortgage, or the exercise of any right thereunder,
render either the Mortgage Note or the Mortgage unenforceable, in whole or
in part and no such right of rescission, set-off, counterclaim or defense
has been asserted with respect thereto, and no Mortgagor was a debtor in
any state or Federal bankruptcy or insolvency proceeding at the time the
Mortgage Loan was originated;
(f) Hazard Insurance. Pursuant to the terms of the Mortgage, all
buildings or other improvements upon the Mortgaged Property are insured by
a generally acceptable insurer against loss by fire, hazards of extended
coverage and such other hazards, if any, as are usually and customarily
insured against by prudent mortgage lenders in the community in which the
related Mortgaged Property is located. If required by the National Flood
Insurance Act of 1968, as amended, each Mortgage Loan is covered by a
flood insurance policy meeting the requirements of the current guidelines
of the Federal Insurance Administration as in effect which policy conforms
to the requirements usually and customarily insured against by prudent
mortgage lenders in the community in which the related Mortgaged Property
is located, as well as all additional requirements set forth in Section
2.10 of the Interim Servicing Agreement. All individual insurance policies
contain a standard mortgagee clause naming the Seller and its successors
and assigns as mortgagee, and all premiums thereon have been paid. The
Mortgage obligates the Mortgagor thereunder to maintain the hazard
insurance policy at the Mortgagor's cost and expense, and on the
Mortgagor's failure to do so, authorizes the holder of the Mortgage to
obtain and maintain such insurance at such Xxxxxxxxx's cost and expense,
and to seek reimbursement therefor from the Mortgagor. Where required by
state law or regulation, the Mortgagor has been given an opportunity to
choose the carrier of the required hazard insurance, provided the policy
is not a "master" or "blanket" hazard insurance policy covering a
condominium, or any hazard insurance policy covering the common facilities
of a planned unit development. The hazard insurance policy is the valid
and binding obligation of the insurer, is in full force and effect, and
will be in full force and effect and inure to the benefit of the Purchaser
upon the consummation of the transactions contemplated by this Agreement.
The Seller has not engaged in, and has no knowledge of the Mortgagor's
having engaged in, any act or omission which would impair the coverage of
any such policy, the benefits of the endorsement provided for herein, or
the validity and binding effect of either including, without limitation,
no unlawful fee, commission, kickback or other unlawful compensation or
value of any kind has been or will be received, retained or realized by
any attorney, firm or other person or entity, and no such unlawful items
have been received, retained or realized by the Seller;
(g) Compliance with Applicable Laws. Any and all requirements of any
federal, state or local law including, without limitation, usury,
truth-in-lending, real estate settlement procedures, consumer credit
protection, equal credit opportunity, disclosure and all predatory and
abusive lending laws applicable to the Mortgage Loan, including, without
limitation, any provisions relating to Prepayment Penalties, have been
complied with, the consummation of the transactions contemplated hereby
will not involve the violation of any such laws or regulations, and the
Seller shall maintain in its possession, available for the Purchaser's
inspection, and shall deliver to the Purchaser upon demand, evidence of
compliance with all such requirements. This representation and warranty is
a Deemed Material and Adverse Representation;
(h) No Satisfaction of Mortgage. The Mortgage has not been
satisfied, canceled, subordinated or rescinded, in whole or in part, and
the Mortgaged Property has not been released from the lien of the
Mortgage, in whole or in part, nor has any instrument been executed that
would effect any such release, cancellation, subordination or rescission.
The Seller has not waived the performance by the Mortgagor of any action,
if the Mortgagor's failure to perform such action would cause the Mortgage
Loan to be in default, nor has the Seller waived any default resulting
from any action or inaction by the Mortgagor;
(i) Location and Type of Mortgaged Property. The Mortgaged Property
is a fee simple property located in the state identified in the Mortgage
Loan Schedule and consists of a single parcel of real property with a
detached single family residence erected thereon, or a two- to four-family
dwelling, or an individual residential condominium unit in a condominium
project, or an individual unit in a planned unit development and that no
residence or dwelling is a mobile home, provided, however, that any
condominium unit or planned unit development shall not fall within any of
the "Ineligible Projects" of part VIII, Section 102 of the Xxxxxx Xxx
Selling Guide and shall conform with the Underwriting Guidelines. In the
case of any Mortgaged Properties that are Manufactured Homes (a
"Manufactured Home Mortgage Loans"), (i) the related manufactured dwelling
is permanently affixed to the land, (ii) the related manufactured dwelling
and the related land are subject to a Mortgage properly filed in the
appropriate public recording office and naming Seller as mortgagee, (iii)
the applicable laws of the jurisdiction in which the related Mortgaged
Property is located will deem the manufactured dwelling located on such
Mortgaged Property to be a part of the real property on which such
dwelling is located, (iv) as of the origination date of such Manufactured
Home Mortgage Loan, the related Mortgagor occupied the related
manufactured dwelling as its primary residence; and (v) such Manufactured
Home Mortgage Loan is (x) a qualified mortgage under Section 860G(a)(3) of
the Internal Revenue Code of 1986, as amended and (y) secured by
manufactured housing treated as a single family residence under Section
25(e)(10) of the Code. As of the date of origination, no portion of the
Mortgaged Property was used for commercial purposes, and since the date of
origination, no portion of the Mortgaged Property has been used for
commercial purposes; provided, that Mortgaged Properties which contain a
home office shall not be considered as being used for commercial purposes
as long as the Mortgaged Property has not been altered for commercial
purposes and is not storing any chemicals or raw materials other than
those commonly used for homeowner repair, maintenance and/or household
purposes. This representation and warranty is a Deemed Material and
Adverse Representation;
(j) Valid First or Second Lien. The Mortgage is a valid, subsisting,
enforceable and perfected, first lien (with respect to a First Lien Loan)
or second lien (with respect to a Second Lien Loan) on the Mortgaged
Property, including all buildings and improvements on the Mortgaged
Property and all installations and mechanical, electrical, plumbing,
heating and air conditioning systems located in or annexed to such
buildings, and all additions, alterations and replacements made at any
time with respect to the foregoing. The lien of the Mortgage is subject
only to:
(A) with respect to a Second Lien Loan only, the lien of the
first mortgage on the Mortgaged Property;
(B) the lien of current real property taxes and assessments
not yet due and payable;
(C) covenants, conditions and restrictions, rights of way,
easements and other matters of the public record as of the date of
recording acceptable to prudent mortgage lending institutions
generally and specifically referred to in the lender's title
insurance policy delivered to the originator of the Mortgage Loan
and (A) specifically referred to or otherwise considered in the
appraisal made for the originator of the Mortgage Loan or (B) which
do not adversely affect the Appraised Value of the Mortgaged
Property set forth in such appraisal; and
(D) other matters to which like properties are commonly
subject which do not materially interfere with the benefits of the
security intended to be provided by the Mortgage or the use,
enjoyment, value or marketability of the related Mortgaged Property.
Any security agreement, chattel mortgage or equivalent document related to
and delivered in connection with the Mortgage Loan establishes and creates
a valid, subsisting, enforceable and perfected first lien (with respect to
a First Lien Loan) or second lien (with respect to a Second Lien Loan) and
first priority (with respect to a First Lien Loan) or second priority
(with respect to a Second Lien Loan) security interest on the property
described therein and the Seller has full right to sell and assign the
same to the Purchaser;
(k) Validity of Mortgage Documents. The Mortgage Note and the
Mortgage and any other agreement executed and delivered by a Mortgagor in
connection with a Mortgage Loan are genuine, and each is the legal, valid
and binding obligation of the maker thereof enforceable in accordance with
its terms (including, without limitation, any provisions therein relating
to Prepayment Penalties). All parties to the Mortgage Note, the Mortgage
and any other such related agreement had legal capacity to enter into the
Mortgage Loan and to execute and deliver the Mortgage Note, the Mortgage
and any such agreement, and the Mortgage Note, the Mortgage and any other
such related agreement have been duly and properly executed by other such
related parties. No fraud, error, omission, misrepresentation, negligence
or similar occurrence with respect to a Mortgage Loan has taken place on
the part of any Person, including without limitation, the Mortgagor, any
appraiser, any builder or developer, or any other party involved in the
origination of the Mortgage Loan or in the application for any insurance
in relation to such Mortgage Loan. The Seller has reviewed all of the
documents constituting the Servicing File and has made such inquiries as
it deems necessary to make and confirm the accuracy of the representations
set forth herein;
(l) Full Disbursement of Proceeds. The Mortgage Loan has been closed
and the proceeds of the Mortgage Loan have been fully disbursed and there
is no requirement for future advances thereunder, and any and all
requirements as to completion of any on-site or off-site improvement and
as to disbursements of any escrow funds therefor have been complied with.
All costs, fees and expenses incurred in making or closing the Mortgage
Loan and the recording of the Mortgage were paid, and the Mortgagor is not
entitled to any refund of any amounts paid or due under the Mortgage Note
or Mortgage;
(m) Ownership. The Seller is the sole owner of record and holder of
the Mortgage Loan and the indebtedness evidenced by each Mortgage Note and
upon the sale of the Mortgage Loans to the Purchaser, the Seller will
retain the Mortgage Files or any part thereof with respect thereto not
delivered to the Custodian, the Purchaser or the Purchaser's designee, in
trust only for the purpose of servicing and supervising the servicing of
each Mortgage Loan. The Mortgage Loan is not assigned or pledged, and the
Seller has good, indefeasible and marketable title thereto, and has full
right to transfer and sell the Mortgage Loan to the Purchaser free and
clear of any encumbrance, equity, participation interest, lien, pledge,
charge, claim or security interest, and has full right and authority
subject to no interest or participation of, or agreement with, any other
party, to sell and assign each Mortgage Loan pursuant to this Agreement
and following the sale of each Mortgage Loan, the Purchaser will own such
Mortgage Loan free and clear of any encumbrance, equity, participation
interest, lien, pledge, charge, claim or security interest. The Seller
intends to relinquish all rights to possess, control and monitor the
Mortgage Loan. After the related Closing Date, the Seller will have no
right to modify or alter the terms of the sale of the Mortgage Loan and
the Seller will have no obligation or right to repurchase the Mortgage
Loan or substitute another Mortgage Loan, except as provided in this
Agreement;
(n) Doing Business. All parties which have had any interest in the
Mortgage Loan, whether as mortgagee, assignee, pledgee or otherwise, are
(or, during the period in which they held and disposed of such interest,
were) (1) in compliance with any and all applicable licensing requirements
of the laws of the state wherein the Mortgaged Property is located, and
(2) either (i) organized under the laws of such state, or (ii) qualified
to do business in such state, or (iii) a federal savings and loan
association, a savings bank or a national bank having a principal office
in such state, or (3) not doing business in such state;
(o) LTV. No Mortgage Loan has an LTV greater than 100%.
(p) Title Insurance. The Mortgage Loan is covered by an ALTA
lender's title insurance policy, or with respect to any Mortgage Loan for
which the related Mortgaged Property is located in California a CLTA
lender's title insurance policy, or other generally acceptable form of
policy or insurance acceptable to Xxxxxx Xxx or Freddie Mac and each such
title insurance policy is issued by a title insurer acceptable to Xxxxxx
Xxx or Freddie Mac and qualified to do business in the jurisdiction where
the Mortgaged Property is located, insuring the Seller, its successors and
assigns, as to the first (with respect to a First Lien Loan) or second
(with respect to a Second Lien Loan) priority lien of the Mortgage in the
original principal amount of the Mortgage Loan, subject only to the
exceptions contained in clauses (A), (B) and (C) of paragraph (j) of this
Subsection 9.02, and in the case of Adjustable Rate Mortgage Loans,
against any loss by reason of the invalidity or unenforceability of the
lien resulting from the provisions of the Mortgage providing for
adjustment to the Mortgage Interest Rate and Monthly Payment. Where
required by state law or regulation, the Mortgagor has been given the
opportunity to choose the carrier of the required mortgage title
insurance. Additionally, such lender's title insurance policy
affirmatively insures ingress and egress, and against encroachments by or
upon the Mortgaged Property or any interest therein. The Seller, its
successor and assigns, are the sole insureds of such lender's title
insurance policy, and such lender's title insurance policy is valid and
remains in full force and effect and will be in force and effect upon the
consummation of the transactions contemplated by this Agreement. No claims
have been made under such lender's title insurance policy, and no prior
holder of the related Mortgage, including the Seller, has done, by act or
omission, anything which would impair the coverage of such lender's title
insurance policy, including without limitation, no unlawful fee,
commission, kickback or other unlawful compensation or value of any kind
has been or will be received, retained or realized by any attorney, firm
or other person or entity, and no such unlawful items have been received,
retained or realized by the Seller;
(q) No Defaults. Other than payments due but not yet 30 days or more
delinquent, there is no default, breach, violation or event which would
permit acceleration existing under the Mortgage or the 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 which would permit acceleration, and neither the Seller nor any
of its affiliates nor any of their respective predecessors, have waived
any default, breach, violation or event which would permit acceleration;
(r) No Mechanics' Liens. There are no mechanics' or similar liens or
claims which have been filed for work, labor or material (and no rights
are outstanding that under law could give rise to such liens) affecting
the related Mortgaged Property which are or may be liens prior to, or
equal or coordinate with, the lien of the related Mortgage;
(s) Location of Improvements; No Encroachments. All improvements
which were considered in determining the Appraised Value of the Mortgaged
Property lay wholly within the boundaries and building restriction lines
of the Mortgaged Property, and no improvements on adjoining properties
encroach upon the Mortgaged Property. No improvement located on or being
part of the Mortgaged Property is in violation of any applicable zoning
law or regulation;
(t) Origination; Payment Terms. The Mortgage Loan was originated by
a mortgagee approved by the Secretary of Housing and Urban Development
pursuant to Sections 203 and 211 of the National Housing Act, a savings
and loan association, a savings bank, a commercial bank, credit union,
insurance company or other similar institution which is supervised and
examined by a federal or state authority. The documents, instruments and
agreements submitted for loan underwriting were not falsified and contain
no untrue statement of material fact required to be stated therein or
necessary to make the information and statements therein not misleading.
No Mortgage Loan contains terms or provisions which would result in
negative amortization. Principal payments on the Mortgage Loan commenced
no more than sixty days after funds were disbursed in connection with the
Mortgage Loan. The Mortgage Interest Rate as well as, in the case of an
Adjustable Rate Mortgage Loan, the Lifetime Rate Cap and the Periodic Cap
are as set forth on the related Mortgage Loan Schedule. The Mortgage Note
is payable in equal monthly installments of principal and interest, which
installments of interest, with respect to Adjustable Rate Mortgage Loans,
are subject to change due to the adjustments to the Mortgage Interest Rate
on each Interest Rate Adjustment Date, with interest calculated and
payable in arrears, sufficient to amortize the Mortgage Loan fully by the
stated maturity date, over an original term of not more than thirty years
from commencement of amortization. Unless otherwise specified on the
related Mortgage Loan Schedule, the Mortgage Loan is payable on the first
day of each month. The Mortgage Loan does not require a balloon payment on
its stated maturity date, unless otherwise specified in the related
Mortgage Loan Schedule;
(u) Customary Provisions. The 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 provided thereby, including, (i) in the
case of a Mortgage designated as a deed of trust, by trustee's sale, and
(ii) otherwise by judicial foreclosure. Upon default by a Mortgagor on a
Mortgage Loan and foreclosure on, or trustee's sale of, the Mortgaged
Property pursuant to the proper procedures, the holder of the Mortgage
Loan will be able to deliver good and merchantable title to the Mortgaged
Property. There is no homestead or other exemption available to a
Mortgagor which would interfere with the right to sell the Mortgaged
Property at a trustee's sale or the right to foreclose the Mortgage,
subject to applicable federal and state laws and judicial precedent with
respect to bankruptcy and right of redemption or similar law;
(v) Conformance with Agency and Underwriting Guidelines. The
Mortgage Loan was underwritten in accordance with the Underwriting
Guidelines (a copy of which is attached to each related Assignment and
Conveyance Agreement). The Mortgage Note and Mortgage are on forms
acceptable to Freddie Mac or Xxxxxx Xxx and the Seller has not made any
representations to a Mortgagor that are inconsistent with the mortgage
instruments used;
(w) Occupancy of the Mortgaged Property. As of the related Closing
Date the Mortgaged Property is lawfully occupied under applicable law. All
inspections, licenses and certificates required to be made or issued with
respect to all occupied 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. Unless otherwise
specified on the related Mortgage Loan Schedule, the Mortgagor represented
at the time of origination of the Mortgage Loan that the Mortgagor would
occupy the Mortgaged Property as the Mortgagor's primary residence;
(x) No Additional Collateral. The Mortgage Note is not and has not
been secured by any collateral except the lien of the corresponding
Mortgage and the security interest of any applicable security agreement or
chattel mortgage referred to in paragraph (j) above;
(y) Deeds of Trust. In the event the Mortgage constitutes a deed of
trust, a trustee, authorized and duly qualified under applicable law to
serve as such, has been properly designated and currently so serves and is
named in the Mortgage, and no fees or expenses are or will become payable
by the Purchaser to the trustee under the deed of trust, except in
connection with a trustee's sale after default by the Mortgagor;
(z) [Reserved];
(aa) Delivery of Mortgage Documents. The Mortgage Note, the
Mortgage, the Assignment of Mortgage and any other documents required to
be delivered under the Custodial Agreement for each Mortgage Loan have
been delivered to the Custodian. The Seller is in possession of a
complete, true and accurate Mortgage File in compliance with Exhibit A
hereto, except for such documents the originals of which have been
delivered to the Custodian;
(bb) Condominiums/Planned Unit Developments. If the Mortgaged
Property is a condominium unit or a planned unit development (other than a
de minimis planned unit development) such condominium or planned unit
development project such Mortgage Loan was originated in accordance with,
and the Mortgaged Property meets the guidelines set forth in the
Underwriting Guidelines;
(cc) Transfer of Mortgage Loans. The Assignment of Mortgage (except
with respect to any Mortgage that has been recorded in the name of MERS or
its designee) with respect to each Mortgage Loan is in recordable form and
is acceptable for recording under the laws of the jurisdiction in which
the Mortgaged Property is located. The transfer, assignment and conveyance
of the Mortgage Notes and the Mortgages by the Seller are not subject to
the bulk transfer or similar statutory provisions in effect in any
applicable jurisdiction;
(dd) Due-On-Sale. With respect to each Fixed Rate Mortgage Loan, the
Mortgage contains an enforceable provision for the acceleration of the
payment of the unpaid principal balance of the Mortgage Loan in the event
that the Mortgaged Property is sold or transferred without the prior
written consent of the mortgagee thereunder, and to the best of the
Seller's knowledge, such provision is enforceable;
(ee) Assumability. With respect to each Adjustable Rate Mortgage
Loan, the Mortgage Loan Documents provide that after the related first
Interest Rate Adjustment Date, a related Mortgage Loan may only be assumed
if the party assuming such Mortgage Loan meets certain credit
requirements, if any, stated in the Mortgage Loan Documents;
(ff) No Buydown Provisions; No Graduated Payments or Contingent
Interests. The Mortgage Loan does not contain provisions pursuant to which
Monthly Payments are paid or partially paid with funds deposited in any
separate account established by the Seller, the Mortgagor, or anyone on
behalf of the Mortgagor, or paid by any source other than the Mortgagor
nor does it contain any other similar provisions which may constitute a
"buydown" provision. The Mortgage Loan is not a graduated payment mortgage
loan and the Mortgage Loan does not have a shared appreciation or other
contingent interest feature;
(gg) Consolidation of Future Advances. Any future advances made to
the Mortgagor prior to the related Cut-off Date have been consolidated
with the outstanding principal amount secured by the Mortgage, and the
secured principal amount, as consolidated, bears a single interest rate
and single repayment term. The lien of the Mortgage securing the
consolidated principal amount is expressly insured as having first (with
respect to a First Lien Loan) or second (with respect to a Second Lien
Loan) lien priority by a title insurance policy, an endorsement to the
policy insuring the mortgagee's consolidated interest or by other title
evidence acceptable under the Underwriting Guidelines. The consolidated
principal amount does not exceed the original principal amount of the
Mortgage Loan;
(hh) Mortgaged Property Undamaged; No Condemnation Proceedings.
There is no proceeding pending or threatened for the total or partial
condemnation of the Mortgaged Property. The Mortgaged Property is
undamaged by waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty so as to affect adversely the value of the
Mortgaged Property as security for the Mortgage Loan or the use for which
the premises were intended and each Mortgaged Property is in good repair.
There have not been any condemnation proceedings with respect to the
Mortgaged Property and the Seller has no knowledge of any such proceedings
in the future;
(ii) Collection Practices; Escrow Deposits; Interest Rate
Adjustments. The origination, servicing and collection practices used by
the Seller with respect to the Mortgage Loan have been in all respects in
compliance with Accepted Servicing Practices, applicable laws and
regulations, and have been in all respects legal and proper. With respect
to escrow deposits and Escrow Payments, all such payments are in the
possession of, or under the control of, the Seller and there exist no
deficiencies in connection therewith for which customary arrangements for
repayment thereof have not been made. All Escrow Payments have been
collected in full compliance with state and federal law and the provisions
of the related Mortgage Note and Mortgage. An escrow of funds is not
prohibited by applicable law and has been established in an amount
sufficient to pay for every item that remains unpaid and has been assessed
but is not yet due and payable. No escrow deposits or Escrow Payments or
other charges or payments due the Seller have been capitalized under the
Mortgage or the Mortgage Note. All Mortgage Interest Rate adjustments have
been made in strict compliance with state and federal law and the terms of
the related Mortgage and Mortgage Note on the related Interest Rate
Adjustment Date. If, pursuant to the terms of the Mortgage Note, another
index was selected for determining the Mortgage Interest Rate, the same
index was used with respect to each Mortgage Note which required a new
index to be selected, and such selection did not conflict with the terms
of the related Mortgage Note. The Seller executed and delivered any and
all notices required under applicable law and the terms of the related
Mortgage Note and Mortgage regarding the Mortgage Interest Rate and the
Monthly Payment adjustments. Any interest required to be paid pursuant to
state, federal and local law has been properly paid and credited;
(jj) Conversion to Fixed Interest Rate. With respect to Adjustable
Rate Mortgage Loans, the Mortgage Loan is not a Convertible Mortgage
Loan;;
(kk) Other Insurance Policies; No Defense to Coverage. No action,
inaction or event has occurred and no state of facts exists or has existed
on or prior to the related Closing Date that has resulted or will result
in the exclusion from, denial of, or defense to coverage under any
applicable hazard insurance policy or bankruptcy bond (including, without
limitation, any exclusions, denials or defenses which would limit or
reduce the availability of the timely payment of the full amount of the
loss otherwise due thereunder to the insured), irrespective of the cause
of such failure of coverage. In connection with the placement of any such
insurance, no commission, fee, or other compensation has been or will be
received by the Seller or by any officer, director, or employee of the
Seller or any designee of the Seller or any corporation in which the
Seller or any officer, director, or employee had a financial interest at
the time of placement of such insurance;
(ll) No Violation of Environmental Laws. There is no pending action
or proceeding directly involving the Mortgaged Property in which
compliance with any environmental law, rule or regulation is an issue;
there is no violation of any environmental law, rule or regulation with
respect to the Mortgaged Property; and nothing further remains to be done
to satisfy in full all requirements of each such law, rule or regulation
constituting a prerequisite to use and enjoyment of said property;
(mm) Servicemembers' Civil Relief Act. The Mortgagor has not
notified the Seller, and the Seller has no knowledge of any relief
requested or allowed to the Mortgagor under the Relief Act or other
similar state statute;
(nn) Appraisal. The Mortgage File contains an appraisal of the
related Mortgaged Property signed prior to the approval of the Mortgage
Loan application by a Qualified Appraiser, accepted by the Seller, who had
no interest, direct or indirect in the Mortgaged Property or in any loan
made on the security thereof, and whose compensation is not affected by
the approval or disapproval of the Mortgage Loan, and the appraisal and
appraiser both satisfied the requirements of Title XI of the Financial
Institutions Reform, Recovery, and Enforcement Act of 1989 and the
regulations promulgated thereunder, all as in effect on the date the
Mortgage Loan was originated;
(oo) Disclosure Materials. The Mortgagor has executed a statement to
the effect that the Mortgagor has received all disclosure materials
required by, and the Seller has complied with, all applicable law with
respect to the making of the Mortgage Loans. The Seller shall maintain
such statement in the Mortgage File;
(pp) Construction or Rehabilitation of Mortgaged Property. No
Mortgage Loan was made in connection with the construction (other than a
"construct-to-perm" loan) or rehabilitation of a Mortgaged Property or
facilitating the trade-in or exchange of a Mortgaged Property;
(qq) Value of Mortgaged Property. The Seller has no knowledge of any
circumstances existing that could reasonably be expected to adversely
affect the value or the marketability of any Mortgaged Property (except as
may be expressly shown in the related appraisal) or Mortgage Loan or to
cause the Mortgage Loans to prepay during any period materially faster or
slower than similar mortgage loans held by the Seller generally secured by
properties in the same geographic area as the related Mortgaged Property;
(rr) No Defense to Insurance Coverage. No action has been taken or
failed to be taken, no event has occurred and no state of facts exists or
has existed on or prior to the related Closing Date (whether or not known
to the Seller on or prior to such date) which has resulted or will result
in an exclusion from, denial of, or defense to coverage under any primary
mortgage insurance (including, without limitation, any exclusions, denials
or defenses which would limit or reduce the availability of the timely
payment of the full amount of the loss otherwise due thereunder to the
insured) whether arising out of actions, representations, errors,
omissions, negligence, or fraud of the Seller, the related Mortgagor or
any party involved in the application for such coverage, including the
appraisal, plans and specifications and other exhibits or documents
submitted therewith to the insurer under such insurance policy, or for any
other reason under such coverage, but not including the failure of such
insurer to pay by reason of such insurer's breach of such insurance policy
or such insurer's financial inability to pay;
(ss) [Reserved];
(tt) Escrow Analysis. If applicable, with respect to each Mortgage,
the Seller has within the last twelve months (unless such Mortgage was
originated within such twelve month period) analyzed the required Escrow
Payments for each Mortgage and adjusted the amount of such payments so
that, assuming all required payments are timely made, any deficiency will
be eliminated on or before the first anniversary of such analysis, or any
overage will be refunded to the Mortgagor, in accordance with RESPA and
any other applicable law;
(uu) Prior Servicing. Each Mortgage Loan has been serviced in all
material respects in strict compliance with Accepted Servicing Practices;
(vv) Credit Information. As to each consumer report (as defined in
the Fair Credit Reporting Act, Public Law 91-508) or other credit
information furnished by the Seller to the Purchaser, that Seller has full
right and authority and is not precluded by law or contract from
furnishing such information to the Purchaser and the Purchaser is not
precluded from furnishing the same to any subsequent or good faith
legitimate prospective purchaser of such Mortgage. The Seller shall hold
the Purchaser harmless from any and all damages, losses, costs and
expenses (including attorney's fees) arising from disclosure of credit
information in connection with the Purchaser's good faith legitimate
secondary marketing operations and the purchase and sale of mortgages or
Servicing Rights thereto;
(ww) Leaseholds. 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;
(xx) Prepayment Penalty. Each Mortgage Loan that is subject to a
prepayment penalty as provided in the related Mortgage Note is identified
on the related Mortgage Loan Schedule. With respect to each Mortgage Loan
that has a Prepayment Penalty feature, each such Prepayment Penalty is
enforceable, and each Prepayment Penalty is permitted pursuant to federal,
state and local law. Each such Prepayment Penalty is in an amount not more
than the maximum amount permitted under applicable law and no such
Prepayment Penalty may be imposed for a term in excess of five (5) years
with respect to Mortgage Loans originated prior to October, 1, 2002. With
respect to Mortgage Loans originated on or after October 1, 2002, the
duration of the Prepayment Penalty period shall not exceed three (3) years
from the date of the Mortgage Note unless the Mortgage Loan was modified
to reduce the Prepayment Penalty period to no more than three (3) years
from the date of the related Mortgage Note and the Mortgagor was notified
in writing of such reduction in Prepayment Penalty period. This
representation and warranty is a Deemed Material and Adverse
Representation;
(yy) Predatory Lending Regulations. No Mortgage Loan is a High Cost
Loan or Covered Loan, as applicable, and no Mortgage Loan originated on or
after October 1, 2002 through March 6, 2003 is governed by the Georgia
Fair Lending Act. No Mortgage Loan is covered by the Home Ownership and
Equity Protection Act of 1994 and no Mortgage Loan is in violation of any
comparable state or local law. This representation and warranty is a
Deemed Material and Adverse Representation;
(zz) [Reserved];
(aaa) Qualified Mortgage. The Mortgage Loan is a "qualified
mortgage" under Section 860G(a)(3) of the Code;
(bbb) Tax Service Contract. Each Mortgage Loan is covered by a paid
in full, life of loan, tax service contract issued by Fidelity National
Tax Service, and such contract is transferable;
(ccc) Origination. No predatory or deceptive lending practices,
including, without limitation, the extension of credit without regard to
the ability of the Mortgagor to repay and the extension of credit which
has no apparent benefit to the Mortgagor, were employed in the origination
of the Mortgage Loan;
(ddd) Recordation. Each original Mortgage was recorded and all
subsequent assignments of the original Mortgage (other than the assignment
to the Purchaser) have been recorded in the appropriate jurisdictions
wherein such recordation is necessary to perfect the lien thereof as
against creditors of the Seller, or is in the process of being recorded;
(eee) Mortgagor Bankruptcy. On or prior to the date 60 days after
the related Closing Date, the Mortgagor has not filed and will not file a
bankruptcy petition or has not become the subject and will not become the
subject of involuntary bankruptcy proceedings or has not consented to or
will not consent to the filing of a bankruptcy proceeding against it or to
a receiver being appointed in respect of the related Mortgaged Property;
(fff) No Prior Offer. The Mortgage Loan has not previously been
offered for sale;
(ggg) Xxxxxx Xxx Guides Anti-Predatory Lending Eligibility. Each
Mortgage Loan is in compliance with the anti-predatory lending eligibility
for purchase requirements of Xxxxxx Xxx Guides. This representation and
warranty is a Deemed Material and Adverse Representation;
(hhh) Mortgagor Selection. No Mortgagor was encouraged or required
to select a Mortgage Loan product offered by the Originator which is a
higher cost product designed for less creditworthy mortgagors, unless at
the time of the Mortgage Loan's origination, such Mortgagor did not
qualify taking into account credit history and debt-to-income ratios for a
lower-cost credit product then offered by the Originator or any Affiliate
of the Originator. This representation and warranty is a Deemed Material
and Adverse Representation;
(iii) Underwriting Methodology. The methodology used in underwriting
the extension of credit for each Mortgage Loan employs objective
mathematical principles which relate the related Mortgagor's income,
assets and liabilities to the proposed payment and such underwriting
methodology does not rely on the extent of the related Mortgagor's equity
in the collateral as the principal determining factor in approving such
credit extension. Such underwriting methodology confirmed that at the time
of origination (application/approval) the related Mortgagor had a
reasonable ability to make timely payments on the Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(jjj) Mortgage Loans with Prepayment Premiums. With respect to any
Mortgage Loan that contains a provision permitting imposition of a premium
upon a prepayment prior to maturity: (i) prior to the Mortgage Loan's
origination, the related Mortgagor agreed to such premium in exchange for
a monetary benefit, including but not limited to a rate or fee reduction,
(ii) prior to the Mortgage Loan's origination, the related Mortgagor was
offered the option of obtaining a mortgage loan that did not require
payment of such a premium, (iii) the prepayment premium is disclosed to
the related Mortgagor in the Mortgage Loan documents pursuant to
applicable state and federal law, and (iv) notwithstanding any state or
federal law to the contrary, the Originator, as servicer, shall not impose
such prepayment premium in any instance when the mortgage debt is
accelerated as the result of the related Mortgagor's default in making the
Mortgage Loan payments. This representation and warranty is a Deemed
Material and Adverse Representation;
(kkk) Purchase of Insurance. No Mortgagor was required to purchase
any single premium credit insurance policy (e.g., life, mortgage,
disability, property, accident, unemployment or health insurance product)
or debt cancellation agreement as a condition of obtaining the extension
of credit. No Mortgagor obtained a prepaid single-premium credit insurance
policy (e.g., life, mortgage, disability, property, accident,
unemployment, mortgage or health insurance) in connection with the
origination of the Mortgage Loan. No proceeds from any Mortgage Loan were
used to purchase single premium credit insurance policies as part of the
origination of, or as a condition to closing, such Mortgage Loan. This
representation and warranty is a Deemed Material and Adverse
Representation;
(lll) Points and Fees. All points and fees related to each Mortgage
Loan were disclosed in writing to the Mortgagor in accordance with
applicable state and federal law and regulation. This representation and
warranty is a Deemed Material and Adverse Representation;
(mmm) Disclosure of Fees and Charges. All fees and charges
(including finance charges), whether or not financed, assessed, collected
or to be collected in connection with the origination and servicing of
each Mortgage Loan, have been disclosed in writing to the Mortgagor in
accordance with applicable state and federal law and regulation. This
representation and warranty is a Deemed Material and Adverse
Representation;
(nnn) No Arbitration. No Mortgage Loan originated on or after July
1, 2004 requires the related Mortgagor to submit to arbitration to resolve
any dispute arising out of or relating in any way to the Mortgage Loan
transaction. This representation and warranty is a Deemed Material and
Adverse Representation;
(ooo) Request for Notice; No Consent Required. With respect to any
Second Lien Loan, where required or customary in the jurisdiction in which
the Mortgaged Property is located, the original lender has filed for
record a request for notice of any action by the related senior
lienholder, and the Seller has notified the senior lienholder in writing
of the existence of the Second Lien Loan and requested notification of any
action to be taken against the Mortgagor by the senior lienholder. Either
(a) no consent for the Second Lien Loan is required by the holder of the
related first lien or (b) such consent has been obtained and is contained
in the Mortgage File. This representation and warranty is a Deemed
Material and Adverse Representation;
(ppp) No Default Under First Lien. With respect to each Second Lien
Loan, the related First Lien Loan related thereto is in full force and
effect, and there is no default, breach, violation or event which would
permit acceleration existing under such first Mortgage or 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 which would permit acceleration thereunder.
This representation and warranty is a Deemed Material and Adverse
Representation;
(qqq) Right to Cure First Lien. With respect to each Second Lien
Loan, the related first lien Mortgage contains a provision which provides
for giving notice of default or breach to the mortgagee under the Mortgage
Loan and allows such mortgagee to cure any default under the related first
lien Mortgage. This representation and warranty is a Deemed Material and
Adverse Representation;
(rrr) No Failure to Cure Default. The Seller has not received a
written notice of default of any senior mortgage loan related to the
Mortgaged Property which has not been cured;
(sss) No Negative Amortization of Related First Lien Loan. With
respect to each Second Lien Loan, the related First Lien Loan does not
permit negative amortization. This representation and warranty is a Deemed
Material and Adverse Representation; and
(ttt) Principal Residence. With respect to each Second Lien Loan,
the related Mortgaged Property was the Mortgagor's principal residence at
the time of the origination of such Second Lien Loan. This representation
and warranty is a Deemed Material and Adverse Representation.
SCHEDULE IX
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass Through Certificates,
Series 2006-HE2
Representations and Warranties of Xxxxx Fargo, as Custodian
Xxxxx Fargo hereby makes the representations and warranties set
forth in this Schedule IX to the Trustee as of the Closing Date. Capitalized
terms used but not otherwise defined shall have the meaning ascribed thereto in
the Agreement.
(a) Xxxxx Fargo is duly organized and is validly existing and in
good standing under the laws of its jurisdiction of incorporation and is
duly authorized and qualified to transact any and all business
contemplated by this Agreement to be conducted by Xxxxx Fargo in any state
in which a Mortgaged Property is located or is otherwise not required
under applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) Xxxxx Fargo has the full power and authority to execute, deliver
and perform, and to enter into and consummate the transactions
contemplated by this Agreement and has duly authorized by all necessary
action on the part of Xxxxx Fargo the execution, delivery and performance
of this Agreement; and this Agreement, assuming the due authorization,
execution and delivery thereof by the other parties thereto, constitutes a
legal, valid and binding obligation of Xxxxx Fargo, enforceable against
Xxxxx Fargo in accordance with its terms, except that (i) the
enforceability thereof may be limited by bankruptcy, insolvency,
moratorium, receivership and other similar laws relating to creditors'
rights generally and (ii) the remedy of specific performance and
injunctive and other forms of equitable relief may be subject to equitable
defenses and to the discretion of the court before which any proceeding
therefor may be brought.
(c) The execution and delivery of this Agreement by Xxxxx Fargo, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of Xxxxx Fargo and will not (i) result
in a material breach of any term or provision of the articles of
incorporation or by laws of Xxxxx Fargo, (ii) materially conflict with,
result in a material breach, violation or acceleration of, or result in a
material default under, the terms of any other material agreement or
instrument to which Xxxxx Fargo is a party or by which it may be bound, or
(iii) constitute a material violation of any statute, order or regulation
applicable to Xxxxx Fargo of any court, regulatory body, administrative
agency or governmental body having jurisdiction over Xxxxx Fargo; and
Xxxxx Fargo is not in breach or violation of any material indenture or
other material agreement or instrument, or in violation of any statute,
order or regulation of any court, regulatory body, administrative agency
or governmental body having jurisdiction over it which breach or violation
may materially impair Xxxxx Fargo's ability to perform or meet any of its
obligations under this Agreement.
(d) No litigation is pending or threatened against Xxxxx Fargo that
would materially and adversely affect the execution, delivery or
enforceability of this Agreement or the ability of Xxxxx Fargo to perform
any of its obligations under this Agreement in accordance with the terms
thereof. For purposes of the foregoing, Xxxxx Fargo does not regard any
actions, proceedings or investigations "threatened" unless the potential
litigants or governmental authority has manifested to a member of the
Xxxxx Fargo & Company Law Department having responsibility for litigation
matters involving the corporate trust activities of Xxxxx Fargo its
present intention to initiate such proceedings.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by Xxxxx Fargo of, or compliance by Xxxxx Fargo with, this
Agreement or the consummation of the transactions contemplated thereby, or
if any such consent, approval, authorization or order is required, Xxxxx
Fargo has obtained the same.
SCHEDULE X
Xxxxxx Xxxxxxx Capital I Inc.
Mortgage Pass Through Certificates,
Series 2006-HE2
Representations and Warranties of LaSalle, as Custodian
LaSalle hereby makes the representations and warranties set forth in
this Schedule X to the Trustee as of the Closing Date. Capitalized terms used
but not otherwise defined shall have the meaning ascribed thereto in the
Agreement.
(a) LaSalle is duly organized and is validly existing and in good
standing under the laws of its jurisdiction of incorporation and is duly
authorized and qualified to transact any and all business contemplated by
this Agreement to be conducted by LaSalle in any state in which a
Mortgaged Property is located or is otherwise not required under
applicable law to effect such qualification and, in any event, is in
compliance with the doing business laws of any such state, to the extent
necessary to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(b) LaSalle has the full power and authority to execute, deliver and
perform, and to enter into and consummate the transactions contemplated by
this Agreement and has duly authorized by all necessary action on the part
of LaSalle the execution, delivery and performance of this Agreement; and
this Agreement, assuming the due authorization, execution and delivery
thereof by the other parties thereto, constitutes a legal, valid and
binding obligation of LaSalle, enforceable against LaSalle in accordance
with its terms, except that (i) the enforceability thereof may be limited
by bankruptcy, insolvency, moratorium, receivership and other similar laws
relating to creditors' rights generally and (ii) the remedy of specific
performance and injunctive and other forms of equitable relief may be
subject to equitable defenses and to the discretion of the court before
which any proceeding therefor may be brought.
(c) The execution and delivery of this Agreement by LaSalle, the
consummation of any other of the transactions contemplated by this
Agreement, and the fulfillment of or compliance with the terms thereof are
in the ordinary course of business of LaSalle and will not (i) result in a
material breach of any term or provision of the articles of incorporation
or by laws of LaSalle, (ii) materially conflict with, result in a material
breach, violation or acceleration of, or result in a material default
under, the terms of any other material agreement or instrument to which
LaSalle is a party or by which it may be bound, or (iii) constitute a
material violation of any statute, order or regulation applicable to
LaSalle of any court, regulatory body, administrative agency or
governmental body having jurisdiction over LaSalle; and LaSalle is not in
breach or violation of any material indenture or other material agreement
or instrument, or in violation of any statute, order or regulation of any
court, regulatory body, administrative agency or governmental body having
jurisdiction over it which breach or violation may materially impair
LaSalle's ability to perform or meet any of its obligations under this
Agreement.
(d) No litigation is pending or, to the best of its knowledge,
threatened against LaSalle that would materially and adversely affect the
execution, delivery or enforceability of this Agreement or the ability of
LaSalle to perform any of its obligations under this Agreement in
accordance with the terms thereof.
(e) No consent, approval, authorization or order of any court or
governmental agency or body is required for the execution, delivery and
performance by XxXxxxx of, or compliance by LaSalle with, this Agreement
or the consummation of the transactions contemplated thereby, or if any
such consent, approval, authorization or order is required, XxXxxxx has
obtained the same.
EXHIBIT A
Unless this Certificate is presented by an authorized representative of the
Depository Trust Company, a New York corporation ("DTC"), to Issuer 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.
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
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
ASSETS.
AS LONG AS THE INTEREST RATE SWAP AGREEMENT IS IN EFFECT, EACH BENEFICIAL OWNER
OF THIS CERTIFICATE, OR ANY INTEREST THEREIN, SHALL BE DEEMED TO HAVE
REPRESENTED THAT EITHER (I) IT 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 OR (II) THE ACQUISITION AND HOLDING OF THIS CERTIFICATE ARE ELIGIBLE
FOR THE EXEMPTIVE RELIEF AVAILABLE UNDER AT LEAST ONE OF PROHIBITED TRANSACTION
CLASS EXEMPTION ("PTCE") 84-14, PTCE 90-1, PTCE 91-8, PTCE 95-60 OR PTCE 96-23
OR A COMPARABLE EXEMPTION AVAILABLE UNDER SIMILAR LAW.
Certificate No. : A-1-[ ]
A-2a-[ ]
A-2b-[ ]
A-2c-[ ]
A-2d-[ ]
M-1-[ ]
M-2- [ ]
M-3-[ ]
M-4-[ ]
M-5-[ ]
M-6-[ ]
B-1-[ ]
B-2-[ ]
B-3-[ ]
Cut-off Date : April 1, 2006
First Distribution Date : May 25, 2006
Initial Certificate Balance of this
Certificate ("Denomination") : $[ ]
Initial Certificate Balances of all [A-1] $435,720,000
Certificates of this Class :
[A-2a] $690,310,000
[A-2b] $196,890,000
[A-2c] $295,470,000
[A-2d] $183,755,000
[M-1] $ 78,206,000
[M-2] $ 71,406,000
[M-3] $ 43,070,000
[M-4] $ 37,403,000
[M-5] $ 36,270,000
[M-6] $ 32,869,000
[B-1] $ 32,869,000
[B-2] $ 29,469,000
[B-3] $ 23,802,000
CUSIP : [Class A-1][617451 ER 6]
[Class A-2a][617451 ES 4]
[Class A-2b][617451 ET 2]
[Class A-2c][617451 EU 9]
[Class A-2d][617451 EV 7]
[Class M-1][617451 EW 5]
[Class M-2][617451 EX 3]
[Class M-3][617451 EY 1]
[Class M-4][617451 EZ 8]
[Class M-5][617451 FA 2]
[Class M-6][617451 FB 0]
[Class B-1][617451 FC 8]
[Class B-2][617451 FD 6]
[Class B-3][617451 FE 4]
ISIN : [Class A-1][US617451ER67]
[Class A-2a][US617451ES41]
[Class A-2b][US617451ET24]
[Class A-2c][US617451EU96]
[Class A-2d][US617451EV79]
[Class M-1][US617451EW52]
[Class M-2][US617451EX36]
[Class M-3][US617451EY19]
[Class M-4][US617451EZ83]
[Class M-5][US617451FA24]
[Class M-6][US617451FB07]
[Class B-1][US617451FC89]
[Class B-2][US617451FD62]
[Class B-3][US617451FE46]
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
[Class A-][Class M-][Class B-]
evidencing a percentage interest in the distributions allocable to the
Certificates of the above-referenced Class.
Principal in respect of this Certificate is distributable monthly as
set forth herein. Accordingly, the Certificate Balance at any time may be less
than the Certificate Balance as set forth herein. This Certificate does not
evidence an obligation of, or an interest in, and is not guaranteed by the
Depositor, the Trustee or any other party to the Agreement referred to below or
any of their respective affiliates. Neither this Certificate nor the Mortgage
Loans are guaranteed or insured by any governmental agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx Capital I
Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association, as
securities administrator (the "Securities Administrator"), servicer and
custodian, JPMorgan Chase Bank, National Association, as servicer, HomEq
Servicing Corporation, as servicer, WMC Mortgage Corp., as responsible party,
Decision One Mortgage Company, LLC, as responsible party, Deutsche Bank National
Trust Company, as trustee, and LaSalle Bank National Association, as custodian.
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.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
***
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities
Administrator
By: ________________________________
Authenticated:
By ______________________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the Business Day immediately preceding such Distribution
Date, provided, however, that for any Definitive Certificates, the Record Date
shall be the last Business Day of the month next preceding the month of such
Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided 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 therefor 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 of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Securities Administrator, the
Trustee nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
_____________________________________
Signature by or on behalf of assignor
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
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO
THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES
AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A REPRESENTATION LETTER TO
THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE
I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS AMENDED ("ERISA"),
OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN SUBJECT TO MATERIALLY
SIMILAR PROVISIONS OF APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR
A PERSON INVESTING ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT
THAT SUCH REPRESENTATION IS VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A
PLAN OR ARRANGEMENT SUBJECT TO SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION
4975 OF THE CODE OR A PLAN SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF
OF ANY SUCH PLAN OR ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR
ARRANGEMENT, SUCH ATTEMPTED TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO
EFFECT.
Certificate No. : P-1
Cut-off Date : April 1, 2006
First Distribution Date : May 25, 2006
Percentage Interest of this
Certificate ("Denomination") : [___]%
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Class P
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx Capital I
Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association, as
securities administrator (the "Securities Administrator"), servicer and
custodian, JPMorgan Chase Bank, National Association, as servicer, HomEq
Servicing Corporation, as servicer, WMC Mortgage Corp., as responsible party,
Decision One Mortgage Company, LLC, as responsible party, Deutsche Bank National
Trust Company, as trustee, and LaSalle Bank National Association, as custodian.
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.
This Certificate does not have a Pass-Through Rate and will be
entitled to distributions only to the extent set forth in the Agreement. In
addition, any distribution of the proceeds of any remaining assets of the Trust
will be made only upon presentment and surrender of this Certificate at the
offices designated by the Securities Administrator for such purposes, or such
other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Securities Administrator shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the Securities Administrator that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act or is being made
pursuant to the Securities Act, which Opinion of Counsel shall be an expense of
the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA, Section 4975 of
the Code or any materially similar provisions of applicable federal, state or
local law ("Similar Law"), or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
By:
-----------------------------------------
Authenticated:
By ________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution 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 (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided 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 therefor 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 of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Securities Administrator, the
Trustee, nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
_____________________________________
Signature by or on behalf of assignor
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
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE IS A "RESIDUAL
INTEREST" IN 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").
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFER
AFFIDAVIT IN ACCORDANCE WITH THE PROVISIONS OF THE AGREEMENT REFERRED TO HEREIN.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED (I) TO A
PERSON OTHER THAN A PERMITTED TRANSFEREE IN COMPLIANCE WITH SECTION 5.02(C) OF
THE AGREEMENT, OR (II) UNLESS THE TRANSFEREE DELIVERS TO THE SECURITIES
ADMINISTRATOR A REPRESENTATION LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT
AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF
THE CODE OR A PLAN SUBJECT TO MATERIALLY SIMILAR PROVISIONS OF APPLICABLE
FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") OR A PERSON INVESTING ON BEHALF OF
OR WITH PLAN ASSETS OF SUCH A PLAN. IN THE EVENT THAT SUCH REPRESENTATION IS
VIOLATED, OR ANY ATTEMPT IS MADE TO TRANSFER TO A PLAN OR ARRANGEMENT SUBJECT TO
SECTION 406 OF ERISA, A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO SIMILAR LAW, OR A PERSON ACTING ON BEHALF OF ANY SUCH PLAN OR
ARRANGEMENT OR USING THE ASSETS OF ANY SUCH PLAN OR ARRANGEMENT, SUCH ATTEMPTED
TRANSFER OR ACQUISITION SHALL BE VOID AND OF NO EFFECT.
Certificate No. : R-1
Cut-off Date : April 1, 2006
First Distribution Date : May 25, 2006
Percentage Interest of this : 100%
Certificate ("Denomination")
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Class R
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate is distributable
monthly as set forth herein. This Class R Certificate has no Certificate Balance
and is not entitled to distributions in respect of principal or interest. This
Certificate does not evidence an obligation of, or an interest in, and is not
guaranteed by the Depositor, the Trustee or any other party to the Agreement
referred to below or any of their respective affiliates. Neither this
Certificate nor the Mortgage Loans are guaranteed or insured by any governmental
agency or instrumentality.
This certifies that [_____________] is the registered owner of the
Percentage Interest specified above of any monthly distributions due to the
Class R Certificates pursuant to a Pooling and Servicing Agreement dated as of
the Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx Capital
I Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association,
as securities administrator (the "Securities Administrator"), servicer and
custodian, JPMorgan Chase Bank, National Association, as servicer, HomEq
Servicing Corporation, as servicer, WMC Mortgage Corp., as responsible party,
Decision One Mortgage Company, LLC, as responsible party, Deutsche Bank National
Trust Company, as trustee, and LaSalle Bank National Association, as custodian.
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.
Any distribution of the proceeds of any remaining assets of the
Trust Fund will be made only upon presentment and surrender of this Class R
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Class R Certificate shall be made unless the
Securities Administrator shall have received a representation letter from the
transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan or arrangement subject to Section 406 of ERISA,
a plan or arrangement subject to Section 4975 of the Code or a plan subject to
Similar Law, or a person acting on behalf of any such plan or arrangement nor
using the assets of any such plan or arrangement to effect such transfer, which
representation letter shall not be an expense of the Trustee, the Securities
Administrator, the Servicers, the Depositor or the Trust Fund. In the event that
such representation is violated, or any attempt is made to transfer to a plan or
arrangement subject to Section 406 of ERISA or a plan subject to Section 4975 of
the Code or a plan subject to Similar Law, or a person acting on behalf of any
such plan or arrangement or using the assets of any such plan or arrangement,
such attempted transfer or acquisition shall be void and of no effect.
Each Holder of this Class R Certificate shall be deemed by the
acceptance or acquisition an Ownership Interest in this Class R Certificate to
have agreed to be bound by the following provisions, and the rights of each
Person acquiring any Ownership Interest in this Class R Certificate are
expressly subject to the following provisions: (i) each Person holding or
acquiring any Ownership Interest in this Class R Certificate shall be a
Permitted Transferee and shall promptly notify the Securities Administrator of
any change or impending change in its status as a Permitted Transferee, (ii) no
Ownership Interest in this Class R Certificate may be registered on the Closing
Date or thereafter transferred, and the Securities Administrator shall not
register the Transfer of this Certificate unless, in addition to the
certificates required to be delivered to the Securities Administrator under
Section 5.02(b) of the Agreement, the Securities Administrator shall have been
furnished with a Transfer Affidavit of the initial owner or the proposed
transferee in the form attached as Exhibit G to the Agreement, (iii) each Person
holding or acquiring any Ownership Interest in this Class R Certificate shall
agree (A) to obtain a Transfer Affidavit from any other Person to whom such
Person attempts to Transfer its Ownership Interest this Class R Certificate, (B)
to obtain a Transfer Affidavit from any Person for whom such Person is acting as
nominee, trustee or agent in connection with any Transfer of this Class R
Certificate, (C) not to cause income with respect to the Class R Certificate to
be 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 and (D) not to Transfer the Ownership Interest in this Class R
Certificate or to cause the Transfer of the Ownership Interest in this Class R
Certificate to any other Person if it has actual knowledge that such Person is a
Non-Permitted Transferee and (iv) any attempted or purported Transfer of the
Ownership Interest in this Class R Certificate in violation of the provisions
herein shall be absolutely null and void and shall vest no rights in the
purported Transferee.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
By:
-----------------------------------------
Authenticated:
By ________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that the Trustee is not liable to the Certificateholders
for any amount payable under this Certificate or the Agreement or, except as
expressly provided in the Agreement, subject to any liability under the
Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution will be made
on the 25th day of each month or, if such day is not a Business Day, the
Business Day immediately following (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided 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 therefor 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 of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Securities Administrator, the
Trustee nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
_____________________________________
Signature by or on behalf of assignor
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
SOLELY FOR U.S. FEDERAL INCOME TAX PURPOSES, THIS CERTIFICATE REPRESENTS AN
INTEREST IN TWO "REGULAR INTERESTS" 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
ASSETS.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
PROPOSED TRANSFEROR DELIVERS TO THE SECURITIES ADMINISTRATOR A TRANSFEROR LETTER
IN THE FORM OF EXHIBIT H TO THE AGREEMENT REFERRED TO HEREIN AND EITHER (I) THE
SECURITIES ADMINISTRATOR RECEIVES A RULE 144A LETTER IN THE FORM OF EXHIBIT I TO
THE AGREEMENT REFERRED TO HEREIN OR (II) THE SECURITIES ADMINISTRATOR RECEIVES
AN OPINION OF COUNSEL, DELIVERED AT THE EXPENSE OF THE TRANSFEROR, THAT SUCH
TRANSFER MAY BE MADE WITHOUT REGISTRATION UNDER THE SECURITIES ACT OF 1933, AS
AMENDED.
NEITHER THIS CERTIFICATE NOR ANY INTEREST HEREIN MAY BE TRANSFERRED UNLESS THE
TRANSFEREE DELIVERS TO THE SECURITIES ADMINISTRATOR EITHER A REPRESENTATION
LETTER TO THE EFFECT THAT SUCH TRANSFEREE IS NOT AN EMPLOYEE BENEFIT PLAN
SUBJECT TO TITLE I OF THE EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974, AS
AMENDED ("ERISA"), OR A PLAN SUBJECT TO SECTION 4975 OF THE CODE OR A PLAN
SUBJECT TO APPLICABLE FEDERAL, STATE OR LOCAL LAW ("SIMILAR LAW") MATERIALLY
SIMILAR TO THE FOREGOING PROVISIONS OF ERISA OR THE CODE OR A PERSON INVESTING
ON BEHALF OF OR WITH PLAN ASSETS OF SUCH A PLAN, OR, IF THE TRANSFEREE IS AN
INSURANCE COMPANY, A REPRESENTATION LETTER THAT IT IS USING THE ASSETS OF ITS
GENERAL ACCOUNT AND THAT THE PURCHASE AND HOLDING OF THIS CERTIFICATE ARE
COVERED UNDER SECTIONS I AND III OF PROHIBITED TRANSACTION CLASS EXEMPTION 95-60
OR AN OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR, TO THE
EFFECT THAT THE PURCHASE OR HOLDING OF THIS 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 TRUSTEE,
THE DEPOSITOR, THE SECURITIES ADMINISTRATOR OR THE SERVICERS TO ANY OBLIGATION
IN ADDITION TO THOSE EXPRESSLY UNDERTAKEN IN THE AGREEMENT OR TO ANY LIABILITY.
NOTWITHSTANDING ANYTHING ELSE TO THE CONTRARY HEREIN, ANY PURPORTED TRANSFER OF
THIS CERTIFICATE TO OR ON BEHALF OF AN EMPLOYEE BENEFIT PLAN SUBJECT TO TITLE I
OF ERISA, SECTION 4975 OF THE CODE OR SIMILAR LAW WITHOUT THE REPRESENTATION
LETTER OR OPINION OF COUNSEL SATISFACTORY TO THE SECURITIES ADMINISTRATOR AS
DESCRIBED ABOVE SHALL BE VOID AND OF NO EFFECT.
Certificate No. : X-1
Cut-off Date : April 1, 2006
First Distribution Date : May 25, 2006
Percentage Interest of this Certificate
("Denomination") : [___]%
------------
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates, Series 2006-HE2
Class X
evidencing a percentage interest in the distributions allocable to
the Certificates of the above-referenced Class.
Distributions in respect of this Certificate are distributable
monthly as set forth herein. This Certificate does not evidence an obligation
of, or an interest in, and is not guaranteed by the Depositor, the Trustee or
any other party to the Agreement referred to below or any of their respective
affiliates. Neither this Certificate nor the Mortgage Loans are guaranteed or
insured by any governmental agency or instrumentality.
This certifies that [_____________], is the registered owner of the
Percentage Interest evidenced by this Certificate (obtained by dividing the
denomination of this Certificate by the aggregate of the denominations of all
Certificates of the Class to which this Certificate belongs) in certain monthly
distributions pursuant to a Pooling and Servicing Agreement dated as of the
Cut-off Date specified above (the "Agreement") among Xxxxxx Xxxxxxx Capital I
Inc., as depositor (the "Depositor"), Xxxxx Fargo Bank, National Association, as
securities administrator (the "Securities Administrator"), servicer and
custodian, JPMorgan Chase Bank, National Association, as servicer, HomEq
Servicing Corporation, as servicer, WMC Mortgage Corp., as responsible party,
Decision One Mortgage Company, LLC, as responsible party, Deutsche Bank National
Trust Company, as trustee, and LaSalle Bank National Association, as custodian.
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.
This Certificate does not have a Certificate Balance or Pass-Through
Rate and will be entitled to distributions only to the extent set forth in the
Agreement. In addition, any distribution of the proceeds of any remaining assets
of the Trust will be made only upon presentment and surrender of this
Certificate at the offices designated by the Securities Administrator for such
purposes or such other location specified in the notice to Certificateholders.
No transfer of a Certificate of this Class shall be made unless such
disposition is exempt from the registration requirements of the Securities Act
of 1933, as amended (the "Securities Act"), and any applicable state securities
laws or is made in accordance with the Securities Act and such laws. In the
event of any such transfer, the Securities Administrator shall require the
transferor to execute a transferor certificate (in substantially the form
attached to the Pooling and Servicing Agreement) and deliver either (i) a Rule
144A Letter, in either case substantially in the form attached to the Agreement,
or (ii) a written Opinion of Counsel to the Securities Administrator that such
transfer may be made pursuant to an exemption, describing the applicable
exemption and the basis therefor, from the Securities Act or is being made
pursuant to the Securities Act, which Opinion of Counsel shall be an expense of
the transferor.
No transfer of a Certificate of this Class shall be made unless the
Securities Administrator shall have received either (i) a representation letter
from the transferee of such Certificate, acceptable to and in form and substance
satisfactory to the Securities Administrator, to the effect that such transferee
is not an employee benefit plan subject to Section 406 of ERISA or Section 4975
of the Code or any materially similar provisions of applicable Federal, state or
local law ("Similar Law") or a person acting on behalf of or investing plan
assets of any such plan, which representation letter shall not be an expense of
the Securities Administrator, or (ii) if the transferee is an insurance company,
a representation letter that it is purchasing such Certificates with the assets
of its general account and that the purchase and holding of such Certificates
are covered under Sections I and III of PTCE 95-60, or (iii) in the case of a
Certificate presented for registration in the name of an employee benefit plan
subject to ERISA, or a plan or arrangement subject to Section 4975 of the Code
(or comparable provisions of any subsequent enactments) or a plan subject to
Similar Law, or a trustee of any such plan or any other person acting on behalf
of any such plan or arrangement or using such plan's or arrangement's assets, an
Opinion of Counsel satisfactory to the Securities Administrator, which Opinion
of Counsel shall not be an expense of the Trustee, the Securities Administrator,
the Servicers or the Trust Fund, addressed to the Securities Administrator, to
the effect that the purchase or holding of such 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 Depositor,
the Trustee, the Securities Administrator or the Servicers to any obligation in
addition to those expressly undertaken in the Agreement or to any liability.
Reference is hereby made to the further provisions of this
Certificate set forth on the reverse hereof, which further provisions shall for
all purposes have the same effect as if set forth at this place.
This Certificate shall not be entitled to any benefit under the
Agreement or be valid for any purpose unless manually authenticated by an
authorized signatory of the Securities Administrator.
***
IN WITNESS WHEREOF, the Securities Administrator has caused this
Certificate to be duly executed.
Dated:
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity,
but solely as Securities Administrator
By:
-----------------------------------------
Authenticated:
By ________________________________
Authorized Signatory of
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
not in its individual capacity, but
solely as Securities Administrator
XXXXXX XXXXXXX CAPITAL I INC.
Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2
Mortgage Pass-Through Certificates
This Certificate is one of a duly authorized issue of Certificates
designated as Xxxxxx Xxxxxxx Capital I Inc. Trust 2006-HE2 Mortgage Pass-Through
Certificates, of the Series specified on the face hereof (herein collectively
called the "Certificates"), and representing a beneficial ownership interest in
the Trust Fund created by the Agreement.
The Certificateholder, by its acceptance of this Certificate, agrees
that it will look solely to the funds on deposit in the Distribution Account for
payment hereunder and that neither the Trustee nor the Securities Administrator
is liable to the Certificateholders for any amount payable under this
Certificate or the Agreement or, except as expressly provided in the Agreement,
subject to any liability under the Agreement.
This Certificate does not purport to summarize the Agreement and
reference is made to the Agreement for the interests, rights and limitations of
rights, benefits, obligations and duties evidenced thereby, and the rights,
duties and immunities of the Trustee.
Pursuant to the terms of the Agreement, a distribution 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 (the "Distribution Date"), commencing on the
first Distribution Date specified on the face hereof, to the Person in whose
name this Certificate is registered at the close of business on the applicable
Record Date in an amount equal to the product of the Percentage Interest
evidenced by this Certificate and the amount required to be distributed to
Holders of Certificates of the Class to which this Certificate belongs on such
Distribution Date pursuant to the Agreement. The Record Date applicable to each
Distribution Date is the last Business Day of the month next preceding the month
of such Distribution Date.
Distributions on this Certificate shall be made by wire transfer of
immediately available funds to the account of the Holder hereof at a bank or
other entity having appropriate facilities therefor, if such Certificateholder
shall have so notified the Securities Administrator in writing at least five
Business Days prior to the related Record Date and such Certificateholder shall
satisfy the conditions to receive such form of payment set forth in the
Agreement, or, if not, by check mailed by first class mail to the address of
such Certificateholder appearing in the Certificate Register. The final
distribution on each Certificate will be made in like manner, but only upon
presentment and surrender of such Certificate at the offices designated by the
Securities Administrator for such purposes or such other location specified in
the notice to Certificateholders of such final distribution.
The Agreement permits, with certain exceptions therein provided, the
amendment thereof and the modification of the rights and obligations of the
Trustee and the rights of the Certificateholders under the Agreement at any time
by the parties to the Agreement with the consent of the Holders of Certificates
affected by such amendment evidencing the requisite Percentage Interest, as
provided 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 therefor 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 of the Securities Administrator upon surrender of this
Certificate for registration of transfer at the offices designated by the
Securities Administrator for such purposes, accompanied by a written instrument
of transfer in form satisfactory to the Securities Administrator 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 and evidencing the same aggregate Percentage Interest in the Trust
Fund will be issued to the designated transferee or transferees.
The Certificates are issuable only as registered Certificates
without coupons in denominations 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
and 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, but the Securities Administrator may require payment of a sum
sufficient to cover any tax or other governmental charge payable in connection
therewith.
The Depositor, the Securities Administrator and the Trustee and any
agent of the Depositor, the Securities Administrator or the Trustee may treat
the Person in whose name this Certificate is registered as the owner hereof for
all purposes, and neither the Depositor, the Securities Administrator, the
Trustee nor any such agent shall be affected by any notice to the contrary.
On any Distribution Date on which the aggregate Stated Principal
Balance of the Mortgage Loans is less than or equal to 10% of the Cut-off Date
Pool Principal Balance, any Servicer individually, or all of the Servicers
together, will have the option to repurchase, in whole, from the Trust Fund all
remaining Mortgage Loans and all property acquired in respect of the Mortgage
Loans at a purchase price determined as provided in the Agreement. The
obligations and responsibilities created by the Agreement will terminate as
provided in Section 10.01 of the Agreement.
Any term used herein that is defined in the Agreement shall have the
meaning assigned in the Agreement, and nothing herein shall be deemed
inconsistent with that meaning.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and transfer(s)
unto
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
________________________________________________________________________________
(Please print or typewrite name and address including postal zip code of
assignee)
the Percentage Interest evidenced by the within Certificate and hereby
authorizes the transfer of registration of such Percentage Interest to assignee
on the Certificate Register of the Trust Fund.
I (We) further direct the Securities Administrator to issue a new Certificate of
a like denomination and Class, to the above named assignee and deliver such
Certificate to the following address:
________________________________________________________________________________
_____________________________________
Signature by or on behalf of assignor
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 E
FORM OF INITIAL CERTIFICATION OF CUSTODIAN
[date]
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
0 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
00000 Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Trust Administration MSAC 2006-HE2
Re: Pooling and Servicing Agreement, dated as of April 1, 2006, among
Xxxxxx Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as Securities Administrator, a Servicer and a
Custodian, JPMorgan Chase Bank, National Association, as a Servicer,
HomEq Servicing Corporation, as a Servicer, WMC Mortgage Corp., as a
Responsible Party, Decision One Mortgage Company, LLC, as a
Responsible Party, Deutsche Bank National Trust Company, as Trustee,
and LaSalle Bank National Association, as a Custodian, Xxxxxx
Xxxxxxx Capital I Inc. Trust, Series 2006-HE2
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), for each Mortgage
Loan listed in the Mortgage Loan Schedule for which the undersigned is acting as
Custodian (other than any Mortgage Loan listed in the attached schedule), it has
received:
(i) the original Mortgage Note, endorsed as provided in the
following form: "Pay to the order of ________, without recourse";
and
(ii) except with respect to MERS Designated Mortgage Loans, a
duly executed assignment of the Mortgage (which may be included in a
blanket assignment or assignments).
Based on its review and examination and only as to the foregoing
documents, such documents appear regular on their face and related to such
Mortgage Loan.
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. The Custodian makes no representations as to:
(i) the validity, legality, sufficiency, enforceability or genuineness of any of
the documents contained in each Mortgage File of any of the Mortgage Loans
identified on the Mortgage Loan Schedule, or (ii) the collectibility,
insurability, effectiveness or suitability of any such Mortgage Loan.
Notwithstanding anything herein to the contrary, the Custodian has made no
determination and makes no representations as to whether (i) any endorsement is
sufficient to transfer all right, title and interest of the party so endorsing,
as Noteholder or assignee thereof, in and to that Mortgage Note or (ii) any
assignment is in recordable form or sufficient to effect the assignment of and
transfer to the assignee thereof, under the Mortgage to which the assignment
relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
[XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Custodian]
By:
-------------------------------
Name:
-------------------------------
Title:
------------------------------
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:
-------------------------------
Name:
-------------------------------
Title:
------------------------------
EXHIBIT F
FORM OF DOCUMENT CERTIFICATION AND EXCEPTION
REPORT OF CUSTODIAN
[date]
Xxxxxx Xxxxxxx Capital I Inc.
0000 Xxxxxxxx 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxx Fargo Bank, National Association
0 Xxxx Xxxxxx
Xxx Xxxxxx, Xxxx 00000
JPMorgan Chase Bank, National Association
c/o Chase Home Finance LLC
00000 Xxxxxx Xxxxxxx
Xxx Xxxxx, Xxxxxxxxxx 00000
HomEq Servicing Corporation
0000 Xxxx Xxxxxxxxx Xxxxxxx, Xxxxx 000, Xxxxxx Xxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Deutsche Bank National Trust Company
0000 Xxxx Xx. Xxxxxx Xxxxx
Xxxxx Xxx, Xxxxxxxxxx 00000
Attention: Trust Administration MSAC 2006-HE2
Re: Pooling and Servicing Agreement, dated as of April 1, 2006, among
Xxxxxx Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank,
National Association, as Securities Administrator, a Servicer and a
Custodian, JPMorgan Chase Bank, National Association, as a Servicer,
HomEq Servicing Corporation, as a Servicer, WMC Mortgage Corp., as a
Responsible Party, Decision One Mortgage Company, LLC, as a
Responsible Party, Deutsche Bank National Trust Company, as Trustee,
and LaSalle Bank National Association, as a Custodian, Xxxxxx
Xxxxxxx Capital I Inc. Trust, Series 2006-HE2
--------------------------------------------------------------------
Ladies and Gentlemen:
In accordance with Section 2.02 of the above-captioned Pooling and
Servicing Agreement (the "Pooling and Servicing Agreement"), the undersigned, as
Custodian, hereby certifies that as to each Mortgage Loan listed in the Mortgage
Loan Schedule (other than any Mortgage Loan paid in full or listed on the
attached Document Exception Report) for which the undersigned is acting as
Custodian, it has received:
(i) The original Mortgage Note, endorsed in the form provided
in Section 2.01 of the Pooling and Servicing Agreement, with all
intervening endorsements showing a complete chain of endorsement
from the originator to the last endorsee.
(ii) The original recorded Mortgage.
(iii) Except with respect to MERS Designated Mortgage Loans, a
duly executed assignment of the Mortgage in the form provided in
Section 2.01 of the Pooling and Servicing Agreement; or, if the
Responsible Party has certified or the Custodian otherwise knows
that the related Mortgage has not been returned from the applicable
recording office, a copy of the assignment of the Mortgage
(excluding information to be provided by the recording office).
(iv) Except with respect to MERS Designated Mortgage Loans,
the original or duplicate original recorded assignment or
assignments of the Mortgage showing a complete chain of assignment
from the originator to the last endorsee.
(v) The original or duplicate original lender's title policy
and all riders thereto or, any one of an original title binder, an
original preliminary title report or an original title commitment,
or a copy thereof certified by the title company.
Based on its review and examination and only as to the foregoing
documents, (a) such documents appear regular on their face and related to such
Mortgage Loan, and (b) the information set forth in items (1), (2), (7) and (9)
of the Mortgage Loan Schedule and items (1), (9) and (17) of the Data Tape
Information accurately reflects information set forth in the Custodial File.
The Custodian has made no independent examination of any documents
contained in each Mortgage File beyond the review of the Custodial File
specifically required in the Pooling and Servicing Agreement. The Custodian
makes no representations as to: (i) the validity, legality, sufficiency,
enforceability or genuineness of any of the documents contained in each Mortgage
File of any of the Mortgage Loans identified on the Mortgage Loan Schedule, or
(ii) the collectibility, insurability, effectiveness or suitability of any such
Mortgage Loan. Notwithstanding anything herein to the contrary, the Custodian
has made no determination and makes no representations as to whether (i) any
endorsement is sufficient to transfer all right, title and interest of the party
so endorsing, as Noteholder or assignee thereof, in and to that Mortgage Note or
(ii) any assignment is in recordable form or sufficient to effect the assignment
of and transfer to the assignee thereof, under the Mortgage to which the
assignment relates.
Capitalized words and phrases used herein shall have the respective
meanings assigned to them in the Pooling and Servicing Agreement.
[XXXXX FARGO BANK, NATIONAL ASSOCIATION,
as Custodian]
By:
-------------------------------
Name:
-------------------------------
Title:
------------------------------
[LASALLE BANK NATIONAL ASSOCIATION,
as Custodian]
By:
-------------------------------
Name:
-------------------------------
Title:
------------------------------
EXHIBIT G
RESIDUAL TRANSFER AFFIDAVIT
Xxxxxx Xxxxxxx Capital I Inc. Trust, Series 2006-HE2,
Mortgage Pass-Through Certificates,
Series 2006-HE2
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 a Class R Certificate (the
"Certificate") issued pursuant to the Pooling and Servicing Agreement (the
"Agreement"), relating to the above-referenced Series, by and among Xxxxxx
Xxxxxxx Capital I Inc., as Depositor, Xxxxx Fargo Bank, National Association, as
Securities Administrator, a Servicer and a Custodian, JPMorgan Chase Bank,
National Association, as a Servicer, HomEq Servicing Corporation, as a Servicer,
WMC Mortgage Corp., as a Responsible Party, Decision One Mortgage Company, LLC,
as a Responsible Party, Deutsche Bank National Trust Company, as Trustee (the
"Trustee"), and LaSalle Bank National Association, as a Custodian (the
"Custodian"). 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 for the
benefit of the Depositor and the Trustee.
(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 Certificate for its own account. 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
Non-Permitted Transferees; (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 Non-Permitted Transferee, 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 a Permitted Transferee 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
Non-Permitted Transferee 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 a Permitted Transferee 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(c) 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(c) 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 a Non-Permitted
Transferee. In connection with any such Transfer by the Transferee, the
Transferee agrees to deliver to the Securities Administrator a certificate
substantially in the form set forth as Exhibit H to the Agreement (a "Transferor
Certificate") to the effect that, among other things, such Transferee has no
actual knowledge that the Person to which the Transfer is to be made is a
Non-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. The Transferee has historically paid its debts as they have
come due and intends to pay its debts as they come due in the future. The
Transferee intends to pay all taxes due with respect to the Certificate as they
become due.
(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 proposed 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) The Transferee will not cause income from the Residual
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) Check the applicable paragraph:
/ / The present value of the anticipated tax liabilities
associated with holding the Certificate, as applicable,
does not exceed the sum of:
(i) the present value of any consideration given to the
Transferee to acquire such Certificate;
(ii) the present value of the expected future distributions
on such Certificate; and
(iii) the present value of the anticipated tax savings
associated with holding such Certificate as the related
REMIC generates losses.
For purposes of this calculation, (i) the Transferee is assumed to
pay tax at the highest rate currently specified in Section 11(b) of the Code
(but the tax rate in Section 55(b)(1)(B) of the Code may be used in lieu of the
highest rate specified in Section 11(b) of the Code if the Transferee has been
subject to the alternative minimum tax under Section 55 of the Code in the
preceding two years and will compute its taxable income in the current taxable
year using the alternative minimum tax rate) and (ii) present values are
computed using a discount rate equal to the short-term Federal rate prescribed
by Section 1274(d) of the Code for the month of the transfer and the compounding
period used by the Transferee.
/ / The transfer of the 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 the 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 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; and
(iv) the Transferee determined the consideration paid to it
to acquire the 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.
/ / None of the above.
(13) The Transferee is not an employee benefit plan that is subject to Title I
of ERISA or a plan that is subject to Section 4975 of